Back in the day, when I was a wipper-snapper account manager, I was given responsibility for the launch of Business for Sterling .
It was an anti-Euro group of businesses, who, for various reasons, were against most things Johnny-foreigner – and anything that might lead to deserting our beloved Sterling.
Now, being a worldly kind of lad, I quite liked the idea of European integration. But, being an economist, I couldn’t see any way monetary union could work without large-scale capital transfers across the entire continent. Germany, I thought, will have to hand large wodges of cash to the likes of Italy. In the words of the song: “It would never have worked”.
Now, far be it from me to say I told you so. Because, if I’m honest I had mixed feelings on the subject back in 1998; even while I was writing press releases, staging events and enduring long dark tea-times-of-the-soul journo-bothering.
How well I still recall my wizzy photocall involving tyre-sized ‘maggies’ pound coins (‘cos they’re thick, brassy, and the think they’re a sovereign – boom, boom).
Nevertheless – here is the news. Right-wing, neo-classical or even neo-liberal ideologies cannot support the necessary levels of wealth transfer. To them this smacks of socialism, or meddling in the market, or indeed, unsavoury acts involving cats, dogs and the coming Armageddon.
So now large wodges of cash are finally winging their way across the continent. Sterling has dodged the Euro, but not the economic car-crash.
But one final thought. Bank bailouts won’t help. Why? Because the experience of recent years in both Europe and South-East Asia, is that the new liquidity flows turgidly into banks’ red-hued balance sheets and then hits a wall…dam.
In other words, the money will save the banks, but not the economy.