The great euro swindle

Following on from Peter Oborne’s appearance on Newsnight last night:

His “Guilty Men” report/pamphlet he co-authored (and threw at the FT guy) is here:

Here’s an extract published in The Spectator: … ndle.thtml

Oh if only we’d stayed out of it like Iceland or went with the dollar like the US this crisis would never have happened!

Those in London who are enjoying the eurozone crisis have deluded themselves into thinking that it doesn’t affect them; that the worse things get for ‘Europe’ (by which they mean ‘Europe apart from Britain’) the better it is for them. They have their own (devalued) currency so things are dandy. A few decade ago their splendid isolationism might have insulated them from external shocks but, like it or not, they are now deeply integrated with Europe. The European single market is the destination for the overwhelming majority of their exports. Ireland imports more British stuff than any of the BRICs, and France and German buy plenty of it too. Should the Eurozone go into a deep recession or spiral into financial chaos, it would drag Britain down with it.

I have a wise and well-placed friend in London who, despite being well up on most things, lives in a London-centric bubble, oblivious to the world outside. I tried to convince her that the UK needs Europe even more than Europe needs the UK but she seemed to think the ‘City’ would continue to drive the UK economy. If the big banks are screwed, London is screwed. Ditto if big companies listed on the FTSE have nobody to sell to.

The attitude expressed by the Spectator article shows have hard it will be to bring all 27 member states along with the necessary changes. Arguably the solution to the crisis might be ‘more Europe’ rather than less, but what hope of getting Cameron’s crowd to see this. (Cameron probably does get it but he has to appease his eurosceptic rump, which he has already done by pulling his MEPs out of the EPP - against the advice of those MEPs who have since seen their influence wane).

The UK needs to be inside the tent. Big issues like the Financial Transaction Tax are now on the agenda and if a two-speed Europe emerges, with Eurozone countries (led by France and Germany) doing all the heavy lifting in the absence of the UK, they will lose influence.

In reality, sane UK officials in Brussels are doing their best to be part of the conversation and provide a counterbalance to the Franco-German axis. The UK Foreign Office is also pushing to get more of their graduates into key positions in the European Commission. They know the value of these things but have to do it quiety for fear of upsetting Tory back-benchers and Daly Telegraph readers.

Finally, how can the UK be rubbing its hands with glee at the prospect of European collapse when the US, Japan, China and the rest are petrified?

English for Schadenfreude

I’d rather say: “If only we hadn’t blown the massive opportunity to do well out of the Euro.”

Also, to say all Conservative Eurosceptics were boundlessly sagacious isn’t right. Many were right by accident, their initial scepticism as much to do with political ideology as economic foresight.

I’d go with that. Cheap credit represented a rare opportunity to do great things, we used it to build shoeboxes in the middle of fields and import goods manufactured elsewhere. Buy hey we’re worth it!

  1. Finland showed what a competent country could do with the opportunity…

  2. The Euro was purely politically motivated, the architects said so at the time…

If the Euro had been the core ERM countries with a real effort put into either a) building a europe-wide political domestic support for a pragmatic federal Euro-Constitution. Or b) build something on the very successful Swiss confederation model. Then they could have built out the rest of the eurozone as the weaker countries started to converge over a decade or two. There was absolutely no way the eurozone as original created could survive, for the very reasons given by the eurosceptics at the time, without Brussels pulling off a defacto constitution coup.

Luckily for all of us this grab for power is way beyond their political abilities. So what we have ended up with is a much much bigger version of Belgium. Lurching from crisis to crisis until the who rotten edifice crumbles into irrelevance.

Do the Belgians have a government yet?

Ochon go deo!

Right by accident is right - for the most part. The role of the City and the new foreign money can’t be attributed to being outside the Euro - English language, legal system, time zone, Brent/FOE Oil are not factors that any current Tory can take credit for

I used to think that the one size fits issues all could be mitigated by using fiscal policy/responsible taxation but fvck me, did Charlie McCreevy (and later Cowen + Bertie) blow that out of the water. And he was the most Eurosceptical in many respects!

I’m with Nigel Farage on this!

Have I missed all the news stories that have shown people starving on the streets of Berlin or panhandling for gold in the cavan mountains because there is nothing else to do? Or is this “financial devastation and social collapse” something that has not yet come to pass? Because while there has been serious deterioration in the economies of a number of peripheral EU nations, none have actually collapsed, which they would have if not for the Euro. As for social collapse, the Greeks are rioting because their country has been mismanaged and they are expressing their anger. I have not yet heard of any coherent group in Greece or anywhere that blames the Euro for its woes and wants to bring the country out of it. That’s because the Euro has helped the damaged countries like Ireland, Greece and Spain, not hindered it. And if the Eurozone doesn’t experience the rapid growth that other countries will experience in a few years time, we have kept our QE bullets aside to create such stimulous, unlike the other countries that have already, for want of a better phrase, shot their load.

The euro in itself is not the problem.

The problem is the lies that governments told to get accepted as part of the euro club.

The problem is the debt run up by individuals and governments because of abuse of the cheap interest rates facilitated by the euro.

The problem is the poor governance of many countries in europe, where the peasant mentality of me feinism trumps all.

The problem is the debt creation by the ECB which facilitated all of this.

The euro was not a bad idea, it was just manipulated and abused by feckless politicians and their electorates.