Europe on brink of another financial crisis, Darling warns
Austerity has made things worse, not better, says former chancellor
John Rentoul is chief political commentator for The Independent on Sunday, and visiting professor at Queen Mary, University of London, where he teaches contemporary history. Previously he was chief leader writer for The Independent. He has written a biography of Tony Blair, whom he admired more at the end of his time in office than he did at the beginning.
Sunday 01 April 2012
Europe is in the eye of an economic cyclone, with a fresh storm about to hit vulnerable countries, the former chancellor Alistair Darling has warned.
Mr Darling, who accurately predicted in 2008 that Britain was on the brink of the worst economic downturn for 60 years, said European Union leaders should not be lulled into thinking that the worst of the eurozone crisis is over.
In a lecture to students at Queen Mary, University of London last week, the Labour MP said the situation in Spain, where the centre-right government is imposing severe budget cuts and a general strike wreaked havoc on Thursday, should trigger alarm bells across the EU.
The French President, Nicolas Sarkozy, claimed last month that following agreement on a fresh EU bailout of Greece, the eurozone was out of the woods. And David Cameron and George Osborne have insisted that Britain's strategy to push on with austerity measures has helped stabilise European economies. By contrast, Angela Merkel, the German Chancellor, has warned that Europe remains in a "fragile situation" and that the crisis is far from over.
Mr Darling told the university's New Labour in Government class: "Part of the problem with Europe is that a lot of them took the view that that this crisis is now behind us, therefore this is a time to visit austerity, whereas the countries who are going to be most hit by austerity [like Spain] are not out of the crisis at all."
"I think we're in a lull in Europe at the moment. It's rather like going through cyclones. You get in the middle and you think, great. And then you forget the other side of it."
Mr Darling urged the British government to do more to stimulate the economy until there were clear signs of recovery. "In my view it's clear: the Government should support the economy through stimulus until the economy is clearly recovering. Then you start getting the borrowing down. But you shouldn't be carrying very high borrowing and very high levels of debt – there's nothing good in that in the long term."
Mr Darling faced a backlash from Gordon Brown's Downing Street when he warned in an interview in August 2008 that Britain was on the brink of the worst economic storm since the 1930s. Yet within weeks he was proved right by the collapse of Lehman Brothers, and within months the country plunged into recession, from which it is still struggling to recover.
Wellcome Image Awards: The most striking images from the world of science, including breast cancer cells under chemical attack and a photographer’s own kidney stone
Missing Malaysia Airlines plane: 'All passengers' under investigation, police say
Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
Oscar Pistorius murder trial: Athlete repeatedly sick as court hears 'graphic details' of Reeva Steenkamp's post-mortem
How climate change helped Genghis Khan: Scientists believe a sudden period of warmer weather allowed the Mongols to invade with such success
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
- 1 Pakistan vs Paul Smith: Sandal-wearers bemused by famed British designer's attempts to sell traditional Peshawari chappal-style shoes for the distinctly untraditional sum of £300
- 2 Family forced to flee home after discovering 'terrifying' nest of spiders in bananas
- 3 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 4 Russell Crowe's Noah banned in three Arab countries before worldwide premiere
- 5 Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
£20000 - £23000 per annum: Inspiring Interns: Our client specialises in creati...
£30000 - £50000 per annum + Very Competitive Salary: Austen Lloyd: Private Cli...
£30000 - £35000 per annum + Very Competitive Salary: Austen Lloyd: Residential...
£1000 per month: Inspiring Interns: The company works with Tier 1 FTSE 100 Ban...