"I was in the Treasury when we were in the Exchange Rate mechanism, and I said to myself: "Never again should we give up control of our domestic interest rates." If I am Prime Minister and for as long as I would be Prime Minister, I would never take Britain into the euro, full stop, end of story. We should never have got ourselves into the financial mess that we are in but at least we have the flexibility of our own currency and our own interest rates."It's the position I have taken ever since the euro came into being (and before, now I come too think of it!). If we were in the euro now, we would be like Ireland and Greece - totally in the hands of the European Central Bank, unable to do what is needed for our own economy. If you give up your currency you effectively give up your right to self government. Government is all about saying what you’re going to do and how you’re going to pay for it. Giving up your currency cedes the second part of that sentence to a Central Bank which by definition does not act in the interests of any one country.
A year ago, Nick Clegg wrote in the Independent that we should now consider joining the euro. People need to be reminded of that.
Whenever I am asked this question at parliamentary selections I commit to never voting for the euro and saying that if I ever did the Association should either deselect me for going native, or section me. I'm delighted David Cameron takes the same approach and has said so.
'It's the position I have taken for the last ten years'
ReplyDeletemay we assume this is a cast iron committment?
Worth comparing Dave's statement with Clegg's "analysis" a year ago in the Indy.
ReplyDeletehttp://www.independent.co.uk/opinion/commentators/nick-clegg-we-should-consider-joining-the-euro-1515755.html
1) An MP needs to ask in the house - within the next few hours - if the UK Government is going to lend any money, or make an guarantees - directly or indirectly to the Greek Government !?!?
ReplyDelete2) The Germans have indicated they will bail out the Greeks yesterday. The markets have priced this in. But I can't imagine they will do it all by themselves.
3) If Greece defaults they will not be able to pay Government workers. Pay packets will be hit first. The Greek Government are on collision course one way or another.
4) The Greek tax collection system is really poor. There is a huge black economy in Greece, mostly based on farming and tourism.
5) The Germans and Turks have VERY strong relations. The Germans oppose Turks in the EU, principally because of Greek objections to them using their ports etc, etc. Perhaps the Germans will use this opportunity to soften the Greeks up.
I just wish he would be as determined about all the other areas where we have lost control, in fact I would like a promise to review the entire concept of our membership and it's overall value to us. From where I stand I only see the rest of Europe benefitting from our membership and not us.
ReplyDeleteGood stuff - we need more of this.
ReplyDeleteSo the ECB will act against the wishes and best inteests of Greece?
ReplyDeleteDon't be silly.
Britain is already in the Euro. We are liable under Article 122 of the Lisbon Treaty for bailing out eurozone countries in difficulties. We are also bound by the terms of the Stabilisation agreement.
ReplyDeleteArticle 121 of Lisbon was activated this week, and the EU is taking control of Greece'e economic government.
On Thursday there is a meeting at which Article 122 will be activated requiring Britain to come up with maybe £10 billion, and that's just for Greece.
The austerity measures which the EU will impose on Greece will crash their GDP and tax revenues by maybe 15%, requiring a minimum cut of 15% to government spending.
The only way such austerity can be rammed through will be by police suppression of opposition, which means violence.
The underlying problem is the low level of demand that the eurozone accepts as normal, with the German economy driven solely by exports. Until the EU increases domestic consumption, the indebted countries are locked into deficits inside the Euro.
And Britain will be paying, again and again. We have to fight this at the start. But Brown signed all the terms of Lisbon. How can he?
Meanwhile Greece will become effectively a Police State inside the terms of Article 121. LINK.
6) I'm begining to think that this is a tipping point in a much bigger strategic situation. The markets are saying that a Greek bail out would seriously damage the EU contention as a reserve currency.
ReplyDeletethis has TWO very big knock on effects
a) The Euro will fall in the medium term as central banks sell Euros. This will also push up interest rates.
b) This means the financial world is going to pass the EU by and look toward China and the US. The Euro is going to become the nearly-man of the Global Economy ... because its socialist Governments can't control their spending.
Well, I'm more open.
ReplyDeleteThe way the Euro is currently run, I'd want to be out. OTOH, the US$ works well for a largely disparate country with dozens (probably hundreds or thousands) of sub-economies.
So if your view is NEVER to the Euro, I'd be interested in hearing the reasoning behind it.
Judging from recent discussions in the media between economists and eurocrats, it would appear that Britain is still (along with other EU members) going to be called on to help bail out Greece (and possibly Portugal), even though we are not in the Eurozone! Against that background, one cannot help wondering what difference it makes. The only other striking benefit of being outside the Zone now appears to be to currency traders. Perhaps the latter helps to explain why so very many rightists are against it.
ReplyDeleteThis was one of teh questions I asked George Osborne on the conservative site.
ReplyDeleteThe pound is going to go to 1.35 and then lower to one to one with the dollar and even thogh Germany looks to have bailed out Greece, the Euro will go to 1.17 and then down to 88.
Although sterling falling will be seen as a good thing for the UK to get out of the 'BROWNS' stuff, never be complacent, the pound in your pocket is not going to be worth the same and your welath as an individual will be lower especially against Asian and American people.
I have traded currencies for over 35 years, I tell you we are in serious trouble, and it hurts me when I see sterling and the UK going down. Brown has used the UK Treasury as a giant hedge fund he should be at the Old Bailey tried on financial terrorism.
javelin- Re Germans and Turks, having worked in Frankfurt & Paris for many years, I can tell you Germans and French will never ever allow Turkey in the EU.
ReplyDeleteGermans really do dislike Turkish as most of the crime, prostitution are Turkish related. Every day on my travel t the bank I had to walk past Turkish sex shops and prostitutes. The middle class Germans really have a problem and will never sanction their government allowing Turkey entry to the UK for fear of them. Just a look at teh Eurovision song contest tells you the amount of Turks in the country as Germany alswyas gives Turkey 12 points, it is a problem
Tapestry is correct about the Article 122 provisions, which is precisely why it is a nonsense now for Britain to not be in the Euro.
ReplyDeleteThe only other alternative is for a total collapse of the Euro system and you would have to be bonkers to think that would not have a huge knock-on effect against Britain.
Despairing liberal, are you seriously suggesting we would be better following the pied pipers of Brussels down to the river, rather than wait on the bank and try to avoid the deluge. Perhaps you should become DespairingLemming !
ReplyDeleteThankfully, by keeping Sterling the Brits have insulated themselves from the worse of this crisis.
ReplyDeleteOh, wait...
The UK is trying and failing to pull an Italian Lira trick of devaluation without economic reform. And it ain't working now, but even worse for you lot, it won't get better in five, ten years time.
Is that a cast iron guarantee?
ReplyDeleteAnother very good reason never to vote Conservative, then. Keep ’em coming.
ReplyDeleteLike you were ever going to.
ReplyDeleteRay, I'm saying that it is true that Britain will have to pay out anyway. Therefore either we should leave the EU altogether or else join the Eurozone. There is no middle-way left. I'm not disputing that many of you want to leave the EU, but you should just say so instead of bragging about a Eurozone collapse that will anyways impact Britain heavily.
ReplyDelete@Iain Dale
ReplyDelete“Like you were ever going to.”
It wasn’t actually me I was talking about. Personally, I’m not going to get the chance.
You should never say “never”.
You cannot believe a word any Conservative leader says on anything to do with Europe or the Euro.
ReplyDeleteWho took us in to Europe?
Who signed up to the Single Market?
Who took us into the ERM?
Who signed up to Maastricht?
Who promised a referendum on Lisbon and reneged on that promise?
Who will do nothing about Europe if elected?
Who will not be voting Conservative at the next election?
So he's joining the Euro then?
ReplyDeleteDespairingLiberal's argument is typical Federast bootstrapping and an intentional example of the arrogance of the EU in the Treaty.
ReplyDeleteSeeing as the Article "binds" us like some One Ring* then the solution is, for National Interest, to withdraw from the arrangement.
Eurozone are not bound to help us so why do we get bound to help them? Binding agreements are bad enough without this kind of asymmetry!
No, the answer is clear - No sovereignty can pass through the Eye of the Eurozone. You must leave it outside.
* Three percent for the German State now unified. Seven for the French Lords in their halls of Versailles. Nine for the other Treasuries, doomed to die. One for Barrosso on his dark throne. One Currency to rule them all, one currency to lure them. One currency to bring them all and in the recession, skewer them. In the land of Brussels, where the Federasts lie.
So lets see....a Cameron Cast iron guarantee....Oh God anything could happen..
ReplyDeleteSo let me get this right... since Clegg wrote, the value of Sterling has fallen roughly a third- and yet this is a GOOD thing? Clinging on to the British £ira has made all of us 30% poorer in 18 months, but we are all supposed to be grateful for this "flexibility"? Sure, a currency you can devalue hides the consequences of economic stupidity for a while, but in the end we will remain poorer- and this is the policy we followed for most of the 20th century. It doesn't work.
ReplyDeleteAt least here in the Baltic, where we have fixed currencies, the recession is over and after a 40% fall in house prices, we can now get on with the rest of our lives. All the devaluation of the Quid has done is delay the evil day of reckoning. It seems that neither Brown nor Cameron will address the fundamental structural problems that keep the UK uncompetitive. Just to remind you the UK has a debt burden of 4.6x GDP (nearly Japan), a deficit of 16% (higher than Greece), the lowest rate of GDP growth in the developed world, oh but hey, at least we can devalue our currency: No s**t! Like you have a choice! It is worth increasingly less every day.
Don't wrap yourselves in Union Jacks and say it is a good thing, however. The abysmal management of the fundamental economy over decades is why we should not join the Euro: it is why we can not: and that should make you start to ask some tough questions about the whole direction of the economy since the War.
Careful Iain, it is probably a "cast iron guarantee"
ReplyDeleteI am not in disagreement Roger about your basic thesis that it is wrong that Britain should still have to bail out a failing Eurozone member, but you then get confused - if that is wrong, then we should be out of the EU and not just remain out of the Zone.
ReplyDeleteClearly that's what you want (withdrawal from the EU) so why not just say so and stop "blaming" the Euro, which is not the issue.
As others have pointed out, most countries that are in the Zone are doing better than Britain now, primarily due to sound ECB management and the benefits of a single large trading area, but also because there was more state control generally over the financial model, with at least some of the lunacy pursued in London and New York being absent, or at any rate, less of a menace to the whole financial system than it was here.
Oh, spot on, Iain. After all, our economy is doing so well …
ReplyDelete@DespairingLiberal "but you then get confused - if that is wrong, then we should be out of the EU and not just remain out of the Zone."
ReplyDeleteEr, no, DL, I was highlighting the flaw in YOUR argument which was to join the Euro as if that was a fait accompli, the only way to avoid paying but not being. The bootstrapping.
I put forward an alternative which is (another very good reason to) get out. And I do want to get out of an undemocratic, Authoritarian Fabian nightmare, yes, and say so all the time. But the comment was about exposing your railroading.
As for your "sound management", no, the Eurozone is a mess.
It will only be truly sorted once all the now National Treasuries are either stripped of their debt issuing powers or it is centrally managed to the extent as to make no difference - Sovereignty in that area will be lost.
It would not surprise me if that has always been the plan. To do so day 1 would have 'scared the horses'. Now we have a mess and once we get a few more the pressure will grow to strip Notional* Governments of their powers.
If it was not the plan then the creators of the Eurozone were stupid. I do not think they are stupid. Duplicitous, yes, stupid, no.
Oh, and I see you are parroting the "lunacy" model The Bankers are a bit like Bin Laden. The US Govt trained them to do something (lend to high risks) then wondered what happened when they turned around and used the skills in unintended ways.
* well, that is what they are rapidly becoming.