Schlepping into downtown Madrid from Barajas airport on the wonderfully efficient Metro, it was hard not to look around the crowded carriage at young Spaniards heading out to start their weekend with some serious Friday night partying and wonder not just if they had jobs, but if they would ever work,  at least in the foreseeable future. Youth unemployment is now over 50%.

All is not well in Europe’s fifth largest economy, with 10-year bond yields pushing back through 6%, street protests at ever more savage austerity measures and the pricked property bubble still eating away at the financial health of much of Spain’s banking system.  Inflation is falling, dropping below 2% in March, reflecting the economy’s slide back into a second recession.

Sovereign debt is hardly at Greek or indeed UK levels at a figure of 69% of GDP at the end of 2011.  But it rising rapidly, driven by burgeoning debts owed by the 17 semi-autonomous regions, especially Catalonia, Valencia & Madrid whose chronic overspending accounted for a third of the 2011 budget deficit, which reached 8.5% of GDP despite earlier forecasts of only 6%.

For sure, Madrid’s gloriously charismatic Cervecaria bars were busy, but on a Friday evening they were nowhere near the manic panic overcrowding of bygone years.  Glasses of vino tinto and plates of tortillas, albondigas and pimientos de padron could be ordered without resort to sharp elbows and received with almost no delay.  Restaurants were very far from full.  Taxis sat at their ranks uncalled, their listless drivers seemingly disinterested in the urgent summons of tourists and locals, late to be somewhere.

The Museo Thyssen-Bornemisza gallery is one of Europe’s best art experiences, with its great light and even better space, currently featuring the early works by Marc Chagall, complimenting his later output on show elsewhere in town at the Fundación Caja Madrid.  No sign here of the queues for the Lucien Freud or Hockney exhibitions in London.  All was eerily quiet on a cold showery Saturday afternoon, making for quality viewing but depressing thoughts about a country seemingly deep in denial about its economic realities, at least at government level.  Taxi drivers were less optimistic than their political masters.

Lecturing to Masters Degree students at Madrid University on international insolvency law and practice seemed an entirely relevant topic.  What did they think of where their banks and real estate speculators, encouraged by weak regulators and naïve politicians, had taken them and their career prospects?  Not a lot it seems, except to mourn the absence of friends now rebuilding their lives across Europe and the world.

One bitter comment struck home: “We are the new Irish, doomed to wander the world in search of better prospects”.  It seemed churlish to remind the earnest young man that this tribe was matched by equally desperate mass emigrations of talent from Greece, Portugal and of course Ireland itself.  The young in Europe live in deeply troubling times.

Prague’s historic Wenceslas Square was hardly buzzing with life on a relatively warm Spring Thursday evening, leaving the food stalls struggling to sell their tasty bratwurst, with or without sauerkraut and mustard.  Small knots of tourists seemed lost in the broad boulevard, leaving the many souvenir shops empty and their massive displays of cheap Bohemian glassware safe from their clumsy clutches.

The Czech Republic is slipping inexorably into the second leg of a double dip recession, pushed down by faltering growth across Europe.  An IMF mission has just reported muted growth of only 1.75% for 2011, but a fall in GDP in the final quarter looks increasingly likely to be followed by further slippage in the first half of this year.  The IMF prediction is for little or no overall growth in 2012.  Fortunately, the economic fundamentals are relatively strong with no major internal imbalances and debts equal to less than 40% of GDP, well below the EU average.

The relative strength of the economy and future growth prospects have been confirmed by a deal in which one of the region’s major brewing business, StarBev with over 20 brands including Czech Staropramen has been snapped up by the US giant, Molson Coors for $3.5bn.  Other signs of external confidence can be seen in statistics showing that a third of all s.r.o. limited companies are now foreign owned, an increase of 45% in the past three years alone.

Both the media and a predictably articulate cab driver seem exercised by unemployment and foreign labour, motivated by a jobless rate of with 8.9%.  Government efforts to restrict overseas work permits have provoked howls of protest from the construction, food production and farming sectors, in an unsurprising echo of a debate going on all over the developed world.

By contrast, the barman at the Hotel Perla was more worried about oil supplies, following some sabre rattling by Russian oil companies which have suddenly stopped making commitments to deliver supplies down the key Druzhba pipeline.  Regional politics never change, although alternative but more expensive oil is available from the Mediterranean so concerns may possibly be overdone.

But what was causing more amused comment were the plans of the coalition government to close down three entire ministries in a novel approach to cost cutting.  The departments said to be in the firing line are Culture, Environment and Regional Development.  There is precedence for this, with the Human Rights and Minorities Ministry having been abolished in 2010.  What might the impact on Whitehall morale be if similar action was threatened by our own cash-strapped Coalition?

And the dry Czech sense of humour was well in evidence as a colleague ordered the American breakfast with its four fried eggs, over easy at the Café Louvre on Národní třída, a shrine to the elegant décor of years gone by.  As the huge plate of cholesterol-infused delights arrived, the waitress winked at our table and asked: ‘So who’s the cowboy here?’  Cue much spluttering among our group of five lawyers and one accountant.

The party line is that the Mafia is in retreat and no longer the force it was, so perhaps the shocking dilapidation of Sicily’s capital, Palermo, is more down to Italy’s northern political bias starving its southern-most outpost of funding, rather than simple corruption siphoning off the cash.

But this beautiful island has long been the plaything of predatory mainland influences: initially a thriving and important colony of ancient Greece, it has since been ruled and pillaged by the Romans, Vandals, Ostrogoths, Byzantines, Arabs and Normans.  The result is a rich but confusing cultural heritage, one of the key drivers for the tourist industry, which is slowly recovering from sharp falls during the recession.  Over four million visitors sample Sicily’s considerable pleasures each year, almost matching the indigenous population of five million.

Travelling around the island, cars flowing on the mainly elevated main roads like motorised water on modern aqueducts, the impression is that agriculture and viniculture must dominate the economy.  But this represents less than 4% of Sicily’s GDP of around €90,000m despite producing more wine than New Zealand, Australia and Hungary combined.

Sadly, it seems that endless fields of vines and trees heavily laden with oranges, lemons and olives, flourishing on fertile soil made rich by the Etna’s volcanic eruptions cannot create an economic miracle.  Instead a mishmash of inefficient industrial and commercial activity continues to produce extremely low income per capita, high unemployment and a thriving black economy.  The current travails of the overall Italian economy are adding to Sicily’s woes.  Without the employment boost provided by the NATO air base near Catania, the situation would be grimmer still.

But add suitable quantities of Nero d’Avola and Pasta alle Sarde to a gentle tour of the island’s stunning churches and cultural sites, and somehow these problems seem less pressing. Palermo, Agrigento and Siracusa are main centres overflowing with places to see; visiting the Cathedral at Monreale and the Byzantine bling of the Palatine Chapel at the Norman Palace in Palermo are just two of so many breath-taking and humbling experiences.  Enna, the fortified citadel atop the very centre of the island is a miracle of mediaeval simplicity, while the Baroque architecture of Noto, glowing in glorious warm sandstone colour is a wonder to behold, especially with a double coffee gelato cone in hand.

So while Italy stumbles on in the midst and mist of the Eurozone crisis with its stricken banking system awash with unrecognised losses, a culture of tax evoidance exceeded only by the Greeks, its opposition leader mired in new scandal and the Bunga Bunga man still lurking at the fringes of politics, whither Sicily?

Can it sail serenely on, despite its problems, grow its tourist trade and modernise both its infrastructure and economy?  Or will all that seem like far too much hard work in the burning heat of summer.  Watch that space, or better still visit Sicily and boost the economy with your tourist spend.  That really is an offer you can’t refuse.

What a difference a year makes.  The UK economy lurched into 2011 sluggish but hopeful, with predictions of GDP growth of 2.2%, surging to a healthy 3% in 2012.  Inflation was thought to be a temporary worry at an RPI rate of 4.7%. Unemployment was stable just below 2.5m.

The October 2010 Spending Review had set the scene for an austerity programme to reduce the budget deficit, but details were yet to be sketched in and the measures certainly hadn’t yet bitten as we celebrated New Year 2011.  There was more fear of cut backs than actual pain, though that was to come soon enough.

The eurozone crisis was confined to the three small-enough-to-bail economies of Ireland, Portugal and Greece.  Commentators whispering about contagion and threats to the survival of the euro were dismissed as hysterics.  The UK was still a functioning member of the EU, or at least it thought it was.

As 2011 unfolded, spending cuts began to cause real distress in certain sectors, most notably construction, leisure and above all, the high street where a string of high profile failures like Jane Norman and Habitat prompted the government to concede control of its retail regeneration strategy to a TV celebrity, the shopping guru, Mary Portas.

Growth prospects have plummeted, to the extent that the 2011 outcome will be no more than a marginal 0.7%.  Unemployment has hit a 17 year high of 2.64m.  Inflation has actually risen to 5.2%, even if economists continue to insist it will soon fall back.  Government borrowing projections are significantly up and the debt mountain is rising, not falling.  Blame the eurozone crisis or heavy-handed austerity, the outcome is an economy somewhere nobody would choose to start from for 2012.

But there are surprising shafts of sunlight amid the stygian gloom.  The government may berate the banks for not lending enough, especially to the vital SME sector, but perhaps we should be grateful that business is so reluctant to borrow.  And we should be reassured that British businesses are allegedly sitting on a record cash pile as they react to the lack of credit available from traditional funding sources, with the UK clearing banks under pressure from the Bank of England to hoard cash in the face of eurozone uncertainty.

Something strange has been happening to our attitude to business risk in the UK, which may explain the borrowing strike.  For the first time in decades, management teams have stopped chasing growth for its own sake and turned away from the busy fool option.  They are learning to live with a low growth/no growth environment.  Without growth, there is much less pressure on working capital resources.

This is why after the worst world recession for over 70 years, corporate insolvency rates in one of the most globalized economies on earth are at a 30 year low, measured as a percentage of active UK businesses.  Historically, insolvencies peak between one and two years after GDP starts to grow again, but not this time it seems and the lack of growth is the underlying reason.

But this cannot continue, as austerity bits deeper into consumer confidence and spending and as the eurozone slow-motion car crash accelerates and chokes off prospects for the UK’s biggest export market.  Anecdotally, credit insurance claims are rising sharply, which means that businesses are struggling to meet their commitments.

There has never been a time when credit managers need to watch their debtor books more closely or when procurement professionals should monitor the financial health of their supply chains with greater intensity.  When (and it’s not an “if”) it all starts to go horribly wrong next year, the descent into financial distress will be headlong and precipitate.  Time spent on Plan B right now will be the best investment most companies could possibly make.

Spending time in London with overseas visitors is to see the UK’s capital through different eyes.  When those eyes belong to insolvency practitioners from all over the world, the risk is that the view will inevitably be jaundiced, especially when these vampires of the recession start comparing their countries’ financial woes and the incompetence of their political leaders.

If you then expose your visitors to the varied delights of a celebrity chef restaurant, a jazz club now grown seedy as London’s premier speed-dating pick-up joint and the quintessential Britishness of afternoon tea at Fortnum & Mason, you can begin to get some interesting feedback about the mood of these troubled economic times.  The final ingredients in this global opinion soufflé were a walk down Oxford Street on a Saturday morning, turning down New Bond Street and eventually through Burlington Arcade.

Almost everywhere seemed busy to our gallant band of business tourists, with the Paris contingent wondering why all of France seemed to be intent on boosting our flagging retail sales with their fistfuls of euros.  The man from Beirut commented that some streets in the West End were dirtier than at home and the pavements more dangerous to walk, a judgement enthusiastically supported by the group from Delhi, surely a wake-up call for all who care about London’s image head of next year’s Olympics.

Gradually, some consensus emerged.  A cynical restructuring expert from New York asked why we Europeans were so obsessed with the parlous state of our economies, when the situation in the US was little better, especially in the real estate market there.  He suggested whatever we might think about the fragility of our banks and the scale of their capital requirements, at least on the whole we are no longer extending and pretending unlike the fiction still rampant in his financial sector.

The view from Budapest was equally scathing.  Why all the focus on the troubles of Southern Europe, when much of Central and Eastern Europe was drowning in utterly unsustainable foreign currency denominated mortgages, while discredited politicians tried to keep the lid on smouldering social unrest about soaring prices and savage unemployment levels.

There was more talk of social issues, this time from a Chinese perspective as rampant inflation overwhelms the benefits of the years of runaway growth and middle class development and the authorities in Beijing struggle to rebalance the economy towards domestic consumption and away from exports to flat-lining developed economies.

Our Austrian born German delegate complained about being the bailers-out of last resort for the whole Eurozone, even as their export led economy falters in the face of the latest global slowdown.  They know that the collapse of the euro and the re-establishment of a strong deutschmark, or “heavy” euro would be a financial disaster, but try telling that to politicians facing elections next year.

Almost the only ray of sunshine came from Malta, where the economy is in good shape, the banks are largely untroubled and there is much lip-smacking anticipation of the benefits to come from exploiting their traditionally strong commercial links with the newly liberated Libya.

Our group of happy cynics said their goodbyes and scattered to the four corners of the globe, cases bulging with over-priced but heavily-discounted gifts, most of them produced almost anywhere but in the UK.  What they wondered, would the world economy look like next Spring, when they are due to meet again in Salzburg?  Even the clearest of crystal balls might struggle to offer any sort of reliable answer to that conundrum.

The Eurozone’s slow motion financial crash has come at a terrible time for the UK’s embattled SME sector, which has been battered by a tide of bad news over the past few weeks just as it struggles to emerge from the global financial crisis.

The payment system operators, Bacs has announced that SME’s are now owed a record £33.6bn in late payments as their customers’ cash flows get increasingly squeezed, with 48% of these overdue debts outstanding from large companies.

Corporate insolvencies, which are overwhelmingly concentrated among SMEs are finally rising after several quarters in the doldrums.  They rose in Q3 2011 by nearly 9% and are set to escalate further as government austerity measures bite deeper still into consumer confidence, unemployment escalates and higher commodity and energy prices continue to depress profit margins.

Little surprise then that the CBI announced last week that confidence among SMEs has fallen sharply in the quarter to October.  Growth in domestic orders stalled for the first time since January 2010, while a balance of 8% saw their export orders fall, the first negative reading since October 2009.   Stock building by SMEs is in reverse, with a net 8% of businesses expecting to reduce their inventories over the next three months.  Overall business sentiment was the worst since April 2009.

The financial pain is being felt widely across most of the economy.  Figures from Red Flag Alert show that companies with financial problems in the travel and tourism sector rose 27% in Q3 2011, making it the worst hit industry.  But many other sectors saw double digit rises in troubled companies, notably businesses connected with discretionary leisure spending.

So what impact is the Eurozone sovereign debt crisis having on our SMEs?  Statistics are beginning to reveal that Europe’s pain is being felt here.  The September trade figures showed a 2.9% drop in exports to EU members, who form our largest trading bloc, accounting for 40% of all UK exports.  Worst of all for the government’s hopes of an export-led manufacturing recovery, the biggest fall in EU exports was in components parts.

The potential knock on effect is reflected in a British Chambers of Commerce survey published just a week ago, which shows that 20% of exporters are expecting to cut jobs in the coming months.  In case anyone thinks this is just a problem for big business, the Enterprise Survey for the first half of 2011 published by the Institute of Chartered Accountants shows that 27% of micro businesses, 50% of small and 46% of medium-sized enterprises are exporters.

The trouble is that it is not just Eurozone austerity measures that are suppressing demand for British goods and services, it is also the severe squeeze on the liquidity of Eurozone banks caught holding the toxic sovereign debt of the PIIGS in Southern Europe.  The latest figures show that European private sector banks currently hold some €736bn of this financial trash and will have to raise €103bn in new capital by June 2012 as a consequence.  The inevitable outcome will be reduced lending to European businesses, curbing their ability to grow and import from the UK.

The risk that Europe’s feckless addiction to debt will tip the UK into a double dip recession is clearly serious, given the haste with which political leaders heavy weights such as David Cameron and Danny Alexander rushed to highlight it as they left the latest G20 summit in Cannes.  This scale of expectation management should make us all very concerned.

99.9% of all UK businesses are SMEs, they employ 59% of private sector workers and produce 49% of all private sector sales.  They are finding it hard right now to access sufficient working capital from the banking sector, at least at an affordable price.  Back at the height of the last major recession in 2003, 2.6% of SMEs failed.  In the year to June 2011, only 0.7% went bust.  The very last thing we need right now is for the Eurozone’s problems to narrow that gap and plunge tens of thousands more SMEs into insolvency.

The name of Venice’s airport prepares visitors nicely for the impracticalities of getting around one of the world’s most charismatic cities. Surely Marco Polo can hardly have faced more obstacles on the Silk Road as the unwary tourist does here, from marauding brigands (for which read touts for the wildly expensive cafes and restaurants in the Piazza San Marco) and local warlords exacting a high tariff for safe passage (the €110 water taxi ride into the City).

But set aside these irritations and ignore the gargantuan cruise liners towering many stories higher than all but the churches in Venice’s supremely elegant skyline, and the reward is to be transported into a magical world, made magnificent by the artistic glories of the Renaissance. Every vista is a latter day Canaletto backdrop.

Unfortunately, Italian politics are still rooted in the murky machinations of that bygone era, with Bunga Bunga parties the modern equivalent of a Roman orgy, or indeed a night out with the Borgias. No amount of super profits skimmed off unsuspecting tourists is likely to restore faith in the ability of the dysfunctional coalition government to steer Italy round the mountain of €380bn of government debt it needs to raise by the end of 2012 or to reduce Italy’s public debt ratio from the present level of 120% of GDP, second only in the Eurozone to Greece’s 150%.

Worries abound about the banking sector, despite talk of the counter balancing effect of Italy’s vast private wealth lodged with it, estimated at €8,600bn. Reality suggests that this source of comfort may prove more mobile and less reliable than the savings of those poor Chinese who underwrite the rampant bad lending of the PRC’s banks. Especially once the more sophisticated depositors realise the implications of Standard & Poor downgrading seven Italian banks as well as the state itself.

GDP growth forecasts have been slashed to 0.7% for 2011, slowing to 0.6% in 2012 before recovering to a still marginal 0.9% in 2013. Venice’s gondolas move faster than that, despite their ballast of overweight tourists. Who knows what the latest €54.2bn austerity programme may do to this glacial progress, assuming the political will or administrative ability to deliver the planned savings in the first place.

Italy has deep structural problems beyond the poor growth outlook, with just over half of its unemployed out of work for over a year. The issues have their roots in the 1960s, since when there have been poor levels of investment, a reliance on imported technology and a worrying dependence among mid-sized corporates on internationally-generated growth. A policy of making the labour market flexible led to a collapse in productivity and a move to casual rather than permanent employment, a trend which is gathering pace in the current crisis.

So maybe the colour of the squid ink in a delectable plate of gnocchi al gusto di nero di seppia at the charming Trattoria Altanella really was a portent for the storm clouds gathering over Italy’s economy. Too big to fail? Maybe not, but the portion was certainly too big to eat.

Leaving a storm-threatened UK for a balmy, late summer day in Warsaw was the perfect metaphor for the comparative strengths of the two economies. Poland continues to be a minor but extremely creditable financial miracle.

Amid the sea of troubles afflicting the whole of the rest of Europe, Poland has been an island of growth, maintaining GDP growth every quarter since the global recession kicked off in 2008. The latest figures for Q2 2011 show a heady annualised increase of 4.3%. Chancellor Osborne would kill for anything near that level, indeed for any consistent growth at all.

The Polish miracle is built on a number of pillars. Currently the strongest is buoyant domestic demand and strong consumer spending, both driving good service sector numbers -well illustrated by the opening of 3,500 new hairdressers and 3,250 new restaurants in the first half of 2011 alone. Altogether an amazing 151,000 new businesses were registered just in this busy period.

Retail spending is growing rapidly, up by 10.9% year on year in June and by 8.2% in July, boosted by Poland’s reputation as a prime shopping destination. 79% of foreigners cited shopping as the prime reason for their visits in 2010. A further boost is expected ahead of next year’s European soccer championships being co-hosted by Poland, as fans rush to upgrade their televisions and update their kids’ replica strips. How UK retailers battling with austerity and government cuts must wish for the same sort of consumer environment.

Good use is also being made of €67bn of developments funds allotted by the European Union for the years 2007-2013. One cynical local talked of Poland being Europe’s biggest building site and clearly not all of this is going well, judging by the third motion of no confidence tabled unsuccessfully against infrastructure Minister Cezary Grabarczyk in Parliament last week.

Another positive is the Polish banking sector. Profits declared by banks totalled zl.7.7bn (£1.5bn) in H1 2011, some 50% higher than the year before. At this rate, they may well break the previous record of zl.13.9bn (£2.75bn) recorded in 2008. A conservative approach to lending has served them well, indeed recent research revealed three of Poland’s banks as the fourth, fifth and sixth safest banks in the CEE region. So successful have many local banks been that their struggling foreign parent companies are now looking to raise cash by selling out.

Professionals talk of some threats on the horizon, not least a strong dependence on their faltering German neighbours. A quarter of Poland’s exports go to Germany. The general slowdown in major developed and emerging economies around the world is a broader concern. Inflation is another worry, with wage growth expected to be as much as 6% in the third quarter.

But all seemed prosperous and confident in busy restaurants like Na Zielnej, proudly boasting that it is the only restaurant in Warsaw using the most refined local products recommended by the ironically-named Polish Slow Food Organization. Chopin Airport was also mobbed as Poles headed away for late holidays, both long haul and in hotter climes further south in Europe.

Maybe all those new hairdressers are tapping into the new found wealth of the hordes of plumbers and builders returning from their UK exile to take advantage of the narrowing gap between imploding British disposable incomes and growing Polish affluence.

Shortly after Germany shocked itself and the world by announcing a shuddering halt to its strong climb out of recession, Berlin is quiet. A strange air of uncertainty greets the visitor disembarking at Tegel airport.

Just a month earlier, Munich was utterly different: conversations with leading professionals and cab drivers alike full of belligerent outrage at seeing Germany’s good financial housekeeping squandered on bailing out the feckless economies of Southern Europe. Now the question being asked is not whether should Germany help, but can it really afford to?

In the intervening weeks much has changed. Not only has the ineffective squabbling of Europe’s political leaders undermined confidence in a solution to the Eurozone crisis, but Germany has also seen the strength of its Gallic companion in the European Project appear to stumble. The speculators have been taking aim at France, encouraged by apparently unjustified rumours of significant problems at a major French bank.

The announcement of Q2 2011 German growth of just 0.1% was well below even the most cautious forecasts. This limp outcome was the worst since the first quarter of 2009 back at the height of the post-Lehman global crisis. Imports rose faster than exports, suggesting that Germany’s manufacturing powerhouse is catching a cold from the downturn in the US and from a pause in the headlong growth of China, as well as feeling the commercial aftermath of the Japanese earthquake and tsunami. Reductions in private consumer spending and construction investment are the other principal worries.

Within days of arriving in Berlin, the mood darkened still further as a survey of 7,000 German businesses revealed the sharpest drop in confidence since November 2008. It seems that there is a general feeling of shock in the business community at how fast the German and the wider European pictures are deteriorating. This is already generating a change in the political mood even in Chancellor Merkel’s own party, and one so strong it is apparent even to visitors. With regional elections next month and general elections due in 2013, this is a recipe for caution at a time when firm decision making is essential.

Other signs both of Germany’s problems and its faltering confidence were obvious moving around the capital. Museums and art galleries were unseasonably quiet, to the point that it was even possible to move about freely in the chaotic Check Point Charlie Mauermuseum on Friederichstrasse, which must be some of record. The newly-opened and excellent Pestana Tiergarten hotel was reasonably busy, but surely not to the extent that the enticing rate of €62 per night including breakfast should have dictated. One inveterate London diner commented on how empty even traditionally popular Berlin eateries were, though the unexpected plague of mosquitos seemed to find sufficient human flesh to gorge on.

So whither the German economy? And what might these issues mean for Europe’s future economic stability and eventual recovery, or indeed the survival of the Euro project? The best hope is that the sudden slowing in growth will act as a wake-up call to policy makers and politicians, warning them that even Germany cannot expect to be immune from the global financial instability.
If they can take the pragmatic and the sensible decisions needed, then maybe Berlin’s world famous Zoo will see its domestic and international visitor numbers grow to outnumber the animal population once more. And maybe Europeans will stop drawing parallels between their leaders and the monkeys on display there.

Escaping from the M5 motorway into picturesque Devon in a warm August rain squall promised a voyage of discovery into the delights of this year’s favourite tourist activity in austerity-battered UK, the staycation.

But it also provided a chance to take a look at the realities of the economy of the UK’s fourth largest county geographically, which boasts some 1.1m permanent residents, of whom some 400,000 are economically active. Devonshire has 32,000 VAT-registered enterprises and almost 70,000 self-employed entrepreneurs. Employment is well above the norm, at 74.1%, and unemployment well below, at 6.1%, compared to 7.9% for the UK as a whole.

But this is a low-revenue, low-wage environment. Over 50% of Devon’s businesses have a turnover below the VAT registration threshold of £73,000 a year, and people working there earn £2,600 per annum less than the national average. Unsurprisingly, there are three times more people employed in agriculture, and twice as many working in tourism than the UK norm.

Another dampener of economic success is prehistoric communications, with very poor penetration even of standard 2Mbps broadband, never mind the far faster speeds demanded by business, social and tourist users alike. The internet connection in an otherwise well-equipped holiday house with stunning views worked for just one brief and frustrating 90 minute spell over eight days.

But despite this, recent research by Kingston University revealed that SMEs in the South West lead the regional table for innovation, show the greatest increase in headcount over the last three years and have the most optimistic outlook on growth.

Tourism is said to be benefiting from the impact of government spending cuts, shrugging off the closure of the South West Tourism board in March. Domestic overnight trips taken in the UK were up 5% in the first quarter of 2011, confirming the impression of tourism leaders in the region and continuing the trend of 2010 when the other side of the equation, foreign visitor numbers in the South West were marginally up, in contrast to the national picture of falling overseas visitors.

And efforts abound to extend the normal tourist season, characterised by the extraordinary decision last month to approve plans to invest £50m in building what will be the UK’s longest indoor real snow ski slope. To be located in Weston-super-Mare at the former RAF Locking site, only time will tell whether bottle-tanned celebs will flock there instead of heading to Switzerland next winter.

But why was the beach at Bideford almost deserted in the first week of August, and why was the spotlessly clean and inviting Royal Plaice chippy in Appledore equally empty? And why were there no queues at any of the iconic Hockings ice cream vans? Even the big supermarkets echoed with the lack of shoppers, which seems strange in a market dominated by self-catering accommodation.

Reflecting on a week characterised by too much food, an elegant excess of alcohol and way too many bedtime stories for the grandchildren, the unanswered question remains: why were those 20 miles of the M5 so over-crowded in both directions if the region in general is relatively quiet? Answers on a postcard to Basil Fawlty, please – or to the Secretary of State for Transport.