Spoils of bruising Scottish referendum battle could go to Gordon Brown

"Are we," asked a senior Whitehall official, "witnessing the return of Gordon Brown to the big political stage?" And that was the day before the Thursday speech that had them rocking in the isles and the deepest recesses of the Conservative party were lost in a mixture of admiration and apprehension.

All right: there was speculation, after one heavily pored-over hint, that the Big Hitter might have challenged Alex Salmond for the post of first minister. But Scotland apart, could it possibly be that, on the eve of the last Labour party conference before next year's general election, there might be a cunning plan for my good friend Gordon to take an even more central role in politics?

After all, people have very short memories. Many forget that, although Tony Blair is frequently credited with having won three general elections in a row, things were going badly for him early in the 2005 campaign. Despite having achieved many good things domestically, Blair will never, ever be forgiven for misleading the nation over the grounds for supporting George W Bush's disastrous invasion of Iraq – and Gordon Brown had to be recalled from virtual campaign ostracism in support of the party.

After Brown's first great speech of last week I bumped into a veteran Labour party figure who attributed "the resurgence of Gordon Brown" to the latter's final release from all those years when "he judged everything in accordance with how it might damage Tony Blair". This was somewhat harsh, and did not account for what was generally regarded as the failure of Brown's premiership once Blair was damaged goods and no longer a threat – although, admittedly, there were still Blairites around to unsettle him.

What few people, even now, seem to acknowledge is that there was a fundamental truth to Brown's Freudian slip of a claim to have "saved the world". His experience, dynamism, determination and breadth of international contacts came to the fore in 2008-09, first with the rescue of a financial system that did not deserve to be rescued (but had to be, for all our sakes), and second with the G20 fiscal and monetary stimulus that stopped the rot when world trade was collapsing at an annual rate of 20%.

Brown's rescue operation for the no campaign came last week, after my sometime Observer colleague Ian Macwhirter wrote in Scotland's Sunday Herald: "Why have so many Scots refused to heed the warnings of press, politicians and banks ?… Well, in a nutshell, George Osborne happened."

Might it give Brown a certain satisfaction that the intervention of Osborne – "project fear" – should have been so counterproductive in the Scottish debate? Not at all: clearly he found it depressing and it made him angry. But, my goodness, did it not bring out the old fighter and great orator we first encountered in the 1980s?

Something else that did not give Brown satisfaction – apart, needless to say, from losing the 2010 general election – was the way that the recovery from the Great Recession was stopped in its tracks when George Osborne and his acolytes embarked on their policy of austerity. This arrested the upturn and, far from boosting confidence, depressed it. Yes, those animal spirits of even true-blue Conservative businessmen were depressed; there was no investment miracle, and improvements in productivity were conspicuous by their absence.

Brown's decision as chancellor to subject the fashionable proposal to join the eurozone to rigorous analysis has been acknowledged by even his most hostile critics at the time to have been statesmanlike. This led to a decision not to join – a decision that has been vindicated by the contrast between the recent experience of the British and eurozone economies.

The presidency of the European Council rotates between member states every six months and is currently held by the Italian government. Last weekend I attended a conference it organised in Rome on "The promise of the EU" and many of the good things the EU does and aspires to were discussed. Alas, when it came to the eurozone, now verging on deflation, the crisis was well epitomised by Professor Jean-Paul Fitoussi of the Institut d'Etudes Politiques de Paris, when he sighed that the eurozone was still in depression and the official policy was … further budget cuts.

In which context I cannot recommend highly enough a new paper by Llewellyn Consulting about the plight of the eurozone. With regard to the German-led approach to disturbingly high unemployment in the euro area, the title of the paper by economists John Llewellyn and Russell Jones speaks for itself: "Wrong Diagnosis: Wrong Cure".

Llewellyn and Jones are seasoned economists, and Llewellyn had experience at the OECD of what economic policies are politically feasible, not least in Germany. The eurozone suffers from a serious shortage of demand, but the Germans go on about supply.

Llewellyn and Jones suggest that the circle could be squared with "a necessarily German-sponsored policy package" of massive pan-European infrastructure investment that would boost demand in the short term and supply in the long term. This, they say, could be orientated principally towards reducing western Europe's dependence on energy imported from Russia – something close to Mrs Merkel's concerns.

Why not?

Powered by Guardian.co.ukThis article was written by William Keegan, for The Observer on Sunday 21st September 2014 00.04 Europe/London

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