The world changed yesterday quite significantly but I doubt that all of my readers would have realised this so I thought I should say my piece.
There is a lot to say, and I am not sure one blog post can do it justice, but I will try. Before I start, I would like to remind you that I am a Conservative, with liberal leanings and I do believe that in an ideal world there would be no individual countries, we would all be governed together, with one single currency, however we are still centuries away from becoming that enlightened. Unless of course we have a big fuck-off global war and then start again.
So yesterday was the final meeting to save the Euro. I argued back in June that there were two options open, assuming they wanted to save the Euro – either the defaulting countries like Greece, default on their debts, the banks take the hits, etc, and yes there would have been a lot of shit to deal with. Or a more controversial one, which is to create a new country, called Europe (I did mockingly call it Germany) and have the same policies on tax, and more importantly the European Central Bank would issue Euro bonds to buy the debt. (which Germany is very much against) – ie a fiscal union. Like what we have in the UK where London’s bankers pay for the wages of the north’s public sector (who then teach the children that their way to make it in life is to win X-Factor and then deal with their resulting drug addictions from their delusions…only joking my beloved public sector workers, love you really!), and the Bank of England prints money from time to time to give us more inflation to pay for those stupid mortgages much of the country could never realistically afford to have but do.
And yes, I know our economy is too heavily reliant on financial services, but we just have to accept that we are the world centre for this – the government is trying to rebalance the economy, and also to focus our exports away from the European Union. By the way, it is generally thought that it is the French owned banks that are most in danger of collapsing due to Euro-zone government indebtedness. I also hear a lot of French people work in the City of London. Just saying.
Oh and a tax on financial transaction is not a bad idea in itself, and the UK government is not against it – but to work fairly, it would have to be implemented equally across every single country in the world, including the tax havens. Like that is ever going to happen.
Back to the story, and if we were going to save the Euro, one of two things needed to happen, as I explained above. However, the idea proposed, was, in effect, to get the UK to pay for the Eurozone’s debts, or otherwise to lay the blame at the hands of the UK. Mr Sarkozy in particular (that is France’s President for those less knowledgeable) wanted a tax on financial transactions, ie on the City of London, which is where the majority of the European finance trading is done, to pay for a fund to rescue profligate countries like Greece where they do not pay their taxes. And to which French banks are badly exposed.
Let me remind you, this is a Euro-zone problem they are trying to resolve. Not one of banks lending too much to people/governments who borrowed too much. And thanks, yes, believe it or not, to Gordon Brown (and regular readers will know how much I despise him for the damage he did to the UK, and the world), it is him we owe a debt of gratitude for us not being in the Euro. Just a small bit because he made so much of a mess of everything else, do not even think this is justification to forgive him.
So the deal that David Cameron was offered, the new treaty, was completely against the UK’s interests. He was most vindicated in not signing it, like a limp Labour socialist politician would have. I also conclude that it is most likely the last stand of the Euro, and fully believe that the bond markets and credit ratings agencies will signify so in due course.
I think the Germans might even agree with me, as they are printing Deutschmarks. I wonder why.
Most likely, when the Euro collapses, the UK’s economy will take a significant hit. But the money and investment has to go somewhere – why not the country with a growth plan, and a plan to repay its debt? And the one that stood up for itself. Do not rule out the possibility that an implosion in the Euro-zone may actually massively benefit the UK economy.
Equally, do not rule out that we will be hated across Europe. Perhaps in the same kind of way that in 1931 the UK left the Gold Standard, which was a boon to our economy. And we all know what subsequently happened in Europe during the 1930’s and what that led to. Sadly Gordon Brown sold all our gold for a tenth of the price it is now so I don’t think we have the money to fight another World War and be victorious.
Thankfully, I believe that one of the massive benefits of the European Union, that of free immigration between members states, will lead to Europe avoiding a repeat of the Second World War. I think most people in Europe feel some kind of affection and understanding to their brothers and sisters in other countries of Europe. Yes the European Union is a good thing, mostly, and I dearly hope it remains intact, and we remain a part of it.
Anyway, the world has changed. The Euro might not collapse, though I do not think anyone would bet otherwise. And we might actually be thanked in the long run for doing the right thing.
And it leaves me with one conclusion, which I already knew anyway – never generate debts that you cannot be absolutely sure you can repay. Used wisely, money is a good thing. Used badly, and it causes fights, arguments, divorces and wars.
It might make the London 2012 Olympics a very interesting political event (just like the Berlin Olympics in 1936 was quite interesting?! Though note I am not saying we are the new Nazis…though there are a few thick individuals in this country who are. Thankfully they do not go abroad to places like Amsterdam or Magaluf, drinking heavily, fighting, etc, so nobody in Europe will know we have those sorts).
And for the first time in years, I can actually envisage England winning a football competition – yes, Euro 2012, with of course, our first game against France – lets hope we get Germany in the final. Penalties. To England. Oh yeah…
I leave you with a quote from a leading French newspaper, Le Monde:
“Brits are not part of this euro crisis. And they have no responsibility for the failure of its institutions to resolve this sovereign debt crisis.”