It was made in The Observer, on 31 August, 1997 (Godley 1997), and you can see the crucial passage in the video below (the resolution/quality of the video may need to be increased).
This is actually what we see throughout much of Europe today (though admittedly many parties actively embrace neoliberal austerity too), and what I suspect Greece will discover as it attempts to end austerity and implement some kind of stimulus.
You can read Wynne Godley’s article here, and a good analysis of MMT predictions about the Eurozone here.
We are seeing the failure of the Eurozone not only in the anti-austerity Leftish parties like Syriza and Podemos, but also in right-wing parties like UKIP, the Danish People’s Party (DPP), and the French Front National (FN).
In a recent byelection for the French parliament, the Front National (FN) won the first round, and the French Socialist party only narrowly won the second round, with the National Front candidate taking about 49% per cent of the vote.
The real question: why do mindless left-wing parties continue to support the Eurozone and EU? Why not dismantle both and reconstruct a real progressive EU at some time in the future? Most of the new anti-austerity leftish parties like Syriza and Podemos are only somewhat Eurosceptic, and not clearly anti-EU.
Godley, Wynne. 1997. “Curried EMU – the Meal that Fails to Nourish,” The Observer, 31 August.