Sterling Virtues
Whatever the argument between Tony Blair and Gordon Brown, it isn't about economics. Yesterday, with impeccable timing, the Bank of England upgraded its forecasts, confirming that there's a 'Baghdad Bounce' in the British economy. Simultaneously, in Brussels, it was officially announced that the euro zone is not growing at all and its largest member, Germany, is in recession for the second time in two years.
The British economy and the euro zone are actually diverging, not converging. The evidence is most striking if you look at unemployment. In Britain, unemployment is lower than in any other major economy. Over in the euro zone, by contrast, they are shedding jobs and unemployment at nearly twice the rate here.
Part of the explanation is historical. In Britain, we are still benefiting - just - from the 1980s' free-market reforms. Germany, on the other hand, is still paying the bills for reunification run up a decade ago.
But it is increasingly clear that the eurozone's plight is being made worse by the single currency itself. Euro members do not set their own interest rates; instead, they must accept the one-size-fits-all policy of the European Central Bank. What is more, they must sign up to the infamous Stability and Growth Pact. For Germany, once the power-house of the continent, this has proved a disaster. Its interest rates are too high, it is saddled with an exchange rate that is too strong, and it cannot borrow to get itself out of trouble.
Gerhard Schroeder, the German Chancellor, has broken his election promise not to raise taxes. Despite his efforts, revenues are still falling short and the second emergency budget in six months is being mooted. The political consequences of this crisis are starting to look pretty scary, and Mr Schroder's Social Democrat/Green coalition has seen its popularity slump. He must look across in envy at Britain with its own currency, floating exchange rate and independent central bank.
Mr Blair has never claimed economics to be his strong suit. But even he must be able to get his head around the starkly differing performances of Britain and Germany. The first, and most important, of Mr Brown's five economic tests considers whether the British and euro-zone economies have converged. All the other tests - to do with flexibility, investment, the City and jobs - are essentially a variation on this. The tests have been failed, and Mr Blair, by all accounts, has accepted the Chancellor's judgment.
The problem is not the tests; it is that the two men
have very different conceptions of what the euro is ultimately about.
Mr Brown believes it is primarily an economic issue, to be decided by
him. But Mr Blair thinks it is more about power. He believes that if he
could only squeeze us in somehow, sometime, Britain would be at the forefront
of Europe and he would go down in history as a saviour who healed the
wound with America. That is all very well, but he should realise that
joining the euro is no way to put such a vision into practice. More European
integration of any kind is not only strongly opposed by the electorate,
it is fraught with economic danger.
Daily Telegraph, 16th May 2003
PHILLIP DAY COMMENT: Although the Telegraph should be mildly applauded for starting to talk about the EU and the problems, none of these major papers are actually discussing the real issues, which are:
1) Who wants to join a monetary union run by fraudsters
and corrupt politicians who have not had the EU's accounts signed off
FOR THE PAST EIGHT YEARS because of fraud and mismanagement?
2) Who wants to join a superstate where the politicians, police, military
and civil service have all been granted a blanket, lifetime immunity from
prosecution under Article 12, Chapter 5 of the Protocols and the Privileges
and Immunities of the European Union?
3) Why aren't the British public being told that joining the euro will
mean Britain handing all her remaining gold, silver and currency reserves
over to the European Central Bank, apart from a small working balance?
4) Who's been told by the press that the ECB is a very secretive organisation
which doesn't publish its policies or the content of its meetings FOR
SIXTEEN YEARS?
5) When was the last time a newspaper told you that there is no exit from
the single currency - that if it proved an abject failure, such as we
are seeing with Germany and other euro nations at present (see report
in this bulletin), Britain would be stuck with it, short of going to war
to free herself?
6) When has the public been told that Germany, France and Italy have been
writing pensions for which there are no underpinning assets? The total,
monstrous liability of this amounts to a staggering $1.3 TRILLION dollars,
a hefty portion for which the citizens of Great Britain will become liable.
7) Who's been told VAT is due to rise, possibly to 25%, and will be put
onto food, children's clothes, books, house prices and funerals? Can't
wait.
8) And who in Britain has thought about the horrendous consequences of
recession, price rises, house repossessions, bankruptcies and business
collapses after we go into the single currency - precisely what happened
to Britain during the 23 months of chaos of the Exchange Rate Mechanism,
when Britain's currency exchange was hard-wired into those of the continent?
Do not be put off by a) 'the euro is inevitable' or b) all the supposed high-brow economic chattering that is supposed to impress us that someone has actually done some original thinking about Britain joining the euro. If you are in any doubt about the dangers of Britain joining, go to Germany, France or Portugal and ask what the euro has done for them and their economy. They'll tell you… and you won't even need to speak the language to understand the price they've paid.
RESOURCES:
Ten Minutes to Midnight
Video: The Euro - The Facts (PAL format only)
Vigilance
Available through www.credence.org
