For years, George Osborne cut a rather lonely figure on the European stage. He was portrayed as the only major statesman who advocated austerity. But finally he has some company. Another European leader has burst away from the pack and is promising to freeze all welfare benefits for a year, cut health spending, cut taxes — and to be honest with the people by saying that ‘we cannot live beyond our means’. The Chancellor can derive much pleasure from the fact that his new ally is François Hollande.
Until now, the French president has been the great hope of Keynesians the world over. He revelled in this celebrity. He was out to prove that, with just one more push from the government, the economy could be launched upwards. He promised ‘a new start for Europe’ — indeed, ‘a new hope for the world’. If the world’s eyes were on him, so much the better. ‘I’m sure in a lot of European countries there is relief, hope that at last austerity is no longer inevitable,’ he declared.
Ed Miliband was full of such hope, and rushed to Paris to become the first British politician to meet Hollande at the Elysée Palace. Miliband solemnly announced that the centre-right axis between Cameron and the defeated President Sarkozy had failed. ‘The tide is turning against an austerity approach,’ he said. A Labour spokesman briefed about ‘failed Camerokozy economics’.
Miliband emerged from talks saying he and Hollande had found common cause: ‘We are in agreement in seeking that new way that needs to be found.’ The great experiment was about to begin.
Hollande’s ‘new way’, however, turned out to be the same old profligate way that had caused the debt crisis in the first place. Mr Hollande’s spending succeeded only in stimulating the French national debt.
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