Austerity is the new cool as Europe turns its back on Keynes

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By Jeremy Warner

Au revoir to haute couture, and adieu to Michelin starred dining. A new fashion is sweeping Europe – the hair shirt and daily diet of thinnest gruel. According to Britain's new Chancellor, George Osborne, it is a trend in which the UK plans to be "a leading force".

The game has changed. Just as Gordon Brown claimed to be framing the international response to the recession by attempting to spend his way out of it, Mr Osborne plans to set the pace in a new, fiscally responsible Europe.

Austerity is the new cool, so much so that if the idea were not quite so ridiculous, you might almost imagine that governments are engaged in some kind of competition for the prize of fiscal pin up boy of Europe. Who can do most to get those deficits down? Whose public debt trajectory looks least scary?

It was Britain's turn on the cat-walk yesterday, and for a first outing, the new Treasury team gave a pretty good show of themselves. Unlike the "pretend" efficiency and productivity savings of the last Government, the £6.25bn of cuts promised yesterday look both real and deliverable.

Salient detail is still missing. Precisely which programmes are being axed and how many jobs are involved? And of course, this is only the hors d'oeuvre. The main course is still to come. All the same, it is a start, as well as a serious statement of intent.

Fiscal responsibility is to replace the profligacy, dithering and prevarication of the last government. Let rip deficit spending was meant to be part of the cure to our economic ills. But it seems only to have succeeded in almost bankrupting both the UK and much of the rest of Europe. There now begins the long hard slog of putting public debt back on a sustainable footing.

Austerity is the new cool as Europe turns its back on Keynes

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