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This is no ordinary downturn for any European nation â€“ whether it is part of the stricken single currency or not
They’d never have said so, of course, but in a more ordinary slump ministers would have been quietly cheered by Wednesday’s figures recording the highest unemployment in 17 years. Polite concern would have been aired about the pain of economic rejection and families struggling with bills, and yet with the detailed data suggesting that we are now near rock bottom, behind closed Whitehall doors there would have been fond imaginings of the beginning of the end.
For the day after inflation was revealed to be easing off fast, there were â€“ on the face of it â€“ signs of employment stabilising, too. The total tally of jobs inched up, inactivity fell, and â€“ even as benefits policy cajoles disabled people and carers into signing on as jobseekers â€“ the dole queue lengthened relatively modestly. This is, to be sure, stabilisation of a dismal sort. Employment blackspots such as the north-east continue to darken; twice as many as before the recession now work part-time for want of a full-time post; and there is still no hope in sight for youngsters struggling to find a first footing in work. But in a more ordinary slump, it would fall to left-leaning economists to keep tabs on the rise in prolonged worklessness and to warn about the vast social toll this will impose. David Cameron and George Osborne, meanwhile, could cross their fingers and bet that containing unemployment without reducing it would prove good enough for them to prosper politically alongside the blackstuff â€“ just as their Conservative predecessors did in the 1930s and 80s.
This, however, is no ordinary downturn for any European nation â€“ whether it is part of the stricken single currency or not. Ticking away under the floorboards of the hoped-for recovery is a financial timebomb that a bickering continent cannot agree on how to defuse. With withering contempt for Greek democracy, Europe yesterday forced the presumed victor in pending elections, Antonis Samaras, to sign a pledge that the poll would not change a thing about the austerity programme. As crowds rage on Athens streets and a true great depression takes hold, it is no wonder that the heir presumptive felt obliged to send out an adviser to explain that he remained determined to add new pro-growth policies to the mix immediately after having signed in blood. If, or more likely when, such ambiguities cease to sustain the grudging standoff between Greece and its northern creditors, the nation will be on a slipway out of the single currency club.
With no legal exit route defined in any treaty, European and Greek courts might take different views on what this would mean for cross-border contracts denominated in euros. No one can be sure which legal view would prevail as Greece’s status within the EU as a whole would come into question. Nobody can be sure, either, whether or not Europe’s claimed financial firewalls are really adequate to check contagion spreading to Portugal, Ireland or indeed Italy, which is surely too big to save.
Ask an economist to tot up what all these known unknowns could mean for British jobs and growth in the event of a euro breakup, and some might venture a fresh 5% shrinkage of the economy. The more honest will confess that they have no idea, except to say that the effect would be very big and very bad.
Before Christmas, as a continent struggled to save its currency, Mr Cameron made a point of wielding a veto, even if it is now far from clear what in fact got stopped. Only yesterday, the Tory leader in the European parliament, Martin Callanan, went way beyond the official line in London by arguing that Greece must now be cut loose. There is a serious case to be made for Greece going its own way, but the argument is as finely balanced as it is fraught. Whatever else it may be, this is emphatically not a moment for posturing.
In the 20th century two generations of Britons learned to their cost that their fates turned on events beyond these shores. In the 21st, a new generation could discover that prosperity in general â€“ along with millions of individual hopes for a job â€“ depends upon Europe too.