Sunday, May 09, 2010

Well Done, Alistair Darling!

I am both surprised and delighted that Alistair Darling has been so trenchant in telling the EU that Britain will not contribute to a support package to bail out the Euro. Why on earth should we? It is absolutely nothing to do with us. Those of us who warned at its inception that it was unsustainable should take no pleasure at its imminent collapse as the effects will be felt for some time to come. A currency which is formed for political reasons is always going to incur stability problems in difficult economic times, especially when it covers such a massive and diverse area, with economies as different as those of Portugal and Germany. A single interest rate was never going to be appropriate for every country.

No one knows where this sorry saga will end. But it is good that there is cross party agreement that the British taxpayer should not be involved in bailing out the Eurozone.


BrianSJ said...

Given that we are in much the same state as Greece, who is going to bail us out?

John Kennedy said...

Is this the first sign of putting the nation first ?

What next a Con/Lab pack coalition ?

john in cheshire said...

What the sodding politicians say and what they do are two different things. I wouldn't be surprised if we end up spending a few billions helping the socialists in the EU. I remember the EMU and the refusal of the germans to help us. It was to our benefit, thank goodness. But despite that, it shows how the mainland Europeans view us. We are the enemy. I just wish the English peoples could appreciate that. they hate us. They'd love us to be destroyed. They willingly force immigrants upon us. They distort our legal system. They drain our seas of fish. They divide us, the English,Welsh, Irish and Scottish, because they know that collectively we are superior to them all. ( I have English, Welsh,Irish and Scottish blood in me). I want us to be what we are destined by God to be. We are the best.And the socialists don't like it - genetic defectives that they are - and they will do whatever they can to destroy us. Divide and conquer. Is that what we want?

Thorpe said...

I agree with your sentiments, but isn't this decision going to take place under Qualified Majority Voting? And as all 16 members of the Eurozone have signed up to it already, it's a done deal, whatever Darling says. Britain is apparently on the hook for 10% of the total: €6Bn for the first €60Bn being sought.

I can't remember if QMV was brought in by Maastricht or Lisbon, but I wouldn't have voted in favour of either of them. The specific article of the Lisbon Treaty (122) being used by the Eurozone leaders to invoke QMV in this case certainly wasn't endorsed by UK voters in a Referendum. Even in it's dying days, the Labour Government turn the screw on the British taxpayer.

Prodicus said...

In today's special circs he will be speaking for himself, Osborne and Cable. No choice.

Not that it matters. Empty gestures.

Lisbon's QMV forces the UK to do whatever the Euro-16 decide. Brown's signature on Lisbon makes it so.


Spot on Iain.

The € project wad always going to end in tears.

Yet another example of the political elite imposing their wishes on the 'uneducated rabble'.

The arrogance of those who imposed the € on the citizens of continental Europe is breathtaking. It's basic common sense that you cannot have monetary union without fiscal union.

All the € has done is drain wealth from northern Europe to the Club Med countries, none of whom were ready to sit at the same economic table as Germany.

john in cheshire said...

Delighted? Not my immediate terminology. The man is a socialist. He probably knows that the incoming government could not countenance bailing out the Greeks. We were told to fuck off by the germans after the ERM fiasco (thank God we extricated ourselves from that - at quite a small penalty as it transpires). Why on earth should we help a bunch of people who hate our guts? I'm not just talking about the Greeks - who are two-faced, smile to us and hate us but treat the Germans better, when on holiday. Same as the Spanish. We, the English, have a distorted impression of 'europe'. the average English tourist thinks that they are our friends. In reality, they are our deepest enemies. They have inflicted so much pain upon us in the past 30 years that I find it impossible to forgive them.

DeeDee99 said...

As others have already said, under QMV which was enshrined in the LisbonConTreaty, the EU can do what it damn well likes. The 16 members of the EuroClub will vote for all 27 members states to contribute to the support package and we will have to stump up or break the terms of the Treaty.

Just one more financial grenade NuLabout has bequeathed the nation.

Still, perhaps Call Me Dave will now see the wisdon of a post-ratification Referendum on the Lisbon Treaty or better still an IN/OUT Referendum - and pledge one during his second term of Office, if he gets a first one with the LibDems that is and can avoid PR, which willl mean there will never again be a strong Conservative Government.

What a silly man he was to ignore the offer UKIP made.

tf said...

Would I be mistaken in saying that by the fact that we have paid billions into the EU, we are indeed contributing to the bailout of Greece?
Willing to be corrected!

Vole Strangler said...

The British Pound is an artificial political currency so it's also bound to end in tears. I always said it was wrong to unite England, Scotland & Wales like this, giving all power to that wunch of bankers in London. Bring back the groat!

Anonymous said...

Perhaps, McDoom's decreasing power has given Darling the opportunity to rediscover his balls.

Russia Today carries an interesting video on the imminent implosion of Greek 'democracy' and subsequently, the EU.

Until we get back to sound money, not based on debt, the world will continue to suffer these problems.

Not a sheep said...

I predict that the EU will find a way to get the UK to contribute. That's what the UK is there for to pay up and shut up. The price of being at the 'heart of Europe'.

Andy said...

Least Darling has done something right. The Euro is a disaster and for those LibDems who have misty eyed view of it I will take them to Greece, a country I know very well and have residency there, and show them what Euro membership has done.

Ian said...

You know there's been a few occasions in the last few months when I wonder of Alistair Darling's rediscovering his inner Tory. So his parent's spending their money sending him to Loretto may not have been wasted and his late great-uncle Sir Will Y Darling may have had a stronger influence than we thought.

Too late in many ways but he's discovering there's political life outside the shadow of Gordon B.

The Boiling Frog said...

But it is good that there is cross party agreement that the British taxpayer should not be involved in bailing out the Eurozone.

Firstly the British taxpayer is bailing out Greece via the IMF to which we contribute.

Secondly, if the EU countries invoke Article 122 of the Lisbon Treaty then we will be adding more to the coffers whether we like it or not. What Darling says we will or won't do is irrelevant.

tony said...

..........and Vince Cable will do even better when he takes over the job next week.

Anonymous said...

Prodicus - we are not in the Euro. Simple. Therefore no power to make us support it.

The Euro is not the EU. The Euro is backed by a European Central bank. We are not part of that. So we do not contribute to the bail out.

Its a moot point that Cl 122 is appropriate or legal (so it seems). This 'stabalisation fund is not meant to bale out the like of Greece anyway (according to the times)

Anonymous said...

I thought the clause said something like 'a natural disaster or a large non culpable problem'. As the Greeks are fully responsible for their problem then the EU should not be using this mechanism to get money from EU members. Take the EU to the European court for breech of Treaty?

Anonymous said...

We have no choice, it is going through on majority voting. We signed up to the system and have to now endure the punishment - we have no democratic say on how our tax revenues are spent as the EU can spend it at will against our governments wishes.

Ray said...

The European Project was built on sound footing however we like it, it has however by it's own constructors become a dangerous structure and needs correcting if not rebuilding. The Euro however was built on sand and by almost deliberate mismanagement is now slipping below the surface. Greece was allowed to join it without what any business would agree is the necessary due diligence, and is not the only country in the same position, we must get clear before it drags us down with it.

Daniel Earwicker said...

@Vole Strangler - an amusing analogy but not really comparable.

The current Euro situation demonstrates the basic flaw with the setup: a single Euro country can endanger the whole project because they retain the power to bribe their local electorate with massive borrowing/spending policies. Far from giving all the power to a "wunch of bankers" in Germany, the Euro drops all the responsibility on the wealthy countries, and yields all the power to take insane risks to a dozen smaller countries.

The only way a common currency can survive is if fiscal policy is also to a large degree centralised. In the UK the bulk of taxation and public spending in pounds is still controlled at the UK level, and the same for dollars in the US. Until the same is true in the Eurozone at the Europe-wide level, the Euro will be constantly at risk of being undermined by the self-interest of member states, as they borrow madly until they have to be rescued, creating a situation in which Euros have to be printed round the clock, undermining the value of the currency and destroying its intercontinental credibility.

In other words, the territorial boundaries of a currency are congruent and concentric with the territorial boundaries of fiscal policies. This is not a very snappy slogan, so hardly anyone grasps it, and hence the Euro came into existence. The anti-Europe Thatcherites, long derided as little-Englanders, were absolutely right about this. The Euro only makes sense as the prelude to a Europe-wide fiscal policy, and this is a political impossibility for decades to come (perhaps centuries!)

This means that unfortunately your joke may one day become literally true, as Britain slowly transforms itself into a microcosm of Europe. As Scots and Welsh (and possibly one day Cornish?!) politicians gain more direct power over regional fiscal matters, England - as the wealthier member and hence a soft touch - will be relied upon to bail the others out, encouraging irresponsible policy. It simply can't last. Either the Union has to be repaired politically, or else each member nation of the UK will - inevitably - need to take responsibility for the value of its own separate currency.

vaiostsianavas said...

May I say that the racist and xenophobic sentiment expressed by some bloggers here does not surprise me in the slightest.
At times of great uncertainty people tend to oversimplify what they see and vent their frustrations towards the ones they ought to protect.
What does however surprise me is that an aspirant politician for the Conservative party like Mr. Ian Dale would hold such a view.
UK banks and pension funds hold billions of pounds of Greek and European dept. Europeans buy billions of pounds worth of goods from the UK every year. What would happen to the British economy if the worst was to happen?
Here is an interesting table we should all be aware of:
Country Name, Gross External Debt, GDP, percentage of external debt vs GDP
1.Ireland – 2.386tr, 188.4b, 1267%
2.Switzerland – 1.338tr, 316.7b, 422.7%
3.UK – 9.087tr, 2.226tr, 408.3%
4.Netherlands – 2.452tr, 672b, 365%
5.Belgium – 1.246tr, 389b, 320.2%
6.Denmark – 607.38b, 203.6b, 298.3%
7.Austria – 832.4b, 329.5b, 252.6%
8.France – 5.021tr, 2.128tr, 236%
9.Portugal - 507b, 236.5b, 214.4%
10.Hong Kong – 631.13b, 306.6b, 205.8%
11.Norway – 548.1b, 275.4b, 199%
12.Sweden – 669.1b, 344.3b, 194.3%
13.Finland – 364.85b, 193.5b, 188.5%
14.Germany – 5.208tr, 2.918tr, 178.5%
15.Spain – 2.409tr, 1.403tr, 171.7%
16.Greece – 552.8b, 343b, 161.1%
17.Italy – 2.31tr, 1.823tr, 126.7%
18.Australia – 891.26b, 800.2b, 111.3%
19.Hungary – 207.92b, 196.6b, 105.7%
20.US – 13.454tr, 14.26tr, 94.3%
Who do you think will be next?
In my view, this is about securing the future of citizens, tax payers and investors all over Europe and beyond, including that of the UK.
Our nabours house is on fire, how can we possibly stand back and watch?

Vienna Woods said...

It would appear that Darling has at last found his voice from under the shadow of the despot Brown. He is correct, of course and I applaud you Iain for your unbiased support.

While we're at it, what on earth is the juvenile "Daily Mirror" up to with this stupid 'chicken' jibe at Nick Clegg. Why anyone would buy this rag, rather than the 'Dandy' or 'Beano' is beyond me!

Oh, and by the way, it is not only the UK that is against the bail-out of Greece. In a poll in Austria a couple of days ago, almost 66% were against any help whatsoever.

Iain Dale said...

Racist? Xenophobic? You are clearly deranged.

We are not part of the Euro.

When we were having problems in the ERM in 1992, did Germany or any other country rush to our aid? Did they hell. They acted in their national interest. Which is exactly what we should do now.

Anonymous said...

The EU initiative is not aimed at greece but others. like Spain. the money as I understand it would be borrowed not pulled from taxpayers direct.

OT ....
I notice the Mirror is taking the political/economic crisis seriously, ie following Clegg with a man in a chicken suit.
Is this likely to endear Clegg to Brown or Labour??

Vienna Woods said...

vaiostsianavas wrote -

"Our nabours house is on fire, how can we possibly stand back and watch?"

If I knew he'd set in on fire himself, then he can put it out himself. Likewise, if he'd done it for the insurance, why should anyone else pay?

Paddy Briggs said...


You are quite wrong on this. We have a high degree of economic union in the EU and the UK is part of this and shares responsibility.

The Euro is a very good transaction mechanism and we should be part of it and one day we will be. The consequences of the fact that the Euro is also is a fully fledged currency haven't been fully worked out yet and at a time of economic crisis it is hardly suprising that the EU countries with more vulnerable economies will struggle. Would you buy a Greek bond when you can have a German one?

The bale out of Greece (etc) shows the strength of the Euro not its weakness!

Unsworth said...

However I understand today that there is an agreement that Britain will contribute to the Greece bail-out slush fund - to the tune of about fifteen billion pounds.


And Labour were giving it all the drama about 'six billion pounds out of 'the economy'' yet casually give the Bubbles fifteen billion?

It's enough to buy every man woman and child in Britain kebabs for life then. Maybe that's the deal, I'll just nip into town and ask Stavros.

JonyGee said...

All for one, and one for all. You know it makes sense.

neil craig said...

I am by no means sure that Darling has actually kept us out of this. He has suggested that we are making a "small" contribution to the immediate patment though not to the long term one. When the smoke clears & we see the small print we will know. Meanwhile Cameron should make it clear that any agreement made by Labour since the day of the election will only be valid if ratified by a government which has gained Parliamentary support.