Britain turns into Poundland
One thing's clear after yesterday's abject performance from Alistair Darling - and you will excuse, I hope, an untypical lapse into the vernacular - we are, as a country, in the shit. Not just in the shit, but choking and spluttering in a Loch Ness of slurry. The chancellor can count himself fortunate that, whatever the outcome of the election, he won't be the one having to take the measures necessary to tackle the deficit crisis - because the man who does, whether George Osborne, Ed Balls or even Vince Cable (a good possibility if there's a hung Parliament) is likely to be very unpopular indeed.
A perceptive analysis by Carsten Volkery, albeit well-larded with Teutonic schadenfreude, appears in Der Spiegel. Tim Montgomerie points it out. He also notes the clever double entendre in the German title: Großbritannien schrumpft zur Mini-Macht means, literally, "Great Britain shrinks to a mini-power", but "mini-macht" also sounds rather like the term for a corner shop ("mini-markt").
In other words, Britain is now Poundland - a shrinking country with a sinking currency.
Volkery's piece is thus far only available in German - or, for readers without any German, in the gobbledegook served up by Google's auto-translator. Here's a paraphrase:
Volkery then looks at the decisions made by Alistair Darling in the face of the record £178 billion deficit, noting that he "refrained from harsh cuts" because of the looming election. As for the future, Volkery predicts that by 2015 the UK will no longer number among the world's top ten economies - falling behind even Russia, Brazil and Canada: an "alarming" decline. Darling has remained vague about future cuts in the face of threats to the country's vital AAA credit rating, instead going for a populist but largely symbolic attack on bank bonuses. And Volkery wonders, as many do, where on earth future growth in the economy is going to come from.
The three major engines of growth in the past decade - financial services, the property market and public sector expansion - are all finished for the time being, he suggests. And after the de-industrialisation of the Eighties and Nineties - which continued under Labour - there's not much else. Labour and Conservative politicians keep talking up the green economy, but here Britain lags behind other major countries. The strength of the financial sector, he concludes, allowed the rapid expansion of the public sector and both disguised underlying the weakness of the economy: now the country is cruelly exposed.
The piece is more than a little gleeful, and I don't know why Volkery thinks the housing market is so weak. He also displays a typically German preference for industrial manufacture over other (equally valid) forms of wealth-generation. But his general analysis rings chillingly true. Darling got a big laugh yesterday when he claimed that "we make these decisions from a position of strength". It could be he know's the game's up and was injecting a dash of gallows humour into the proceedings; more likely, I think, that Gordon Brown, a stranger to irony, insisted the phrase went in. It was almost a Ceaucescu moment.
There was more pessimism on display in the Economist's Bagehot column, which noted how the Empire still casts a long shadow on national life. The highlight is this savage dissection of the psychology of Brown's Britain:
Gordon Brown's most un-British obsession with "Britishness" certainly falls into this category - unlike Cool Britannia, which was really just a bit of froth. Even at the time it seemed as hubristic and empty as the Dome that was its symbol, yet that didn't really matter because it tasted like the head on a pint of Guinness. Now that the bubbles have evaporated, it is evident that there never was any beer.
Which raises an interesting question about the next election. Given that whoever wins will be faced with the biggest mess to have confronted an incoming government since the end of the Second World War, and with it the near certain prospect of deep unpopularity, wouldn't the wisest long-term political strategy be to try very hard indeed to lose?
A perceptive analysis by Carsten Volkery, albeit well-larded with Teutonic schadenfreude, appears in Der Spiegel. Tim Montgomerie points it out. He also notes the clever double entendre in the German title: Großbritannien schrumpft zur Mini-Macht means, literally, "Great Britain shrinks to a mini-power", but "mini-macht" also sounds rather like the term for a corner shop ("mini-markt").
In other words, Britain is now Poundland - a shrinking country with a sinking currency.
Volkery's piece is thus far only available in German - or, for readers without any German, in the gobbledegook served up by Google's auto-translator. Here's a paraphrase:
London - The United Kingdom is anticipating dark times. In the coming years cash-strapped local authorities could be forced to ration the streetlighting, reports the Financial Times. Shopkeepers could be asked to pay for the police themselves. And the public would have to wave goodbye to amenities from libraries to swimming pools.
Welcome to formerly booming Britain. With the disastrous state of the public finances, not only local government is threatened with cutbacks. The reason is that the economic crisis has hit the island far more than other European countries. Britain is the only country in the G-20 group of leading industrial nations, which has not yet come out of recession. In the third quarter of 2009 the economy for the fifth consecutive time has shrunk. For the current fourth quarter, the long-awaited turnaround is expected, but growth will remain weak for the foreseeable future.
Volkery then looks at the decisions made by Alistair Darling in the face of the record £178 billion deficit, noting that he "refrained from harsh cuts" because of the looming election. As for the future, Volkery predicts that by 2015 the UK will no longer number among the world's top ten economies - falling behind even Russia, Brazil and Canada: an "alarming" decline. Darling has remained vague about future cuts in the face of threats to the country's vital AAA credit rating, instead going for a populist but largely symbolic attack on bank bonuses. And Volkery wonders, as many do, where on earth future growth in the economy is going to come from.
The three major engines of growth in the past decade - financial services, the property market and public sector expansion - are all finished for the time being, he suggests. And after the de-industrialisation of the Eighties and Nineties - which continued under Labour - there's not much else. Labour and Conservative politicians keep talking up the green economy, but here Britain lags behind other major countries. The strength of the financial sector, he concludes, allowed the rapid expansion of the public sector and both disguised underlying the weakness of the economy: now the country is cruelly exposed.
The piece is more than a little gleeful, and I don't know why Volkery thinks the housing market is so weak. He also displays a typically German preference for industrial manufacture over other (equally valid) forms of wealth-generation. But his general analysis rings chillingly true. Darling got a big laugh yesterday when he claimed that "we make these decisions from a position of strength". It could be he know's the game's up and was injecting a dash of gallows humour into the proceedings; more likely, I think, that Gordon Brown, a stranger to irony, insisted the phrase went in. It was almost a Ceaucescu moment.
There was more pessimism on display in the Economist's Bagehot column, which noted how the Empire still casts a long shadow on national life. The highlight is this savage dissection of the psychology of Brown's Britain:
Beneath all this is the peculiar British combination of bragging and bewilderment, an air of expectations great but unmet and of unrealised specialness. It is hard to think of another country so keen to magnify its accomplishments (everything must be "the best in the world"), yet also to wallow in its failings; so deluded and yet so morbidly disappointed. Every recent prime minister has struggled to overcome this sense of thwartedness and decline, and to come up with a notion of Britishness to replace the defunct imperial version. Mr Blair tried Cool Britannia. It flopped. The gloom may be almost as acute now as it was in the late 1950s or 1970s.
Gordon Brown's most un-British obsession with "Britishness" certainly falls into this category - unlike Cool Britannia, which was really just a bit of froth. Even at the time it seemed as hubristic and empty as the Dome that was its symbol, yet that didn't really matter because it tasted like the head on a pint of Guinness. Now that the bubbles have evaporated, it is evident that there never was any beer.
Which raises an interesting question about the next election. Given that whoever wins will be faced with the biggest mess to have confronted an incoming government since the end of the Second World War, and with it the near certain prospect of deep unpopularity, wouldn't the wisest long-term political strategy be to try very hard indeed to lose?
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