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Robert Peston on Tuesday night's BBC News came close to suggesting that the Eurozone is on the point of economic meltdown. His fearwas triggered by the collapse of Dexia bank and the downgrading of Italian sovereign debt by Moodys.  I think, like many others, he may be concluding that the crisis is starting to outpace the speed at which policymakers are able to respond.  If you're not worried, you should be: Peston knows his stuff as his blog posts in advance of the 2008 Crash testify.

Robert Peston on Tuesday night's BBC News came close to suggesting that the Eurozone is on the point of economic meltdown. His fearwas triggered by the collapse of Dexia bank and the downgrading of Italian sovereign debt by Moodys.  I think, like many others, he may be concluding that the crisis is starting to outpace the speed at which policymakers are able to respond.  If you're not worried, you should be: Peston knows his stuff as his blog posts in advance of the 2008 Crash testify.

If he is right, banks may well crash,countries could default, the Eurozone may even fracture and the world would almost certainly be plunged back into recession.  But what I find really scary this time round is not just the economics of such a sorry situation but the politics. While the impact of 2008 was to sweep out incumbents in favour of oppositions and, particularly, to leave left of centre parties bereft, I fear this time that a new crisis will usher all sorts of populist and fringe forces to prominence at the expense of the mainstream.

Already anti-EU parties of the right and anti-globalisation parties of the left have been picking up votes since 2008. Their most significant impact has been felt in smaller countries particularly Finland, Holland and Belgium. But if the economic crisis really gathers pace, then their biggest moment may come when France goes to the polls next year and Germany the year after. 

The worry has to be that the populists and fanatics will have a compelling story to tell not just about the abject failure of mainstream politics to protect European citizens against joblessness and hardship but also about their catastrophic misjudgement on the Euro.  Failures, they will argue, not just of the current incumbents but of both centre left and centre right over the last decade.

This is all deeply troubling. The economics will cause hardship enough but the politics has the power to cause turmoil and conflict. Whether the UK will remain insulated from a domestic upsurge of the fringes is an interesting question. But we will undoubtedly feel the effects of such shifts on the continent whether our own brand of populism reaps electoral rewards or not.

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