Gordon Brown, former Chancellor whose policies fuelled the Boom and Prime Minister in charge at the Bust, has, in an interview with Robert Peston, made a dramatic and prescient intervention in the Euro crisis. He has said the worst is yet to come and it may be coming as soon as the New Year.
He cites all the structural issues which this Blog has emphasised time and again. He has added a new warning which carries great weight because he has seen figures that many have not, namely that the banks of Europe are sitting on liabilities for which they do not have the capital to support and that this includes the U.K. banks. Anybody who does not sit up and take note, whatever their politics, is a fool.
Many revile Gordon Brown and dismiss him for his many failings and failures. In some ways he is similar to Churchill, whom most dismissed as a hot head and self publicist, until he took over at the moment we were losing the war. He stopped the rot and when later we won, a grateful nation put it all down to him. They also voted him out of office.
Brown had been the architect of the economic model, based on an expansion of a blueprint bequeathed from Thatcher. When the whole thing began to sway and totter then to fall, he knew what to do, where to go and what to prop up. He is widely seen as the world leader who mobilised everyone to act to stop a crash becoming a meltdown. The problem is that whilst the structure did not fall down altogether it is dangerously flawed and may yet collapse. The key fault now is in the Euro. If that snaps, we will not escape damage. This is what Gordon is talking about. He is in a position to know. This time it behoves us to listen.
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