The Euro: Problem, Not Solution

by Andrew Stuttaford

I think Dan Hannan underplays the technical (and other) problems of a break-up of the euro, but his latest piece is (as so often) a must-read and dead on target when it identifies  the single currency as the problem, not the solution.

Some extracts:

Since we joined the EU,” says Richard Sulik, leader of Slovakia’s liberal SaS party, “our net receipts from the Brussels budget have come to just over one billion euros. Under the European Stability Mechanism, we are liable for 13 billion. All to bail out countries with higher GDPs than ours.”  According to the polls, two thirds of those who use the euro believe it has made them worse off. They’re right. On Europe’s periphery, monetary union means deflation, poverty and emigration. In the core, it means unprecedented tax rises.

And not just the core.

Rightly, Hannan trashes the way that the Merkel & Co. keep playing the Verdun card:

The truth, of course, is that supporters of the euro were never interested in the economics. Newly released documents show that Helmut Kohl was specifically warned against including countries with high debt levels. He decided that the political imperative of integration mattered more than the economic practicalities. The present Chancellor has made the same call. “If the euro fails, Europe fails,” Angela Merkel told the Bundestag when seeking support for the bail-out fund. “No one can take another 50 years of peace for granted.”

Put like that, it’s beyond argument. Everyone wants peace in Europe. But supporters of integration never stop to explain why jamming Europe’s states together without the consent of their peoples makes the continent more stable. Listen to how Greeks are talking about Germans and vice versa…

Yet the oligarchs of Brussels  insist on scapegoating “Anglo-Saxon” speculators for the crisis now engulfing a currency that was dangerously constructed and irresponsibly operated, a disgraceful and destructive fiasco for which none of those responsible has been held to account. To start with, there is now clear evidence of Kohl’s culpability, yet no action appears likely to be taken against him.

Instead, we have this (which is, of course, linked to the attempt to deflect blame onto those sinister “speculators”):

“[A]s a dog returneth to its vomit, the European Commission reiterated its plan for an EU-wide financial transactions tax – 70 per cent of which would fall on the City of London, where most such transactions take place. They want to stick us [the Brits]  with the bill to prop up a currency we didn’t join. Yet we have already committed £12.5 billion to the bail-outs…”

Cameron should make clear that there will be no more assistance from Britain (through the IMF or otherwise) for as long as this tax remains under discussion. He won’t, of course, but then he’s not up to the job of prime minister. Never has been. Probably never will be. And, yes, Labour’s Milliband would be even worse. Sad times.

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