History suggests that in the long term monetary unions either develop into political unions or they collapse.

Sign up to have your kiddies ruled from Brussels or accept the short term pain of the collapse of the euro.

That\’s really the choice being faced.

My view of course is that the UK should leave and let the rest of them get on with whatever they damn well want.

3 thoughts on “Yup”

  1. Larry Elliott is wrong. No amount of money will fix the Euro. It was fundamentally flawed from the start and then further compromised by the failure of its most dominant members to abide by their own fiscal rules. Both France and Germany flouted the debt and deficit limits set in the Stability and Growth pact. Now they criticise others for doing the same. No wonder Italy and others resist having austerity imposed on them.

    The Eurozone lacks political and economic credibility. Bond markets don’t trust it and investors are therefore removing their money. Throwing more money into the ring will do nothing to restore the Eurozone’s credibility. I agree with Elliott that full political and fiscal union would be required for the Euro to have any chance of survival long term. But there is stuff all chance of a political union, frankly. Voters don’t want it, and cultural and economic differences between member states are far too great for it to work anyway.

    Even if they come up with a viable rescue package this time, the markets will simply raise the stakes and we will play the same game again for even more money in a few months’ time. It’s time they cut their losses, allowed Greece to default (and others if they wish) and let the misbegotten Euro break up.

    But the future of the Euro is not the same as the future of the EU, Tim, and I don’t agree with you about UK membership.

  2. All this kind of glosses over the problem hinted at here-

    The long-term answer to that question is that monetary union was always a reckless gamble, which relied on the ability of a single interest rate, a single exchange rate and a single inflation target to cement together countries with utterly different records

    The error is in managed currencies. A single interest rate, exchange rate and money printing inflation target doesn’t work within a country either. Economics knows nothing of national borders. The local economies in regions of Britain, or the USA, are just as much blighted by the frankly lunatic idea that bureaucrats can manage a currency by setting, for instance, centralised interest rates.

    A nation is, often, a valid cultural entity. The people may share a sense of togetherness, beloning and heritage. Or not, as the case may be. Belgium *cough*. But that has no bearing on economics, which is inherently individualist. Different regions, towns and individuals are economically different. You cannot fit one interest rating to London, Edinburgh and Much-Binding-On-The-Marsh any more than you can fit it to Germany, Greece and Ireland.

    That is why currency needs to be independent of nation states; and if they must have some stupid bit of paper with the head of a Saxe-Coburg Gotha on it, they should at least just print one stock on Day Zeroi then not fuck about with it.

    You can’t manage money nationally. You can’t beggar your neighbour without beggaring yourself, or bugger your neighbour without buggering yourself come to that. You can’t sneak the quantity so you export more and everyone else exports less and you get rich and they get poor. It’s all a chimera, a mirage, a wank fantasy by idiots.

    So sure, let the Euro collapse. Let’s be rid of it. But make no mistake, the same utter, total stupidity that led to its creation is the same utter, total stupidity by which every other currency in the world is “managed”. And that is why most of us are so fucking poor, millions are forever unemployed, and Utopia never gets a day closer.

Leave a Reply

Your email address will not be published. Required fields are marked *