• Dan Hannan just wrote an interesting piece with his predictions for the EU. He believes that the Euro-Corporatists of the “centre-right” are realising that they can’t make austerity stick in the face of popular unrest and the revolt at the ballot-box. So they will revert to type: more spending, more stimulus projects, more integration, common taxes and budgets and a common Finance Minister.
He could be right. Never mind that excessive government spending got us into this mess. The Eurocrats will do the one thing they know how to do — more of the same. And the effect will be to accelerate Europe’s decline, and facilitate the triumph of the East.
I was thinking similar thoughts, but from another starting point. I am sick to death of being told by Osborne and Cable and others that “Even though we’re not in the €uro, it will be a disaster for Britain of it goes down (or breaks up). So we must strain every sinew to support it”. And not just strain every sinew, but spend the money we don’t have to prop it up.
Let’s get back to basics. The €uro is the problem, not the solution. If we keep pursuing palliative measures (and betting the ranch) to keep the wretched €uro on life-support long after its sell-by date, we just make matters worse.
Of course there will be horrible consequences when the currency goes down. But that’s already baked into the pie. If on the other hand we keep the €uro in place, we also keep the appalling imbalances between North and South which are at the heart of the problem. We keep the political tensions, where the Greeks hate the Germans, and the Germans resent the Greeks. The whole European project was designed to eliminate the historical nightmare of national hostility in Europe, yet perversely it is having the opposite effect.
The choice is quite simple: either short-term pain and chaos while we dismantle the single currency, or permanent pain and chaos and political unrest if we fail to do so. Enough is enough. Time to call a halt. There will be a realistic prospect of recovery in a post-€uro world.