Spot the scaremongering

However, Mr Van Rompuy, the president of the European Council, said: “Let us be clear: we will not prune the eurozone to a more selective club.

“That would be contrary to the letter and the spirit of the European political pact, as embodied in the treaties.

“If the eurozone’s integrity would not be preserved, one should not take the continued functioning of the internal market for granted.”

Gosh? Why\’s that then?

We\’ve still the basic treaty insisting upon the free movement of goods, labour and capital, haven\’t we?

And we did have the Single Market before we had the euro as well. So the absence of the euro shouldn\’t mean the absence of the single market.

By the way: soimething that should be pointed out. Yes, free trade is desirable, yes, free movement of goods people and capital are. However, there\’s not actually great evidence that inter-European trade has been all that important in terms of economic growth.

Further, while a single currency should in theory increase such inter-European trade (it being one of the justifications for it of course) there\’s also no great evidence that it\’s had much effect. From memory (and as always, I welcome clarification) people have gone looking for that trade effect and not found as much as they thought should be there.

So me, I think rumpy pumpy is just waving the bloody shirt. Look at what disaster will happen: when in fact, the disaster predicted probably won\’t be much of a disaster. We\’ve not seen the upside promised so we probably won\’t see the downside threatened.

6 comments on “Spot the scaremongering

  1. None of the good things they told us about the euro happened and they didn’t see this crisis coming. None of their ideas to fix it work for more than 24hours so why should we believe their forecast of death and destruction?…..it seems to me that they haven’t a clue what they’re doing and are making the situation worse.

  2. In addition the WTO rules would preclude them from restricting trade with non-eurozone members and, as pointed out by John Redwood, since they sell more to us than we do to them they’d only be shooting themselves in the foot anyway. However, since they show no apparent for treaty concerns that don’t work to their advantage and continually shoot themselves in the feet it’s clearly a done deal!

  3. Seems to imply that if the euro fails, so does the EU. As you say, Tim, I can’t see any reason for that. I think this is more underhand bullying tactics, actually, like the “you-must-join-the-euro” stuff from Merkel, and that idiotic FTT idea, all of which are blatant attempts to involve the UK in bailing out the Eurozone.

  4. There are 31 Countries (EU + EFTA) making up the internal market. 17 of these Countries are in the eurozone, 14 are not.

    That means 45% of the internal market is outside the eurozone.

    And of course the original ‘single currency’ available to all, the ECU, still exists.

  5. Leaving aside arguments for and against the free movement of goods, etc., surely a single currency, by itself, cannot create wealth?
    Locking units of vastly different efficiency into a single currency will only impoverish the inefficient to the advantage of the efficient. This is exactly what has happened with the Euro, Germany has drained the wealth out of Greece, Italy et al. In order to grow, wealth has to be brought into an economy from outside, whether that is from the ground, as oil or minerals, adding value to imported materials and re-exporting them or providing services. Just churning the same value round and round may enrich those with clever ideas or, worse, the strength to grab it for themselves. Europe has only ever been a one trick pony; Germany. The constituent parts lack the ability to adjust relative to Germany by way of exchange rates, setting up the strains we are seeing; the enterprise is doomed. Germany will not be prepared to impoverish itself just to keep the scheme together, no matter how keen the eurocrats are to deny their folly.
    The Euro has demonstrated remarkable resilience throughout because Germany has been seen as backing the project, if Germany wavers the Euro will go into free fall, and I’ll be able to holiday in Europe again.

  6. IIRC we were told that if Britain remained outside the Euro all the financial services would migrate to Europe. Didn’t exactly happen, did it?

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