Combining two fashionable themes of the moment – the rise of Nick Clegg and the travails of the euro – here is a link to a debate I did with Clegg for Prospect magazine, back in 2002, on whether Britain should join the euro. I was against, he was in favour.
Reading back over the copy, it seems to me that neither of us really anticipated the future course of events. Still, given the Greek imbroglio, I think I was closer to right than he was.
I thought George Papandreou’s statement conceding defeat and accepting an IMF programme for Greece was elegant and dignified. “We are on a difficult course, a new odyssey . . . but we have charted the waters and we will reach our destination safely,” said the Greek PM.
But I do wonder whether Greece is, in fact, pretty soon going to hit choppy water and rocks. I was in Latvia last summer – a country that had already had to submit to an IMF-EU programme, in return for emergency funding. The consequences are extremely severe. It’s like watching a whole country go through the economic equivalent of chemotherapy.
The Latvians had to put up with double-digit cuts in wages and pensions, all of which deepened an already bad recession. I was surprised and impressed by the stoicism with which the Latvians took their harsh medicine. But I fear that the Greeks will not be so accepting – and there could soon be trouble on the streets. Papandreou has already warned those who might want to drive the IMF out under a hail of bricks.