Return of the Sophisticated Beggar

by Andrew Stuttaford

The Daily Telegraph’s Ambrose Evans Pritchard turns his attention to the idea that ‘isolated’ Britain should cough up €31bilion in yet another futile attempt to rescue the Eurozone:

Euro rage is reaching new heights over Britain’s latest outrage. Our refusal to pony up a further €31bn we cannot afford, to prop up a monetary union that was created against our wishes and better judgment, and with the malevolent purpose of accelerating the great leap forward to a European state that is inherently undemocratic. It is being presented as treachery, Anglo-Saxon perfidy, and the naked pursuit of national self-interest.

Let me just point out: 

1) The UK never agreed to such a commitment in the first place. The line was written into the December 9 summit communiqué in an attempt to bounce Britain into handing over the money.

2) The UK does not consider the rescue machinery to be remotely credible as constructed.

3) The eurozone has the means to tackle its own debt crisis, if it is willing to use them. These include fiscal pooling and the mobilisation of the ECB.

As eurozone politicians never tire of reminding us, their aggregate debt levels are lower than those of the UK, US, or Japan. They are right. So get on with it and stop begging…

And so he goes on, to devastating effect.

That said, even Evans Pritchard concedes that the UK should chip in something. And, if it proves to be really necessary to head off cataclysm, so it should (it’s worth remembering that the IMF is the ultimate preferred creditor), but only on a basis that recognizes (mathematically and otherwise) that Britain never signed up for a trip on Brussels’s ship of fools.

Evans-Pritchard’s suggestion: “Only in line with [the UK’s] IMF quota and proportionate to other members around the world.”

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