The Economy

In a moment I will deal with the parallel with the United Kingdom. Let me say first, however, that the lesson of history shows that it is not possible to deal with a solvency crisis by providing liquidity package after liquidity package, because that does not reach the heart of the issue. On the contrary, it makes the position worse and worse. At some point people will have to face up to that. Package after package has been agreed, but that has not worked. The debt has not gone down; it has gone up. History teaches us that three things are necessary to the credibility of a plan, whether it involves monetary policy or fiscal policy. First, the plan must be for the medium term; secondly, there must be political support for it; and thirdly, it must work. If it does not work, that will eventually rebound on political support, as we have seen in Greece in recent weeks.