THE TALK IS OF a run on Greek and Spanish banks. Santander and other Spanish banks have been downgraded by Moody the credit agency. With Santander falling fowl of the credit agencies, the British public are now left to consider whether their deposits are safe with Santander here in the UK.
Since last January Spanish banks have faced withdrawals of €50.6 billion[1], the largest removal of depositors’ money within the whole of the eurozone. It even beats Greece, which has seen €40.5 billion withdrawn.
If panic does set in, as we saw briefly when Northern Rock faced bankruptcy, then such a panic within the eurozone will be a thousand times worse; and will involve the savings of hundreds of thousands of British people living in Spain, who have their savings and pensions paid to them in euros.
If Greece, as now seems likely, defaults and has to leave the eurozone and return to the Drachma, Greek depositors will make heavy loses unless they manage to transfer their money to a German or French bank were the euro will remain strong and their euro deposits remain protected.
The Drachma would face a heavy devaluation which would in turn erode any of the Greek depositor’s savings, that had chosen not to re-deposit their savings in other European banks. So it would come as no surprise if there was a run on Greek banks once it became clear that a return to the Drachma had become the only way forward.
As for Spain, at the very least, it could get caught up in the panic that would ensue with Greece’s return to the Drachma. In such a climate emotion governs people’s responses, when someone believes their life savings are at risk.
This unfolding tragedy of the euro was predicted from its very foundation, but the warnings went ignored. So today we have the gravest of economic crises that will, if it is not in some way tamed by those who created it in the first place, bring ruin to the continent and may prove the final chapter of European civilisation several decades before it is due.
I can hear the gasps of horror at the mere suggestion of such an outcome. If this piece were to fall into the hands of those European dilettantes who thought a single currency the perfect counteraction to the United States hegemony when it was first promoted, then I would find myself bemused by their gasps of dismay.
I am not an economist, and I failed my 11-plus 51 years ago. But even I knew (like Napoleon and Hitler), that for a whole continent to be drawn into a super state, political union (in the cases of both Hitler and Napoleon, through conquest) would have to precede monetary union by several decades before uniting the many currencies under one roof.
BUT EVEN TODAY, those Europhiles that set this whole madness in motion, still believe that they were right to plough ahead with the euro. They set the conditions for entry: the main one of which was that the national debt of any nation should not amount to more than 3% of a nation’s GDP.
We now know of course that the southern European countries, in their eagerness to become part of the single currency, cheated their way forward through creative accountancy which, given Europe’s own predilection for such practices, they managed to turn a blind eye too.
Both Greece and Italy cheated their way in. While those who let them in were fully prepared to do so in the full knowledge that they were being given fraudulent statistics regarding their countries level of debt to GDP.
The European project was all that mattered; and when Chancellor Koll of Germany (Angela Merkle’s predecessor) finally learnt of Italy’s creative accountancy in order to join; he just shrugged and said it would all work itself out in the end – such was the slackness regarding any kind of European attempt at the creation of a United States of Europe.
Europhile blindness has driven this adventure from its very beginning. Wiser voices were dismissed as Eurosceptic and Right-wing. Instead of sound economics, faith born of idealism took its place leaving us where we are today.
In the 1950s there was talk of not ever having to fight another war on European soil between nations. This was the idealistic impetus for what has come about today. It is why so many of the early post war British Conservative politicians - especially among those who fought gallantly in the Second World War, sought full Europeanization of the UK as a solution for what had proved to be a bloody continent for hundreds of years.
They in turn passed their experiences on to the next generation, who had by their own devices reached the same conclusion, and were the willing apostles of a European super state – thus ended a purely British Conservatism.
However when it was temporally revived in the 1980s by Margaret Thatcher, the following generation of Conservative leaders sought to disassociate themselves from her historically accurate portrayal of traditional Conservatism. They termed themselves as the ‘nasty party’ in order to regain the centre ground and separate themselves from Thatcherism.
THE PROBLEMS OF the eurozone have been self-inflicted by the political classes throughout Europe, including the political classes of the UK. For the Conservative and Labour parties to say that they both refused Britain’s entry to the eurozone is not enough, because given the right conditions both parties would sell their nation’s soul to the European ideal, if it had proved itself successful as both parties had hoped would have been the case.
Both of this country’s main parties would have joined the eurozone if it had been created by sound reasoning instead of romantic idealism which allowed the southern European countries to join. If the eurozone had been a northern European ambition, then I have no doubt that our politicians from whatever party would have exposed their people to its enticements - but without a referendum of course.
We now have a situation that demands a decision to be taken by the people of the UK regarding the demise of this country from a nation state within Europe into a mere canton of Europe.
An in or out referendum must now take place. We should have a say upon whether we remain a nation state or subjugate ourselves to the Europeanization virus where we will value ourselves as nothing more than a canton within the Greater Europe. If this is to be the case then our people must be allowed a vote upon such a destiny.
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