It is hardly surprising that we have little time for reflection, as the New Year dawns, about matters beyond our own back yard. The “tidal wave” of Omicron has struck, the Nightingale hospitals are understaffed, the PCR tests have run out, the hospitality industry has been hit by panic, and large parts of the economy seem barely able to function as hundreds of thousands self-isolate. And yet, however bad matters of public health might be, and however diverting the implosion of possibly the most dishonest and incompetent government in British history, there is scope for life to get much, much worse.
Recently, I found myself in an intelligent conversation with a minister in the present government. That itself was something of an achievement: one reason why the government is so bad is that the present prime minister has as far as possible surrounded himself with yes-men and deep mediocrities. His hope, perhaps, was that they would be slow to recognise his laziness, unseriousness and inability to cope with his job; and that their inadequacies would distract the electorate from focusing on him. My interlocutor slipped through the net — and had been thinking about the wider world quite deeply.
His conclusions were depressing. They were, in short, that it is an exceptionally dangerous place, far more so than most realise; and that however grim 2020 and 2021 were, 2022 could be the most perilous year, particularly for the West, since the end of the Cold War.
We talked through his reasons for this gloom, beginning close to home. Since it was at the forefront of most people’s minds, we discussed the fear, promoted by the government, that the National Health Service could collapse as a result of the supposedly highly-transmissible Omicron variant. Before the NHS reached that stage (with its inevitable effects on public morale), action would have to be taken that would badly affected the economy here, with the promise of a renewed taxpayer-funded furlough scheme if businesses were forced to close. The Conservative party was divided over the need for such measures, not least because the lethality of the Omicron variant had yet to be proved. Now, although the rate of infections has reached record levels, the rate of hospitalisations and deaths lag far behind. This is encouraging a substantial cadre of MPs to argue that we must learn to live with Covid, supported by a vaccination programme. Should Boris Johnson remain prime minister, such dissent in his own party would, if his form is any guide, lead to an unclear and confused response by the government and therefore by other agencies. That, too, would be costly, but it would be only the start.
The new wave of Covid has attacked Europe, disrupting “normal” life. Even “rich” nations such as Germany (where the cost of the pandemic now exceeds €2 trillion, and inflation is above the EU average of 2.2%) are feeling the financial effects of a long period of subsidising non-productivity; in poorer countries in southern and eastern Europe, the prospects are even more stark, and tempers are fraying. Italy has a budget deficit of around 10%, and a new wave of restrictions will cause growth targets to be missed. Inflation will drive up interest rates across Europe, and the higher cost of servicing debt would put pressure on everyone with a bank loan or a mortgage: a factor behind, it seems, the Bank of England’s reluctance to raise rates in Britain, a reluctance that cannot be maintained indefinitely.
Poland and Hungary have both been sniping with Brussels over what they consider to be undue EU interference with their internal affairs — Poland about its justice system, Hungary about migration. Both countries, with an eye on the money that Brussels contributes to them — stress in public their commitment to a future within the EU, but an internal debate is being cranked up in both countries about when a breaking point will come, as it did in Britain in 2016. The EU has learned nothing from Brexit — quite the reverse, it seems — which is always a sign that history may repeat itself.
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