Since leaving the Cabinet, Liam Fox has acted as a cross between a scout and an out-rider for various of his former Conservative Cabinet colleagues. In a speech in Oslo tomorrow, he’ll argue that the only way to deal with the Euro crisis is for all of those countries who cannot realistically cope with the demands of the single currency to leave in one go. Otherwise, he argues the markets will simply pick the weaker countries off one by one.
Fox is certainly right that if Greece left, or was forced out, of the single currency, Spain and Italy would then find themselves under intense—and, probably intolerable—market pressure. But I suspect that the Eurozone lacks the political and economic awareness to make the kind of clean break that Fox is proposing.
This is worrying because as Fox says, the kind of austerity that the Greeks are being made to go through could all too easily end up boosting extremism there. Paul Mason, the economics editor of Newsnight and hardly a Foxite, was examining the parallels between Greece today and Weimar Germany just this weekend.
One other thing worth noting about the speech is the emphasis that Fox puts on the Arctic and security there in the face of a more authoritarian Russia. Fox says that he hopes post-Afghanistan when UK forces ‘recommence training for contingency operations, exercises in the Arctic will return as one of their staple activities.’