Saturday, November 19, 2011

Eurozone and the UK - Ongoing Debate

Courtesy of fellow Beaumont Union Blog Poster Barnaby, who lives in France, I publish the following extract from the debate on his blog:

 No Right answers to these questions Barnaby as Angela Merkel and David Cameron have just made plain. 

 However certain sectors of the German Press have got it right when they suggest that the UK needs to decide whether it is in Europe or not. A problem for us on this island is that the Europeans have never really welcomed the UK. Charles de Gaulle's strident "non" is as firmly imprinted on the memories of many here as President's Kruschov's "niet" although admittedly there were no French shoes being banged on the table at the time of de Gaulle. Even when the Europeans eventually said 'yes' it was only after the well stocked UK fisheries and oil fields were put at the disposal of our continental friends and our taxes used to subsidise their hugely inefficient farming smallholdings that Europe permitted us to join their then rich men's club.

 Sadly that latter epithet aptly describes subsequent EU arrangements made to continue to feather bed its rich farmers at the expense of African etc allotment holders; (also as it happens alas at the expense of Commonwealth food producers) So here we all are rich and less rich men and women of Europe in a real financial mess. 

 Your own remarks about a possible way out of the mess being the EU or at least the Eurozone section of it changing to become like the USA as regards its dollar zone, may represent the only viable solution. However that would entail even more cash transfers being made by the remaining rich men countries to their poorer EU brother and sister nations just as the wealthier USA states essentially transfer cash to the poorer ones. Of course in the USA there is also a national bank and national government which facilitate the regulation of  federal cash. These all have the effect of making $1 worth the same throughout the USA. The absence of such equivalents in the EU at present is potentially fatal. As Germany is so predominantly the rich man of Europe at present the lion's share of the burden of such transfers would fall upon the German taxpayers shared to a lesser extent with its other N. European neighbours.

 The trouble is that West Germany is still struggling with the huge cash transfers made upon reunification with the East Germans. West Germans however could quite easily associate themselves with the ties of kinship with East Germans and so take the financial sacrifice in their stride - well almost. But I wonder if the cash or the will exists in Germany to make the same sacrifices for the poorer EU nations of today. Even if the cash exists which is by no means clear, can ordinary Germans empathise with the new EU poor in the same way as West Germans empathised with those in East Germany? I wonder? 

 Reverting to the UK: If the Germans do decide to make that huge sacrifice to the outer EU then morally the pressure on the UK likewise to consider committing to Europe increases despite the sacrifices and I would then wish to see us rising to the challenge of such moral leadership. Even then though the other poor in the world for example the African allotment holders, should not be prevented by rich men's club rules like the EU CAP from enrichment by free trade with countries such as the UK. However if the richest countries of the Eurozone today cannot make the necessary and very real financial sacrifices to bring about an USA type solution to current woes, then we in the UK should quit.

 Finally Barnaby I hope that you will not object to my posting this comment as a separate blog post on my own blog as posting fatigue is now setting in!

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