Alistair Darling says economic crisis is worse than 2008
Former Chancellor Alistair Darling has warned that the economic crisis is worse than 2008. Photo: Peter Macdiarmid/Getty Images
FORMER chancellor Alistair Darling has said the current economic crisis is now worse than in 2008 when the government had to begin its rescue of RBS, HBOS and Northern Rock.
In a bleak assessment of the UK’s hopes of recovery, the Edinburgh MP said the country faced “years of bumping along the bottom” unless strong action was taken. And he warned that no leader in Europe was taking control of the financial crisis.
“Three years ago we came within hours of the banking system collapsing,” he said. “We had to take extraordinary action to stop our economy going from recession then depression. It worked.
“The situation we face today, in my view, is much, much worse. A banking crisis is relatively straightforward to deal with. We had to recapitalise the banks, we had to make sure there was enough money in the system, we had to make sure other countries were doing the same thing.
“What we are now dealing with are question marks about the solvency of whole countries, and not just small countries like Greece, but larger countries too. We really have a very serious situation.”
The Labour MP, who was speaking at the Journalists’ Charity lunch in Glasgow, took a swipe at the way decisions are being made across the EU as countries try to save the euro and national economies.
He also said the crisis had speeded up the process of “the economic centre of gravity moving west to east”.
“We have a situation in Europe where they know their banks need recapitalising but they’re not going to do it until next summer,” he said. “They know the Greek solution is not going to work because even after eight years Greece is going to have more debt than when it started out. Right across Europe, here included, there is absolutely no growth.
“The real frustration here is that all these problems are fixable. But there is a complete absence of leadership at the moment.”
The Labour MP said that in 2008 former prime minister Gordon Brown had locked several of key players in a room until a solution was found and suggested a similar approach was now required.
He said: “I cannot understand why Angela Merkel, the chancellor of Germany, is prepared to stand back and possibly watch the euro, which is a political project that’s been grown up over many, many years, run the risk of that falling apart.”
Mr Darling said Europe’s austerity programmes were having the opposite effect to that intended.
He also spoke directly to the SNP about Scotland’s role in the banking crisis, which rocked Edinburgh-based financial institutions such as RBS and Bank of Scotland.
Recapping his experience as chancellor, he said: “If there are any Nationalists in the room, let me tell you this. This didn’t happen – the crisis that hit these two banks – because of what was happening in the sub-prime market, or in New York, or in London, it happened because of bad decisions being taken 40 miles away on the other side of the M8.”
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There are 48 comments to this article
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The Answer
Saturday, November 26, 2011 at 09:23 PMCommenting Mr Salmond said: ___________________________ "The Royal Bank of Scotland and HBOS/Bank of Scotland are two major Scottish success stories." _______________________ “Indeed, they are the two biggest Corporation Tax payers in the UK - these two companies alone pay about the same amount in Corporation Tax as GERS allocates to the whole of Scotland" ____ http://www.snp.org/media-centre/news/2007/mar/salmond-comments-banks-success
e2toe4
Saturday, November 26, 2011 at 07:37 PMAlistair Darling is not a numpty, and if any of the bloggers here have had to sit in rooms with the heads of the world's most powerful companies, and nation states, and managed to force them to do something they may not have wanted to do,-------- then just let us all know when and where that was. ++++++++++++++ +++++++++++++++ ++++++++++++ It also does Scotland no favours at all to persist in the relentless stupidity of the 'If not for us, then against us" dichotomy in which all Goodor bad depends upon the Union---or all good or bad will arrive with independence. +++++ +++++++ ++++++ +++++++ Alistair Darling had to go into rooms where youthful idealism just isn't enough-- and what is needed is intelligance, intellectual ability and some wisdom derived from experience to try and pursue acheivable goals. +++++++++ +++++++ +++++ +++++++++++ ++++++++ So I feel he deserves respect although also has to accept some blame. However Alistair Darling was making the point that one has heavy touch regulation for the 'little kids', needing guidance. The Light Touch regulation was meant to be for the adults, Sir Fred Goodwin and Andy Hornby (et al) were meant to be responsible adults able to tell between right and wrong. + +++++++ ++++++ +++++++++++ ++++++ ++++ +++ ++++ We now know they were greedy and selfish kids and our assumprtions on how to regulate banks have changed, and I hope this change will soon be evidenced by real change in regulations, of which we have seen zero at this point.. +++++ +++++ ++++++++++ +++++ +++ ++ + But I don't think that understanding was clear back in 2006. But in any case I'll be interested to see which set of bravehearts will attack the above argument, and upon what basis they will ground any attack.
sprog
Saturday, November 26, 2011 at 05:10 PMLabour back benchers Frank Field,, Austen Mitchell and Micheal Meacher, signatories to a letter printed in the Guardian dated 13th March 2009., had this to say about the Financial crisis******'...The current collapse is due, not to the US sub-prime crisis....but to the excesses of... 'de-regulated market fundamentalism'.. that New Labour ill-advisedly championed for so long and who were responsible for the creation of a new regulatory authority in 1997 which exerted the weakest regulatory supervision of all the other western economies, on the instructions of the Treasury.***** Mr Darling was an influential member of the Blair cabinet at the time and a close confidant of Gordon Brown who was as we all know the Cahncellor of the Exchequer,.
Finnzz
Saturday, November 26, 2011 at 04:39 PMSuch as shame that Brown and Darling did everything to ensure that the regulation of the banks did not follow "regulations suitable to a Scottish financial sector with its outstanding reputation for probity" and instead was allowed to follow the Westminster-controlled FSA guidance. Guidance and controls dictated by these two Labourites designed purely to maximise the taxes flowing into Westminster coffers, and to finance the discredited PFI beanfeast.
The Answer
Saturday, November 26, 2011 at 03:05 PMMr Alex Salmond (Banff and Buchan)__________________________ "The Minister seems to be telling us that successful companies do not get taken over.___________________________________ Given the profitability, success and 'strategic importance' of the Royal Bank of Scotland to the Scottish economy,________________ does the Minister welcome the fact that the takeover threat to the bank appears to have receded in the past two weeks?" http://www.theyworkforyou.com/debates/?id=1996-06-19a.873.2&s=salmond+royal+bank+scotland+scottish#g874.0
The Answer
Saturday, November 26, 2011 at 02:46 PMThe First Minister, Alex Salmond, also appears to have forgotten saying in the 2007 campaign:________________________________ “We are pledging a light-touch regulation suitable to a Scottish financial sector with its outstanding reputation for probity, as opposed to one like that in the UK, which absorbs huge amounts of management time in ‘gold-plated’ regulation.”________________ http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110504/debtext/110504-0001.htm
The Answer
Saturday, November 26, 2011 at 02:07 PMCommenting Mr Salmond said:_____________________________ "The Royal Bank of Scotland and HBOS/Bank of Scotland are two major Scottish success stories.___________________________ Indeed, they are the two biggest Corporation Tax payers in the UK - these two companies alone pay about the same amount in Corporation Tax as GERS allocates to the whole of Scotland"_______ http://www.snp.org/media-centre/news/2007/mar/salmond-comments-banks-success
whitstomatowiu
Saturday, November 26, 2011 at 01:08 PMDougie Bader, ElieKing Cammers, Sailor Mallan,-------------------------------You have told us you worked in economics all your life.-----------------------------------When Prudence and Mr Darling handed over all our money to the banks should they have put some currency stipulation on ? instead of what they done and the bankers handing out bonuses to themselves.
Tibially Challenged Douglas Bader
Saturday, November 26, 2011 at 12:51 PM4 - Cynicus - "He forgot to add: "......as a result of the regulatory regime devised by Macavity and me."" Really Cyn? Why did other countries banks get into such a mess then and also needed bailing out? Also, why did Salmond call for less banking regulation than the UK's?
Tibially Challenged Douglas Bader
Saturday, November 26, 2011 at 12:46 PM27 - "Now apparently this was not the case at all, and it was all the fault of the SNP in Edinburgh" For god's sake read the article Biffo. It was because of management decisions taken by RBS in Edinburgh such as the takover of ABN. You know all about the takeover of ABN don't you Biffo? After all, you did claim RBS' takeover of ABN had little to do with RBS being bailed out. Oink! Oink! SPLAT!
Gibbo
Saturday, November 26, 2011 at 12:03 PMHe would say that and he should know he he and his crony Flash Gordon caused it all, including selling our gold, roll on independence so as we can contol our own finances and resources.
Kinghob
Saturday, November 26, 2011 at 11:44 AMAlistair Darling is a labour ex chancellor twot with little or no predictive qualities and certainly is proven to know 'naff all' about the economy!
mickymonkey
Saturday, November 26, 2011 at 11:29 AMEveryone but you eh Mr Darling - hang your head in shame for what is happeningabout to happen to the ordinary folk that you once claimed to care for. Labour stink of hypocrisy!
trenchchat
Saturday, November 26, 2011 at 11:09 AM#34 What I am saying, in a nutshell is: AD - you had your chance to put into practice all that stuff that you believed in as a young socialist, and you were offered that chance unlike many of us, but you blew it old son, and let us all down.
trenchchat
Saturday, November 26, 2011 at 11:01 AMAD, when he was an up and coming star of Lothian Regional Council was a decent socialist who had a good grasp of Marxist economics, ie that the capitalist system, by its very mode of production and structure had periods of slump that followed periods of boom and that the slumps would get to a point that no amount of remedial measures could fix a broken system including bailing out banks with public money and so called nationalisation that left the same bosses who caused the crisis still at the top. AD knew very well that the credit boom which fuelled the 15 year boom was based on ficticious money and the credit bubble was bound so burst sooner than later but let it go on and on and on. Incredibly Brown, who understood this basic fault line of the system as much as Darling and the Bank of England came out with the statement, during the period of massive credit, to state that the era of bust and boom were gone! Darling and Brown were rewriting history and had solved the problems that had beset capitalism for 150 years! AD and Brown were not solely responsible for the US bank crash or the fall of the Euro, but they still have a lot to answer for! They were elected as socialist MP's , in theory, but when it came to the practice of carrying out their principles they both bowed to the market with the terrible consenquencies that we now suffer. So AD - shut up! And no! - we should have let RBS and Bof S go bust as we would be better off in the long term.
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