The folly of jetting off to an international summit in a pleasant tropical resort during a time of emergency at home was amply demonstrated by Jim Callaghan in 1979 when he arrived, suntanned, back from the Caribbean apparently unaware of the seriousness of growing industrial unrest at home. But at least he never actually uttered the words ‘Crisis, what crisis?’
This week, on the other hand, the EU Commission president, José Manuel Barroso, really did make a statement that deserves to enter the history books, as a symptom of the detachment of EU leaders from the economic crisis engulfing the eurozone. Looking every bit as relaxed as Sunny Jim, Barroso told reporters at the Mexican resort of Los Cabos, ‘This crisis did not originate in Europe… this crisis originated in America.’
That would be a preposterous charge coming from anyone, but from a man who should be helping to stabilise a dire economic emergency, it is frightening. It shows just how far the creators of the euro are from understanding what has gone wrong. And until they can start to do that there is no chance whatsoever that they can begin to put things right.
Barroso was presumably referring to the sub-prime scandal which preceded the global banking crisis of 2008. This was indeed a disaster largely made in America. But to assert that Europe’s only problem is to have been ‘contaminated’ by US banks is obviously not credible. America’s property boom in the years leading up to 2007 was modest compared with those in Spain and Ireland, in which US mortgage-lenders played a negligible role. Neither does the sub-prime crisis explain why the Greek government spent years living beyond its means while not bothering to collect the taxes due to it.
The eurozone is in crisis because, as many including this magazine warned at the time, it forced very different economies with different fiscal and spending policies to share the same interest rate. No American stood over EU leaders while they devised the flawed single currency. Neither did Americans kidnap officials at the European Central Bank and order them to set an interest rate more appropriate to stagnant Germany than to what became the bubble economies of the south and west. Europe’s property boom and bust were not even influenced by over-excited estate agents in Florida: the process began before its US equivalent. There were already signs of it in Ireland in 1999, the year that the euro was created.
José Manuel Barroso shows no understanding of this whatsoever, even though he was prime minister of one of the bubble economies, Portugal, during the boom years. Or if he does understand what has gone wrong, he has decided that he is going to try to pass the blame elsewhere. Barroso went on to state that he hadn’t gone to Mexico ‘to take lessons in democracy or in how to run the economy’, which rather makes one wonder what is he doing there, other than escaping Brussels and soaking himself in the surf.
At the very least his ears might be open to the eurozone’s critics. The stench of decay emanating from the EU worsens with each new bailout. Barroso stands as a representative of an arrogant, unelected regime which feasts as its empire burns.
Wanted: revolutionaries
Britain has the best schools on the planet. This is not a matter of opinion. The international league tables show our privately educated pupils doing better in literacy, numeracy and science than those of any other sizeable country. Our only problem is how to extend this to those who cannot afford school fees.
That will be the subject of The Spectator’s third ‘schools revolution’ conference, to be held in Westminster on Tuesday. We will hear from Barbara Bergstrom, who set up Sweden’s leading chain of state schools and has now opened her first school in England. We will hear from Michelle Rhee, who did battle with the American unions and managed to get rid of a thousand underperforming teachers in Washington DC. Rhee wondered aloud why America did so badly in state schooling. ‘Now I know,’ she concluded after a while in her job. ‘It’s not about the children. It’s all about the adults.’
The adults in Britain have some thinking to do. Free Schools are emerging at a pitiful rate. It’s no use haranguing Eton, St Paul’s and Rugby to open multiple branches in Liverpool and Glasgow. They are charities — rapid and potentially risky expansion is not in their nature. Only entrepreneurs do this, and entrepreneurs operate best as profit-seeking businesses. Once a solution becomes obvious, there’s no excuse for waiting.
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