great drama is playing itself out across Europe - and it threatens to be a Greek tragedy. The crisis in the eurozone now threatens to engulf it. A 'bank jog' has begun in Greece and in Spain, with savers removing money from potentially insolvent banks. This may herald a fully-fledged run in the weeks ahead. Economists now recognise a Greek exit from the euro as almost inevitable, caught as the country is in a death-spiral of deepening recession and increasingly unsustainable debt repayments. No one can predict the shocks to the wider European economy this earthquake will bring. Politics is essentially a battle between hope and fear and the dark forces of fear are gathering across Europe - scapegoating other nationalities and immigrants for the plight of the continent. The Far-Right Marine Le Pen scored well in the French presidential elections. Her Dutch populist counterpart, Geert Wilders, has brought down the government in the Netherlands. And the Greek elections saw an openly neo-nazi party win 21 parliamentary seats. But the forces of hope are mobilising, too. The Socialist candidate, Francois Hollande, triumphed in France; the Social Democrats delivered a humiliating defeat to Christian Democrat chancellor, Angela Merkel, in subsequent elections in the most populous German region. Merkel has dominated the European stage. Yet, fearful of collective solutions - which she associates with the dictatorial East Germany in which she grew up - she has insisted on a politics of national austerity, which has left at least nine EU countries in recession. It is the modern equivalent of leeching blood in the hope it will cure patients. The message of hope is that European solidarity can address the debt crisis in the periphery and stabilise the banking system. The economic bloodletting could be stemmed by: * the issuing of eurobonds, which would mutualise the debt and allow the bailed-out states to return to the financial markets * the European Central Bank offering unlimited, long-term loans to steady the banks, allied to tight regulation and a widening of the ECB mandate beyond countering inflation, and * support for a continent-wide, green economic recovery via the European Investment Bank, assisted by a revenue-raising tax on financial transactions. And that message is getting through. Merkel was isolated at the G8 summit at Camp David last month, as the US presidential host, Barack Obama, weighed in in support of the jobs agenda of Hollande. And she found her new French counterpart much more challenging than his conservative predecessor, Nicholas Sarkozy, at an EU summit in Brussels. As a weak, peripheral region, Northern Ireland's economy is intensely vulnerable to a wider European depression. True, it is not part of the eurozone - though, perversely, it is still being subjected to just the same austerity as the Republic (which last week voted by a large majority to approve the Fiscal Reform Treaty). This is because of the ideologically-driven commitment of the chancellor, George Osborne, at Westminster. But, outside of internal UK trade, most exports from Northern Ireland go to eurozone countries. Falling export demand allied to falling domestic demand is a recipe for trouble. Two years ago, when the Northern Ireland Assembly published research it had commissioned showing that the public took more interest in international affairs than events at Stormont, MLAs must have been scratching their heads. Yet, whatever the imposing facade of Parliament Buildings, anyone can see that it is but a cork bobbing on an ocean of wider economic forces. That, however, is no excuse for the deafening silence of Northern Ireland's political leaders on the European crisis and what can be done to address it. They have focused on a myopic demand for a cut in corporation tax for the region - a demand which, it is now clear, the Treasury will not endorse, because of its financial implications for internal UK tax leakage and its political implications for Scotland. And the last thing Europe needs now, when only unity offers strength, is a collapse into competing, inward-looking, beggar-thy-neighbour economic strategies such as these. In spite of the cuts in public expenditure faced at Stormont over the coming years, the DUP and Sinn Fein have recently agreed an £80m 'social investment fund', the criteria for whose allocation remain worryingly unclear. There is real danger that this money will be frittered away on projects reflecting political patronage, rather than social and economic logic. The Housing Executive estimates that its social housing estate needs at least £1bn of investment to bring it up to scratch. A far better way of investing any spare cash would be in a major programme of retro-fitting, across the private and public sectors, to reduce horrendous fuel poverty and provide 'green-collar' jobs, as in the Green New Deal which business, the unions and the voluntary sector have endorsed - but on which Stormont has gone cold. The fundamental problem is that Northern Ireland's main political parties have always benefited from the exploitation of fear - fear of the sectarian other. That's why they could only belatedly agree a modest, segregated housing scheme for the development opportunity represented by Girdwood Barracks in north Belfast. No wonder they offer so little by way of economic hope.
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