Twenty years ago, at the height of the last recession, Britain faced many of the same problems of unemployment and spiralling Government debt, that we do today. Yet there was one vital difference: there was precisely nothing that the British government could do about all this because of our membership of the Exchange Rate Mechanism. Yet at this time the Conservative Government, the Labour Party, the Liberal Democrats, the Trades Union Congress and the Confederation of British Industry were passionate supporters of the ERM.

Today, exactly the same problems are being faced in the euro-zone, and for exactly the same reason. The governments of Portugal, Italy, Greece, and Spain, referred to by some commentators collectively as ‘PIGS’ and a number of other European countries face terrifying levels of unemployment and public debt.

Back in 1992 Britain was forced out of the ERM, on September 16th ‘Black Wednesday’ as it is sometimes called, because conventional wisdom foretold a loss of economic credibility, leading to an inability to sell Government Bonds, ie support borrowing, rampant inflation and economic Armageddon.

What actually happened politically was the Conservatives lost their reputation for economic probity, and the next election, economically Britain recovered and was well placed to benefit from the Chinese Industrial Revolution which drove down inflation as the cost of many manufactured goods fell, meantime the new Labour Chancellor Gordon Brown was very happy to take credit for these fortuitous circumstances.

It seems obvious that abandoning the Euro and reclaiming the ability to set interest rate levels, readopting a national currency - effectively devaluing, would be of great economic benefit to these troubled economies.

However this would be the death knell of the Euro, and with it the dream of a single European State. For this reason Brussels will do whatever it can to prevent these troubled Governments from following their National Interest.

It will lead to mass unemployment and savage public spending cuts - and probably civil unrest.

• European markets plummet as the echoes of the ERM crisis intensify (telegraph.co.uk)