The Chinese curse - "May you live in difficult times!"

I have read a series of excellent articles recently. For instance, in the Guardian there is yesterday's hatchet job against Labour minister Hazel Blears by George Monbiot. Today, you can read in the Daily Mail an article by Peter Oborne drawing from the comments by Labour minister Ed Balls that we will suffer in the UK the worst recession in a hundred years. Then, in the Daily Telegraph the American pundit
Irwin Stelzer opines today about the possible future of the UK and its choices in store.
For instance, can we afford a special relationship with the United States if we don't
invest in the military? Will there be a choice between an independent nuclear deterrent or pensioner care?
I think the underlying connection between Monbiot, Oborne and Stelzer, (besides being talented columnists) is that we have reached a watershed. We (or the politicians) are going to make some hard choices. They could fudge but this would probably lead to domestic unrest.
Monbiot savages Blears but she is not the only incompetent politician in the cabinet (the venal Jacqui Smith step this way). Oborne notes that the provincial solicitor background of Alistair Blair does not prepare him for the role of national finance chief in crisis. Stelzer cites Gordon Brown's doleful performance in Basra, which has questioned our reliability as an U.S ally.
So if the situation is so bad and we don't need incompetent ministers, then would Brown or Cameron appoint Vince Cable as Chancellor of the Exchequer? It might help confidence. If the British economy is possibly going to fall by 4 pct according to Bank of England governor Mervyn King (another friend of Brown?), is there going to be measures to promote small businesses and employment? This might go against the grain for Brown, who has just wanted to raise more and more taxes from the British economy. (A rise in national insurance anyone!).
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So Gordon Brown looks part of the problem rather than part of the solution. I don't think we can avoid taking an axe against public sector expenditure. The Irish government is already cutting public sector pay and I expect we will have to do the same (obviously not before the election).
Commentators say we are going to have to make defence cuts and they look at the savings if we scrap our nuclear deterrent, which faces a costly upgrade. I doubt this will happen given the number of countries joining the nuclear bomb club. We might also have to invest in the conventional armed forces just for defensive purposes rather than to operate in far-flung areas such as Afghanistan and Iraq. However, there might have to be some tough choices on the future of the
RAF.
Labour has invested heavily in welfare, health and education. It would probably want
to cut spending over time by inflation. I would try and use the benefits paid to young people by getting them into some type of education, training and voluntary service. I don't think we can afford to give housing benefit to foreigners. Unfortunately, the NHS is going to have to charge A*E users, if they are there due to
their own culpability. These are old chestnuts but they don't go away. Why pay tax credits to people living in Poland?
We are going to have to review our relationship with the European Union. Letting our
currency collapse to block off imports was not very EU friendly and drew complaints
especially from France. The EU has not worked well in a crisis with some monumental bickering. However, either we are going to have to be fully committed, which will probably mean joining the euro or completely out of it. If we are going to be a poor nation then there is no point making ourselves poorer contributing to French
farmers.
Despite sending lots of money and bureaucrats to Brussels, the bail-outs of the European banking and car industries have followed national lines. The French want to rescue Renault but not its plant in the Czech republic. This contrasts with the various banking negotiations here with the Spanish banking group Banco Santander treated as a domestic institution.
In many respects our decision to stay or leave the European Union will be swayed by the decisions of France and Germany. Will Paris and Berlin pull out the stops to rescue countries such as Ireland, Spain and Italy? If they do, then in a few years I will think the main political parties will support a referendum calling for the United Kingdom to replace the pound with the euro. Membership or not has not prevented mass unemployment in Spain and in the UK but sheltering under the protection of a possible reserve currency might prove too attractive.