ONE of the architects of New Labour predicted yesterday that the pound had neared its lowest point against the single currency, but warned it would be many months before it regained substantial ground on the euro.
Lord Anthony Giddens, wrote the 1998 book, The Third Way: The Renewal of Social Democracy, and is a confidante of former prime minister Tony Blair and other New Labour founder Peter Mandelson.
He was speaking in Palma yesterday ahead of a conference exploring world democracy and the role of China, Europe and the United States.
Lord Giddens, Emeritus Professor at the London School of Economics, warned that the global financial crisis had yet to hit member countries of the single currency, but added it was only a matter of time before it slumped against the pound and other currencies. I suspect sterling is near the bottom point against the euro, but it's not governments that make these decisions, it's the free markets, he commented. Investors must decide where they want to put the pound and also decide if the dollar is too strong against the single currency, he added.
Giddens, who was made a life peer in 2004, said he understood the difficulties faced by ex-pats trying to pay mortgages or exist on a sterling-based income. There's not a lot of good news for many months and everyone will have to re-adjust, but the consequences for countries with the single currency could be far worse than for the UK, he warned.
The professor insisted The Third Way was still the way forward for a fair society, but he said no-one could have predicted the depth of the world's financial problems. The Third Way offers a renewal of Left-centre thinking and social democracy. In previous times, the Left was a class thing based on low-paid workers involved in industry and agriculture. But now we have to reach out to other class groups because radicalisation can no longer be identified with the Left because just 16 percent of the population is involved in manufacturing and agricultural industries, he claimed.
Lord Giddens, who holidays at Calvia's Bendinat Hotel, said the problems facing the world were now greater and could be tackled by a broad political spectrum.Things like energy and climate change are not a Left and Right issue. But some socialist values still remain important like health and the welfare system, added the professor.
But he said no political force could have anticipated the financial crisis.
He said this was the worst crisis facing world economies because it was the only time when problems were truly global.
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