Magazine article The Spectator

Summit of Arrogance

Magazine article The Spectator

Summit of Arrogance

Article excerpt

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, Jose 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. …

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