THE CONTAGION GATHERS APACE. The stock markets are falling on the prospect of both Italy and Spain succumbing to the debt crises. At the time of writing (14:23 London time) London’s FTSE is down 5% and the markets are, shall we say, less than confident that these two countries who are, after all, the third and fourth largest economies in the Euro zone, will not be targeted at some stage for a bail-out of Irish, Greek, and Portuguese proportions.
The question is, is that if the inevitable happens will Europe and the IMF be able to provide the finances to bail out these economies, and more importantly, should they? Of course if needs be… but most of Europe’s citizens would say enough is enough and the euro is just not worth it. To date billions of euros of taxpayers’ money have been poured into Ireland and Greece at exorbitant rates of interest which neither country can afford to re-pay. Even the UK, who never joined the euro is having to contribute to keep it solvent.
The German people have, most of all, had to cough up the greatest share of their taxpayers money to keep the idea of the euro afloat – and still Baruooser, the EU president, insists all will eventually come good.
THE EURO WAS the brainchild of European romanticism; an affliction that has determined the fate and destiny of continental Europe for centuries. When it came to grand political designs, the continent has always let its heart rule its head; whether it was a Napoleonic EU led from France , Fascism in Italy, or a Nazi EU led from Germany.
The nations of Europe have a history of conflict, and what began as a Common Market and became a European Union, has proved to be yet another strain of the same idealism that produced Europe’s many varieties of idealistic ideologies that turned to tyranny.
The euro was never clearly thought about. In Europe we had a whole host of nations at different levels of economic progress. But the European ideal overrode (indeed saw no problem) with combining such a diverse arrangement of economies into a single whole, via political and monetary union. It was a grand gesture of idealism that only Europe could come up with. Its impracticalities would be made to work, by the sheer will of the optimism behind the whole enterprise.
But now the idiocy of such an arrangement and its cost to, in particular, to the German taxpayer, is only now being appreciated. Yet we still have the European President, speaking to his fellow countrymen in Portugal pleading the euros case.
RATHER THAN A CURRENCY that was set to match the mighty dollar; the euro has become a virus that threatens the world economic order by its contagion. For even in countries outside off the euro (including our own) the infection has penetrated the banking system. If for instance the Italian economy collapses it will cost the British economy £43 billion. Our banks have been exposed, in particular Barclays, who have an exposure to Italy as well as the Iberian peninsula.
It may turn out to be a fact that this country’s refusal to join the euro will not have proved propitious after all. That it was the right decision there is no doubt. But it may prove to be nothing more than a pyrrhic victory.
The EU should abandon, if not the euro, then at least those economies within Europe that should never have been encouraged to join in the first place. In this country at the time of the euro’s implementation when we were debating this folly. Many of those who were thoughtfully opposed, but not prejudiced against such an arrangement , suggested a two speed economic union, comprising a different time scale of entry between Northern and Southern Europe.
As an empirical solution, this was of course ignored on the continent and would have been seen as perfidious Albion once more working its magic; that is, if such a debate was ever known about in the first place within Europe: and so we are where we are today. It is has not been, to say the least, a success.
A SINGLE CURRENCY between such economically and culturally diverse nations on the continent of Europe, could only have been conceived of by the European intelligentsia with little thought given to any impracticalities of the sort debated in the UK at the time.
But even in the UK, the euro had its many supporters. Those on the Left of the Conservative Party, the Liberal Democrats as well as many on the Right of the Labour Party; all of whom were ready to embraced this concept for idealistic reasons, and wished it well, despite our nation’s disapproval of its creation.
The whole structure of the European Union was originally based upon eliminating the continent’s history of national conflict; and in attempting to prevent such a continuance into the future.
After the Second World War Europe’s politicians sought to prevent such conflicts ever recurring in the future. Which was a wholly admirable outlook, but, as we are seeing today, hardly practicable within the arrangements of the EU’s leaders.
IF THE EURO is to continue in some form it had better jettison those of its members that cannot keep up. Which means allowing the likes of Greece to abandon their membership of the euro. This may also apply to Ireland, and, in the coming months, Portugal, Italy and Spain.
The road to Hell is paved with good intentions, and Europe’s statesmen and women, did indeed have good intentions when they set the continent’s compass on a uniform path within a decade of the war’s end. They believed that their zeal for the project would prove all that that was needed to overcome the concerns of the many sceptics.
Unintended consequences were dismissed as heresy and the statesmen of Europe ploughed on with the fulfilment of their ambitions. But monetary union was a step too far. As if seeking to unify such diverse economies into a single currency was not enough; it was attempted before political union made it at all practicable. Putting the cart before the horse comes to mind.
But despite all of this the project will continue. Too much intellectual prestige; not say political self-importance, has been nourished upon the mission for our European politicians and their bureaucratic brethren to simply admit defeat by steering the ship away from the iceberg before it is too late – here is another aphorism; pride comes before a fall.
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