Last Monday (29th October) evening, I had the opportunity to address a meeting convened by the European-Atlantic Group in the British Parliament. Later on that night, I was also honoured with an opportunity to deliver the after-dinner speech at the Caledonian Club. The topic of both events was “Global and European Recovery: What will it take?“
Interestingly, the organisers (and many in the audience) belonged to the conservative side of British politics. Indeed, it would not be wrong to describe the mood in the audience as Eurosceptic. For this reason, I felt compelled to submit to my hosts the view (which I hold passionately) that:
“the worst enemies of European unity are those who are arguing in favour of political union without having a logical plan for addressing the Eurozone’s quadruple crisis now: the crisis of its banking system, of public debt, of negative investment and, last but not least, the growing democratic deficit. Let me leave you with a thought which is far less of a paradox than it seems: Those of us who despise the euro the most have the highest moral duty to help fix it.” (Extract from my after dinner speech at the Caledonian Club)
While my talks were not scripted (and thus impossible to reproduce here in text form – though an audio may become available soon), you can read the conclusion to my main talk of that evening below:
Ladies and gentlemen, the world after 2008 cannot be made sense of in the language and by means of the narratives that preceded 2008. We are in uncharted territory now and we need to create a new discourse.
Before 2008, we based our growth on what turned out to be a global Ponzi scheme; a global surplus recycling mechanism that was bound to buckle under its own hubris. Aided and abetted by what I term toxic economic theory (a particularly pernicious form of ideology), the US, Britain and the Eurozone were pretending to be living the dream of some Great Moderation – when the reality could not have been more immoderate.
After 2008, Post-Credit Crunch, both Europe and Britain turned to Ponzi Austerity, pretending that growth will come when new debts are created on condition of more income-sapping, universal austerity – hoping to free-ride on growth that comes from America or Asia. Alas, it won’t happen. Europe cannot eschew its responsibility to help restore global growth.
However, while designing the Recovery, we better beware: The return to growth should not come at any price. What grows matters. We want growth in sectors that generate good things that humanity needs more of and a deep deflation of the toxic sectors that make life nasty, brutish and short – from physical pollutants to real estate bubbles and toxic derivatives.
We must aim at the mobilisation of idle savings into medium to long-term investments that serve genuine human needs – rather than producing new bubbles for the purpose of dealing with the ill effects of previous bubbles that burst disastrously. None of this will be accomplished by markets caught up in an equilibrium of fear that is reinforced daily by universal austerity. Equally, none of it will happen unless public investment takes markets seriously.
Lastly, permit me to finish on a note appropriate to the great debates that take place in this fine building concerning this country’s role in Europe and with regard to your attitude to the Eurozone – to the currency union whose on-going disintegration is threatening to push us all into the mists of a long Winter of Global Discontent.
Like many of you here tonight, who happen to share a Eurosceptic disposition, I too think that we Europeans created a monster in the form of the Eurozone. And just like Mary Shelley’s Dr Frankenstein, whose intentions were not all bad, we now find ourselves unable to control our creation, the euro – a vicious beast that is wrecking our neighbourhood with reckless abandon.
But my message to my Eurosceptic friends, of both the Left and the Right, both here in Britain and in my own country, is this: Beware what you are wishing for. For the cruellest God is the one who grants us our wishes.
We may wish that inane Euro-loyalists get their comeuppance; that they learn their lesson the hard way, watching their ill-conceived Euro perish. But, tragically, if this happens, the pain will spread far and wide and the vast majority of victims will be outside the Eurozone and will suffer far more than the Eurocrats ever will.
If we fail to fix the Eurozone, Europe will most probably inflict, for the third time in a century, an unnecessary calamity upon humanity. My great fear, and conviction, is that, today, Europe’s worst enemies are the Euroloyalists who profess to serve and to believe in it. Not the Eurosceptics. Europe needs Eurosceptics, or better Eurocritics, to be at its centre. To stop deluding themselves that they can sit this one out.
After all, no economy is an island.