We have been reluctant to post over the last week or two out of a very real fear that anything we said would be out-of-date a few hours later.

However, this does not mean that anything that has happened is at all surprising or incredible, as some in the media have claimed. On the contrary, we were not the only ones to predict that there must be severe consequences if European politicians did not face facts about the euro and Americans did not get real about their debts.      

Being proved right, again, gives us little pride and no pleasure – little pride because it was all so obvious that we do not deserve much credit for spotting it, and no pleasure because it is frustrating that such an avoidable disaster was not avoided.

It is doubly depressing that the politicians still have not learnt their lesson. The response of the European Central Bank, buying debt from badly run countries, is treating the symptom not the disease. Greece must be kicked out of the eurozone. Such a display of resolution might be enough to keep other failing members in. If not, the euro cannot continue as it is. Everyone knows this.

Everyone also knows that the American “debt deal” is nothing of the sort. It is full of holes. Referring the real decisions to a committee is a politician’s way of avoiding his duty. At best, it simply postpones the problem – like kicking the ball to touch in a rugby match so that both sides can catch their breath. At worst, it means that the big crisis is yet to come: the real fighting will start when the committee reports – if it ever does.

Given this prospect, Standard and Poor’s decision to strip the United States of its AAA credit rating is fair, albeit perhaps a little premature. The politicians who are complaining about it are in a state of denial. It was rude of Mr Putin to call America a parasite on the global economy for sucking up so much of the world’s available credit – but he was factually correct. It is shameful that the USA has now surrendered the moral high ground to a past KGB Colonel.

All that said, too much should not be read into the current market turbulence. For one thing, the big players agree that most businesses are slightly over-valued by the markets, so some readjustment is necessary. It should also be noted that it is summertime, when the players themselves are away, and nervous juniors are running the office.

Things will calm down soon – but only until the players get back to their desks and find that the politicians have not done anything in the meantime to solve the problems that are now all too obvious.

The media are not sure how to react to the turmoil in Tunisia and Egypt, but their default position is to be broadly supportive of crowds on the streets because they look vaguely “democratic”.

The markets, on the other hand, are nervous, and, as ever, it is the markets which represent brutal realism and practical experience, while the media represent wishful thinking.

Parallel with, and sometimes overlapping, the economic integration of the European Union, the nations around the Mediterranean have, in recent years, become more and more integrated with each other and with the global economy. Some of these nations, those which are culturally Christian, are EU members; others, those which are culturally Muslim or Jewish, are currently not full members, but some of them would like to be. Yet, irrespective of whether they are EU members or not, the business links between them are growing in importance.

So whatever happens in the Mediterranean Basin matters a lot to the EU, and would matter to EU nations even if the EU did not exist. You only have to glance at the map to see why. Italy, for example, is only a few miles across the water from Tunisia, and the two are close trading partners. In purely business terms they have more in common with each other than Italy does with some fellow EU members further north.

As both cause and effect of increasing prosperity, the Mediterranean Basin has enjoyed a longer period of relative peace and stability than at any time since the zenith of the Roman Empire. Compare the region with how it looked in the 1970s and the change is wondrous. Even problem countries like Libya and Lebanon are making real efforts to become part of the commercial mainstream. Free trade is indeed a powerful force for peace, but it cannot be taken for granted.

It is possible only because Muslim states around the Mediterranean have become increasingly pro-business and, if not exactly pro-Western, at least subtly open to Western influence. This is not always popular. Although all observe the constitutional niceties of democracy, the price of strong government sometimes involves turning a blind eye to democracy in the broader sense.

If – and it is a big “if” – greater democracy comes to Tunisia and Egypt as a result of the current unrest, there is no guarantee that those elected will continue the policies that have delivered such peace, stability, and prosperity as they currently enjoy. If this is the beginning of a return to the uncertainty of the 1970s, the impact on the global economy – and especially on the economic integration of Europe – could be catastrophic.

“Guerrilla art” can make its point very effectively. After a – now forgotten – stock market crash in 1987, sculptor Arturo di Modica, made a 7,000 lb bronze bull at his own expense and installed it, without permission, in front of the New York Stock Exchange, as a reminder of the “strength and power of the American people”.

In the early hours of Christmas day, street artist Olek covered the bull with a charming all-over sweater as a gesture of her own warmest wishes for the New Year.

Alas, bureaucrats have got worse since di Modica’s original installation. Almost immediately, a park keeper cut Olek’s lovely bull cosy to pieces with scissors and dumped it.

The irony is that the bureaucrat’s nastiness provides the perfect third act to a work of street performance art that symbolises where we are with uncanny accuracy.

Di Modica’s bull has indeed come to symbolise the resilience of the American people in particular and the global markets in general. Just as the statue is still with us, so are the strengths it represents. Yet Olek’s woolly covering reminds us that, however strong it appears, the bull needs to be loved and looked after. The bureaucrat’s destruction of that covering is itself symbolic of the unhelpful attitudes of officialdom – which never wanted the bull in the first place and does not care if it is left out in the cold.

This is exactly where we stand on the threshold of 2011. Free enterprise has proved its resilience yet again, but recovery remains fragile, and government needs to be more sympathetic.

Yet the New Year finds us finds us cautiously optimistic. There is a now a more realistic attitude in business and political circles. Gone is the hysterical optimism that preceded the 2008 crash and the equally hysterical pessimism that followed it.

Even politicians seem to be growing up. President Obama’s deal with the Republicans on extending the Bush tax cuts gives hope that a bipartisan approach to America’s problems may be possible. The British government is taking mathematics seriously at last. The Germans are imposing discipline on the euro. Several potential crises – in Dubai, Greece, and Ireland – passed without panic. These are all encouraging signs.

The next year will be tough for many, but most will see slow improvement. That said, any predictions must end with the one that is always proved right: expect the unexpected.