Europe needs an FDR to break the mould and bring prosperity
Under Sarkozy and Merkel, all Europe can look forward to is years of unemployment and falling living standards
WHILE most of the attention in Britain has been focused on the domestic political implications of the Cameron-Clegg split over Europe, the bigger, more important story is what the EU leaders actually signed up to last week.
As respected economic commentators such as Ambrose Evans-Pritchard in The Daily Telegraph and Larry Elliot in The Guardian have highlighted, 'Hooverism' - in other words, the politics of austerity - will now be enshrined in EU treaty law. It will no longer be possible for EU members to engage in deficit spending to try to stimulate the economy in times of recession: any government which breaks the harsh spending and borrowing rules faces automatic sanctions.
We shouldn't be surprised that it has come to this.
Back in the early 1990s, as European monetary union was being discussed in the British Parliament, Peter Shore, the veteran eurosceptic, warned that closer economic integration in Europe would lead to a new age of austerity. Joining monetary union, Shore predicted, would amount to "national economic suicide". How right he was.
Last week's Brussels agreement, while hailed by the EU elite, is actually terrible news for ordinary Europeans. If Sarkozy and Merkel get their way, all we can look forward to is years of austerity, high unemployment and falling living standards.
Far from there being any light at the end of the tunnel, Gerard Lyons, the chief economist at Standard Chartered, has predicted that the eurozone will contract by 1.5 per cent next year. Merry Christmas everyone.
It doesn't have to be this bleak. What is urgently required is a totally different approach - a break with Hooverism and the return of imaginative Keynesian solutions.
That means letting the Euro collapse - we can't get expansion and keep monetary union - and allowing eurozone countries to go back to their old currencies.
To get to this point we will need radical, new leadership in Europe. And the model for the new leadership should be Franklin Delano Roosevelt - America's greatest ever president.
FDR was a man brave enough to break with economic orthodoxy and set America on a different path. When he succeeded Herbert Hoover as president in