I read informed comments today, one saying that the British housing market will never recover, and one saying something even worse about the Spanish one.
The former surprised me and I had to check that the member of the BOE monetary committee who made the comment had indeed used the word Never.
The Spanish commentator did not surprise me, not at all; when a few of us made predictions about the Spanish housing market for 2011 earlier this year, I said I expected a 30% fall in house prices this year. I believe that target has already been reached, and it makes me hellishly sad because I own a house here in Spain.
What has it got to do with the Eurozone? Everything, in my opinion. Currently, the zone in unbalanced, the southern members are dragging it down, for a myriad of reasons.
There is one simple solution. The large UK economy should join with Germany, France and the others to show European solidarity to the world. The markets would soon turn their attention elsewhere and allow the Med countries to catch up.
Spain, especially, is trying hard, but it takes time. The adjustments are painful, as is shown by the falling property market.
It’s not Merkel who holds the key to a world recovery, it’s Cameron (and Clegg, if you believe in fairies).