The Eurozone Crisis: What fresh hell is this?!
It is a very interesting time for anyone watching the events of the European economy; recently it has had more ups and downs than an episode of Skins (young people, please explain this to the old folks). The Americans appear to believe that the best way to deal with their financial crisis, as with all other problems in life, is to sue someone else. As a direct consequence of this it seems the FTSE has taken one hell of a pounding last Monday. £49 billion is not a number to which mere mortals such as I can really equate. Traders were obviously quite peeved about the loss however, and clearly it is not a good time to own shares, or have a pension (not a thing my generation will have to worry about, because we probably won’t be able to retire).
This came shortly after grumblings from German MPs suggested that Germany’s battlefield promotion of bailout saviour of Europe was under threat. It was certainly a tough week for Angela Merkel, first she has had to deal with the death of her father, and then there was the suggestion that actions taken to bailout stricken Eurozone countries was ultimately illegal due to the fact that they were not debated in the German parliament. This was not helped by recent news that Greece is still struggling to pay its debts, and there is now talk of her leaving the Euro altogether. This would not do the other Eurozone countries any good as they try to increase confidence in the failing currency; yet at talks the Greek Prime Minister had with Chancellor Merkel and President Sarkozy, no new measures to help Greece were discussed. George Papandreou was simply told that he had to stay the course with the austerity measures that have already been implemented. I suppose in some ways this is a characteristically prudent think for Angela Merkel to suggest, since the changes to the economy have not really had a chance to bed in, as it were.
The calls will not go away however, many EU politicians still consider the expulsion of Greece as a real option; in fact one German politician was quoted in the Telegraph as saying that it would “not be the end of the world” if Greece left the Euro. It just goes to show how precarious the position of the Euro has always been, but rather than scoff, as I have been known to do in the past, I am heeding the advice of George Osbourne on this one, and refraining from my usual schadenfreude. There seems to be the very real danger that they demise of the Euro could well take the EU tumbling down with it, in some ways because, as Olaf Cramme puts it, European governments “have failed, over the last two decades, to create a compelling narrative – which justifies and explains their pooling and transfer of power to supranational institutions”.
While UKIP might initially jump for joy at this validation for their own narrow view, when one considers that around 40% of UK exports go to the continent, can we really afford for this to happen? Unemployment in this country is on the rise, and scarily inching its way closer to that all time high in the 1980s. Im not suggesting that we start hemorrhaging cash (we don’t have) into every European begging bowl, but there may be other ways we can help. Mr Osbourne has been racking up the airmiles flying to various conferences recently, but as yet I don’t think there have been many concrete resolutions to emerge from them. The other option we have, is to leave the Eurozone to sort itself out and focus out energies to marketing British exports further afield to make up for the possible reduction of exports to Europe. David Hannan (Conservative MEP for South East England), argued that this would not be that hard, in fact he stated that in all probability, it would most likely be easier than selling things to our closest neighbours. Not simply because the language barrier may be non existant (especially when considering markets in the US and the Commonwealth), but also because of the amount of regulations governing the imports to the EU are stifling businesses and pushing up costs, making it more difficult for companies to make decent profits.
In the midst of all this, is the not too dignified specticle of the EU Commission demanding more money for the 2014-2020 budget. It is frankly an appalling stance to take when European economies left, right and centre are having to slash billions from their own budgets. As David Liddington quite rightly says, they need to spend better, not more! Surely this sentiment should apply to EU member states as a whole; it’s sad, but maybe this little piece of common sense needed spelling out to them. As for Greece, since the bedrock of their economy is tourism maybe we need to focus on ways of encouraging people more people to travel there. A good place to start would be to keep the flights cheap, maybe Mr Osbourne could try and stop battery hen class airlines like Ryan Air gouging people for using credit and debit cards to book flights! Since the Olympics originated in Greece, maybe they could earn some form of royalties fee for the use of the name and/or concept?
Posted on September 16, 2011, in Comment, Foreign Affairs, General and tagged Angela Merkel, David Hannan, David Liddington, EU Commission, eurozone, George Osbourne, George Papandreou, greece, Nicolas Sarkozy, Olaf Cramme. Bookmark the permalink. Leave a comment.