I am in one sense I am pleased the UK is holding out against some aspects of the EU deal proposed by Merkel and Sarkozy. As I have argued, that deal is dire for democracy.

At the same time I loathe his reasoning – that puts the City of London at the core of concerns.

It leaves me strangely conflicted.

What is so obviously true is that with low interest rates, mass unemployment and a crisis of hopelessness sweeping Europe, whilst we know that at the same the environment is being trashed, the we need a Green New Deal for Europe.

And that such a Green New Deal for Europe has to reflect, respect and even encourage diversity within a framework of mutual respect on which we can all agree.

That’s so far from what’s on offer. No wonder the politicians in Brussels are failing.

From today’s Guardian, from my Green New Deal colleague Colin Hines:

Mervyn King is right that the UK is looking over an economic abyss (Britain in grip of ‘worst ever financial crisis’, 7 October), but giving greedy, tight-fisted banks a further £75bn in the hope that this time they will lend enough to business is a fantasy. Quantitative easing should instead have been used to increase economic activity and hence jobs and business opportunities. Without that, who is going to want to borrow when for many businesses the real crisis is increasingly a shortage of sales and not a shortage of capital.

The Bank of England could have started to tackle this demand deficit, had it used a substantial percentage of the £75bn to finance a green new deal to make all UK buildings energy efficient. This would have helped kickstart the economy by creating hundreds of thousands of jobs where people actually live. King admits he will probably need a QE3, but to be third-time lucky he should make it a green QE3. It could even be nicknamed plan B.
Colin Hines
Convenor, Green New Deal Group

Full details of Green Quantitative Easing here.

As Larry Elliott notes this morning:

One Sunday in October 2008, Alistair Darling flew back from Washington to find Britain on the brink of banking meltdown.

Let’s be blunt: Labour solved that one.

But the underlying issue remains. The Green New Deal group had already addressed that underlying issue in July 2008 (Larry’s a member, along with me). As he puts it though:

There is the potential there for not just one crisis but three: a situation where the ATMs freeze up, the planet warms up, and the lights go out.

So what does he think the options are?

It’s not pretty but there are at least four possible choices. Choice one: do nothing because modern financial capitalism is robust and self-correcting, there is more oil in the ground than we think, and global warming is a fantasy. Possible, but given that it was the same mindset as prevailed in financial markets pre-2007, fraught with risk.

Choice two: argue that there is an incompatibility between growth and sustainability, so the big developing countries cannot hope to aspire to western levels of consumption, which need to be reduced anyway. Perhaps true, although the deep green road map for getting from A to B is somewhat sketchy and currently lacks political support in both the developed and developing worlds.

Choice three: bring human ingenuity to bear by investing heavily in new forms of low-carbon green growth while at the same time negotiating a binding global climate change deal. Tough, expensive, and open to the objection that green growth is pie in the sky.

Choice four: file under “too difficult” and hope it is not too late to respond when the crisis breaks.

As he says:

Personally, I’d go for choice three, while accepting that choice four looks most likely and that choice two may eventually be forced on us anyway.

I’m more optimistic about 3.

But what’s clear is there is no way we can choose 1 or 4: they’re the route to much more serious problems.