The dawn of a new year is usually a time of hope and ambition, of dreams for the future and thoughts of a better life. But it is a long time since many of us looked forward to the new year with such anxiety, even dread.
Here in Britain, many economists believe that by the end of 2012 we could well have slipped into a second devastating recession. The Coalition remains delicately poised; it would take only one or two resignations to provoke a wider schism and a general election.
But the real dangers lie overseas. In the Middle East, the excitement of the Arab Spring has long since curdled into sectarian tension and fears of Islamic fundamentalism. And with so many of the world’s oil supplies concentrated in the Persian Gulf, British families will be keeping an anxious eye on events in the Arab world.
Meanwhile, as the eurozone slides towards disaster, the prospects for Europe have rarely been bleaker. Already the European elite have installed compliant technocratic governments in Greece and Italy, and with the markets now putting pressure on France, few observers can be optimistic that the Continent can avoid a total meltdown.
As commentators often remark, the world picture has not been grimmer since the dark days of the mid-Seventies, when the OPEC oil shock, the rise of stagflation and the surge of nationalist terrorism cast a heavy shadow over the Western world.
For the most chilling parallel, though, we should look back exactly 80 years, to the cold wintry days when 1931 gave way to 1932.
The ultimate warning from history: If our political leaders fail to provide adequate direction the results, as demonstrated 80 years ago, could be catastrophic. Then as now, few people saw much to mourn in the passing of the old year.
It was in 1931 that the Great Depression really took hold in Europe, bringing governments to their knees and plunging tens of millions of people out of work.Then as now, the crisis had taken years to gather momentum. After the Wall Street Crash in 1929 — just as after the banking crisis of 2008 — some observers even thought that the worst was over.
But in the summer of 1931, a wave of banking panics swept across central Europe. As the German and Austrian financial houses tottered, Britain’s Labour government came under fierce market pressure to slash spending and cut benefits.
Bitterly divided, the Labour leader Ramsay MacDonald decided to resign from office — only to return immediately as the leader of an all-party Coalition known as the National Government, dominated by Stanley Baldwin’s Conservatives.
Like today’s Coalition, the National Government was an uneasy marriage. Sunk in self-pity and spending much of his time flirting with aristocratic hostesses, MacDonald cut a miserable and semi-detached figure. By comparison, even Nick Clegg looks a model of strong, decisive leadership.
The ultimate warning from history: If our political leaders fail to provide adequate direction the results,
as demonstrated 80 years ago, could be catastrophicn.
Should the eurozone collapse, as seems perfectly likely given Greece’s soaring debts, Spain’s record unemployment, Italy’s non-existent growth and the growing market pressure on France’s ailing economy, then the consequences would be much worse than when Britain left the gold standard.
The shockwaves across Europe — which could come as early as next spring — would see banks tottering, businesses crashing and millions thrown out of work. For British firms that trade with Europe, as well as holiday companies, airports, travel firms and the City of London itself, the meltdown of the eurozone would be a catastrophe.
Read more:
http://www.dailymail.co.uk/news/article-2080534/Will-2012-new-Dark-Age.html#ixzz1i58VYsdJ
