Bernard Ginns: Could debt and inequality fuel uprisings in Europe?

That’s a question being asked by top foreign policy experts who are seeing some of the same warning signs that were present ahead of the revolutions and protests that swept the Arab world earlier this year.

The most striking theme in common is unsustainable debt, which makes countries vulnerable to economic shocks.

Another theme is a stark inequality of income. And, as with many of the Arab Spring countries, some European nations, particularly those in the south, lack efficient systems of redistribution.

In Greece, for example, tax evasion is estimated to cost the country $20bn a year.

Further, many countries in southern Europe have limited social safety nets, which often lack proper funding.

Another strong similarity is high unemployment, particularly among young people. In Spain, the youth unemployment rate stands at about 40 per cent.

Young people tend to become politicised when their feelings of hopelessness rise.

In Greece, groups revolted against a government that was trying to change things. In Egypt, groups revolted against a government that refused to change things.

In both, protesters believed that the current system of governance was not working.

So, you can see that many of the conditions that led to the Arab Spring are present in Europe, particularly in the south.

But there are big differences as well, chiefly the presence of democracy.

Significantly, the army and police are under civilian control. Basic social safety nets are in place. Citizens have freedom of movement and freedom of association. There is political accountability and a degree of transparency. There are no major religious or ethnic fault lines.

But will these be enough to get us through this period of economic tension and weak politics? That’s the big question and one that can only be answered over time.

Closer to home, the prevailing uncertainty will inevitably lead to more reluctance among Yorkshire business leaders to commit to new investment.

It will probably make it harder to get bank funding as the big financial institutions make sure they have enough capital to cushion against more shocks.

Combined, these will ensure that meaningful economic growth remains elusive. Testing times, indeed.

THE debate over reforms to the banking sector took another twist yesterday with some new comments from Barclays well-remunerated chief executive Bob Diamond.

Speaking ahead of next month’s final report from the Independent Commission on Banking, Mr Diamond told investors: “It’s no longer a question of whether Barclays wants to stay in the UK but whether the UK wants Barclays.”

Commentators saw this as a threat by the bank to quit the country if proposed reforms to the banking sector are felt to be too draconian, although a spokeswoman said that the bank had “no desire” to leave its home of 300 years.

It’s worth taking a look back at the history of that self-same bank.

Barclays can trace its roots back to the Quaker movement, which by the early 19th century had established 74 lenders across Britain.

These included reputable names such as Gurney’s Bank of Norwich and Pease Bank of Darlington, which would both later become part of the Barclays group.

In their time, the Quakers created some enormously successful businesses, notably the chocolate empires of Rowntree of York, Fry of Bristol and Cadbury of Birmingham.

But they regarded wealth creation for personal gain as offensive.

Instead, said author Deborah Cadbury in her new paperback Chocolate Wars, they believed that wealth creation was for the benefit of workers, the local community and society at large, as well as for the entrepreneurs themselves.

Quaker guidelines for business published in 1833 put it clearly: “We do not condemn industry, which we believe to be not only praiseworthy but indispensable... but the love of money is said in the Scripture to be ‘the root of all evil’.”

The guidelines urged followers, known as Friends, “who are favoured with outward prosperity, when riches increase not to set your hearts upon them”.

Such an approach might look rather puritanical and out of step with today’s business world, but it clearly worked, proving that it is possible to align the interests of employers, employees and the wider community in a way that was beneficial to all.

I wonder what the founders of Barclays would make of the bank and its leaders today.