Let me say a few words in praise of Germany.

I am glad Mrs Merkel has better things to do with her time than attend the grandstanding “Save the world” session with the UK and France today.

I am glad she has avoided mock reflation based on massive borrowing. The UK plan to borrow more to pay for a VAT cut has backfired badly. Maybe Mrs Merkel understands that if the money is borrowed from nationals, there is very little reflation. The extra savings made by individuals and companies to lend to the government cannot also be spent by the savers, so it offsets much of the benefit of the extra spending by the government. Clearly she understands that this year’s reflation on public borrowing is a future year’s tax increase when you have to start repaying the debts.

Germany has fought its way back from over borrowing to finance the reunification. It has maintained some very good engineering based industries, and built a large balance of payments surplus. Mr Brown’s strategy of treble deficits, where everything rests of borrowing, is not going to prove as robust a model as the German one. Germany’s reluctance to join the others today should be taken as an opportuntiy to rethink the UK strategy, which is taking far too much risk with the public accounts.