The Euro was meant to secure the peace in Europe. Instead, it is the cause of conflict. Those who seek European harmony should now recognise that the Euro stands in the way. We need to understand why this is. Here is my take.
Most economic areas have a successful centre and struggling periphery. Think of London versus Northumbria in Britain, Germany versus Greece in Europe. How do winning and losing regions establish competitive equilibrium?
Within a sovereign nation, political pressures ensure large resource transfers from rich to poor regions. Taxes raised in the prosperous centre are spent to prevent poverty at the periphery. The parties argue about the level of cross-subsidy, and rarely eliminate all disparities, but tend to achieve a reasonably stable and viable equilibrium.
Within a group of independent nations, a different mechanism – devaluation – comes into play. Less successful countries can thereby maintain trading competitiveness at the expense of reducing their national wealth. This is crude, but it also tends to work.
Sadly, we then come to the Eurozone. With no supranational political parties to force Germany to compensate Greece for its economic disadvantages, and no mechanisms for national currency devaluation, the Eurozone “chain gang“ is uniquely hamstrung by its novel, disastrous financial experiment. Economic imbalances, and tensions between its nations, therefore grow inexorably.
The Euro exchange rate with the outside world settles at an intermediate compromise level – artificially weak for the industrially strong Germany and Benelux, artificially strong for the struggling PIIGS. This has baleful consequences for both.
The artificial weakness of the Euro as a German currency keeps quality German goods competitively priced on world markets. So sales grow, factories expand, and the Germans celebrate their virtuous hard work.
The artificial strength of the Euro as a PIIGS currency makes their wage costs uncompetitive, and local industries lose out to global competition. However, the unwarranted strength of the PIIGS currency does have certain advantages – for spivs and speculators. Borrowing becomes easier than under the punt or the peseta. So in PIIGland, it is financial manipulation rather than hard work that pays. The false strength of the Euro (and not weaknesses in national character!) predisposes the PIIGS towards spiv economics – whether that means Irish financial shenanignans, Spanish property speculation, Italian crime and corruption, or the bloated Greek state.
The Euro must go. The longer this is resisted, the more harm it will do.
There are two contrasting options. One is that the Eurozone should become a single nation, which can undertake massive internal financial transfers from rich to poor regions, just as West Germany financed reunification with the East. Today’s half measures – Eurobonds, bailout funds, etc – are just not enough.
In theory, this option should be favoured by internationalist liberals. All it requires (all!) is that the Germans and Benelux should recognise that the “feckless” Greeks and “lazy” Spaniards actually need and deserve large subsidies to finance their development, without which European unity cannot be achieved. Sadly, in the current climate, there is clearly no chance of this happening.
The alternative option is that favoured by Eurosceptics – that the Eurozone, perhaps excluding its central core, should split back into financially sovereign nations. This might seem a backward step, a capitulation to UKIP dinosaurs. It does, however, have one big advantage. It could work.
European cohesion cannot be speeded up or enforced by a faulty financial experiment. It must be built gradually from the ground upwards, through cultural and business links, joint development, cooperation in defence and security, and the evolution of common resource, climate, and foreign policies. That should be our task.
It was chauvinism, not economic wisdom, which led the Eurosceptics to oppose the Euro. No matter. They got to the right answer. The longer we leave them in sole ownership of that answer, the more we shall cede credibility to them.
* David Allen was a Lib Dem activist for more than 25 years, including being a Borough Councillor and local party Chairman in Rushcliffe. However, he opposed the Tory coalition, and finally left the Party in 2020. Since then, he has been politically independent. He would be delighted to support a centre-left Coalition including the Lib Dems.
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“European cohesion cannot be speeded up or enforced by a faulty financial experiment. It must be built gradually from the ground upwards, through cultural and business links, joint development, cooperation in defence and security, and the evolution of common resource, climate, and foreign policies. That should be our task.”
I totally agree with this. In fact it bears a very close resemblance to what I thought I was voting for in 1975.
Thre is a problem with this article. Killing the Euro has very little to do with the UK. Those who wish for the implosion of the Euro need to persuade the Spanish, the Greeks, the Irish and the Italians to leave the Euro ASAP.
Unfortunately, the Eurozone countries are coming together and building a future together. We may complain about the detail, but the big vision is powerful and compelling.
What is less compelling is a narrative for Britain’s future in the mid-Atlantic.
The problem with the Euro began with its fair weather design: no one wanted to talk about or even conceive what might happen when the storms came. The storms did come, and the fudge we’re seeing produced in response is no remedy. I agree, it is time to end the experiment for the states which cannot handle it any longer: I suggest that it could continue to work for Finland, the Netherlands, Germany, etc.
On the other hand, you could also say that the Euro is actually working well. The present trouble sare just the workings out. The bailouts are the equivalent of resource transfers from central to peripheral regions of a country, and the Euro heat is the equivalent of the domestic political pressures that cause those transfers and create the eventual equilibrium.
The proposed arguments about exchange rates are wrong because they could equally apply to regions within a country. Why not have London and the South East spilt off from the rest of the UK? London and the South East could revalue, and the rest of theUK could devalue to make their wage costs competitive and so (puzzlingly) become rich!
What happened in Europe is that the less efficient nations were used as ways of solving the problems created by the increasing productivity and limited markets of the more efficient nations. The solution – dumping excess production onto the poorer countries – was made possible by everyone’s banks and politicians turning a blind eye to the long term consequences. Now those consequences are here, the ructions are the natural way of correcting the blindness.
Once the corrections are made, no-one is going to be so foolish in future. This means that, as long as the Eurozone puts the idea of staying together above other ideas, the pressure will eventually lead to the development of very strong Euro institutions and practices, well able to compete with other large unife=ied markets such as the US, India, China, and eventually a unified Africa and a South American grouping. Our tragedy is that we have been frightened by our self-interested politicians who have voted ourselves out of this rosy future.
A businessman who sees his own fotune in the Far East is quite capable of persuading himself that his fortune is the same as the country’s, and of feeling justified in misleading a population and altering his country’s future for his own benefit.
Unless we join the Euo, we are heading for dire poverty.
Couldn’t possibly be the structural inequities of international finance, and the vulture ethos which they encourage, could it? If Europe could confront those agents of greed and bring them to heel, much of the crisis could be averted – has nothing to do with imagined national stereotypes and everything to do with transnational corporations who see themselves as the masters of us all.
The one big change that would strengthen the euro is to make it a petro-currency. The EU should refuse to buy oil and gas in anything other than Euros and encourage trading partners to do likewise.
Of course, it would be better not to buy any oil…
All thispresumes that the PIIGS haven’t already undergone adjustments already to improve their competitiveness – but if you actually looked at what has happened many of those countries have already suffered from dramatic levels in their real wage levels. What you seem to be arguing is that what they need is another dose of medicine from the devaluation and inflation that would inevitably follow from their leaving their Euro and on top of that we can throw in a little austerity. You should perhaps also bear in mind that typically devaluations take 18-24 months before the impact on improved competiveness comes through -and in the meantime the speculators and free market theorists will no doubt continue to play their games with peoples lives.
The real responsibility here lies with the wealthier countries in the Euro which having set up the Euro area, and having taken the benefits arising from fixed exchange rates now have to accept that they have to fulfil their obligations to make resource transfers to those areas which have not fared as well. I’m afraid that this is the logic of fixed currency areas – those in the UK Government in the process of destroying regional policy please note.
“The Euro was meant to secure the peace in Europe. Instead, it is the cause of conflict. Those who seek European harmony should now recognise that the Euro stands in the way. We need to understand why this is. ”
Never was a truer statement made, my thanks for making my day by seeing such wholesome wisdom on libdemvoice of all places!
But………
“It was chauvinism, not economic wisdom, which led the Eurosceptics to oppose the Euro.”
Which euroskeptics?
http://johnredwoodsdiary.com/2010/11/19/why-the-euro-was-bound-to-be-trouble/
just one example, i’m pretty sure there would be more. a lot more!
The problem with the article above is that it swallows the line put out by the more daft of UK newspapers utterly and uncritically. There isn’t a problem with the euro. It’s still there. It’s still working and it still means that businesses in countries in the eurozone have much lower costs and a much more certain trading environment than do UK businesses.
A currency is supposed to be a means of exchange and a store of value. It is not meant to be tinkered with in repeated attempts to con the populace that you haven’t cut their wages and the value of their savings. Britain’s policy of repeatedly devaluing its currency has failed again and again and again. That fact alone demolishes the purported argument against the euro.
Excellent piece, I agree. The future for Europe Union will need to be one of economically separate countries, but countries that are united in most other respects. I don’t see this as failure. I believe the architects of the Single Currency had a tremendous vision, but in reality it is not working. I cannot see the ‘single european nation’ being remotely possible, but I don’t believe this is catastrophe or the end of the european project. The reality is that some countries are not at all compatible with others – it’s a ‘human nature’ thing.
Good article David. For the Euro to work there must be a way for financial imbalances between countries to be levelled out. Within countries that task is performed by a combination of financial transfers and migration to the more successful regions. That was never going to be politically acceptable on the necessary scale in the eurozone – hence disaster.
The system survived for ten years or so because accumulating savings in surplus countries were recycled by their banks into loans in deficit countries where much of it was wasted by foolish property speculation and worse. In effect this was supplier finance to enable some to go on living and speculating beyond their means. Now the party has ended the banks have loans that cannot be repaid and are therefore bust. So when Germany et al bail out Greece et al they are indirectly and covertly bailing out their own banks at taxpayer expense. That is partly why Greece is now in a bigger hole than it was at the outset; the propaganda was about helping the Greek people, the reality was about helping the banks. Hence, except for Greece (a special case) the problem is and always was centered in the banks and the bankers are using their influence (and massive political donations/promises of plumb appointments etc) to ensure that it is the taxpayers not they who carry the can.
@ Richard Dean
The bailouts are not the equivalent of resource transfers from central to peripheral regions. Those go either directly to people in benefits or indirectly via, for instance, infrastructure spending. This is very different from the pattern in Greece etc.
Re exchange rates between regions: this is indeed an issue in the UK albeit one we don’t talk about much. A few years ago Melvyn King caused a storm by admitting that the economy was being managed to help the City and that the policy stance was not helpful to manufacturing based economies of industrial cities (this from memory so the gist of what he said rather than his exact words obviously). You are right however that depreciation never made anyone rich – all it can do is soften the impact of failure – it amounts to a policy of managed decline. Politicians in all parties have no idea how to reverse decline nor, apparently, have they done much to find out how it could be done.
As to future follishness I am less sangine than you. As long as bad bankers do not suffer from their bad decisions they have no incentive to mend their ways. And in banking being bad can be immensely profitable.
@ Chris
[The Euro] still means that businesses in countries in the eurozone have much lower costs and a much more certain trading environment than do UK businesses.
If true why are we not seeing a boom in export-oriented businesses in Greece or Spain. If their own banks are unwilling or unable to finance such growth foreign investors would willingly do so if you are correct and costs in the eurozone really are much lower.
The bailouts are indeed about helping the banks, not about helping Greece. But Greece has already had the benefit transfers – in the forms of the money they received and used.
The richer countries dumped on the poorer ones precisely because the richer countries found it too hard to compete in world markets. Their party is now over, they have to make their industries competitive. The reduction in value of the Euro is going to help do that for them, and it is something they should thank the poorer countries for.
The problem that King identified can be resolved by directing new investment to the regions, while avoiding regional pay schemes that reinforce geographical inequality. The next London airport could be in Birmingham or Liverpool, for instance, with HS2 is re-designed to connect regions to regions rather than regions to London.
First of all the UK has no voice in this, which is a shame considering we are completely reliant on the euro zone doing well. If you actually talk to any Euro zone residents I haven’t met any who want to stop using the Euro. Do any of the Eurosceptics realise what economic chaos would be created by a disorderly break up of the Euro? Devalution is a very destructive policy long term, at tleast the Euro is acting like a vice to stop members taking the lazy, ruinous option, ie introducing inflation and ruining savings levels. Britain has devalued repeatedly instead of addressing productivity and the result is a lower living standard than most North european nations. The Eurozones solution, a full banking union, makes more sense.
Thanks for all the comments so far. Here goes:
William Hobhouse said: “Killing the Euro has very little to do with the UK. …. Unfortunately, the Eurozone countries are coming together and building a future together. …. the big vision is powerful and compelling….What is less compelling is a narrative for Britain’s future in the mid-Atlantic.”
Fair enough, I was not aiming to set out a policy prescription for the UK Government. The Eurozone leaders don’t pay much attention when Cameron lectures them, for understandable reasons. They will have to work out their own salvation, and the sooner the penny drops, the better. It is, however, also important to Britain that they sort out the problems.
The “big vision” is only compelling these days if it is a visionary exercise. If it means looking at the wreckage in the real world, it soon becomes a lot less compelling.
As to mid-Atlanticism, I don’t like that idea, either. It is where we seem to be headed right now. If the Euro were abolished, so that we and the French, Germans etc were back on level terms each with our own currency, we would find ourselves a little closer to Europe, not further away!
Christian de Feo said:
“The problem with the Euro began with its fair weather design”
Yes, that’s what I used to think, see my earlier article, which you can get by clicking on “chain gang” in the above. The Euro certainly does have a problem when storms hit, I agree. However, I now think the Euro has problems in fair weather as well, because there are always imbalances, and the Euro is always acting to exacerbate them.
“I suggest that it could continue to work for Finland, the Netherlands, Germany, etc.”
Tend to agree, but, even with a smaller and relatively homogenous group of countries, a common currency has the potential to cause imbalance problems. If that’s the way the Eurozone core want to go, I think they would be well advised to move rapidly towards full political union, thereby giving themselves the capability for an internal “regional policy” to tackle economic imbalances.
Mike Cobley said:
“Couldn’t possibly be the structural inequities of international finance, and the vulture ethos which they encourage, could it? If Europe could confront those agents of greed and bring them to heel…”
Oh of course Mike, you are right. There are a lot of powerful greedy people out there, and they assuredly make things worse. However, your “if” sentence should probably be written “if PIIGS could fly” (sorry for awful pun). We won’t get rid of aggressive capitalism in a hurry. We could get rid of the Euro, and that would at least be a step forward.
Toryboys said:
“the PIIGS … have already suffered from dramatic (reductions?) in their real wage levels. What you seem to be arguing is that what they need is another dose of medicine from the devaluation and inflation that would inevitably follow from their leaving their Euro…..
The wealthier countries in the Euro … now have to accept that they have to fulfil their obligations to make resource transfers to those areas which have not fared as well.”
The Germans are contemptuous of the Greeks, and they are in absolutely no mood to make the resource transfers you suggest. I quite agree that it would be equitable if they did, but, since it ain’t going to happen, it ain’t a good idea to campaign for it. That leaves the PIIGS with the devaluation option, and I am puzzled that you should equate it with austerity. Austerity is what the PIIGS are facing now. Devaluation stimulates exports and growth and thus tends to get away from austerity.
Jedi said “Which eurosceptics?”
OK, Redwood and other sceptics score high marks for their lucid analysis of why the Euro is a disaster. They tend not to do so well when they analyse other aspects of economics, such as fairness between capital and labour, when their fundamental beliefs are not so helpful in guiding them toward the rational analysis.
However, if you think I’m being a bit churlish towards them, perhaps I am. I want to persuade liberal-minded people that there are some occasions when it isn’t wrong to agree with dinosaurs. That is a bit of an uphill struggle!
Tea break…
… one lump or … 26, 27 ? …
I completely agree with everything that David says. There are some additional points I would make:
Countries such as Greece and Portugal cannot survive in the Eurozone as currently constructed. Even if there was the debt jubilee the Euro remains over-valued for those countries so they will always be stuck in austerity/deflation. There is no remedy for that except a transfer union, which the Finns have flatly rejected and which may well be declared unconstitutional in Germany.
The Euro allowed moral hazard to flourish. French and German banks lent recklessly to countries like Greece that could not afford the loans. The banks lent because they were confident that the debt would be backstopped by Germany. The Greeks borrowed because they were confident of the same thing.There was fault everywhere, but the trigger for the explosion of unsustainable credit was the introduction of the Euro.
Bond spreads are now reaching unsustainable levels. Spain and Italy are paying Euro-era record prices for money whereas the markets are actually paying other countries such as Germany and Finland for the privilege of holding their cash as yields have turned negative – ie the bond buyers will get back *less* in absolute terms than the amount they have spent buying the bonds. A 500 basis point spread between nations tied into monetary union cannot be sustained.
The ECB and the Eurozone policy makers have expended a great deal of political capital and taxpayers money trying to stem rising market disquiet but have failed miserably. Mario Draghi has spent 1 TRILLION Euros of Eurozone taxpayers money in the LTRO operations which he said would “buy time” for the policy makers to sort things out. But they have manifestly failed to do so.
As we see in Greece, Portugal, Ireland and now Spain- austerity is a disaster for economies that are already experiencing severe recession. But it is the only option that is proposed. The lack of vision from Brussels is frankly staggering but when nations are locked into this monetary straight-jacket it is difficult to see any alternatives.
And most importantly there is the lesson of history. Returning to national sovereign currencies for Europe today is as logical a step as ending the gold standard was for Britain in 1931.
Greece, Portugal and others can certainly survive and flourish within the Euro; the issue is just about working out how to do it. The problem won’t be solved by Brits saying in their self-interested way that it can’t be – and they are interested precisely because Euro success will means poverty for the UK if the UK stays out.
The lack of vision is certainly staggering and there must certainly be alternatives to the madness of austerity. History has no relevant lessons – we are making those now. If the problem is over-valuation, then the investment needs to be made to correct that , in physical assets such as efficient factories located in those countries. Financial services and manipulations are not the solution, manufacturing is, which any sensible person has known for a long time.
Now that everyone has seen the damage done by the financial services industry and its moral hazard, there’s a chance that systems will be put in place to address it. There’s a big benefit to everyone in the Euro if that happens. The possible rewards from solving the problem may even be high enough that none of the money, influence, and misinformation emanating from the City of London will make any difference – the Euro will win in the end.
Richard Dean said:
“the Euro is actually working well. The present troubles are just the workings out. …Once the corrections are made, no-one is going to be so foolish in future.”
and Chris said:
“There isn’t a problem with the euro. It’s still there. It’s still working”
Convince me that this isn’t desperately wishful thinking in support of an ideal that has failed. Convince me that you have a valid reason for treating as trivial the problems that are giving Europe’s leaders endless sleepless nights.
Neil Bradbury said:
“If you actually talk to any Euro zone residents I haven’t met any who want to stop using the Euro. Do any of the Eurosceptics realise what economic chaos would be created by a disorderly break up of the Euro?”
I’m sure you’re right. However, the fact that cold turkey is very painful doesn’t mean that it’s a good option to carry on mainlining the class A drugs.
My thanks to DGN, Liberal Eye, and Paul in Twickenham for their very useful further insights on how the Euro is wrecking Europe. Would anyone like to have a shot at suggesting:
– how the Euro could be broken up with least damage?
– how Europe could best maintain its drive toward political harmony and economic cooperation after the Euro has been abandoned?
I can only offer a very simple initial comment. If things stagger on until the Euro cannot hold together and the break-up is forced by financial crisis or by a confrontation between the nations, then the debacle is bound to cause great acrimony, and it could even threaten the peace. If, on the other hand, a majority of Eurozone leaders recognise soberly that a planned transition is in everyone’s interests, there is a much better chance it will be achieved without tearing the EU apart.
No-one said the problems aren’t trivial. But they won’t be solved if noone tries. The poorer Euro countries provided a temporary solution to the richer countries’ problems of lack of competitiveness in world markets. What is happening now is that the richer countries are having to face that reality. They will face it okay, they’ve faced far worse in history, and they’ll feel far worse pain if they don’t find a solution within the Euro .
So there’s no need to ask questions about how to manage a breakup – it won’t happen. Better to ask what the UK’s response will be when the Euro survives and prospers in a few years time. In the meantime, I wonder if Tim Leunig and Centreforum might be able to enlighten us, and perhaps even suggest a realistic solution to Euro survival mechanics and/or the consequent issues for the UK. What’s a think tank for, after all?
No-one said the problems ARE trivial! 🙂 Though they may look like that in hindsight after their solutions are found.
The solution may indeed be happening right now!
http://www.telegraph.co.uk/finance/economics/9396430/Euro-tumbles-as-Asian-funds-shun-EU-chaos.html
The article ends by this … .”A weaker euro can save the euro in the end,” said Bank of America.
Stein’s law states that if something cannot go on forever, it will stop. In the absence of the political will to resolve the Eurozone crisis – i.e. fiscal union – all other end-games appear to involve fundamental change to the Eurozone.
Some writers above suggest a smaller, northern group centred on Germany, Austria, Netherlands and Finland. A type of Hanseatic League. That would certainly be feasible. Equally if Germany left the Euro and went back to the Deutschmark then that would probably work too.
In Greece, the troika is making increasingly ominous noises about how the Greek programme is “off-track” – 210 of 300 changes promised by now have not yet been undertaken. Shaeuble is refusing to countenance an extension of the Greek programme. It feels like we are moving to a Greek exit – or more accurately a Greek defenestration.
In Italy, Berlusconi is threatening to run for PM again on a platform of return to the lira – a policy that has over 60% support in the most recent opinion polls.
In Spain, Rajoy has thrown away his election manifesto and is now slavishly doing exactly what Berlin instructs. He has no choice; the Spanish cajas still have vast unreported liabilities as they continue to mark their unsellable property portfolios to book. Repeated refinance of zombie property companies avoids the need to mark their assets to market, which would crystallize vast losses. Rajoy needs German money to avoid this happening as it would result in a complete Spanish meltdown.
Irrational loyalty to the Euro project means that we are in permanent crisis. But what can’t continue will eventually stop. Somehow. I hope it is not the result of some black swan.
“Convince me that this isn’t desperately wishful thinking in support of an ideal that has failed. Convince me that you have a valid reason for treating as trivial the problems that are giving Europe’s leaders endless sleepless nights.”
Go to Calais or Dublin. Walk into shop. Spend euros. OK. It won’t convince you, but then you’re not paying attention. Your whole argument is a bit like someone who might have said, in the early ’80s. “There’s a miner’s strike. We must get rid of the pound.” There’s no relevance between one and the other. And Britain has spent 50 years proving that devaluation is not a magic bullet – to say the least. It’s failed every time.
There is a debt crisis. It needs dealing with. It’s not the fault of the euro and creating lots of little currencies would not change it.
@ Neil – “Do any of the Eurosceptics realise what economic chaos would be created by a disorderly break up of the Euro?”
Why yes Neil, for that is exactly why I (we?) have been calling for eurozone governments to seek a mandate from their respective electorates for:
1. fiscal transfers between rich and poor nations of up to 5% of GDP on an ongoing basis.
2. eurobonds
………………………………… or, if that mandate cannot be acquired to accept the logical consequence and return the euro to its ECU days as a soft-basket of broadly convergent currencies / a northern eurozone core.
“Would anyone like to have a shot at suggesting: how the Euro could be broken up with least damage?”
Might I suggest the winner of the Wolfson Prize:
go.telegraph.co.uk/?id=296X683&url=http%3A%2F%2Fwww.policyexchange.org.uk%2Fimages%2FWolfsonPrize%2Fwep%2520shortlist%2520essay%2520-%2520roger%2520bootle.pdf
Roger Bootle answered the easy question, but it’s is only worth 10% of the marks. It doesn’t get a pass. What Wolfson now needs to do is offer a million euros for the first credible “how to stay together and prosper” solution. Plenty of answers available, outside the boxes of cosy economic thinking.
What a very interesting debate! I, too, completely agree with everything that David Allen says. As, I believe, would all members of the Liberal Party. And how right “Paul in Twickenham” is to say: “And most importantly there is the lesson of history. Returning to national sovereign currencies for Europe today is as logical a step as ending the gold standard was for Britain in 1931.“!
It is extraordinary, and very telling about the mainstream EU-fanatic Liberal Democrat ideology, alas, to see Liberal Democrats still arguing for the UK to join the Euro, given what an utter disaster it would have been for us to do so when we had the chance. So long as the Liberal Democrats continue to want the UK to join the Euro and a single country called Europe, or so long as they are perceived to want that, that perception will be a millstone around their collective neck.
So long as that is so, there will always be the UK Liberal Party, in which it is possible to be both a liberal in favour of genuinely greater equality of opportunity for all in health, education and inheritance of capital and also a thoroughgoing EU-sceptic.
The person that figures out how to get the people[s] of europe to turn around and say:
“Yes, we are a collective familiy with a common destiny, and therefore commit to a single governance and joint liability, secure in the knowledge that our shared aims and expectations permit absolute trust that even if ‘our’ man isn’t running the show ‘their’ man will govern in a predicatble and acceptable way.”
deserves more than a million euro’s, they would deserve outright deification!
The crucial feature of indirect democracy is the perception of representation, the collective trust in shared aims and expectations that allows the people to put their destiny in the hands of another, safe in the knowledge that even if ‘their’ man doesn’t get the job then the other guy will still be looking after their best interests.
The manner in which this trust is built is the knowledge that you and ‘he’ have a history of cooperation, and that your respective families likewise have a shared social and cultural history of cooperation, all of which allows you to trust that when adversity strikes ‘he’ will act in a predictable and acceptable way.
There is nothing in the past five years of the euro-crisis to indicate that this a likely outcome, so there is very little merit in treating Roger Bootles roadmap as an irrlevant stepping stone to the promised land of euro-nirvana.
The strength of any currency is the numbers of peoples and places that recognize the currency has any value. For that the Euro, Rouble, Yuan and the US dollar has worked as long as people have confidence in its value. To do this a currency’s value must be backed up by real commodities. (purchasing power).
It will be great to have just one world currency – that will stop the speculators!
Actually we DO have a world currency and we have it for hundreds of years and it has worked well: GOLD !!!!
At one time the £GBP was directly linked to the GOLD and the £ had an exact value of quantity of gold.
Then a Tory chancellor back in 1971 took us out of that gold standard (I now remember why I dislike the Tories so much) since then we have inflation, recession in the 1980/1990s and uncertainty ever since.
The Euro should have assigned to a fixed amount of gold from the beginning.
But, even if the UK stays out of the Eurozone the £ value should still be linked to gold value.
We can still enter the currencies into the gold ‘fixed value’ standard now.
@ Richard Dean
The richer countries dumped on the poorer ones precisely because the richer countries found it too hard to compete in world markets.
Not so. Germany is the world’s champion exporter and not just to the eurozone. We hear a lot about China’s vast exports but until only about three years ago Germany exported even more. In Mercs, BMWs, greentech and an immense amount of engineering and other goods it is a global market leader. The problem is imbalances within Europe – it doesn’t matter what the absolute level of prosperity is across Europe – as long as there are no politically viable mechanisms to handle the inevitable imbalances they will blow the system up sooner rather than later unless there is a fiscal union which I believe to be politically unacceptable – it would certainly be highly centralising and undemocratic..
History and reason both point to solutions to the mess. Firstly, austerity does not work but the neoliberals that dominate economic policy making – for instance via the ‘Washington Consensus’ – refuse to accept this. Secondly, the solution to a debt crisis is to write off the bad debts. Absolutely the most toxic thing that can be done is to try and stabilise them, to throw the taxpayers onto the fire as it were. This only leads to enduring stagnation yet it is Coalition policy. Thirdly, we should identify and eliminate useless overheads by which I mean the bloated bureaucracies of Whitehall and dysfunctional running of the country where whenever something goes wrong it turns out that no-one was responsible (the MOD and out-of-control parts of education are perfect examples). I do NOT mean benefits paid to the most vulnerable in society which is what the Tories mean by cutting costs. Finally, we should ask why it is that costs are so persistently high in this country. If we looked I have little doubt that we would find it was largely due to epidemic levels of ‘rent extraction’. This is fixable but only if we are prepared to take on the vested interests.
And then we should ask who are we saving the Euro for as Golem XIV has done.
http://www.golemxiv.co.uk/2012/06/save-the-euro-who-for/
Sometimes (but not always), an analogy helps in thinking through big problems.
Suppose a rich man has 6 children and he wants them to be financially catered for. He sets up an account and gives each of his children a chequebook linked to that account. Three or four of his children use the chequebook reasonably, and fairly wisely, but two of his children constantly overspend knowing that dad will pick up the tab on the joint bank account.
What is the fathers solution?
One solution might be :
~ Don’t put any more money into the children’s joint account.
~ Open a New second account, with a sufficient stream of new funds.
~ Give New account chequebooks, to the sensible children.
~ The father now has control of the funding streams to all of his children again.
What this analogy seems to suggest is:
~ The country doing the funding needs to take control.
~ A better class of funding needs to be created by the controlling country.
~ This better class of funding is adopted by compatable countries.
~ The two funding streams are run simultaneously.
~ The rate of exchange between these funding streams are allowed to naturalize.
~ A two tier two speed Europe.
In short, Germany has the chequebook, and the solution to the problem is in their hands, and ONLY their hands.
Many people in Europe recognize that “we are a collective familiy with a common destiny”, and that a Europe without the Euro would be worse than one with. The reasons are explained in a book that is endorsed by Charles Bean, Deputy Governor of the Bank of England responsible for monetary policy. The book is called “Macroeconomics, a European Perspective”, and every day I go to the spanish cafe, spend a euro or two on breakfast, and read a chapter before starting work.
Chapter 25 explains that, before the EMS, less competetive countries would gradually go into debt and eventually have to devalue. This made their products more competitive. To protect themselves against the effects of thers’ devaluations, countries introduced import and export tariffs. These protectionist strategies reduced trade, so that a country that did this would also have to devalue after a while. This kept everyone poor in the long tem. Fixed exchange rates, and then the Euro, were seen as a solution that might be worth trying.
So history tells us that going back to the old system won’t solve anything at all. Instead, the Euro system needs to be redesigned so that it does indeed solve the problems of trade imbalances and governance. That is why a Wolfson Prize for a winning strategy would be worth a lot more that the quarte of a million that Roger Bootle won for working out how to repeat the failures of history.
@ David Allen
how Europe could best maintain its drive toward political harmony and economic cooperation after the Euro has been abandoned?
This is the key question. So far the official Lib Dem approach is to adopt an ostrich strategy and not admit the problem and as long as that remains the case they will fail as a political force. Guaranteed!
Any country much larger than Luxembourg has problems reconciling devolution on the one hand and centralisation on the other. Each has its strength and weaknesses; each is sometimes and in some contexts better than the other. The most sophisticated solution is the ‘federal’ approach of the USA and Germany. Some powers are state powers, some federal and some are split. Hence the US has both state police and the Federal Bureau of investigations with a mostly clear and reasonable division of responsibilities between them. Yet, despite the USA’s relative homogeneity and shared history, turf wars – often over ‘states’ rights’ remain endemic. The 10th amendment to the US constitution makes it clear that legitimacy is bottom-up – by providing that the Federal government only has those powers explicitly granted to it and that all others are reserved to the states. This is surely the correct approach although in practice it remains (and no doubt always will) the cockpit for ongoing political fights which again is correct – the world is ever changing and the politics must reflect that.
In contrast the EU is dedicated to the principle of ‘ever greater union’ which amounts to a one-way ratchet whereby powers progressively transfer to Brussels with weak or no oversight of either the transfer process or the continuing use of those powers. This doesn’t work and is fundamentally illiberal so the Lib Dem establishment’s continuing enthusiasm for this approach is a mystery. In the long run it will inevitably lead to a descent into the grey goo of homogenisation. We should remember that many think that the centralised bureaucratic system of imperial China led to its long eclipse by the west.
There is however a problem in even discussing this in Britain. In the UK the meaning of ‘federal’ has somehow become inverted so that it now means roughly ‘centralised and bureaucratic’; what’s not to hate about it if that is what it means? Unpacking the meaning can work wonders. I remember a conversation with a UKIP-type retired national tabloid editor some years ago. When he has simmered down from attacking the EU and all its works. I said would it not be better if everything was done locally where there was not an overriding reason to to it at a higher level and that this meant that most powers should be returned from Europe but maybe they should take on others if – and only if – there was a strong case. This might mean, I suggested, that ultimately there would be a common European army since it made no sense in the long run to have lots of little ones. And he AGREED. This was, he said, the sort of European Union he would support, be enthusiastic about even.
So, while this is just one anecdote, it does illustrate a possible solution. Devise a mechanism whereby powers – often very narrowly defined as with US policing – can be passed to Brussels or repatriated from Brussels depending on the views of member states. Passing powers TO Brussels would require, say, the support of all but two countries AND of countries representing 95% of the population while repatriating power might require, say, only 5 countries representing 33% of the population to ask for it. Over a few years this would lead to a shuffling of the powers held by Brussels and most likely far greater sensitivity to popular feeling; to get up too may peoples’ noses over some issue would be to loose all powers over it. And we could start by calling for a repatriation of the CAP – and soon thereafter its strangulation!
Oops! I fluffed the closing italic tag after DA quote. Moderator please fix.
Competitiveness is not just about selling goods and services, it is also about maintaining markets, A country is not competitive if it has huge surplus of exports over imports that rely on loans that it makes and which eventually destroy its market.
@ RIchard – “Many people in Europe recognize that “we are a collective familiy with a common destiny”, and that a Europe without the Euro would be worse than one with.”
Truly?
http://blogs.independent.co.uk/2011/09/15/european-public-opinion-turns-against-the-euro/
@Jedibeeftrix. As usual, the agenda-driven and somewhat uninformed journalist has misinterpreted the survey information. People were not asked whether they want to keep the Euro, they were asked how they feel it has worked for them so far. Feeling the Euro has had a negative influence translates into a desire for change, not into a desire for abandonment.
Go to Europe. Stand in the street. Knock on the doors. Ask. Very few people want to return to their old currencies.
“Go to Europe. Stand in the street. Knock on the doors. Ask. Very few people want to return to their old currencies.”
Got any evidence for that? Beyond the purely anecdotal?
These are tense political times, and the discussion can get equally edgy. This is a good site for discussion, and I simply want to say that I respect the moderators in managing the comments, in their aim to allow ideas through, whilst filtering out ‘noise’. It’s a difficult job, and I think on the whole they do it well. I hope my comments don’t offend ; it is certainly not my intention. My ideas are often ‘off the wall’, but my intention is to add, not detract.
If you want to know what is happening in the markets, go to Bloomberg News. You will find that the markets want stability above all. The solution to the Euro crisis is quite straight forward and not rocket science. Here it is;- 1. Countries agree to a banking union run by the ECB as part of the single market 2. The 17 Eurozone countries negotiate together for their common good. Each Country starting from its present position, lays out a path (gentle or steep – but downwards) to return to the original agreement of annual deficits being no more than 3% of GDP.
On a political note, I don’t understand why LibDem MEPs have not been involved in this process and I am so disappointed that all the member countries of the Eurozone and the EU have put national interest in front of common interest. That is the weakness of the Eurozone, not the finances. (see my letter to LibDem News)
I am temporarily in Spain, and have plenty of anecdotal evidence from people here, even with the periodic protests agaionst austerity including rioting and some brutal police behaviour. JediBeeftrix’s “evidence” is no evidence at all.
Chapter 26 of the book tells me that the very first sentence of this posting is wrong, The purpose of the Euro has always been to improve everyone’s standard of living by improving trade and by reducing costs associated with exchange rate uncertainty, price opacity, and the huge pre-ERM inflations. People here are stll in favour of these objectives, and do not believe they would be served by returning to the pre-Euro chaos.
It seems to me that one of the major facets of the problem is the behaviour and incentives in the financial services sector, which makes profits from uncertainty, exchange rate fluctuations, price opacity, debt, and inflation. So one of the major parts of the solution is going to involve getting better control of what the crooks in that sector are able to do.
… which I am delighted to see is Dave Pollard’s solution too!
@ David Pollard
An attractive sounding proposal but are there any snags? Well, yes unfortunately.
1. Countries agree to a banking union run by the ECB. The difficulty here is that sovereign nations become just local government writ large. Also the timescale means that there is no way that this massive change can be subject to proper debate or referendum in time to be useful and even if it were I doubt that it would pass. So this proposal compromises (at best) democracy in favour of finance.
2. Glidepath to modest deficits. But the ‘south’ remains uncompetitive even now so how will this be achieved? Also what about accumulated losses at banks and now between countries? One estimate puts the amount needed to rectify the Spanish banks alone at Euros 990 billion and the capital flight from Spain to be running at at annulaised rate of 50% of GDP.
http://neweconomicperspectives.org/2012/07/the-growing-pain-in-spain.html#more-2658
I agree with you about Lib Dem MEPs though.
You missed out one necessary ingredient for building cohesion – popular consent, even enthusiasm. The sight of presidents and prime ministers bargaining away national economic rights has been the most unsavoury aspect of the current crisis that never ends. And commentators keeping egging them on – it’s up to Merkel and Hollande and the rest to “sort something out” quite regardless of whether it is acceptable to their electorates.
“If you want to know what is happening in the markets, go to Bloomberg News. You will find that the markets want stability above all. The solution to the Euro crisis is quite straight forward and not rocket science. Here it is;”
This will be a solution for the short term, because that is what markets must look for. Never do something which is right in the long term if it hurts in the short term.
Richard Dean said:
“Chapter 25 explains that, before the EMS, less competetive countries would … eventually have to devalue. This … kept everyone poor in the long tem. Fixed exchange rates, and then the Euro, were seen as a solution that might be worth trying. So history tells us that going back to the old system won’t solve anything at all. Instead, the Euro system needs to be redesigned”
Let’s just think about how eurocentric this view is.
The rest of the world copes, to a greater or lesser extent, with floating national exchange rates. Sure, it isn’t perfect, and there are some problems. Then the Eurozone comes along, and tries something different. It bombs.
The humble response would be “Oops, our special idea wasn’t so special after all. Let’s just go back and join the herd, along with the BRICS, the US, the Brits, in fact everyone else.”
The arrogant response would be “We Europeans are special, and if our first shot at showing how special we are had a few little flaws, then let’s compound them by sticking with our special system, doing some desperate tinkering, and then telling the world that Europe is the cradle of civilisation, so what we’re doing must be brilliant.”
I am a Europhile. I was delighted when the Euro was launched, because it looked like a brighter future. But I don’t ignore what my eyes tell me.
The whole world is trying to solve the problems of exchange rate fluctuations. That was what the gold standard was about, and the Bretton Woods agreement, and the ERM, and the Euro. That’s what China is about – a huge collection of regions with fixed exchange rates – and India, and Caricom soon, and others.
So panicking, and going back to a solution that everyone is trying to get away from and didn’t work before, is not a way forward. Thinking about how to solve today’s problems is.
This is a war between populations and the financial services industry. The people will win in the end.
There’s one possibility, I think, for the Euro to continue. If we turned the Eurozone into a multi-currency zone, so that the Euro would be a kind of meta-currency floating above the regions national currencies. How could this work? Well, international and competitive industries could use the Euro (pay costs, labour, taxes in the currency). Less competitive industries could resort to their local currencies in order to take advantage of the necessary pricing flexibility.
In all of this, we shouldn’t underestimate the stimulus value of single currency zone for trans-European business. Taking that away could have serious repercussions.
There’s another, unintended consequence of this argument against the Euro. If it’s true, then not only is it an argument against a trans-national currency, it is also an argument against a national one too. Surely the north should have it’s own currency from the south, if it is to ever create wealth and be free of it’s dependency?
I write all of this to say that maybe, despite the prevailing wisdom, we are missing something by focusing on currency, so much in all of this. Perhaps the Eurozone requires something else: perhaps greater pricing flexibility (wages, costs, etc) in order to allow specific industries and businesses to sort out their competitiveness, rather than having crude sweeping pricing devaluations by governments and central banks.
@mpg – “Surely the north should have it’s own currency from the south…”
If we did not have fiscal transfers within the UK then yes, that would indeed be a perfectly sensible arrangement. However the UK is a single nation and we routinely transfer taxation revenues that have been generated in more prosperous areas to areas that are more deprived. We share a common identity, culture and history. It is what defines a nation.
The problem (as is described here and elsewhere) is that the people of – for example – Finland, do not share a common identity, culture or history with the people of Greece. Would you be happy to see your taxes used to pay for health-care in Slovakia? Similarly, the German constitutional court has explicitly outlawed fiscal transfers to other countries : “No permanent treaty mechanisms may be established that lead to liability for the decisions of other states”.
The problem with the Euro can be boiled down to a single statement: You cannot sustain monetary union between countries (or regions) with significantly differing levels of productivity without offsetting fiscal transfers. But the sovereign nations of the Eurozone are not willing to permit fiscal transfer. Therefore the Euro as currently formulated is unsustainable.
“Paul in Twickenham”
How right you are! Devaluing a currency is a lot easier on social cohesion than lowering real wages and salaries by lowering nominal wages and salaries..
The majority of Liberal Democrats must come to their senses and stop allowing starry-eyed EU and Euro visionaries to lead us back to the 1930’s.
If you “cannot you sustain monetary union between countries (or regions) with significantly differing levels of productivity without offsetting fiscal transfers”, then solutions seems astonishingly easy and obvious:
1 improve productivity where it is low, and/or reduce it where it is excessive
2 change the prices of things so that fiscal transfers are no longer necessary
Solution 2 suggests a simple interpretation of what is happening now. Germany thought it could seel goods to Greece at high German prices, by lending Greeks the money to pay. Greeks realized that they could get the goods at a cheap Greek prices if they simply didn’t pay off the loan.
Perhaps we can see it another way too? In my imaginary Greek market for cars, the choice is between:
> having a fancy car and no money left
> having a banger which works and which leaves you with money to spend on other things
German productivity is astonishingly low in this market environment, because German manufacturers focus only on the first choice while most (of my imaginary) Greeks find the second choice much more desirable. To offset their low productivity of bangers, German salespeople arrange loans for Greek customers, and everyone knows that the loans will never be repaid so it’s ok in the short term.
This thought experiment shows that the essential problem is low German productivity of bangers, and the fiscal transfers to Germany (via baliouts) that are needed to assist them in their consequent poverty. If only they could develop some form of understanding that they need to make products that markets want, rather than products that they want to make. They need some way out of their marketing myopia!
How do wages equałise? Can a average typical spanish or italian simply take up a job in Germany with better prospects or vica versa? No. Because there is a language barrier. Europe needs a common language before a common currency. No plans for this are being implemented by the E.U. kids in italy arer being taught french. Mobile labour comes even before policy, because divergent policies of states would also be at the behest of mobile labor, so high taxes without very much in return would see the labour force moving etc… This is why money unions like the usa are so successful, even when policy and taxes between states is highly divergent.
Richard Dean said:
“solutions seems astonishingly easy and obvious: 1 improve productivity where it is low, and/or reduce it where it is excessive”
Sorry Richard, but, exactly how would you implement this solution? By waving a magic wand?
“Solutions” aren’t solutions unless one can identify who is going to implement the solution, why they should want to do it, and how they could practicably do it.
@Paul in Twickenham :
Thank you for your comment, but my point still seems to stand. A national currency zone, in this instance, traps a less competitive region into uncompetitiveness, while exacerbating the advantage to the competitive region. Wealth transfer doesn’t solve this problem (a key point in my previous comment). But surely the aim, in both nations and the Eurozone, is to restore competitiveness to the underperforming regions & countries. Therefore, in both national currency zones and the Eurozone, the currency is a drag on uncompetitive regions and countries, even with wealth transfers. So, my general point remains unblemished. The ‘currency devaluation’ criticism of the Euro is just as applicable to a national currency.
@Dane Clouston:
Your ‘social cohesion’ rebuttal is interesting, but I don’t know enough to know if it is valid or not. Do you have any real-life evidence to show that market-led devaluation is socially worse than government-led devaluation?
Again, my point is that a market-led solution would probably allow for more nuanced outcomes than the sledgehammer approach of simply depressing an entire economy’s value. Further, a market-led solution would leave the space for productive areas of a malfunctioning economy (in Greece’s case it’s tourism and shipping) to compete at an optimum level.
Chris said:
“Britain has spent 50 years proving that devaluation is not a magic bullet – to say the least. It’s failed every time.”
The pound has both risen and fallen against other currencies over the last 50 years. Arguably, its strengthening due to North Sea Oil has done us more harm than anything else. With a strong currency, we could export our oil, but not our manufactured goods, which became overpriced on the world market. This speeded up our withdrawal from manufacturing, leaving us vulnerable now that the oil is running out. It’s called the “curse of natural resources”: having something valuable buried under your land actually hurts your economy:
http://www.nybooks.com/articles/archives/2012/jun/07/what-makes-countries-rich-or-poor/?page=1
Richard Dean said:
“The whole world is trying to solve the problems of exchange rate fluctuations. That was what the gold standard was about, and …. the Euro. That’s what China is about – a huge collection of regions with fixed exchange rates – and India, and Caricom soon, and others.”
On the first sentence: Yes, floating exchange rates have their problems, as I acknowledge above. However, since the Euro floats against the rest of the world’s currencies, it in no way avoids such problems. What it does do is to float at a compromise level, too weak for Germany and too strong for Greece. So it has all the problems that a national currency has, and then it adds some extra problems that are all its own!
On the second sentence: China is not like the Eurozone, because it is a single nation, which takes responsibility for internal fiscal transfers (see Paul in Twickenham’s post which explains why the is a crucial difference). As to Caricom , well OK, there are a number of “common market” national groupings around the world which organise preferential internal trading, and in that sense are similar to the European “Common Market”. But, whatever one thinks of such arrangements, they are quite different from the Eurozone, because they don’t make the critical mistake of imposing a single currency on multiple different sovereign nations.
mpg said:
“There’s one possibility, I think, for the Euro to continue. If we turned the Eurozone into a multi-currency zone, so that the Euro would be a kind of meta-currency floating above the regions national currencies. ,,, International and competitive industries could use the Euro (pay costs, labour, taxes in the currency). Less competitive industries could resort to their local currencies in order to take advantage of the necessary pricing flexibility.”
Sorry mpg, but, if I have two different sets of legal tender currency notes in my pocket, and the value of my Ruritanian florints keeps rising and falling compared to the value of my euros, then I shall spend a great deal of my time on speculative financial transfers between the two currencies in the hope of making money that way. So will all the retailers, so will all the manufacturers. So will all the tax dodgers, who will have a field day. I can’t believe that this system will work.
As far as motivation to change is concerned, information is key, and pain can help. Following on from the thought experiment in my previous comment, it’s clear that the Germans need to improve their productivity and competitiveness in the low cost car market. The pain their banks are feeling from the present crisis may help them to see this. But this is a wider problem which many countries, and indeed economists and advisers, need to understand. The way forward for an exporter is twofold:
1. to be able to sell: they need to invest in re-organizing their design and production systems in ways that allow them to products that the markets want at prices the markets can afford
2. to be able to continue to sell, they need to arrange that their customer countries are also able to sell products back to them – so that the fiscal transfer problem does not arise.
I agree that this is a huge step forward from today’s vulture culture, which is able to achieve only the first of these and then only by having the financial services industry do a con job on customers. The second is something that no major economics text or academic study seems to look at, so it’s mechanics and behaviors and ethics have yet to be developed and agreed and learned.
This change will certainly be hard, but the possibility of adding trillions more to the trillions of euros alread spent, ought to provide a rather large incentive to try to make this change.
China is certainly like the Eurozone, though more advanced in some ways. Its provinces have identities that are as different as the different European national identities. Its history is different, but we live today not yesterday. We don’t have to be prisoners of the past.
Catalonia is a province in the North East of Spain. It has its own language, Catalan, which is different from the national castillano language of Spain. In the breakfast cafe, they also speak French and a bit of English and German. I wouldn’t be surprised if they think of themselves as Catalan first, European second, and Spanish third!
Like the Welsh who are Welsh first. And Scotland is also part of the UK. Has the difference between English and Scottish and Welsh national identities meant that the sterling currency union has failed. Absolutely not!
How a population identifies itself is a choice that that population makes, and so is something they can choose to change. The argument that the Euro won’t work because of different national identities is totally invalid.
@David Allen:
Having two working currencies seems to work well in places like Romania?
“China is certainly like the Eurozone, though more advanced in some ways. Its provinces have identities that are as different as the different European national identities.”
You are, presumably, aware that there is a significant authoritarian price to pay in order to hold this diverse china together?
A necessary price even considering the reduced importance Chinese society places on individualism!
I point this out from the perspective of a typical ornery British individualist suspicious of the overweaning ambitions of the state, one who will certainly be found in the hills in an insurgency should your great (political) leap forward ever arrive on these shores………..
@ Jedibeeftrix
It is certainly not easy to hold together a diverse multiplicity of states, tribes, or nationalities, and to form a single, large, competitive supernation. China is coping, up to a point, by authoritarian means. The USA is coping, just about, although the conflicts inherent in its confused and semi-devolved political system threaten to outweigh its strengths in business and in military dominance. Europe is failing to cope, partly because too many of its members do not want to rise above nationalism, partly because of failures in its “political engineering” – the technology of organising financial and governmental systems that work, a technology which is remarkably poorly developed!
In the long run, I believe the supernations must and will learn to cope. When they do, they will dominate. In the short term, we have to strike down inadequate schemes and systems such as the Euro, and go back to the drawing board.
There is no drawing board. What existed previously was also something that someone created.
@ David – “Europe is failing to cope, partly because too many of its members do not want to rise above nationalism”
Funny, i must be looking through the other end of the telescope, for i do not see a problem in ‘failing’ to recognise a european identity.
I am British, I recognise a shared social and cultural history that allows me confidence in our shared aims and expectations resulting in a culture of governance and policy that is acceptable. I therefore [consent] to indirect governance……………….. rather than waging war against what i might otherwise percieve as illegitimate governance.
I am not european in any useful political sense, and thus i recognise insufficient shared aims and expectations to breed a system of governance and policy that is acceptable to me. I therefore will not consent to indirect european governance…… for it would be illegitimate.
I fail to see how this is a ‘bad’ thing, for their is nothing in the scriptures that commands us to render-unto-Brussels, and nothing in this view is antithetical to desiring harmony, cooperations, and collaboration with out neighbouring countries where a common position can be sought.
As i said; opposite ends of the telescope – i feel zero need to adopt an invented euro-identity purely so some post-Westphalian wet-dream can be realised.