Monday, September 05, 2011

The Euro - well into extra time

There is one thing we should all be very grateful to Gordon Brown for – he kept Britain out of the Euro.

As Chancellor, he refused to allow Tony Blair to lead us up the garden path to be swallowed by the giant Euro-monster.

If the economy is managing to keep its head above water, it’s only thanks to the fact that we have a cheap pound and we are not stuck with the Euro.

Manufacturing exports are one of the few bright spots in the gloomy economic landscape and that’s almost entirely because British goods are cheap compared with those made in the Eurozone.

Sadly, what happens in the Eurozone affects jobs in this country whether we like it or not.

The turmoil over the Euro-Pigs (Portugal, Italy, Greece and Spain) has already led to a slow-down in British exports and the crisis is far from over.

There are only two options left for the European Union.

One is to wave goodbye to the Pigs, let them bring back the Escudo, Lire, Peseta and Drachma and create a hard core Eurozone of countries which can be trusted to run their national budgets properly.

The other – the one favoured by the Brussels empire-makers – is to continue bailing out the Pigs and impose new rules and restrictions on national governments.

The Pigs would be better off if they were left to sink or swim outside the Euro. They could devalue their currencies and enjoy the prospect of some sort of prosperity in the foreseeable future.

They would still be saddled with massive debts, of course, and they might go bankrupt. The problem is they owe billions to banks all over the world, though mainly in France and Germany.

Allowing them to escape the Euro straitjacket isn’t appealing to the Euro’s masters in Berlin, Paris and Brussels. The banks would be massively out of pocket and require yet another taxpayers’ bail-out.

The snag is that if the EU presses on with further bail-outs through its planned “European Financial Stability Facility” – a £400 billion slush fund – the Germans will not be happy.

The EU was formed after the Second World War as a French initiative to contain Germany’s ambitions and it’s done a pretty good job.

The Euro gave Germany a cheap way to sell its goods to a captive market. The country has grown rich thanks to the Euro.

The price is massive debts built up by the profligate Pigs of the Mediterranean.

The German people aren’t sure they want to prop up these countries any more.

They squander their money, they don’t pay their taxes and they retire early – at 50 for many Greeks and on 95 per cent of their working salaries.

Hard-working, prudent, industrious, law-abiding, tax-paying Germans are starting to wonder how long they will have to carry these spendthrift spongers.

Germany’s Chancellor Angela Merkel is losing support from her own party and a recent poll said 76 per cent of Germans opposed a “Eurobond” bailout.

They don’t want to take on responsibility for other people’s debts – and who can blame them?

The problem for Chancellor Merkel, French President Nicolas Sarkozy and the Eurofanatics is that the creation of a huge collective debt – most experts think £400 billion is just the start – can’t happen without the voters noticing.

Brussels bureaucrats may be unaccountable but national politicians must eventually submit themselves to the will of the people.

The EU has – though another sleight of hand – recently inserted a clause into the Lisbon Treaty ruling out referendums on Euro-bailouts.

Even so, voters are not as dumb as their leaders seem to think.

A European debt union, which is what Brussels hopes to create, will not survive if public opinion in Germany and France refuses to put up with it.

The only way to keep the Euro alive is to create a single financial system for all the countries using the currency.

That means one tax system and centrally-imposed public spending limits – in short, a European Superstate.

For decades that’s been the ultimate aim of the Brussels elite. They see this crisis as a real chance to build that Superstate.

While that state may, in theory, be run from Belgium, the power will lie in Berlin.

Germany would call the shots and impose its own standards of financial restraint on its wastrel neighbours. But it would also be lumbered with debts which will take decades to clear.

Europe’s politicians refuse to admit the dream has turned into a nightmare. They will deny the peoples of Europe a say for as long as they possibly can.

But it can’t go on for ever. The Greeks, Italians, Spanish and Portugese won’t want their countries run by Germany; the Germans don’t want to run these countries.

The Euro will die. The only question is whether they insist on giving it a long, lingering and increasingly expensive death or they go for a short, sharp shock.

As the famous commentator Kenneth Wolstenholme said on a previous occasion when Germany was forced to admit defeat: “They think it’s all over… It is now.” It soon will be, anyway.

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