Today sees yet another round of hand-wringing across the Eurozone, driven by another round of hand-rubbing by the markets. When will it end?
We’re told that all it takes is a decisive move, that sufficient taxpayers’ money can be thrown at bank balance sheets to stop all this instability. It’s clearly nonsense. As Matt Taibbi pointed out yesterday in gorgeous detail, these bailouts are an endless series of ways to break the rules in favour of the rich elite, and it’s no wonder the peasants are revolting. Europe’s bureaucratic bailout merry-go-round is basically the same scam, just in more languages.
If the moral hazard is withdrawn and the value of your investment is never allowed to go down, and the traders and hedgies get offered a bet to nothing backed up by public money, they’ll just stop asking for more and threatening whoever’s next in line? Really? If the banks get offered a voluntary “haircut” only on their government debts, but the hedge funds can buy those debts and extract the full value, they won’t get together and make that deal? Really?
We know that austerity isn’t the solution to government debt. Greece’s economy fell 7.3% over the year – it’s not a technical recession, it’s a collapse. The previous link to the BBC shows what the vulture funds and multinationals are making from it too: woohoo! Cheap property in Kolonaki! Can I buy the lottery? Even the New York Times knows better than our current UK administration: “Mr. Cameron’s austerity program is the Tea Party’s dream come true“, and “unlike Greece, which has been forced into induced recession by misguided European Union creditors, Britain has inflicted this harmful quack cure on itself.”
Can political union save the economic union? Those of us who never believed a single currency could work across an economically diverse continent doubt that too. It’s just an even grander elite project to replace a failed elite project. The larger a state, the harder it is to change things. This is one of the reasons I favour independence: we need a radically reformed system of governance, and that seems almost impossible even at a UK level. Assuming political union could be delivered, the democratic deficit would feel even stronger to European citizens across the continent. The wrangle and tension that would come from making all taxation and spending decisions centrally, never mind all the social policy differences, make this pure fantasy.
Personally I agree with Frances Coppola on Liberal Conspiracy yesterday – the Euro is finished. Why any responsible First Minister would tell us so confidently that joining it is part of Scotland’s manifest destiny I have no idea. But before that there’s a choice of bailouts in front of the Eurozone leaders. The first option is to bail out the banks again, become the lender of last resort, and to prop up and vindicate all the traders who thought there’s money to be made here without risk. The second option is to go beyond the current guarantees and underwrite every deposit made by every individual and business in those banks, and tell the banks they’re on their own. A big society bailout, if you like, a bailout for the people who’ve suffered through these economic hard times, not yet another one for the people who made the mess in the first place. It’s not enough, but it would be a start.
If they go the right way, they will have redeemed themselves as Götterdämmerung for the dream of a United States of Europe approaches. If not, it’ll be time for the indignados and occupiers to take it to the next level, to turf a whole generation of corrupt politicians who put banks before people out and start again.
#1 by Barbarian on October 26, 2011 - 7:58 pm
If Alex Salmond really wants to get support for full independence, he could do no better than to state Scotland will NOT join the Euro, and membership of the EU will decided by the people.
The Euro is a disaster, and one that many people predicted. No one in their right mind can possibly sell this as a good thing for Scotland. What do we do, join the Euro and then spend billions bailing out other countries, especially those that don’t even collect their own taxes properly?
I keep saying this, but the SNP are going to have to be really careful when it comes to Europe. All the focus is at present on Westminster but you can bet the spotlight will soon shift to Holyrood, and the First Minister is going to have to produce a really good argument for even considering the Euro.
#2 by Stuart Winton on October 27, 2011 - 1:11 am
“Why any responsible First Minister would tell us so confidently that joining [the euro] is part of Scotland’s manifest destiny I have no idea.”
Perhaps he’s just hedging his bets at the moment to see how it will all pan out, but more probably he wants to save face by doing a three-point-turn on the currency issue rather than a quick u-turn – a gradual change in direction is always less open to criticism than a quick volte face, so he’s already changed course on sterling and will probably do so as regards the euro at the appropriate time.
Of course, as Barbarian rightly says the whole EU issue is a very tricky one as regards an independent Scotland, and particularly so in view of the fundamental question marks over the future of the EU per se.
For example, AS can’t just (literally) laugh off the legal advice that Westminster has had over an independent Scotland and EU membership as he did on STV’s new current affairs show the other night, and pooh pooh this on the basis that it’s from *London* lawyers when the SG won’t publish its own legal advice and the EU won’t proffer an opinion on the matter either.
And he can’t just say that the EU won’t keep Europe’s largest oil producer in the cold either. What does he mean by that precisely – that the EU is eyeing up Scotland’s oil assets with a view to a future US of E and transferring our oil wealth to bail out the likes of Greece, thus merely substituting our supposed subsidy of England over the past generation with the Greeks, Italians and Spanish et al in the future??!!
#3 by Angus McLellan on October 27, 2011 - 1:56 am
I am unable to understand the apparently widespread faith that lawyers – or if you are Catherine Stihler or David Martin, EU bureaucrats – could have anything useful to tell us about the response of the EU to an independent Scotland. It could be that I’m missing something important, but diplomacy seems logically to be something that diplomats would be best placed to offer advice on. And I apologise if I’ve missed some recent developments here, but my understanding is that if EU governments should choose to treat an independent Scotland in a different manner than the finest experts in international law think they should, there is no court where such decisions can be appealed. International law is descriptive rather than normative.
At one extreme, you could believe in a beneficent, all-wise EU. Such an organisation surely would not leave poor little Scotland isolated, alone in the dark. A solution would be found and we would be saved.
On the other hand, you might believe in an evil conspiracy called the EU, which plots constantly to extend its tendrils into every corner of our lives. Such an organisation would certainly not allow the Scots to become free, perhaps inspiring our oppressed neighbours in England to make a break for it. Rules would be twisted and plots would be plotted so that our freedom was blotted out before we even knew it was gone.
OK, those are straw men, but there’s a germ of truth in there. Neither a “nice” EU nor a “nasty” one would have any reason to leave Scotland outside. And that’s before you consider the howls from businesses world-wide if that were to happen somehow.
#4 by Stuart Winton on October 27, 2011 - 9:24 am
Fair point Angus, which in essence is saying that the position of an independent Scotland vis-a-vis the EU would be a matter of politics rather than existing law?
But to that extent I suppose politics might indeed be the problem in view of the uncertainty regarding the euro and the further EU economic and political integration necessary to hold the whole thing together.
To that extent the politics of the EU could mean that an independent Scotland might not want to joint the Union at all, never mind the single currency per se!
#5 by Angus McLellan on October 27, 2011 - 11:16 am
As you say, people might well have one or two concerns. And that could be another reason for great and the good of the EU to look for a quick fix. The experience of Norway and Switzerland, among others, suggests that a plan which involved a referendum somewhere along the way would have an uncertain outcome.
#6 by Ken on October 27, 2011 - 5:25 pm
“The larger a state, the harder it is to change things”
In what sense “larger”? Geographically, population wise, economically…?
#7 by James on October 27, 2011 - 5:29 pm
I’d say by population.
#8 by Ken on October 27, 2011 - 5:59 pm
Type your comment here
True. But doesnt’ that assume the EU evolving into a singular entity like a large state as opposed to a federal (or even conferderal) system which could counteract natural imbalances a centralised large state brings.
I would say what makes things harder to change is not the size, but the lack of political will. We could equally pick a tiny country and show the inability (or unwillingness) of the ‘elites’ (political, economic, etc) to change.
/2¢