That is the "political trigger" to euro exit. But market participants are watching something else: the flight of deposits out of Greek banks and into other Euro currencies.

That is because the normal mechanism for making payments across Euro borders, called TARGET2, is seen as the economic trigger for a euro exit.

It works like this. Suppose a Greek wants to send a Spaniard 1,000 euros. Let's call them Louk and Gomez:

The thing to note here is that both central banks are creating debits and credits with the entire system, not each other. They do not directly face each other. All that happens is that their accounts with the central system, TARGET2, are changed.

Now what if Bank A, in Athens, does not have enough reserves at the Bank of Greece? It borrows from the Bank of Greece, which is in turn borrowing from the ECB.

Now what if the Bank of Greece knows Bank A is in trouble because its deposits are being withdrawn? Still no problem: it can lend to Bank A, borrowing from the ECB, and take very poor collateral, by permission of the ECB, up to a certain limit.

But the sticking point comes on the issue of collateral. The Bank of Greece has permission from the ECB to lend against poor collateral up to a certain amount, set twice a week. If that amount is breached, the ECB must vote to raise it: that vote will be effectively a vote to allow massive capital flight. The moment the limit is not raised, Bank A goes bust, triggering massive capital flight if it has not already started. At that point, the Bank of Greece would have to impose capital controls, and everybody who has euros in a Greek bank account would have to keep them there and see them devalued on euro exit.

There are about 170bn euros of deposits in Greek banks. If these were then devalued by 50% after euro exit, it would probably not crash the euro system. On Greek sovereign debt, the default has already occurred. Until Monday, only 700m euros had fled Greece since the election. But on the first two days of this week, says the FT, outflow exceeded 1.2bn euros.

However, what the markets are looking at right now is contagion to Spain and Italy. Here you have 800bn euros of foreign-owned government bonds, 600bn euros of foreign-owned corporate bonds, and 300bn euros of foreign-owned listed equities (numbers from JP Morgan) - together with E3 trillion of deposits.

What policymakers and market players are worried about right now is if foreign investors see a Greek deposit crisis as a signal to rush for the exits in Italy and Spain.

One way of stopping that, says my market interlocutor, is if the Eurozone authorities would issue pan-European depositor insurance, effectively saying to everybody, everywhere in the zone, that the other members would make good bank deposits in the event of exit, or capital controls etc. It would be another way of imposing fiscal union and therefore a tough one to get through Germany/Holland etc.

The coming weeks, leading to the second Greek election, will see the interplay of opinion polls, depositor behaviour and the European Central Bank's bi-weekly decisions on the Bank of Greece's lending capacity.

The above is a technical explanation why the future of Greece in the euro may not lie in the hands of the electorate as voters: it lies in the hands of the electorate as bank customers.

1. Syriza is an acronym signifying "Coalition of the Radical Left". It's key component is a party called Synaspismos, itself an umbrella group of the far left in Greece.

2. Alexis Tsipras is the 38-year-old leader of the Synaspismos party, and rose to prominence as its candidate for the mayor of Athens in 2006. Tsipras originated from the youth wing of the Communist Party, the KKE.

3. Greek communism, like most of Western communism after the 1970s, was split into two hostile parties: the KKE of the "interior" and that of the "exterior" - the latter denoting a Moscow-oriented party - the former denoting a Euro-communist, more parliamentary and socially liberal agenda.

4. Initially Synaspismos was the electoral alliance between the two KKEs. But in the early 1990s the main Moscow-oriented KKE quit the alliance, purging about 45% of its members, who then stayed inside Synaspismos with the Eurocommunists. These included Tsipras.

5. Synaspismos then evolved in an interesting direction. Reacting to the rise of the anti-globalisation movement, first of all the party itself became a highly diverse left umbrella group: of Eurocommunists, left-social Democrats, far leftists, and ecologists. It played a significant role in mobilisations against summits, beginning in Genoa 2001 and beyond. Meanwhile the main KKE remained a traditional Communist party, rooted in public sector and manual trade unions.

6. Then, in the 2004 election, Synaspismos came together with other small parties to form Syriza. These included a split-off from the British SWP, a split off from the main Communist Party and another group of eco-leftists.

7. Under Tsipras' leadership, and invigorated by now including the entire left, except the traditionalist KKE, Syriza grew the far left's vote from 3.3% to 5.6% in the 2007 election - giving it 14 MPs.

8. The crisis which broke out in December 2008, after the police shooting of a 15-year-old schoolboy, led to two weeks of rioting by the youth and poor of Athens, and further strengthened Syriza as a left pole of attraction. Though the parties inside Syriza remained in the low thousands of members, many young people began to identify with them - above all in a country where Marxism has massive prestige due to its role in both the anti-fascist resistance and in the 1946-49 Civil War. In addition, those migrants with the right to vote, hearing a rising chorus of anti-migrant rhetoric from the centre as well as the right, have flocked to vote Syriza.

9. Once George Papandreou's Pasok party committed itself to supporting EU-designed austerity programmes, after January 2010, a huge political gap opened up on the left of Greek politics - which arguably forms a natural majority. Only the KKE and Syriza were opposed to austerity and of the two, Syriza had a political leadership of youth, resilience and global vision.

10. (It is worth noting here the character of Pasok. It emerged in the inter-war years as a split from republican liberalism, and while it became a traditional social democratic party after the fall of the Colonels regime in 1974, its forms of organisation, and mass base among civil servants and small business people, lead some to compare it to Argentine "Peronism" - that is left nationalism with a working class base. This affects the political dynamics the moment the Pasok leadership loses its claim to represent "the nation" in conflict with the EU.)

11. As events pulled Syriza leftward and swelled its support, one final split took place that may prove highly significant. Veteran leaders of the old KKE-interior - that is, the Eurocommunists - split from Synaspismos and formed the Democratic Left, led by Fotis Kouvelis - in March 2010. They formed a separate parliamentary group of four until the recent election massively swelled their numbers to 19. At the first congress of the Democratic Left, in March 2011, in an extraordinary move, the then serving Pasok prime minister, George Papandreou, attended. He sat in the front row of the audience and applauded.

12. Now, how to make sense of this, and why does it matter?

13. The mainstream Pasok party split before the May 2012 election. Six sitting MPs joined the Democratic Left, while others tried to form an anti-austerity left social democratic party, led by charismatic female MP Louka Katseli. The latter disappeared without trace. But the Pasok left and its voters now co-exist with the former Eurocommunists in a fairly moderate, anti-austerity but essentially left social democratic, pro-Euro party - the Dem Left - which now has 19 seats.

14. Syriza massively scooped up the votes of leftist, progressive, socially liberal young people, as well as the trade union voters, not specifically aligned with the Communist Party, to gain 52 seats.

15. The Communist Party itself, while growing its vote, did not break out of its traditional demographic base - manual workers, older lifelong Communists with family loyalty traced back to the pre-war workers' movement. The KKE gained 26 seats.

16. In the negotiations to form a government this week the Pasok leader, Venizelos, got the Democratic Left as far as agreeing to a programme to "progressively disengage" from the Troika-imposed austerity. But they could not persuade Syriza to join, and without Syriza, the Dem Left knew it would be the captive of a Pasok/ND coalition.

17. As new elections loom, obviously one possible outcome is the return of voters to ND and Pasok. But the latest polls do not signal this. They signal a growth in support for Syriza, which is seen as a consistent opponent of austerity on the left, and which has narrative and momentum among the traditional base of all other leftist parties.

18. If we look at the demographics of the left, there are the following:

19. The success of Syriza then seems down to its ability to attract voters and activists from all these groups, eating into almost every part of the left including the old Moscow-style KKE.

20. In the process of negotiations over the past seven days, Tsipras and his close advisers have further upped their own credibility by being seen to play the game of constitutional negotiations; sticking to their economic rejection of austerity stance, but in general not going out of their way to alienate, rhetorically, natural Pasok, Dem Left or KKE voters.

21. In the NET poll, taken while Tsipras was making his doomed attempt to form an anti-austerity government of the left, Syriza scored 27% - compared to its election showing of 17% - clearly demonstrating that it had created momentum as the pole of attraction for left voters wanting a showdown with the EU. Pasok was losing ground to both Syriza and the Dem Left. Some KKE voters were saying they would switch votes to Syriza in a second election.

22. When I spoke to leading members of Syriza in summer 2011, they were privately very pessimistic about the possibility of forming a government - even an alliance of all the left including splits from Pasok. At that time they said the most obvious solution would be an above-politics left-nationalist figure, a "Greek Kirchner" or "Greek Morales", and that the absence of such a figure would make it impossible to form what Marxists refer to as a "workers government" - ie a radical reforming government with the participation of the far left, but limited to parliamentary means.

23. Now however, the charisma of Mr Tsipras, the fear of a far-right backlash, the depth of the crisis and the seeming inability of Pasok to recover, may thrust Tsipras himself into the Morales role. Of all the left party leaders he is the least encumbered by a rigid ideology, because Syriza remains highly diverse and internally democratic as a party. And he is tangibly a generation younger than the other leaders. (Pasok's further problem is that its younger politicians tend to be on the technocratic right of social democracy).

24. When I interviewed a Syriza spokesman earlier this year I explored the problem of a far-left party, which is anti-Nato etc, taking power in a country whose riot police have been regularly clashing with that party's youth since 2008. The message was that they would be purposefully limited in aim, and that the core of any programme would be a debtor-led partial default - that is, the suspension of interest payments on the remaining debt and a repudiation of the terms of both Troika-brokered bailouts. What Syriza shares with the Dem Left and Pasok is its commitment to the EU social model: they are left globalists. Hence they could make any attempt to force Greece out of the Euro look, to the Greek population, like a Brussels/Berlin inititative, no matter how it looks to the rest of the world.

25. If, in the next election, Syriza scores 26% it would get about the same number of seats, under the vote redistribution rule, as ND got this time - say just over 100. If, on top of that the Dem Left vote holds up, with about 20 seats, and the Communists retain their 26 seats, that is very close to the 150 they would need for a majority.

26. It is being rumoured that Syriza may soon transform itself into a single party and extend membership to a far left group called Antarsia (which gained 1%) and the Louka Katseli group from Pasok which failed to gain seats, and the Eco-Greens, who polled below 3%. That would extend its reach even further, both to its right and left.

27. Even without a majority, a Syriza-DL minority could attempt a legislative programme that relied on the abstention of some of Pasok's remaining MPs, tacit "non-opposition" form the KKE, and, paradoxically, the non-opposition of the right-wing anti-austerity partiy Independent Greeks (conservative nationalist). One current obstacle to this is the KKE's historic enmity to Syriza and indeed the entire rest of the Greek left.

Whatever the outcome, the above explains how a combination of historical factors, the position of the EU and a demographic radicalisation of young people propelled one of the furthest left parties in any European parliament to within a few steps of forming a government; and provoking a showdown with the EU that would doubtless see Greece's suspension or exit from the Euro.

At the same time it explains that the resulting government may, in effect, be little more than a left-social democratic government, despite its symbology and the radicalism of some of its voters. By forcing the mainstream parties into positions where they could not express the will of the majority of centrist voters, the EU may end up destroying the Greek party system as it has been shaped since 1974.

In any case, the unwillingness of the Greek communist party, the KKE, to participate in a Syriza-led left government means Tsipras will, like the leader of New Democracy, fail to form a coalition.

So the likely outcome of the week is a presidentially appointed technocratic government, which will rubber stamp measures needed to remain within the rules of the EU bailout, before a new election is called either in June or in Autumn.

What the Eurozone elite and political mainstream then hope is that Greeks "come to their senses", and after a couple of months go back to the traditional parties, New Democracy on the right, and Pasok on the left. Unfortunately this is based on a misunderstanding.

The European centre does not have a very good understanding of Greece for a reason: its only roots in Greece are the mainstream media and the mainstream politicians, whose credibility has collapsed (the Troika itself is, like all mainstream Greek MPs, mostly closeted behind shutters and security guards).

That is not to say the parties beyond the centre have any better handle on the situation: it is physically disorienting to be propelled to within two percentage points of political power when you have spent the last two years linking arms in the face of tear gas and police batons - and this is exactly the experience many of Syriza's new MPs have been through.

The best way to orient oneself in the Greek situation now is through a series of scenarios. In Scenario One, the voters do, indeed, swing back to New Democracy so that it gets into the mid-20 percent, and Pasok comes second. Then they have the numbers to form a government.

But that's where Greekonomics kicks in.

For the un-noticed problem with New Democracy (ND) is that it has never, in its heart, supported the Eurozone-imposed austerity plan. I have been told publicly and even stronger in private by its economic experts that the Troika plan, with its reliance on tax rises to obviate even deeper spending cuts, will not work.

The Greek centre-right would have preferred a much faster and steeper cut in public spending combined with tax cuts, and - in its head at least - much bigger and faster proceeds of privatization. That's why they wanted an outright mandate - to attack what they see as the vested interests of civil servants and public sector unions. Instead their vote collapsed.

And that's where you run into a problem with Pasok. Pasok still (just) has a mass base. Some of that mass base are the very workers and civil servants whose world would end if ND were able to unleash the programme it wants. Hence any New Democracy/Pasok coalition would fall apart, with the technocratic faction of Pasok claiming (with some justification) that ND was trying to renege on the Troika-brokered agreement, which includes a sharp and prolonged tax hike.

Scenario Two is that, having stood aloof from government in the aftermath of the 6 May vote, the left, Pasok and the Democratic Left (a split from Syriza historically associated with Eurocommunism) attempt to form a left government of national unity, relying on de-facto support, but not participation of Syriza and the KKE. This scenario is anathema to every one of the parties I just listed, but has a logic if things spiral out of control: it would probably need some big, historic, intellectual figure of the Greek left to figurehead it, and one of the salient facts in Greece is the absence of any kind of left-Caudillo figure.

Scenario Three is the formation of a right-of-centre coalition. This now looks very unlikely: New Democracy split over the bailout; LAOS - the right wing nationalist party - collapsed after participating in the pro-austerity coalition, and Golden Dawn is so extreme that it's unlikely to get any bigger without a complete collapse of social order.

None of these scenarios creates stable government for Greece; so what would have to change to bring the situation to a resolution?

One route out would be the EU effectively designing, from above, an escape route for the Greek mainstream parties - completely rewriting the terms of the second bailout to give Samaras or Venizelos something to come back with - a piece of paper - saying: we saved the country from collapse, again, and this time we really did get the Germans/French to shoulder the pain. This would most probably take the form of "Public Sector Involvement" - ie a writeoff of Greek debts to the ECB and IMF.

A second route out would be some form of soft, presidential coup (I am not advocating it!). That is, the parties effectively realizing that to be in power is to commit political suicide, connive in the prolongation of a presidentially-appointed technocratic government which takes the most contentious decisions on privatization, immigration, cuts etc. But that government would still be working to an EU/IMF designed script, and if the script leads to catastrophe then it simply opens the way to a decisive, populist swing by the electorate to the left or right. (In this regard, the experience of Hungary's technocratic government, which led to Viktor Orban, and the Carlos Mesa government in Bolivia, which led to Morales, are worth looking at.)

The problem is, time marches on. And the Greek economic story is not just a question of designing a strategy, it is an execution story: that is it relies on relentless pursuit of goals and targets - whether they're ND/Pasok goals or Syriza/KKE goals - by a civil service and a set of ministers who can actually rule. It will be very hard for a technocratic government to pull the levers of power because so much of Greek politics has been based on patronage.

So we are back to the same problem that has dogged Greece. It cannot stay in the Euro without abiding by the rules. And the rules, as currently designed, will force the economy into a downward spiral and destroy social cohesion. Unless the EU/IMF take some kind of initiative that allows some form of viable coalition to emerge to implement some kind of "Plan B" you will sooner-or-later have a debtor-led default on your hands and most likely a prolonged social conflict.

The story so far: in December, after the disastrous Cannes summit had unleashed a second euro debt crisis, the EU countries finally committed to a form of fiscal union.

The price Germany and its north-European allies exacted was a new fiscal treaty, signed by 25 out of 27 EU members, mandating balanced budgets from here to eternity, and forcing some countries to slam the brakes on to meet the 2014 deadline. In a word, mandatory austerity for a continent already sliding towards recession.

But they sugared the pill. The European Central Bank, which had always resisted quantitative easing, or itself taking part in the continent-wide bailout, suddenly turned on the taps in the form of a massive, temporary bank bailout known as LTRO: it pumped three year loans into the banking system at interest rates of 1% and a repayment date of three years.

This has been like the sudden connection of a saline drip to a very poorly patient. It removed the immediate threat of contagion from Greece, and allowed the Greek debt write-off of euro 107bn in February to be a) partial b) controlled c) controlled by the European centre, so that it is really a bailout of those who lent to Greece, not the Greeks themselves.

This, combined with the imposition of non-elected governments on Greece and Italy, and the election of a pro-austerity right-wing government in Spain, seemed to calm things down.

So why have they again erupted?

First: the turn to continent-wide austerity seems to have choked off what was left of the EU recovery. Euroland plunged into recession in Q4 last year, is in recession now and looks likely to stay there for at least another three months. Though the banks look safer, it is at the cost of reduced bank lending, and that is hitting businesses and consumer confidence.

Second: the LTRO injection of money into the banks has had limited results. They deposited most of it back at the ECB at interest rates of 0.25. Interbank lending has, from indirect evidence, fallen and bank lending to the real economy is in negative territory.

Third: time has run out for the imposed technocratic government, at least in Greece.

The current Greek polls show the combined forces of the two main parties at 37%, with about 37% for the left (communists, Trotskyists, Eurocommunists and Greens) and the vote for the Christian nationalist right slumping (to 3%) in favour of the outright fascists of Golden Dawn (5%), who only four years ago had disbanded themselves in despair.

One former governing party MP told me the mainstream parties were unlikely to get past the threshold triggering a vote-reallocation mechanism designed to give the largest party stability, meanwhile the fascists are now pretty confident of getting seats in the parliament.

If the Greek election looks, as is likely, to deliver only political chaos then we may see new elections, or some kind of presidential soft coup, or even a left government committed not just to opposing austerity but, technically, the socialisation of the economy.

On the latter two outcomes, this would challenge not just euro membership, but the ability to abide by either the Copenhagen Treaty (which stipulates European Union members must be democracies) or the Lisbon Treaty (which forbids socialist-style nationalisations).

Whatever happens politically, it is then clear that the Greek "deal" to reduce its debt to 120% of GDP by 2020, through massive spending cuts and tax hikes, is a dead letter, and the way for a second default is open, followed by exit from the eurozone, or some form of semi-detached membership of it.

But while painful for the Greeks, the Greek catastrophe is only a harbinger of the problems to come in the rest of stricken Europe.

Spain now has 25% adult unemployment. Its banks are teetering on the edge of another bailout, massively reducing loans into the real economy; and the country may be forced to seek, itself, bailout money from the interim European fund - the EFSF.

So we get to Monday and what? The thought in the financial markets had been that Francois Hollande wins but he does not go through with his threats to renegotiate the fiscal compact; and then the Greek main parties scrape through and a new grand coalition holds things together there.

But the rapid flight of European voters away from the centre is changing things. The political class assembled for decades around the centrist, pro-globalist project can now see, very clearly in some countries, that it is just one crisis away from a political earthquake. The rise of the nationalist right in Holland, Denmark, Finland, Italy etc had always seemed containable within, or excludable by, centrist-coalition politics.

But if the centrist coalitions cannot deliver, or end up making unbearable demands on the nationalist right - for cuts that affect their voting base as with Geert Wilders' Freedom Party in the Netherlands - then one by one European governments are forced into coalitions of the centrist true believers, stiffened by technocrats, wagons circled against the extremes.

Once all the eggs are assembled into the technocratic grand-coalition basket, the situation becomes fragile.

The way out, of course, is to deliver growth. This is what is promised in the original fiscal compact, and what Hollande, and for example the Portuguese socialists (and quietly the IMF) mean when they call for "growth enhancing" additions to the austerity plan.

But that will not happen unless something stimulates demand: either a rapid recovery in the rest of the world (the United States is clearly in recovery), a rapid resolution of the banking crisis, a U-turn on fiscal policy driven by the rising demands on non-centrist voters, or a sharp turn to the kind of free market deregulation policies advocated by the banking lobby, effectively declaring an end to the "social Europe".

Of these, only the external recovery is beyond the control of the Euro political elite, and (possibly not coincidentally) the only one likely to happen.

Bokeh is a Japanese term used by photographers to describe that pleasing effect where the background of a photo is defocused, often into blobs or hexagons, while the subject is razor sharp. It's what you need a real lens for, and it's produced by the effect of the little blades that open and close the aperture, letting the light onto the sensor.

If you're sharp-eyed you will notice bokeh has suddenly splattered onto your TV screen, as journalists have begun to use Digital SLR cameras to shoot video (trailing by about two years the practice of activists and demonstrators). Normal TV cameras, costing maybe five times as much as a Canon 5D MkII , don't really do Bokeh. They're designed to keep more of the scene in focus, and to maximize clarity over moodiness.

Now while documentary TV teams and arts programmes have been using SLR lenses for a couple of years now on TV, the startling thing has been its use by frontline cameramen in wars and revolutions, most notably in Libya and Syria by BBC cameramen and others.

In a series of three films I've just made for Newsnight in America, we decided to go Bokeh. My cameraman, Peter Murtaugh, used a Sony video camera called NEXFS100. Basically a square box that takes SLR lenses and can shoot very high quality video on a 35mm sensor (so every frame it takes has the same quality as a 35mm film shot).

We fitted it with Nikon SLR lenses - for camera nerds a 50mm f1.4 prime, the veteran 17-35mm wide zoom, keeping the Sony kit lens (18-200mm) for long shots. And we shot at 24 frames per second - the same as in celluloid feature films.

The most important change was: we didn't need lights. For anything. The 50mm prime, at f1.4, allows you to shoot interviews by candlelight, and captures a night-time demonstration well. Instantly relieved of carting a lighting kit around Manhattan, everybody in the team (producer, cameraman, reporter) became happier.

I should add here, that shooting this way has been pioneered by the producer on these films, Warwick Harrington, in his Peabody-award winning series White Horse Village.

Second - and this may be purely psychological, and may not last - we were able to run interview clips for longer because the picture, and the face, is more interesting. A head shot in an interview no longer felt like a dead shot.

You do miss the ability to zoom. For action we found ourselves increasingly having to switch to the Sony 200mm zoom lens, which is not as good as the others. However, what happens is you compensate by shooting action in a more photographic way - letting people and things move through a static shot.

And as all stills photographers know, shooting news with a wide zoom forces you to get inside the action.

A final operational change was, among the Occupy protesters, people tended to assume we were not a network news crew. Which is an advantage.

Now to the point raised by, among others, TV critic Charlie Brooker (read his article here): all this makes news look more filmic and can therefore be distorting reality. I have been fascinated and concerned by this ever since I saw the BBC and rival networks start using SLRs to shoot the Libya conflict.

The base case is, the SLR-shot video is tangibly different from the live studio shots that surround it, and from all other video output on the bulletin, and from the past. Therefore it is privileging the action, or giving it an extra narrative feel that distances us from the maybe horrific events.

Obviously some of these objections will go away over time, if all TV video gets shot in HD through shallow-depth lenses. But you will still be left with the contrast with the studio. And, for example, a football match will never - not soon anyway - be able to be shot like this (though all stills sport photography uses the same technique) - so "news" will feel different from other captured live reality.

However there is one bigger objection - millions of people now shoot actuality video themselves, on their Androids and iPhones. And the video here has the exact opposite quality to that shot on an SLR, or on a movie-style camera such as we used. It is grainy; it is "interlaced", so on every paused shot you will see blurring. The sound is tinny, the shot always wobbly etc.

So, taking stock, what's happening is that the potential sources of "news" footage are now four different technologies:

- the legacy cameras from the tape era which will always beat an SLR for long-range clarity but not rich colour, or bokeh

- iPhone footage with its unchallengeable "truth"

- SLR-shot footage, with or without a slower frame rate to make it look filmic

- live, static versions of the old TV cameras, with lighting etc in a studio or live satellite position.

- You could add, for increasingly cash strapped programmes that can't afford satellite feeds, Skype interviews.

- And while I think about it, there is also the GoPro, an ultra-wide, ultra-sharp mini camera people use to film themselves, ski-ing, surfing and taking their dog in their kayak etc.

There's suddenly a high diversity of image quality in news footage. I think the modern viewer is OK with this (I can remember picture editors "rejecting" early mobile footage on the grounds that it did not conform to broadcast standards).

But what it forces the video journalist to do is - where they are taking a positive choice - to justify why they're using a particular type of image, or shot. It also breaks up the profession, in the sense that 10 years ago, if a cameraperson and reporter arrived on a scene and the producer said shoot A, B and C, everybody would swing into action in the same way, even if they had never before met. Not true now.

Myself, I am in the mode described by Cole Porter in his famously double-entendre laden song: "Experiment". But even while experimenting you have to justify and assess your results.

Watch my Bokeh film on the car industry here, and for more Bokeh glory, watch Newsnight tonight at 10.30pm on BBC Two.

Watch Paul's full report on bokeh on Tuesday 1 May 2012 at 10.30pm on BBC Two, then afterwards on the BBC iPlayer and Newsnight website.

Read my full article - Does Occupy signal the death of contemporary art? - here. And you can watch my film on Monday's Newsnight at 10.30pm on BBC Two. The film will also be posted in the article after transmission.

But now Detroit has come back to life.

The city, to the visitor, is still a landscape of cold winds, steam-exhaling drains and smashed-up Art Deco buildings.

But it's still the place where the big names of US auto-making work. And after the US government spent $89bn on keeping the two iconic auto giants alive, Detroit is getting back to work.

At GM's Lake Orion plant I meet Brad Glende. In 2009 he was made redundant, with thousands of others and, he tells me, thought his 16 year career at GM was over. But after a six-month layoff he was re-hired and has returned to a factory that is very different.

The plant is one big room, the size of 55 football pitches. With the bailout money, GM has ripped out everything that was there before (you can still see the oily marks of the old layout on the floor). And they've re-tooled.

I get Brad to do a bit of spot-welding but, in truth, most of it is done by relentless robots: a car-sized claw picks up an aluminium panel, twists it through the air, zaps it amid a hail of sparks and puts it back into a neat pile, as gently as a mother might lay down a sleeping baby.

There are fewer workers and more robots. But that's not the biggest change. They've adopted, effectively, German and Japanese ways of working, slashed the workforce, massively reduced the number of job-titles and taken a major hit to working conditions and pensions.

In return, the union pension fund got to own 11% of GM's shares.

If it all sounds a bit like a kind of state capitalism, that's what the management are touchy about.

"The bailout saved the whole industry and the government holds its shares just like any other owner - it doesn't interfere," says GM's on-message executive Selim Bingol when I interview him later.

But that's where the politics comes in. Consider this as a headline: "Let Detroit Go Bankrupt". It was an unusually forthright strap in the New York Times, which generally prefers understatement and opacity. It was the banner for an op-ed article written in 2008 by Mitt Romney, who is now virtually certain to become the Republicans' presidential candidate.

Romney, whose dad was an automobile man, wrote: "If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye."

Though unpopular on the shop floor at GM, it's a view still strongly held by senior Republicans. Mitch Daniels, former Bush administration budget chief, told me GM and Chrysler would have been easier to turn around, and at much less cost to the taxpayer, if they'd gone through the traditional bankruptcy route, stripping them of their pension liabilities and debts.

Now this issue is going to play hard in the upcoming presidential election, especially in the northern Mid-west, scattered with bailed-out car plants and their supply chain businesses.

To America, the automobile and the open road have always been symbols of free-market individualism; and on the bumper stickers of the cars there are still the same slogans proclaiming various forms of neo-liberal freedom.

But whether you call it crony capitalism or state capitalism, the auto industry's successful turnaround - GM made a $7bn profit this year - bears the hallmarks of European and Japanese style statism.

And while much of America's recovery remains fragile, halting and uncertain, the turnaround in cities like Detroit, Toledo and the like is tangible, and has much to do with the government's one-off foray into industrial activism.

This is going to be a battle for the heart and mind of the American worker, and the ammunition will be counted in the LED displays that clock the cars, slowly, one by one, off the end of the track at places like Lake Orion.

Watch Paul's full report on the US auto-industry on Thursday 26 April 2012 at 10.30pm on BBC Two, then afterwards on the BBC iPlayer and Newsnight website.

In that parallel universe, the British economy recovers rapidly on the back of a shrinking state, booming exports and a rapid switchover to high-tech manufacturing.

Stay with me for a tour of this alternative reality: The economy is now recovering rapidly, at 2.6% per year, following a very decent 2.1% last year. Exports are booming - the positive trade balance contributing a third of the growth, even as government spending and investment slumps. Oh, and CPI inflation is 1.9%.

Every week at PMQs, Ed Balls sits with his head in his hands, ruing the day he ever read a Keynes textbook…

Now, that parallel universe is based on something very real and tangible. It is the original projection of the Office for Budget Responsibility in November 2010, which George Osborne used to justify the biggest fiscal austerity programme Britain has seen in 60 years.

Almost every aspect of the OBR's vision has been proved wrong.

Even though manufacturing has recovered fast, it has nowhere near made up for the destruction wrought during 2009-10, so output is below where it was when Lehman went bust.

Meanwhile the world economy, which was recovering faster than expected in 2010, has slowed down, and Britain's key export market, the eurozone, has tanked because of disastrous leadership and the naked pursuit by Germany of its own self interest.

Last November, two years on, the new OBR leadership presented George Osborne with a much bleaker picture: So much damage had been done that rebalancing would not be rapid; growth would not return rapidly. The "output gap" was so large that there would have to be even more austerity even to meet the target George Osborne set himself, and then conveniently moved. Moreover, consumer demand was being flattened by imported inflation, the result of the lower pound engineered by Mervyn King at the Bank of England in numerous Eeyore-like appearances.

At that moment Mr Osborne had a choice. The IMF had left him an open door to respond to any deterioration by cutting taxes. It said that if the economy deteriorated:

"Some combination of the following would need to be considered: (i) expanded asset purchases by the Bank of England and (ii) temporary tax cuts. Such tax cuts are faster to implement and more credibly temporary than expenditure shifts and should be targeted to investment, low-income households, or job creation to increase their multipliers."

Asset purchases - ie expanded money printing by the Bank of England - we have had. Tax cuts we have not. On 29 November last year George Osborne set his face against that kind of Plan B, in favour of a Plan A++, which involved extending the period of cuts for two years and raising the amount clawed out of the economy by austerity from £111bn to £147bn by 2017.

That's why I described it as "a turning point in British history": Osborne rejected one form of conservative response to slowing growth - tax cuts - in favour of a policy mono-focused on balancing the books in five years time.

A consistent theme throughout this past 12 months has been the absence of a growth plan that actually delivers growth. The Conservatives' instinct was to go for a rapid breakup of labour market impediments to growth: mass exemptions for small businesses from minimum wage rules, reducing entitlement to maternity leave etc and unfair dismissal. This was the focus of the Beecroft report. The Lib Dems stymied it, leaving the government, as Vince Cable said in a leaked letter, without a coherent strategy.

"There is still something important missing - a compelling vision of where the country is heading beyond sorting out the fiscal mess; and a clear and confident message about how we will earn our living in future."

The government will argue, correctly, that a huge amount of our current woe is the result of the collapse in confidence and in global credit conditions engineered by Mr Sarkozy and Frau Merkel. It will point out - as I have pointed out on Newsnight, in my report from Lincoln last month - that there are pockets of success where industry has oriented itself to high-tech, export-led growth.

The challenge for policy now is what to do about these new conditions. Quantitative Easing is a strategy running out of road. The only "upside" to the persistent high inflation is that it is wiping out the savings of the old, as opposed to the job prospects of the young. But that, as they say, is not the sort of upside you really want when there is a huge demographic bulge of over 55s in the electorate.

You could cut taxes, as demanded by various industry federations, slashing corporation tax or massively increasing capex exemptions: but that would involve accepting the risk that the UK loses its AAA rating (as France and the US have done).

Supporters of tax cuts might argue that we will lose our AAA rating anyway if growth fails to materialize - because even the new, revised and realistic OBR projection has growth at 0.8% this year (it will struggle to meet that) and a combination of consumer spending and a soaraway investment boom from 2013 onwards. This too begins to look like fantasy island.

The fact is, even in this depressed world situation, economies that are export oriented, high-tech and can expand domestic services - including mixed-economy health services - are growing.

The initial premise of George Osborne's austerity programme turned out to be wrong. The real problem is if the premise of his longer, deeper austerity plan is also wrong, and that Vince Cable is right.

What will the government do? It's hard to get them into a TV studio at present but we'll let you know.

David Cameron vetoed an attempt to write this into the fundamental treaty of the European Union, so the participants - everybody except Britain and the Czech Republic - signed up to a "Fiscal Stability Treaty".

Now, long before ratification, it has brought down the government of The Netherlands and looks set itself to be blown out of the water by a Francois Hollande victory in France.

Even though Mr Hollande has rowed back from his pledge to "renegotiate" the Treaty, in favour of "adding growth clauses", the Germans in the shape of CDU chief whip Peter Altmaier on Newsnight last night, point out this cannot be done without killing the Treaty. For the Irish are set to vote in a referendum on the Treaty as unamended, within six weeks.

I said when the Treaty was designed that it might bring stability, but not growth. Now Europe is probably in the third quarter of a double dip recession. As economist Nouriel Roubini pointed out (13 April):

"Front-loaded fiscal austerity - however necessary - is accelerating the contraction, as higher taxes and lower government spending and transfer payments reduce disposable income and aggregate demand. Moreover, as the recession deepens, resulting in even wider fiscal deficits, another round of austerity will be needed. And now, thanks to the fiscal compact, even the eurozone's core will be forced into front-loaded recessionary austerity."

And so it has come to pass that French growth has ground to a halt, French official unemployment has passed 10%, and the French people have voted in large numbers against the Merkel-Sarkozy strategy of upfront austerity. Indeed six million of them voted against the euro.

Of course countries with a fiscal Luger held to their head have rushed to ratify the Treaty: Greece, Portugal, the Slovenian parliament voted it through with just two abstentions. For them, signing the Treaty was easy because they had no choice.

What is emerging now though is a concerted attempt to re-look at the Treaty's terms. Two weeks ago, in a little noticed move, the Socialist Party in Portugal, who voted for ratification, proposed the addition of "growth clauses" similar to those advocated by Mr Hollande. These were rejected, but will no doubt come back on a European level if Ireland votes the Treaty down.

But what could a "growth clause" mean? Europe's problem is that it has to rely on upfront austerity because the euro's design has limited the power of the central bank to use monetary policy to promote growth.

Though its impact is now flagging across the globe, monetary expansion has proven the effective lifeline in the first four years of the Great Recession. Printing money allows you to save the banks, keep stock markets buoyant and - surreptitiously - export the crisis to your trade rivals by tanking your own exchange rate.

It does not actually boost demand much directly, but if combined with fiscal expansion - as in the US - it can produce a weak recovery even in a country with a massive debt overhang.

Poor Europe, however, cannot even get to first base. It cannot do proper monetary expansion; its banks are "saved" but lending is contracting; its new fiscal rules tell it to keep budget deficits to a minimum, even as GDP contracts. And crucially it cannot get the unofficial benefits of monetary expansion, which is a lower exchange rate.

So now a rash of elections is forcing the technocrats to face up to what they have created.

It would be stupid to pretend the 18% vote for Marine Le Pen's Front National is only about economics. There is a long-term rejection among a section of French voters of what they see as the erosion of their national, secular culture (apparently 30% of working class votes went to Le Pen).

The same demographic pressures, from immigration and stagnant labour markets, allowed Geert Wilders' Freedom Party to gain 15.5% of the vote in the Netherlands in 2010, the Danish People's Party a consistent 12-13%, the Flemish Interest party about 15% in the Flemish regional parliament etc.

But unemployment, austerity, depressed communities and the failing narrative of the liberal centre in European politics is not some endless stasis to which the continent is condemned. It is producing political instability.

If the economics get worse then there is only one inflection point that matters: the point at which a parliamentary majority, or largest party status, is achieved for a grouping that opposes the euro, or is outright protectionist, or rejects austerity at the price of provoking a clash with the financial markets, followed swiftly by a "debtor led default", nationalisations etc.

And here is the danger inherent in the European situation. I say "danger" with some hesitation, because as a public service journalist you have to be above the fray, and if this event occurs, changing the dynamics of the entire continent, we will have to find dispassionate language to understand it, report it, and accept it as the new reality.

Nonetheless, Europe right now is the only one of the big economic blocs in the world where politics is in danger of taking over from economics as the driver of crisis.

The crunch could come as soon as 6 May in Greece: in the last opinion poll, the combined ratings of the two main parties, socialist and conservative, was 36%; the combined poll ratings of the Communists, Eurocommunists, Trotskyists and Greens was 37%. A new, more effective nationalist right-wing grouping has been formed, and is polling 11% (the old right party LAOS is languishing at 3% after it eviscerated itself by supporting the austerity plan).

And Greeks will soon get to see a 45-minute primetime interview with the candidate of Golden Dawn, whose flag looks like this:

We have only seen a rapid move to the right and left in European politics once before, and it bears studying in detail - not with the habitual lazy stereotype lens provided by TV dramas.

There were two "moments" in the defeat of liberal centrist politics in Germany, Austria, Spain etc. in the 1930s: the first, where polite society realised the working classes were swinging to the right and left, but patronisingly reassured themselves that the world of Jazz, surrealist poetry and foreign holidays could never end. That is, they said to themselves: the workers are clinging to the past, but we, avatars of a more liberal and progressive future, have economic history with us, which points only in the direction of liberalism and economic co-operation.

The second moment of fatalism came at the shock of fascist or far right election victories: "the people have stupidly ignored our advice, there is nothing to be done, let's emigrate or retreat to our country homes" etc.

I simplify, even here, of course. But the parallels are clear: right now much of the political centre, the media establishment etc. in Europe has adopted that late Jazz Age fatalistic disdain: they voted for him/her? How troubling, how irrelevant.

But here's the problem. Le Pen's Front National and Wilders Freedom Party are by no means "fascist" in the way the NSDAP or Action Francaise were in the early 1930s. And of the Greek left parties, none are as viscerally revolutionary as they were in their grandfathers' generation. But they do not need to be in order to deliver an electoral shock on the scale that took place in several European countries in the early 1930s. They represent a fundamental break with a globalised, liberalised Europe.

In previous decades, mainstream conservatives could neutralise the anti-immigration right by adopting their policies; social democrats could neutralise the left by delivering welfare benefits to the poor and jobs to the workers. What neither can do is break fundamentally from a pro-globalisation stance, so the old neutralisation tactics of the centre are ceasing to work. Of course, at the same time they are losing control of an important lever of power: the mainstream media, which can be circumvented by heterodox parties and movements quite easily now.

What is startling to an economic and social historian is how large these left and right wing votes have become, despite the fact that the crisis has been ameliorated by stimulus, and despite the high material starting point of modern economies.

So far only Greece has been pushed to the edge of social breakdown. And it is not wrong to point out that the material level most people in Europe enjoy is way above that which pushed their predecessors in the 1930s towards the extremes. My grandfather's generation spent their last penny and then starved; they had their furniture seized by the means-test man; you could see the effects in stunted growth and chronic illness even in the 1960s and 70s.

By contrast this generation has managed to rediscover nationalist, socialist (not to mention horizontalist anarchist) politics concurrently with buying iPods and Blackberries like there is no tomorrow. To put it bluntly, though the crisis is less extreme, our capacity for suffering is also reduced, as are our social bonds.

Roubini has pointed out, and I agree, that what the ECB's spending splurge created was a "holiday" from crisis. Another bond market participant puts it, in distasteful but accurate terms: Europe now has, instead of a heart attack, economic cancer. But many market strategists now think the holiday is coming to an end. The only question is sooner or later.

The challenge for the centre - before "centre left" and "centre right" just merge, historically, into a term that describes an old, defeated order - is very clear. They have to come up with a strategy for growth across Europe that is acceptable to the hard-working people who vote for them.

If they want to stick to austerity and the destruction of the social Europe they have to explain how it leads eventually to growth; if they want to break with austerity, they have to explain where the money to finance the continued social model is going to come from.

Inside it is quiet, calm and the facilities are pretty basic. Because of the protesters, most mainstream hospitals have stopped providing abortions, gynaecologist Dr Martin Ruddock tells me. Here they serve many women from low-income neighbourhoods.

Because of threats to his life by pro-life campaigners, Dr Ruddock travels to work in a bullet-proof vest.

Now Ohio is on the front line of America's abortion furore, which has been cranked up massively during the Republican Party's primary season. While presidential candidates have vied with each other to sound more anti-abortion, the past 12 months have seen a major attempt to tighten abortion laws at state level.

In Texas it is now mandatory for a woman to have a so-called "transvaginal ultrasound" prior to a termination. The law requires the doctor to display images of the foetus and make the heartbeat audible. The woman can decline to view the images and listen to the heartbeat, but the doctor must verbally describe the image - even if the woman does not want to hear it.

When Virginia tried to introduce a similar law, there was uproar; numerous states already ban abortion after 20 weeks. In Oklahoma, a bill to give a foetus "personhood" from the moment of conception creates an implicit challenge to the existing legal settlement that has yet to be tested in the courts.

In Ohio, anti-abortion campaigners are pushing for a so-called "heartbeat bill" - which would define a foetus as alive once a heartbeat is detected and effectively limit legal abortion to around six weeks.

Anita Rios, who has campaigned for abortion access since before the historic Roe v Wade decision made abortion legal in 1973, and who works at the Toledo Clinic, told me the impact of the political furore, and the state level restrictions, is already tangible:

"The strategy is to put these laws into place state by state and erode and destroy access to abortions and that is what's working."

Workers at the clinic told me of women turning up already convinced that the proposed law - which would most likely be deemed unconstitutional - was in force.

The law requiring them to make two visits to the clinic meant, for some of the poorest, long hours of travel and hardship. On entry to the clinic, some are handed small rubber models of foetuses by the protesters.

The combined effect of the rhetoric, the protests and the legal changes at state level, says Ms Rios, "makes it harder to fund and use these services. And it creates a burden of guilt and shame".

And she says, while middle class women will always be able to get an abortion; the restrictions on provision are hitting the poorest hardest.

In the small town of Findlay, Ohio, they see things differently. Here I met some of those campaigning for the Heartbeat Bill: Republican voters from the religious right, they believe America's abortion law to be creating "a holocaust".

Barb McKinch, one of the Heartbeat Bill activists told me they were fully prepared to see the Republicans lose votes on the issue:

"The time has come regardless if our candidate wins or loses. The time has come to stand up for what's right."

"America needs to wake up: it is genocide," another campaigner, Rachelle Heidelbaugh, told me. "You couldn't really have a political candidate who denied that, it would be like having a holocaust denier," I asked her. "Exactly," she replied.

The campaigners told me the aim with the Heartbeat Bill - here and in other states - is to create momentum for a decisive challenge in the Supreme Court that would overturn Roe vs Wade.

The debate is being conducted in language that is shocking and extreme. And while it has fired up a new generation of feminist activists, who see it as a "war over women's bodies", its biggest impact may be among those normally conservative women voters who cannot accept the hard line on abortion.

Among women, Republican frontrunner Mitt Romney is now polling up to 18 points behind President Barack Obama in battleground states.

The tipping point came when the Obama administration introduced contraception into its new healthcare system: all the Republican presidential candidates responded in the language of apoplexy. Mitt Romney, who as governor of Massachusetts had not rushed to repeal a similar provision, declared Obama's new law "an attack on religious freedom".

Mitch Daniels, governor of Indiana and once tipped for the presidential race himself, called last year for the party to engage in a "social truce". Now he is despondent over the way reproductive rights issues are skewing the campaign.

"[The Republican candidates] haven't handled this very well, but they didn't bring this issue up the president did. I'm not a conspiracy theorist but if this was a gambit on the part of the administration, it worked beautifully. Some of our people took the bait."

He believes the party's focus on social issues could doom its prospects in November:

"At this stage our party could be doing a lot better. I like to say that given the failure of his policies, a weak economy and high energy prices, it would be very hard to lose an election to President Obama. But we've just the team to do it."

Outside the Toledo clinic the vigil continues into the evening. Inside, Dr Ruddock vents his exasperation at the intrusion by lawmakers into what he believes should be matters of medical practice.

He shows me the normal ultrasound device, which is used to scan a woman's uterus from outside the body. Then he demonstrates the "transvaginal" probe - a long plastic device which is used only where complications make the normal sensor impossible:

"To mandate the use of this would be an absolute intrusion into women's reproductive healthcare and it is totally unnecessary in the practice of abortion practice," he says.

Anita Rios puts it more bluntly. Like many pro-choice campaigners, she believes it is "state-sponsored rape".

Dr Ruddock says: "They are doing it to drive doctors away, to make the procedure more expensive, to make it more costly to scare women away, basically to put additional obstacles one after the other in the path of a woman who is pregnant, and doesn't want to be, to try and get access to a compassionate abortion provider."

In some ways, this argument is a part of the wider culture war between liberals and conservatives in America. It is certainly fuelling the conflict between conservative-run states and the federal government that will define any second-term Obama administration.

What is new are the results at local level. Almost silently, legal abortion for women from the poorest neighbourhoods of America has become harder and harder.

Well first, consider the dirt storm that has been stirred up by the writing off of one country's debts - a country whose entire GDP makes up 2% of eurozone GDP - near meltdown of the G20 summit; numerous riots, deaths, political chaos.

Now consider this: the combined public, household and corporate debts of selected countries:

The chart is out of date of course - Greek government debt alone is above 200% of GDP now, and in the United States the same figure should be 100%, not 84%.

The analysts who drew this up, at Boston Consulting Group, concluded that it would be impossible to write down these debts to a sustainable level (60/60/60, making a combined total of 180% of GDP).

They concluded that the austerity demanded would be too hard to bear politically, and that the likely outcome would be a turn to "financial repression" plus inflation.

It was economists Carmen Reinhart and Belen Sbranica who, in March 2011, issued a ground breaking study of what "financial repression" means.

If we hear today the National Association of Pension Funds complaining that quantitative easing has placed a £90bn hole in the pension system, we can judge how rapidly the concept of "repression" is moving from theory to practice.

So what is "financial repression"? Put simply it is a combination of inflation and capital controls designed to erode the value of debts - and therefore of savings. It is overtly designed to prevent market mechanisms responding to inflation, leaving the price of borrowing too low and the return on savings too low.

Reinhart and Sbranica pointed to the success of Western economies in "repressing" a mountain of debt after World War II - in a way that avoided fiscal austerity, and allowed a growth spurt, combined with inflation, to cancel out unsustainable debts. Here's the graph:

From left to right: the combined sovereign debts of the developed countries falls before 1914, rockets afterwards, but is then only bumpily reduced - by devaluations and defaults - contributing to the Great Depression. Then it rockets in WWII, but the post-war boom coincides with a reduction from 90% to 30% of GDP.

A second graph shows how it was achieved:

The orange line shows that real interest rates on deposits, in the advanced countries, were significantly negative throughout most of the post-war boom. That is, you were effectively paying the bank to hold your money in all those little branches of the Midland and the TSB.

It is no mean feat to achieve this. You needed capital controls, so people could not easily move their money from one country to another. You also needed further rules to force pension funds to hold a certain amount of home government debt. In this way you create and encourage a "national pool" of capital, from which savers can't escape.

Then you unleash inflation, preferably in one surprise spike at the start of the process. If then the real value of deposits is shrinking at 4% a year, then compounded over 10 years, you are soon well into double digit falls in the national debt (not to mention also corporate and consumer debt).

Now given we live in a globalised financial market, with free-floating exchange rates and no capital controls, how would you "do" financial repression?

Reinhart and Sbranica say: "Similar policies… may re-emerge in the guise of prudential regulation rather than under the politically incorrect label of financial repression."

You would need to cap interest rates - either explicitly or by market manipulation. You would have to penalise savers for failing to hold government debt. And you would have to make government debt hard to value.

Then, as the inflation kicked in, you would ideally make most government debt long term, with no need for countries to borrow anew for a period of 30-50 years. In that way the trapped saver cannot respond by raising the interest rate to compensate for the falling value of debt.

Now consider this: the Federal Reserve's quantitative easing III tactic explicitly targets the "risk free interest rate" - aiming to set it at a historic low, and thus influencing all related interest rates downwards. It is not (yet) a cap, but it is a way of repressing interest rates.

Then, with much of the European bond market effectively neutralised by the long-term purchase of government debt by the ECB (we are paid not to think about the market value, says one fund manager), you make a large part of the world's debts difficult to value.

Then you create a euro 1tn fund to buy the debts of Spain, Italy and Portugal and bury them for 20 years.

It is hard to escape the conclusion that "financial repression" - as mooted by Reinhart and Sbranica - is, if not under way, then being pieced together ad hoc out of the anti-crisis measures in Europe.

Indeed economists at Credit Suisse this week wrote: "We think it is appropriate to judge the ECB's LTROs as an accompaniment to, or part of, a re-emerging programme of 'financial repression' by which domestic financial institutions are strongly incentivised, or forced, to support the financing needs of their sovereigns." (Under Repression, 5 March, Alexopoulos et al)

What makes this time different, on a global scale, however, is the reality of floating exchange rates. Countries couldn't use competitive devaluation under the Bretton Woods system. Now they can.

What this means is, that to the extent that you can't do financial repression, or don't want to, you are forced to "repress" other countries: to do trade war, currency war, or - if you're powerful - force them to do austerity packages they don't want; or if you're belligerent, you just default on your foreign debts and raise an Argentine style two fingers to the rich and powerful.

What is important is that, despite the protestations of the pension funds, the scale of the UK national debt - and many others - is still large and growing, and exerts a drag on growth in most economic models.

However "repressed" interest rates and therefore savings returns feel, it would take much more of this to wipe out the debts in the graph at the top. And much more inflation. In fact what you would need was something close to double-digit inflation for a couple of years: an inflation "shock" that really gets you started.

There is only one sure-fire way to provoke an inflation shock and that is to close the Straits of Hormuz, or otherwise cause Middle Eastern oil to cease, temporarily. Diplomacy anyone?

I personally do not remember seeing the film Help! or A Hard Day's Night until I was in my teens - but we could intuit that the series was a general reference to "that thing", whatever it was, that was going on in the outside world.

What was "that thing"? Well if you look at any single shot from The Monkees TV series you will see it. Long hair, kaftan-weirdness, a cool, laconic disdain for authority, spending power; the ubiquity of the picked electric guitar; surf culture. Not hugely hidden beneath the surface were soft drugs and anti-establishment messages, as exemplified by the series' first ever Radio Times entry:

"What do The Monkees want? To be free... to make every day Saturday night, to climb impossible mountains, to take a trolley car to the moon, to deflate stuffed shirts."

The Monkees were, of course, a studio-created Beatles-wannabe band and the TV series a straight American lift from "Help!". But for a time in my childhood they loomed larger than the real thing.

This is because a) their music was actually good, especially the hit singles written by, for example, serious pop giants like Neil Diamond and folksinger John Stewart; b) they were American. And while, in the films of the Beatles they are relentlessly trying to be Scouse lower-middle class boys, in the songs The Beatles were trying to sound American, as everybody did.

And so The Monkees had a weird advantage of seeming like "the real thing", even though the slickness of the production values told you they were not.

Another thing about The Monkees worth noting, as cultural commentary, is that the production values of the TV show were genuinely ground-breaking: it repeatedly broke the fourth wall; it used genuine out-takes from the screen-tests; it was effectively a "human cartoon" in its action sequences.

It used the same kind of cinematography you would see used in wacky, semi-surreal European movies: jump cuts, speedups, crash zooms. It was, in the era of uber-toxic pink bubblegum, a kind of visual equivalent.

And The Monkees were unleashed on unwary British pre-teen audience at the precise moment that reality would also bombard us with unsettling images of radicalisation, war, craziness.

Not long after the series started, in early 1967, I think I must have seen my first kaftan in Leigh, Lancashire, worn by a very endearing young woman on the wrong side of puberty to myself: because of The Monkees I was not shocked by this.

George Best was, at that time, in the middle of that glorious season 1966-7 that would see his hair lengthen and his stubble darken. George slipping past the entire Benfica defence, The Monkees, the kaftan girl, the My Lai massacre, Manfred Mann (I can still hear the lyrics of "My Name Is Jack and I Live In the Back of the Greta Garbo Home For Wayward Boys and Girls" every time I close my eyes and think of summer holidays in Cornwall)… all these were what we would now call "signifiers" of modernity.

Just as the Kray Twins, Enoch Powell and the "tired and emotional" Foreign Secretary George Brown were symbols of pre-modernity.

And of all the signifiers of modernity, Davy Jones signified most. He was the English kid who ended up in America, perched on the bonnet of the Monkeemobile next to its stupidly large chrome engine block, peering at us through his fringe; the Artful Dodger transported to the land of Marvel Comics and bubblegum, oblivious to My Lai, Altamont, the Watts Riots and the impending breakup of the actual Beatles themselves.

When we look back at the 60s now we do so through anachronisms provided to us through mass culture: even serious treatments like the surf film Big Wednesday or the Brit social drama Our Friends In the North tend to project back on the "innocent" phase, the inevitable disillusion that was to come.

What's remarkable about The Monkees TV series is that it captured the innocence and exuberance in fine detail. If you watch just one episode of it, on the occasion of Davy Jones' untimely death aged 66, you will feel just a bit of what it was like before it all went wrong.

My ears pricked up at the words "and others" because it's one of those police-speak terms that could just mean "everybody else" or it could be a codeword for even more sensitive categories, like "the Royal household" or "the intelligence services". We'll have to wait and see: "government" itself is a tantalising word, suggesting as it does not just politicians but, perhaps, civil servants. But, like I say, she could be wrong.

However, if she's not wrong, it hardly matters that it was the Sun "wot done it". What matters is that Britain's public life stands accused by a senior policewoman of being riddled with criminals. Crooks on the take, using public office to line their pockets.

Are we surprised? Well we've had, in the past two decades, the arms for Iraq scandal, cash for questions, cash for honours, MPs' expenses, the dropping of the Serious Fraud Office investigation against BAE Systems on national security grounds, plus all the issues to be covered in the Chilcot Report, when it finally, at long, long, last comes out.

In those two decades, London has quietly become the destination of choice for hot money: whether it's in property, high finance, art or simply cash, only the nationality of the dodgy geezers in black-window limos changes, as the world turns.

But this is different. The common thread in all the previous scandals has been, sadly, parliament. In an age when MPs are encouraged to be - indeed picked to be - "non-ideological", it was probably inevitable that the legislature should be the venue for so many scandals involving self-enrichment. And the common theme to "dodgy London" has been the ill-gotten gains of foreigners.

Now, we have to assume, there is corruption at the heart of major British institutions with better reputations than parliament. The medical profession, the prison service, the civil service, the armed forces? Like I say, she could be wrong.

But if she is right there is an even bigger concern: suppose person A has been taking X thousand pounds from News International, as alleged by Assistant Commissioner Akers. Now suppose person A needs X+N thousand pounds. Are we absolutely certain person A has not been also taking money from, for example country Y? This was the problem uncovered in the Profumo Affair (1963): that once respectable people start frequenting the semi-criminal underworld they are apt to bump into people even more dangerous than criminals.

This is where corruption inquiries always lead: to the heart of darkness.

But who is to lead the inquiry? The News of the World scandal claimed the careers of the Met Commissioner Sir Paul Stephenson and his deputy Assistant Commissioner John Yates. Rupert Murdoch owns the Times, Sunday Times and 39% of BSkyB. The current prime minister, given the choice, hand-picked as his right-hand press adviser, a man who has now been arrested as part of the investigation.

Actually, on a day when a major British bank is being stung for "only" £500m of tax avoidance, it's worth saying, on a hunch, that plain old British business is one of the least corrupt institutions: businesses have too many customers, suppliers and rivals for systemic corruption to go unreported. That's my hunch, anyway.

But on the substantive issue, if Sue Akers is right we're going to be very glad we have a non-corrupt judiciary.

At the clinic, on the corner, people hang around the doorway. Some have sunken cheeks. Others emerge carrying that international brand identifier of poverty - the multicoloured plastic sack - filled with old clothes and basic food.

Volunteer doctors and nurses set the clinic up for migrants who fall through the Greek social security net. The diseases are not unusual for a poverty-stricken area: diabetes, hypertension, stress.

But since the crisis, something startling has happened. Greeks have started to turn up here, in ever larger numbers:

"It's gone from 8% of the users to 30% in four months, and because I can see the trends across all our clinics I'm sure it will reach 50% by the end of 2012," says Dr Nikitas Kanakis, president of the charity Medecins du Monde.

Under the Greek system, you pay five euros to see a doctor and up to 25% of the medical bills yourself; the rest being covered by social security. But after a year of being unemployed the social security runs out, Dr Kanakis tells me. Some Greeks never had it - because after five years of crisis they have never properly worked.

Others, like Maria Vitali, just hit bad luck: her husband is a construction worker whose access to the system got withdrawn. So she sits with her five-month-old baby and her toddler in the waiting room.

The clinic sees about 90 patients a day. Recently they had to vaccinate 400 Greek children for free because they could not afford the vaccination fee: apart from any issues of poverty, it makes no sense medically, says Dr Kanakis, because vaccination only works if you do it to everybody.

"Even the pregnant women have to pay for the delivery in a state hospital. Sometimes this can be 800 euros or 1,000 euros - so if they can't afford it they don't give them a birth certificate."

In the last two months they started providing food as well as medicines. "Just here in Perama we're feeding 500 families," Dr Kanakis says.

The people who come here are trapped amid advancing penury and the retreating state. The minimum wage has just been slashed by 20% The government has just voted to cut the medicines bill by a further 1bn euros. What is going to happen to the health service if this goes on?

"I think it will collapse," says Dr Kanakis. "Very soon. Because as the cuts continue, even very sick people can't get treatment; even people with social security. My mother has a pension of 500 euros and this month had to pay the special austerity tax, collected through her electricity bill. It was 350 euros. She's 80 years old. So tell me how she can survive?"

What is clear, once you get away from the incessant shouting on Greek TV, and the flash-bang battles between the anarchists and the police, is that this rapid breakdown of certainty is having a big, but immeasurable, effect on people's political expectations.

The polls tell one part of the story. The Pasok party, which tried and failed to implement the first austerity bill until replaced by a technocratic coalition in October, is now down to 11%. (Epikaria poll, 16 February 2012)

New Democracy, the centre-right party that expected to form the government - it has been a two- horse race since the restoration of democracy in the 1980s - is also in trouble. Its own vote - 27.5% - is not enough to form a government. And 20 MPs just got expelled for opposing the bailout.

The Christian Orthodox hard-right party, LAOS, has also split, after leaving the coalition government during the austerity vote last Sunday. I heard two perfectly ordinary guys, sitting next to me in a cafe, comment: "I don't care if the splitters from LAOS were once fascists. They are right."

The far left is now polling a combined 43.5%. The extreme-right party Golden Dawn is on 2.5%. And there's an air of mania.

During the autumn, Greek commentators began to speak of "anomic breakdown", where people begin to disobey laws and social norms individually. Back then I reported on small road toll defiance movements, and the occupation of courts trying to repossess homes.

Now it is different. Anomie has been replaced by something much less obscure in the annals of social history: visceral hostility to the Germans and north Europeans who are seen as imposing the austerity. And the hostility has only grown this week, as the euro group threw back in the faces of the Greek government their austerity plans and refused to release the bailout money.

The lightning rod for this hostility has been the call by two Greek octogenarians - Mikis Theodorakis and Manolis Glezos - for an "uprising".

Mr Theodorakis is, of course, famous as a composer. Mr Glezos is famous for tearing down the Nazi swastika flag from the Acropolis in May 1941. Both were gassed as they tried to march on parliament on Sunday night. As I was standing amid the teargas and missile barrages, a young masked protester limped up to me, almost sobbing: "They attacked Glezos!"

Few Greeks believe the austerity plan can work. The rationale among the politicians has turned from "Do the cuts and we will recover" to "Do the cuts because we have no option."

The projections of IMF economists - that Greece may get its debt down to 129% by 2020, by running a surplus of tax receipts over spending in the short term - looks to most people in high finance like wishful thinking.

New Democracy (ND) wants to stick to the fiscal limits agreed with Brussels but unleash a radical, free-market reform onto the economy: privatising faster, possibly introducing a flat tax to free up small businesses.

But the experts in Brussels and Washington look askance at this. In Hungary, they have a worked example of what happens when a mercurial right-wing party takes over in a crisis and implements a flat tax.

In summary, it was a failure - and Hungary is now begging the IMF for $20bn.

But in any case few believe ND can get a majority for its free-market therapy. In fact, the combined support for ND, Pasok and the rump of LAOS totals 43% in the polls.

The left, for its part, remains riven by splits. When the security squad of the communist trade union PAME clashed with anarchists on a demo last summer, the communists pinned the blame on the other big left party, Syriza.

Outflanking both of them, a tiny former "eurocommunist" party called the Democratic Left has gone from near zero to 16% in the polls.

Yiannis Bournous, the international spokesman for Syriza, believes that despite this, it may be possible for the left to attempt to form a government. "And run a state that's part of Nato?" I ask. He makes clear that any left government would do the basic things - certainly not leave Nato.

Syriza and the DemLeft do not even want to leave the euro: Syriza's proposal is for Greece to declare a selective moratorium on debt repayments and use the euro bailout money for a programme of social reform.

In the meantime, their growing popularity is not just down to the militant atmosphere on demonstrations: "We've built a solid record in local administrations," claims Mr Bournous "and all over the country groups of our supporters are organising things: food provision, bartering clubs, self-help groups. That's how we've built ourselves.

"We are talking about a new bloc of forces that have their internal differences but which agree on the rejection of the new memorandum and this suffocating policy of super-austerity."

Does he seriously think they can form a government?

"This is our proposal. They must put aside their partial differences and after the election, yes, form a new bloc of power."

This week the German Finance Minister, Wolfgang Schauble, voiced fears others have only spoken about in private: that given the low showing of the "mainstream parties", there should be a truly technocratic government, with no career politicians involved.

Others, such as the appointed Pasok MP Elena Panaritis - an economist who advises the party leadership - say the elections should be postponed:

"If there's an election so soon, then there'll be elections again in two months, and an election the next months, and then we can kiss the country goodbye, and possibly the euro goodbye. If we're not seriously looking at the repercussions we're looking possibly at a situation like Russia in the early 1990s; then Russia had a poverty rate higher than under communism. And it had crooks running the country."

I have been reporting the Greek crisis now for two years, intermittently on the ground, and it looks like something changed, tangibly, in the past 10 days.

The established parties lost belief in what the EU is forcing them to do; parts of the EU lost belief in it too; and the people - quite wide layers of society - lost belief in the political class.

I cannot emphasise enough the role of policing and the media in this.

On the ground, Sunday's demonstration felt massive. It was never allowed to assemble in one place but even the PAME contingent, where I stood on Stadiou Street, looked maybe 50-70,000 strong.

The organisers claimed 250,000 had tried to assemble. The police claimed 4,500. The media reported 15,000. Both of the latter figures were a joke.

What was no joke were the clashes between police and the hardline protesters - drawn from the anarchist black bloc, the fringes of the far left and in increasing numbers from right-wing, football-supporting groups on the fringes of LAOS and the fascist group Chrissi Avgi. Time and again, on the grounds of confronting the rioters, police made incursions into large masses of peaceful protesters.

This is hardly spoken of by Greek ministers and the EU doesn't seem to want to comment on it. But I can tell you from repeated experience, it feels like a process of collective punishment of a peaceful majority.

I think this week caught Greece on the proverbial brink of something. The anger could easily solidify into anti-German sentiment, but with the conservatives and Orthodox right implicated in the first bailout, anger can more easily flow to the left.

It may be of course that I am overestimating the dangers. But here is another problem of perception: in the three hours I spent at or close to the front of the rioting on Sunday night, I did not see a single other television crew. Ours was repeatedly harassed, verbally and physically, most harshly by a small group of right wingers who accused us of being German.

At the start of the demo I saw one other (foreign) TV crew and that was it. Parts of the Greek broadcast media have long since given up telling the story of the streets; for most of them it is too dangerous, such is the popular hostility to a media many believe is in the pocket of a corrupt political class.

That is sad, but here's the wider problem this creates. If you are Schauble, Rehn, Merkel, Lagarde, you are increasingly flying blind in this crisis. The Greek papers, heavily politically aligned, can only partially reflect what is happening. The Greek politicians you talk to spend their nights shuttered behind grilles in anonymous offices - they cannot appear in public, they cannot get a feel of the streets.

The Greek politicians in power cannot deliver the country they run to an austerity package they do not believe in. And after the election, power is likely to be even more fragmented.

Just as the combined might of the IMF and the Greek government is pulling economic levers that do not work, the more insidious problem is that they are pulling political strings that are broken.

You can watch Paul Mason's full report on the personal and political impact of the Greek crisis on Friday 17 February at 22.30 GMT on BBC Two.

But "agency" is the word uppermost in my mind now for a different reason. Rarely in economics do you find so much dependent on the actions and decisions of a few human beings. In its philosophical sense, "agency" is the key to understanding the present situation, which I will summarise as follows.

1) Greece is close to the endgame. It needs a debt write off that puts its pubic finances on a sustainable future path. The proposal is 50%, "voluntarily" accepted by the creditors. I understand the IMF believes a "sustainable" settlement needs an 80% plus write off - and the IMF rules do not allow it to sign off deals that are unsustainable.

2) Numerous hedge funds are reported to have bought Greek debt so as to operate in the space of uncertainty this opens up, much as a gambler operates next to a roulette wheel. If the "haircut" is 80%, I am told, many of them lose money and are prepared to trigger credit insurance contracts that will then torpedo the entire deal. They will not lose money as a result, but the European banking system will go into crisis.

3) Beeping away at the edge of the radar is Hungary, which has enough money to last until November but whose government is absolutely determined to defy IMF demands for austerity in return for a bailout. Most Hungary watchers believe the government of PM Viktor Orban to be unpredictable, and entirely capable of simply choosing to default, should political conditions internally turn against them.

4) Mario Draghi, boss of the ECB, has turned the taps on to an unlimited supply of cash, provided by the Fed, Bank of England, BoJ etc - and has simultaneously bought unprecedented amounts of Italian and Spanish debt, and simultaneously allowed the European banks to store their money overnight in unprecedentedly huge amounts. He can go on doing this as long as Chancellor Merkel does not start getting punished electorally for allowing the ECB to become exposed to large amounts of financial junk.

5) Finally another Mario, Mario Monti, is trying to push through a series of austerity measures and reforms in Italy that could make or break the euro. Quite literally: if Italy comes good, and the markets believe its story, then the magnet that was drawing France away from the group of "solution" countries to the "problem" countries goes away.

So there are really six "agents" here in the short term: the Greek government, the biggest hedge funds - nobody will tell us who they are but Reuters tried to name them earlier this week; Orban in Hungary, Draghi in Frankfurt; Merkel in Berlin and Monti in Rome.

Now here's the thing. The debate about "agency" in sociology and philosophy revolves around how much real freedom of action a subject has. Are they really free to influence the outcome of events, our bound by the structural conditions that surround them.

Here's my take: Orban is really free. He has a 2/3 majority in parliament and has curtailed checks and balances on executive power. Draghi is for now really free. He has more or less cut loose from Merkel and the Germans and is doing unsaid and unheralded what people wanted him to do - print money, lend money, accept dud cheques as collateral. The hedgies are really free. They always are.

Not free are Merkel, Monti - because constrained by politics in Italy - and the Greek government. The latter have, off the record, briefed that the IMF's proposed austerity programme means "civil war". The most likely outcome of next week is they accept a fudged austerity programme that then does not work. One Greek commentator put it to me like this: "the people who sign a deal that gives away Greek sovereignty over debt that then goes wrong have to be prepared to be court-martialled". He wasn't joking.

Christine Lagarde of the IMF is not really free either because though she may like to square the circle between a "sustainable debt write off" of 80% and an unsustainable one at 50%, there are technocrats inside the IMF whose reputations depend on sticking to the letter of the Fund's rules. She would like to raise and lend $1 trillion but she can't. Her former boss, President Sarkozy, does not figure in my list of the major actors - because though still powerful, he's almost entirely dependent now on what Merkel and Draghi do.

So here's the next problem. Like in a chess game, it depends which of the actors has the next move. What looks a strong position if you can move first is a weak position if you move last; sometimes it's vice versa.

The next real move is supposed to be with Greece: it can, and probably will say my Greek sources, sign some kind of second bailout deal, involving an inadequate write off of its debt and an unachievable austerity programme. Then it will have an election.

The ECB will go on pumping. It may also cut interest rates. Viktor Orban is the wild card: one of my analyst sources put it to me last week:

"Orban believes in economic nationalism - he believes in a crusade against remnants of socialism/communism and will take whatever and any means necessary to achieve it with speed regardless of legality etc."

The IMF also has become a slightly wild card. It is no longer - it seems like prehistory now, the days of the Genoa protests etc - "a tool of America". America hasn't even paid its dues to the IMF! It is becoming more like a reflector of the balance of forces; more autonomous as an agent.

Mario Monti remains therefore the interesting figure. He warned Merkel this week to stop simply calling for more austerity and to cut Italy some bilateral slack. He half agreed with S&P's diagnosis - that the Eurozone is on the route to a self-imposed catastrophe with its insistence on "austerity only" - pleading that he, himself, is pursuing a more nuanced strategy of austerity plus growth-inducing structural reform.

Much still depends on who makes the first big move. If they come in the right order, it might look like this:

The Greeks do a deal on a second bailout that, by tactical negotiation, leaves key hedge funds out of the haircut.

The hedgies fail to trigger Armageddon in the CDS market.

Orban climbs down in his standoff with the IMF.

Draghi goes on printing money and accepting dud cheques so that, with the second Greek bailout, the pressure eases on Italy, and Monti can point to a fall in bond yields.

Then, as the credit crunch in Europe eases, the predicted recession turns out shorter and less deep.

Greece and Portugal probably still go bust at some point, and there is a political crisis in Hungary, but at least the periphery crisis is finally - they hope - sealed off from the wider financial system in the heart of Europe.

That's how it could look. It could equally end in disaster if, like Eric Morecambe in that famous encounter with Andre Previn, they "play the right notes but not necessarily in the right order".

Right now, on the other side of the world, Hungary's government is staging a standoff with the European Union about the constitutional role of its central bank. And conservatives everywhere are relooking at the role of central banks as they morph from lenders of last resort to effectively underwriting - some say controlling - fiscal policy.

This new preparedness to question the role of central banks comes alongside a renewed interest in pure-form Austrian economics, which we covered on Radio 4's Analysis programme a year ago.

Ron Paul himself buys the full monty of Austrian-school positions on money and central banking. He is against fractional reserve banking - ie the practice of banks lending more than their deposits; he's against the "fiat money" that is the result of this; he believes central banks and the size and weight of the state within the economy are the cause of economic crisis; that the Fed is unconstitutional and that the US should return to - or as he puts it, go forward to a modern version of - the Gold Standard.

The mainstream media tends to treat this as lunacy or extremism. But once it was different. When the Fed was first created, in 1913, its Wall Street progenitors had to meet in secret at the exclusive Jekyll Island Club in Georgia, for fear that the new institution would be characterised as a "bankers' cabal".

For 20 years after the Jekyll Island conference, none of the participants would admit it had taken place. Only by compromising on the form of the Fed - it was created as an alliance of formally autonomous regional central banks - could its supporters get the new law through congress - and so the Fed was born amid much of the same opprobrium Mr Paul and his supporters now heap on it.

In an earlier phase of capitalism, Britain and the earlier European commercial powers (the Dutch Republic, Sweden) created central banks either to lend money to the government or to stabilise the convertibility of trading currencies into gold.

These then morphed into "banks for bankers" - clearing houses which would mop up liquidity among the middle and upper classes and spread it through the private banking system (in the lobby of the Bank of England there is a nice painting of the English bourgeoisie queuing up at Threadneedle Street on Dividend Day by George Elgar Hicks).

When the Bank of England set up in 1678 there was a similar hue and cry in parliament to the one that greeted the Fed in 1913:

"Both Tories and Whigs broke into a fury at the scheme. The goldsmiths and pawnbrokers, says Macaulay, set up a howl of rage. The Tories declared that banks were republican institutions; the Whigs predicted ruin and despotism. The whole wealth of the nation would be in the hands of the 'Tonnage Bank,' and the Bank would be in the hands of the Sovereign. It was worse than the Star Chamber, worse than Oliver's 50,000 soldiers. The power of the purse would be transferred from the House of Commons to the Governor and Directors of the new Company." 'The Bank of England', Old and New London: Volume 1 (1878), pp. 453-473.

The good burghers of restoration England, then, understood what many modern politicians do not, or purport not to: a central bank is part of the state.

Yes, independent or no, governed by a cabal of financiers or a collection of fools, its function has grown way beyond simply raising money for the government or clearing debts between banks. A modern central bank issues the currency; it controls the amount of money in the economy; it lends to the government and to other banks; it sets interest rates; it regulates the banking system - even now in the UK regulating macroeconomic policy - manages the foreign exchange reserves of the government and "owns" something called monetary policy.

But it is not elected. Indeed the attempt to place Hungary's central bank under parliamentary control is what has caused the EU to threaten to withdraw economic aid.

Nor is it much accountable. The Bank of England likes to claim it is accountable to the Treasury Select Committee, because it has to appear there quarterly. But in fact it is accountable to the Chancellor, who has signed away most of his rights to hold it to account.

Now, in the crisis, central banks are becoming all this and more: by issuing paper money on a giant scale they are affecting the ability of governments to make tax and spend policies - Chancellor George Osborne's ability to do £147bn of fiscal tightening is based entirely on the assumption that Bank of England Governor Mervyn King will go on doing £400bn of monetary easing.

There have been three crucial stages in the evolution of modern central banks. The first - well documented in the excellent Lords of Finance by Liaquat Ahamed - was when World War I threatened to crash the national banking systems of the combatants.

It was here that the unelected, largely unknown and unaccountable nabobs of central banking actually began to fix the global monetary system in a series of ad hoc and highly irregular deals with each other. This continued through Versailles and on to the second big crisis - 1931 - when the gold standard began to fall apart.

As capitalism moved in a statist direction, it became politically controversial for these private-style cross border loans to be made, and in some countries central banks became, for the first time overtly, a tool of the executive - Hitler controlled the Deutsche Reichsbank directly after 1937 proclaiming it was transformed "from an internationally controlled bankers' enterprise to the institution of monetary issue for the German Reich" - (Speech 21 January 1939). (Obviously with the Nazis this critique of central bankers as cosmopolitan internationalists drew on their general anti-Semitic critique of international finance).

This overt statism was reversed after 1945, but you do emerge in the post-war boom years with a clearer understanding of the central bank as an arm of the state, albeit a relatively independent arm; and the culture emerges that the central bank has to meld its activities with the national interest of states within a global system, rather than - as was sometimes the case in the era of Montagu Norman et al - a private club representing the supposed "interests" of the finance system.

The Fed, of course, as the bank of the dominant power, gains great power over the global monetary system.

The third stage in the development of central banks came in 1971 when the US abandoned the Bretton Woods arrangement of fixed exchange rates against the dollar. From this moment you get true fiat currencies, the takeoff of financialised capitalism and the emergence of the central bank in each country as money creator on behalf of the state, and thus a major centre of political power.

Once you understand that the central bank is really part of the state in modern capitalism, and that the crisis has made it the most important and powerful part, that allows you to understand almost everything else.

Right now, central banks are engaged in a major operation to stave off the Euro sovereign debt crisis by extending global unlimited short term credit to Europe's banking system. They are also printing money to support demand; and to export the crisis - and inflation - to the developing world.

One of the frustrations of being a journalist faced with this is where do you even begin to hold such institutions to account - not just for their tactical actions, as with my famous spat with Mervyn King in February last year - but over their strategic role, in both regulation, macro-stability and enabling (ie backing) certain fiscal policies over other ones (as again with Sir Mervyn and the Coalition).

Also for their role in diplomacy: Wikileaks released a cable last year showing the Chinese requesting Tim Geithner to lean on the Federal Reserve to speed through the partial acquisition of Morgan Stanley.

Given the central bank acts often in secret, and through informal contacts in networks like the Trilateral Commission (see membership list here) and Bilderberg it's hard to subject them to scrutiny. And this is not a new problem.

In my extensive collection of obscure books, there is one called "The Old Lady Unveiled" by J.R. Jarvie (Wishart 1933). Purporting to be a critique of the Bank of England, it contains an exchange of letters between Jarvie and the-then Secretary of the Bank, Ronald Dale, in which Dale unceremoniously tells Jarvie to get lost for requesting a list of stockholders in the bank.

"The bibliography of the bank is meagre and leads to nowhere in particular," Jarvie observed.

It sometimes feels that way today: for while there is much statistical information published by the central banks, and while some are now even putting themselves up for ritual grillings by journalists, it's very hard to find a hard-edged discussion of the economic, political, diplomatic and strategic role of central banks within the current system. Politicians meanwhile often simply shrug their shoulders: "The bank's independent, what's it to do with me?" they ask.

At least after Ron Paul, and after the Hungarian debacle, there will be more sensible questions to ask, even if we don't always know the answers.

In 2012 however, the shape of the crisis is heavily predetermined: there are a series of crucial stages the eurocrisis has to go through and the way they're resolved will affect everything else.

Now, as is clear from Thursday night's summit statement, these common institutions are to oversee a selective "fiscal compact".

Because yesterday's Autumn Statement will set the political tone of the decade: it will tie the hands of future governments; and it has already brought a philosophical debate on the British right to an abrupt end.

There is a fair bit of tentative dirigisme in there: a national infrastructure plan; transport links upgraded with macro-economic design; exemption from carbon targets for crucial industries; 100% capex tax exemption in the north of England.