Cable’s euro war warning

BUSINESS SECRETARYVince Cable has warned that Europe could be plunged into conflict if the euro collapses.

The senior Liberal Democrat said the consequences would be “incalculable” and said there is “no automatic guarantee” that Europe would not disintegrate into conflict.

“I think we need to take stock that if the eurozone were to unravel in a way that destroyed the European project — and there is a risk that could happen — the consequences would be absolutely incalculable,” Mr Cable said.

“We tend to forget, until we were reminded last week of that Nobel Prize, the European project was constructed in order to rescue Europe from extreme nationalism and conflict.

“There is no automatic guarantee that won’t return.”

Mr Cable spoke during an event at the Cheltenham Literature Festival called Austerity, the Euro and Us.

The minister described the euro as “very valuable” and has to be maintained — otherwise Britain would suffer.

“We are not in the eurozone so we cannot directly influence it. We will be heard very loudly if it does unravel,” Mr Cable said.

“My sense is that the Germans in particular realise how much is at stake.

“A series of sensible measures have been taken in recent months.

“I think deep down there is enough common sense and a sense of survival to pre- vent this getting out of control. If it does, I’m afraid the consequences for us will be awful.”

The Business Secretary said the challenge for the Government over the next year is how to balance the need to stimulate growth while maintaining confidence on the money markets.

“How does Government do that without at the same not undermining the reputation we have acquired for being able to manage the Government’s finances sensibly and maintaining the confidence to lend to us?” he said.

“Contrary to a lot of perception the Government is being quite flexible in the way it is cutting the budget deficit.

“We started off aiming to deal with the structural deficit in four years and we’ve now said we’ll deal with it in six because the economy has slowed down making it more difficult. It’s not far from whatAlistair Darling set out to do... he said seven years.

“We’ve also said we want to create conditions under which the Bank of England can support the economy through monetary policy.

“What we are now beginning to realise is that this aggressive monetary policy, which was one of the unique features of this crisis, is probably reaching diminishing returns and having all kinds of unintended side effects.”

Business Secretary Vince Cable has issued a dire warning about the failure of the European experiment.