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Apocalypse soon

The other day I read a prominent economist describe the current Eurozone crisis to a slow-motion car crash. That’s a fairly common metaphor, but I had a car crash once, and remember frantically turning the steering wheel and braking in an attempt to avoid a collision. That bears very little resemblance to the paralysis that seems to be prevalent amongst Europe’s politicians and much of its population in the face of potentially era-defining economic collapse.

Back in 2008, very few people seemed to realise how close our economy – and way of life – came to crumbling around us. Alistair Darling has subsequently revealed that our high street banks were hours away from going out of business, meaning no cash from cashpoints, no salaries, and, ultimately no money. For anyone. At the time, thanks to a couple of friends in senior positions in the City, I was rather more cognisant of the dangers than most, and explained the repercussions to colleagues at work. They listened, looked vaguely worried and carried on with their lives, as did I.

Try to get your head around the inability of an entire nation to conduct monetary transactions and you can quickly imagine how things might get rather ugly, rather quickly. And if you can’t imagine it, turn your mind back to August and the riots. That’s what would happen, only on a nationwide scale. Even the most morally-upstanding citizens might be tempted to grab what they can from the shelves of Tesco if the alternative was to go hungry. That’s why plans to mobilise the army on our streets were discussed back in 2008, and probably are today, too.

The point of this post? Last night, I watched Question Time on the BBC. Simon Jenkins and Will Hutton – both highly respected thinkers – disagreed so fundamentally on the outcome of the current Euro crisis that I am surprised their difference of opinion did not merit further discussion. One posited the theory that Greece and other highly indebted countries had to leave the Euro if the world economy was to be saved; the other described the fallout of such a scenario in such apocalyptic terms that it summoned the image of my family foraging for grubs in the back garden. When diametrically opposed points of view can credibly be held as the only resolution to the same scenario, alarm bells should start ringing.

What’s scary is that nobody knows which, if either of them, was correct. The point when the Euro collapses, or is saved by what would be a monumental leap of faith (and injection of new money) by Germany, is fast approaching. Like the brick wall that I could see coming towards me as I frantically tried to regain control of my steering wheel, it’s getting closer; not in slow motion, but very quickly.

The outcome of my crash, since you asked, was that I wrote off my car but escaped without physical harm. That might be the most accurate analogy of all, I suspect.

 

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Categories: politics
  1. Anonymous
    November 21, 2011 at 11:13 am

    An interesting take on the possible solutions to our current economic woes here, both in the main article and comments: http://www.guardian.co.uk/business/economics-blog/2011/nov/20/recession-sovereign-private-debt-recovery

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