Opinion: Lessons from Greece: why Liberal Democrats need to rethink their enthusiasm for the Euro

I can’t help but sympathise with Greece. In responding to the Eurozone’s latest debt offer, its people found themselves choosing between a rock and a hard place. The referendum was a bit like asking a vegetarian to choose between beef or chicken. The overwhelming rejection of the Eurozone’s proposals is the act of a nation with nothing left to lose: vote ‘yes’ and you sign up to breathtaking austerity and misery; vote ‘no’ and you take a huge step into the unknown that may take you down the same path, but one which also causes your creditors some pain, too.

The whole debacle clearly underlines why currency union without fiscal union does not work. It was something that Danny Alexander seized upon during the Scottish Independence referendum when he rightly pointed out that Scotland would have limited control over the direction of its economic policy if it kept Sterling in a post independence scenario.

And so it has proven to be the case with Greece. Faced with a single currency, and member countries with varying credit ratings under their old currencies, the banks concluded that all member nations should be offered the same one as the higher-rated nations. The seduction of cheap credit proved too much for Greece, which borrowed way beyond its means. A credit crunch later, and the wheels have well and truly come off.

This circumstance should have been foreseen. It was by some economists, but the cautions fell on deaf ears. By ignoring the warnings, each and every Eurozone member shares responsibility for what has happened. This is why every Eurozone member should share responsibility for trying to put it right.

Greece, like anyone else, should pay its debts, but it cannot be right that creditors can dictate such punitive terms to the extent that they dictate another nation’s economic and social policy. That is fundamentally wrong. Describing it as economic imperialism may be going too far, but what we have is not far short.

More than any other nation, Germany should realise the dire social consequences of imposing a harsh financial arrangement on an unwilling people in another country. This is exactly why the settlement offered to Germany after the Second World War was so lenient. It is unfortunate that they, and their Eurozone partners, are refusing to heed these lessons. In a nothing to lose scenario, who is to say that Greece would not turn to an extreme option like New Dawn? It should also be remembered that Greece was a dictatorship in the not too distant past.

There needs to be a significant restructuring of Greek debt, one which does not heap undue misery on Greek citizens, and one which doesn’t simply put the economic interests of Eurozone members first.

The Liberal Democrats have been very quiet on the Greek crisis. Perhaps this can be attributed to preoccupation with a leadership election? Or, perhaps, it is because it raises some uncomfortable questions about our policy position on Europe, specifically our enthusiasm for the Euro.

I’m a committed Internationalist and strongly in favour if the EU, albeit a reformed one, but the Euro has never rocked my boat. It robs states of the tools to take local action to address economic concerns. It centralises power in a distant Central Bank with limited accountability and, as Greece has proved, the lack of fiscal union means the bigger economies call the shots when the going gets tough. As for fiscal union, the very idea of such a centralising measure is a complete anathema to me.

We need a credible narrative on the Greek Tragedy. Our new leader must take a long hard look at our policy on the Euro and engage the membership in a debate on whether or not it is fit for purpose.

As for me, I think that joining the Euro is the best thing we never did.

* Energlyn Churchill is a pseudonym. He is a Welsh Liberal Democrat. He is active in his local party and serves on a Welsh Party committee. He blogs at Towards Gunfire.

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36 Comments

  • Matthew Huntbach 8th Jul '15 - 12:21pm


    Faced with a single currency, and member countries with varying credit ratings under their old currencies, the banks concluded that all member nations should be offered the same one as the higher-rated nations.

    Well, tough, the banks made a mistake. A rather obvious mistake. This makes no more sense than saying of you lend money to a person or company it must always be at the same rate. The general principle is that if you assess the risk as higher, you set higher interest rates. But also you take responsibility, you are rewarded with the higher interest payments if the borrower can pay back, however, you accept that you must bear the cost if the borrower really can’t pay back.

    To say “The seduction of cheap credit proved too much for Greece, which borrowed way beyond its means” is unbalanced. The lenders also had a responsibility to make sure that Greece was not borrowing beyond its means. If it was reasonable to conclude it was, and when you say “way beyond” that means a time was reached when it was reasonable, then was when the lenders had a DUTY to say “No”. By failing to meet that duty, they made a mistake just as much as the Greeks, and they should pay for the consequences if Greece has reached the situation – and it looks like it really has – where it just cannot pay what is owed.

    Getting out of such a mess by devaluing a local currency is, in effect, a hidden form of wealth tax. Is that the fairest way of handling it? Wouldn’t an actual wealth tax be fairer? Is it right that the burden should fall just on those with cash assets or who are owed money, as in effect happens with devaluation?

  • Jenny Barnes 8th Jul '15 - 1:08pm

    Currency unions like this always break up, usually with unpleasant effects. Gold Standard and the Great Depression, Bretton Woods in 1971. It’s not like we haven’t already done the experiment. Oh no, it’ll be different this time.

    No it won’t.

    Love
    Cassandra

  • Steve Davenport 8th Jul '15 - 1:12pm

    “Germany should realise the dire social consequences of imposing a harsh financial arrangement on an unwilling people in another country.”

    Is this necessary?

    For one, Germany is only one of Greece’s international creditors – I think I’m right I’m saying that the ECB and IMF are actually the biggest lenders to Greece.

    Secondly, the historical comparison is tenuous at best. Negotiations between Greece and it’s creditors have been going on for months and in my view a remarkable degree of patience has been shown. Comparisons to the 1919 Treaty of Veraailles or Post-WW2 settlement should be made with great care.

    Whether historical comparisons are valid or not I feel fairly sure most Germans would not see a history lesson as being helpful at this time. It would therefore be preferable if this debate could be held without straying into such sensitive and potentially provocative territory.

  • paul barker 8th Jul '15 - 1:24pm

    With the benefit of 20/20 hindsight we can all see that Greece should have reformed first & joined The Euro a lot later. The big problem was not the principle of Monetary Union but the Political pressures to make it big & fast, it should have been developed the same way The EU was, slowly & bit by bit. There was a lot of self-deception blinding people to what could go wrong.

  • Pretty much agree with what Matthew said, but I’m not a fan of the Euro. I would add that we’ve all been devaluing local currency through QE.

  • Eddie Sammon 8th Jul '15 - 3:29pm

    The problem is not a single currency but a single interest rate. So why can’t the central bank lend to countries at different interest rates? Lend to German banks at more than Greek banks. Germans want higher interest rates anyway because it forces their banks to offer a better deal for savers.

    I feel as though I must be missing something, because this radical change seems obvious to me.

  • Roger Billins 8th Jul '15 - 3:42pm

    I agree with much of what has been said. There must be a lot of Liberals who share a sneaking regard for the bold and radical politics of Syriza, which compare favourably with the corrupt governments of the past in that country and the bureaucratic mealy mouthedness of so many European politicians, which voters despise. Briefly the following points need to be made;
    1. The bailout money given to Greece to date had largely been used to pay off its private creditors;
    2. The austerity policies imposed upon it have been a disaster and reminiscent of the Versailles settlement.
    3. Germany has a long way to go to make reparation for the carnage it caused Greece in WW 2
    4 Failure will not only lead to Grexit but the collapse of democracy in Greece paving the way for the fascists of Golden Dawn and the Stalinists of the KKE.
    5 Failure will almost certainly lead to Greece becoming Putin’s main ally in Western Europe.
    6 Syriza needs to liberalise the Greek economy.

    The EU treatment of Greece has been an economic and political disaster which makes a British exit more likely.

  • I don’t buy into the idea that broad currency zones cannot work at all. I mean, look at the dollar. And on a smaller scale, isn’t it is ludicrous that places as disparate as London and Penrith could be well served by the same currency, so are we in favour of a Cumbrian Pound, and a whole suite of other local currencies? Maybe we could be, if we could make the idea hold together intellectually.

    Anyway, all these sage proclamations about the foolishness of the euro are making one error. It isn’t finished. It is like observing that a half finished house without a roof lets in the rain. The architects of the eurozone chose to take a risk and implement the currency union ahead of a sufficiently comprehensive political union on the assumption that things would progress and that by the time the crisis hit the thing would be ready. A mistake on a par with moving into that house on the assumption that it’ll be sunny, perhaps. But that doesn’t invalidate the idea of houses.

    Unfortunately, ten years of a do-nothing Commission under the previous incumbent, combined with a stronger than expected resistance to the idea, meant that the whole project stalled and the necessary gradual change didn’t happen. Europe will be the sum of the responses to the crises it is forged in. Now it is time to be just a bit bold and for the Eurozone to take that leap forward in political and institutional union. It may fail anyway, but we can’t stay where we are and trying to fall back will result in exactly the same sort of failure.

  • Lessons from Greece indeed :

  • The big issue with the Euro and the EU is moral hazard. There is an opportunity for governments and political parties to be irresponsible with an assumption that they will not have to face consequences. Europe really cannot afford to refuse to countenance Greece leaving the Euro, nor the UK leaving the EU. The EU is a democratic system that is founded on consensus and an assumption that other members will not risk upsetting the apple cart.

    As usual Guy Verhofstadt has been blunt and to the point, when he spelled out what Greece and Tsipras have to do:
    – End the clientelist system in Greek politics i.e. party cronyism and rewarding loyalists with jobs.
    – Downsize the public sector
    – End privileges: privileges of the military, the orthodox Church, the Greek islands and the political parties.

    Addressing Tsipras directly “there is never such a prime minister in Greece who has such a strong mandate as you.” “You need to come forward with your reform pacakge, it is not a chicken or egg situation.” “The choice is very simple, whether you want to be remembered as an accidental prime minister or a real revolutionary who modernised his country.”

    Anyone who thinks that comparing Greece today with an destroyed, defeated, occupied and divided post war Germany has lost sight of reality. Greeks who think this way need to consider that only part of Germany was treated this way, the remainder was subject to a communist/ socialist experiment that held the country back.

    As for LDV discussion: we had a vie from Athens last week and there is an on going discussion on the members forum.

  • Good article. By far the best write up of the Greek tragedy I have yet found is this by Steve Waldman. It’s longish but a must-read.

    http://www.interfluidity.com/v2/5965.html

    Among the points he makes are:
    1. The EZ and creditor countries went into this with their eyes open well knowing that Greece’s figures were thoroughly ‘fudged’.
    2. When the crisis broke they could have/should have fixed regulatory errors and forced banks to recognise their losses. Instead they chose to socialise the losses, replacing private debt with public debt. (I would add that this means that a heavy burden has been imposed on weaker countries that previously had negligible exposure to Greece).
    3. Europe’s leaders have betrayed the ideal of integration. They turned a systemic problem of financial architecture into a rancorous dispute between nations,
    4. They have stood the concept of moral hazard on its head. Waldman’s paragraph on it is magisterial.
    5. The creditor institutions have made a complete horlicks of managing the Greek economy. Pre-Syriza governments did most of what they were directed to and the result is a wasteland. Look at the graphs.

  • T-J – “I don’t buy into the idea that broad currency zones cannot work at all. I mean, look at the dollar.

    The dollar zone (or pound zone come to that) are in no way comparable. The US (and UK) are ‘transfer unions’ where regional differences in performance (which are inevitable for anywhere much larger than Luxembourg) are accommodated in one of two ways. Either people move to the more prosperous area or part of the taxes raised there are spent in the less prosperous region.

    In the EZ such transfers are politically impossible. Germany is running a ruthlessly mercantilist policy but is totally unwilling for any of the proceeds to be spent elsewhere in Europe and is in denial about the inevitable consequences.

    Absent the EZ the German exchange rate would have soared pricing their goods out of export markets; with the EZ the exchange rate is artificially depressed so that can’t happen. That also means that instead of taking it’s share of European unemployment, Germany ‘exports’ it to countries that have had their exchange rates artificially fixed at too high a level making them deeply uncompetitive. That’s why unemployment is so high and persistent across southern Europe.

    The Eurozone is going to go on unravelling as each domino in turn falls. In doing so I greatly fear that it will most likely take down the EU as well. In putting the EU on a pedestal to be supported no matter what I fear many liberals have done it a great disservice.

  • Bill le Breton 8th Jul '15 - 6:10pm

    Interfluidity has indeed been illuminating on the Greek situation. And so has Prof Wren-Lewis: http://mainlymacro.blogspot.co.uk/2015/07/austerity-is-integral-part-of-greek.html

  • Bill le Breton 8th Jul '15 - 6:11pm
  • Gordon, good demolition of the first two sentences in my comment. The eurozone today and the dollar today are not the same thing. Anything to say about the rest of it, though? Personally, my position is that we shouldn’t just sit back and say that transfers within the eurozone are politically impossible. That would be giving up.

    As I say, ten years of totally inert Commission leadership under Barroso left Europe very much on the back foot. But the poor performance then does not mean that the next ten years have to follow in the same route. A leap forward in political and institutional integration is needed, making fiscal transfers within the Eurozone not only possible but also seeing them employed strategically to bolster weak regional economies and deliver benefits for the union as a whole.

  • jedibeeftrix 8th Jul '15 - 6:21pm

    @ T-J – “I don’t buy into the idea that broad currency zones cannot work at all. I mean, look at the dollar. And on a smaller scale, isn’t it is ludicrous that places as disparate as London and Penrith could be well served by the same currency…”

    As noted above, you miss the point about Britain and the US being fiscal and transfer unions, in addition to being a monetary union:

    Federal US taxation is ~25% of GDP and the variation in spending levels between rich and poor states is ~5% of GDP, so a variation of roughly 20% of federal spending.

    How big a budget would the EU need to be able to slosh around 5% of combined GDP into the poor regions (bearing in mind the current budget is only 1% (and heavily constrained by CAP payments)?

    The other point is that americans accept this, they are all american, whereas we are rapidly finding out just how german the germans are, and finnish the finns are, when it comes to firehosing cash at nations they consider to be essentially delinquent! In the UK this ‘sloshing’ occurs in the form of:

    a) National pay-bargaining which benefits poorer regions (teachers, nurses, etc)

    b) National social benefits more generous than poorer regions could afford alone (eg.housing benefit in glasgow)

    c) Targeted regional development grants/discounts to encourage business growth (objective 1 EU/WEFO funds)

    d) Additional infrastructure spending to support the local economy (the mainland-skye bridge)

    e) Operating national services hubs from depressed regions to boost wages (DVLA in swansea, etc)

    Unless Germany recognises the ‘familial’ relationship, and the obligation that goes along with that, then it needs to leave for the good of its neighbours.

    This principal applies equally to the netherlands and finland, but since it is Germany that is the driving economic power for the euro’s sake the answer must be ‘right’.

    Do you anticipate the Euro19 being able to achieve this level of integration?

  • Little Jackie Paper 8th Jul '15 - 7:01pm

    I intend to show Greece all the solidarity that Greece has shown to the Republic of Macedonia.

    jedibeeftrix – ‘Unless Germany recognises the ‘familial’ relationship, and the obligation that goes along with that, then it needs to leave for the good of its neighbours.’

    That seems to make the mistake the Greeks have made. The ECB and the various EZ institutions do not exist for the benefit of Greece. The EU negotiators are not first and foremost concerned about the health of the Greek economy per se – or even debt repayments necessarily. Their interest is the European project and the European public at large. What we in Britain have never quite seen is that the euro is a political project. Blair, Brown and Coalition tended to see it as an economic project. Frankly the euro is the most political project I can think of. Certainly other countries see it as political and see it as in their political interests. The Baltic states have put their economies through the wringer, probably more than Greece, because the see membership of the euro as in their political interest. What one makes of the politics of the euro is another matter and there are all sorts of value judgments that could be made.

    Any sort of, ‘cave in,’ to Greece is basically an open encouragement to other countries. But all of these countries signed up willingly to the project – politics and economics. The power relationship (on current terms at least) is not a familial one. Again, what you make of that I’ll leave to you.

    As things stand, I love German style ordoliberalism as much as the next man, but whether it’s enough to hold together a political project on the scale of the euro is not clear to me.

  • T-J

    Dani Rodrik, Professor of International Political Economy at Harvard’s JKF School of Government, argues that there is an inescapable ‘trilemma’, in that (1) economic globalization (European continent-ization is the same but on a smaller scale) (2) political democracy (3) the nation-state are mutually irreconcilable. You can have any two but not all three simultaneously.

    He’s right about this (for reasons too involved to summarise easily in a comment) which implies a very basic design flaw in the EU as currently conceived and moreover one that goes far deeper than the problems of the Eurozone. So far the leg that is breaking is democracy. Referendums were re-run in Denmark and Ireland and denied elsewhere when polls showed the results would go the ‘wrong’ way. More recently we have seen regime changes with democratically elected governments replaced by technocrats and the EU institutions presuming to tell Greece who is and who is not an acceptable minister.

    Naturally, people are fighting back – hence the rise of parties like UKIP. My belief is that it’s ultimately going to be globalization that is scrapped because its benefits accrue only to the 1%, not to ordinary people. We’re too close to have proper perspective but I think this is a struggle comparable to that over the divine right of kings. Which side should liberals be on?

    For the life of me I can’t see that it would be politically possible to initiate transfers on the necessary scale. If we had instead gone for just a tiny amount of political union at the outset, a very limited but mutually beneficial pooling of sovereignty in carefully delineated and agreed areas we would have built a durable EU and avoided Rodrik’s trilemma. Fools rush in …

  • Little Jackie Paper 8th Jul '15 - 7:31pm

    T-J – Transfers are perfectly possible politically. We have them already in the sense that some EU states are net beneficiaries and some are net contributors. That’s not even all that new. But that’s rather different to having a lender of last resort outside your economy. Now as I said earlier, all countries went into this with their eyes open. The architecture of the ECB council, the Stability and Growth Pact the Eurosystem – these things weren’t exactly secret.

    One could (reasonably) argue that at the very least the economies of Southern Europe have been forced to confront their creditors and reality whilst in the UK we simply turned our currency into toilet paper. But we had that option, however unsatisfactory it was and however many problems it might have stoked up. When a country is in financial difficulty, the central bank as the body that issues currency should be the LLR and negotiate where it can in what might be seen as a technocrat role. In Greece now it’s all rather different because the central bank is not Greek but European. That’s a very different political relationship and I would hope that the non-EZ countries are seeing that risk in the EZ is rather more than theoretical.

  • Jedibeeftrix, yes, thankyou, my first two lines again. I should probably have left them out, really, because it seems people can’t step outside of the here and now. If the US had operated as constituted under the original Articles of Confederation, it would have found the dollar impossible to maintain as a single currency. They changed it. Since the EU is obviously having trouble running a currency union under the Lisbon-Maastricht treaty system, it must likewise reform, completing the political and fiscal aspects of the union. Or fail.

    Just to talk about the US briefly, as I understand it, its present situation is that its total tax take is about 25% of GDP. Including all taxes Federal, State and Municipal. So, you can get away with smaller figures of federal taxation to underpin a working transfer union. I’d be willing to bet that Europe could get away with 5-10% of the budget being euro-federal. Going much higher than 15-20% would mean putting things in Europe-wide hands that I think would be better handled at national or regional levels with autonomous budgetary powers remaining in those hands.

  • Little Jackie Paper 8th Jul '15 - 7:59pm

    From the article – ‘it cannot be right that creditors can dictate such punitive terms to the extent that they dictate another nation’s economic and social policy.’

    That totally overlooks the support that Greece has had from the EZ. See http://www.voxeu.org/article/greece-solvent-illiquid-policy-implications. Those are terms that some countries would see as remarkably supportive all things considered.

  • Gordon, your trilemma is an interesting point. I don’t agree that the benefits of globalisation/continentisation can only accrue to this 1%, and I don’t agree that second referendums on altered proposals constitute the end of democracy, though.

    If it really is the divine right of kings of our time, nation-states versus a globalised world, then I wouldn’t be sorry to see the end of the nation-state. They strike me as the comfort blanket from the previous era, ripe for replacement, and as internationalism and globalisation start to encroach on the idea of westphalian sovereignty I’m not convinced I want to be defending the status quo. Although I do appreciate that people on the other side might see globalised economics as the unquestionable orthodoxy that must now be rejected.

  • James Ridgwell 8th Jul '15 - 10:50pm

    i’m pro-EU, but I don’t support the Euro, either for the UK or for Europe generally. The UK has been and is much better off out. History has repeatedly shown currency unions without fiscal/political union do not last and the damage done in the meantime by inappropriate exchange rates for the economies of many eurozone states, not mitigted by fiscal transfers, is effectively set out above.

  • Kevin Manley 8th Jul '15 - 10:51pm

    If there was a ‘like’ button I’d click it. It’s always seemed to me since the ERM crisis that you can’t sensibly have a single currency without a single fiscal policy, and you can’t sensibly have a single monetary / interest rate policy applying across economies at different stages of the economic cycle. One of the only reasons we’re not in the same boat as Greece is because we have a floating currency.

    All the support Greece has had has been to support (in the sense of ‘prop up’) the whole Euro project as much as it has been to support Greece; if Greece had left the Euro when all this began it would now be growing and with a lot less debt, but that would have had a major shock on the Eurozone and the Euro project may now have unravelled.

  • It is all in the head: mathematically there is no difference in having Drachma a devaluing it by say 50% and cutting wages (pensions), prices, services by half and keeping Euro. Arithmetic aside, different part of population will suffer: with drachma devaluing the savers (workers of the past) will bear the crunch as their saving will be wiped off. (Might be partly offset by higher interest rates), with cutting wages the current working population will suffer.
    The problem is quote: the banks concluded that all member nations should be offered the same [interest rate] as the higher-rated nations. That was balmy – but argued for very strongly by exactly the same left-leaning politicians who now criticise it. Energlyn don’t despair, we have a fiat currency so ‘it is all in the head’. The idea, that just because we do not have Euro we are somehow more democratic, free, independent is as barmy as putting the same credit rating (the same interest rates) on different countries. How long do you think the Bank of England would keep the interest rates low if ECB would suddenly move the interest rates up?

  • Guy Verhofstadt said:

    “a few weeks ago, thirteen directors in the Ministry of Education had to be nominated and by accident there were twelve of the Syriza party. And only one they don’t know what his affiliation really is.”

    How can other countries be expected to be sympathetic to Syriza when this is what they are about? Privilege for politicians, the church, the military and the ship owners are not caused by the Euro; perhaps these powerful groups used the Euro to further their privileges. The good that can come of this crisis is to expose the basic unsustainable corruption that has caused it in the first place.

    We live in a world of vastly powerful global organisations. Those who oppose globalisation need to explain how they would de-globilise Microsoft, Nestlé, Coca cola, Exxon, Shell, Google, the international banks etc, etc. A host of separate currencies would only consolidate the strength of the big multinationals, as smaller nationally based businesses suffered from the inefficiency, expense and lack of transparency of currency barriers.

  • Never believed the Euro was a good idea for Britain.

  • Mike McDade 9th Jul '15 - 12:42pm

    A good piece.

  • John Tilley 9th Jul '15 - 1:11pm

    T-J 8th Jul ’15 – 8:10pm
    “….If it really is the divine right of kings of our time, nation-states versus a globalised world, then I wouldn’t be sorry to see the end of the nation-state. They strike me as the comfort blanket from the previous era, ripe for replacement…”

    Well said!
    The old chestnut that you cannot compare the Euro with the US Dollar is nonsense on stilts. I am intrigued by the suggestion (Gordon 8th Jul ’15 – 5:53pm) that in the USA –” Either people move to the more prosperous area or part of the taxes raised there are spent in the less prosperous region. “.

    I bet the folks in South Carolina would also be intrigued by this as they presumeably refuse to move to California or Colarado because they are bathing in federal dollars shipped to them from those more prosperous states. Am I missing something about poverty in the USA, has it really disappeared?

  • John Tilley – What on Earth are you talking about? A transfer union doesn’t abolish poverty or inequality. A poor and ill-educated person from South Carolina would still be poor and ill-educated if they moved to California (a state with a shed load of problems BTW) but they would also be cut off from family and friends that form a support network more important for those on the margins than the more fortunate among us can easily understand. Despite that Americans have a long history of moving for jobs, education, whatever on a scale that dwarfs anything we see in Europe. Have you read the ‘Grapes of Wrath’? How do you think the large black populations of northern cities like New York, Chicago, Detroit and others got there? In the US both mechanisms work, not perfectly but well enough.

  • John Tilley & T-J,

    Regarding the nation state be careful what you wish for. Whether you like it or not they exist and those that are real (as opposed, for instance, to artificial ex-colonial constructions) are based on a depth of shared cultural experience, communal ties etc. which in the real world are of huge significance. In crisis people naturally turn back towards the familiar. In human space such forces are as real and important as gravity in physics. Ignore either at your peril.

    Hence in the US whatever the government did in response to the financial crisis they did equally across the country. In Europe not so. The very people who should know better ran to look out for themselves and their cronies first, dumped their banks’ losses onto the Greeks (who only got about 11% of the bailout money) and then covered their tracks by blaming the victims in an orgy of national stereotyping which should be beyond the pale in Europe.

    If you do away with the nation state do you suppose that such practices will stop or merely become easier with no push back on behalf of the weaker groups? That’s why I have always believed that any attempts by the EU to play fast and loose with its democracy is something to be opposed – rerunning referendums and representing the rejected Constitution as a treaty for instance.

    Also, if the nation state does wither away who/what do you imagine would replace it? It’s a fair bet that ordinary people (whose leverage on power – aka democracy – is limited to their elected representatives within a national context) will be outmatched by mobile and flexible corporate power. The risk is that corporate and especially financial power will attempt a soft coup that elevates their ‘rights’ above others’ – in other words an internationalised version of crony capitalism that is above the law and serves only itself, not the people. That is the sort of globalisation I oppose, not that Pepsi, McDonalds, Siemens, Apple and many others have international operations.

  • Matthew Huntbach 10th Jul '15 - 10:54am

    Gordon

    Also, if the nation state does wither away who/what do you imagine would replace it? It’s a fair bet that ordinary people (whose leverage on power – aka democracy – is limited to their elected representatives within a national context) will be outmatched by mobile and flexible corporate power.

    Yes, and I think that is why international co-operation is necessary. The individual states of Europe are too small to fight back against corporate power, a union between them is needed to do so.

    This is the underlying reason for the anti-EU movement in the UK. Forget the surface impression that the like of UKIP use, that’s just to fool the naive. UKIP is funded by big finance money, and it does it for the reason that the “attacks on UK sovereignty” it doesn’t like are those which are down to international co-operation against global corporations. If you look at the more elitist anti-EU discussions, in places like the Spectator, that’s very clear. Of course the Daily Mail et al don’t put it like that, but underneath their motivation is to sell anti-EU to the plebs for the same reason.

    Note the anti-EU big finance here is a particular subset of global big finance, it is the spivvy and non-productive end of it.

  • John Stevens 10th Jul '15 - 12:41pm

    I recall the LDs joined the Establishment at precisely the moment anti-establishment sentiment started to take off. I anticipate a similar mis-judgement of timing if the Party now embraces, as these comments suggest it will, opposition to the euro. The Greek crisis is far more about Greece than it is about the euro, which will be strengthened if the Greeks leave. Being then in some outer ring of the EU, with the Greeks, might test even the most Byronic Brit. The fundamental strategic situation remains: if the Eurozone at its German-French core holds, ultimately we will join.

  • Richard Underhill 10th Jul '15 - 8:10pm

    Please be careful about language. “single currency,” might have been an aspiration in the past, but it is factualkly incorrect now. The currency has a name and a symbol, which should be used.

    We should also be careful not to say “Europe” as if it were a foreign country. Here in the UK we are in Europe. Those who mean the European Union should say that, or EU for short.
    Belorussia is in Europe, although it is a Stalinist dictatorship.
    Ukraine is in Europe.
    Turkey is partly in Europe, has a long history in Europe and has applied to join the EU.
    Norway has applied four times.

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  • User AvatarMichael BG 9th Aug - 2:09am
    Peter Martin and Richard Easter, You make a valid point about where those who vote Liberal Democrat will go if there is no Liberal Democrat...
  • User AvatarJoseph Bourke 9th Aug - 12:05am
    David Raw, I would expect anyone proposing a UBI/Mininimum Income Guarantee scheme to be aware of Spain's program. Paul Mason has a good article in...
  • User AvatarCharles Smith 8th Aug - 9:54pm
    William R Evanina, Director of the National Counterintelligence and Security Center, made the claim in a statement on Friday. He commented: “We assess that China...
  • User AvatarGeoffrey Payne 8th Aug - 9:02pm
    The most important job that Biden has to do as president is to implement policies that have the knock on effect of making it impossible...
  • User AvatarJoe Otten 8th Aug - 8:53pm
    I don't see any good reason to give £200bn a year to people who don't need it in preference to spending that money on health,...
  • User AvatarDavid Raw 8th Aug - 8:27pm
    So, on Friday 25 September, Conference will be asked...."Liberal Democrats to campaign for a Universal Basic Income,paid to all long-term UK residents". Good news for...