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  1. #1

    Euro break up - good for Britain?

    It looks as if the Euro leaders are going to have another go at trying to save the Euro. Opinions on the EU and its artefacts excites opinion here in the UK. But what is better for Britain economically - for the Euro to survive or for it to break up? And is the answer different when we look at it in purely political terms?

  2. #2
    I believe that we now live in a very inter-connected world and that none of us should be pleased to see other economies fail as if an economic bloc fails it affects us all indirectly.

    There is no point in creating wealth if nobody can afford to consume it and in that respect a good percentage of the world population are in this mess together; Britain may be an island but unless Britain can go back to producing all its own food and be self-relaint on energy then it cannot afford to be isolated if Britain wishes to prosper.

    Is the answer different in purely political terms?

    Yes, but only if you are interested in power plays as far as wishing to dominate other countries or fearful of other countries attempting to dominate you - and this is the fear (genuine or otherwise) that many in the UK latch onto.

  3. #3
    I have sympathy for your views Robert. Yet when I look at the comments in response to articles in Citywire on the Euro and its problems I see many strong (extreme?) anti Brussels, anti Europe, anti German etc. reactions. Would Britain be better off, economically and politically, if the EU had never been created? Is the existence of the single currency relevant in answering this question? And even if it is not relevant, now that we have it can it be gotten rid off without damage to Britain at a delicate moment in our economy?

    Given our weak economic health right now, what should we in Britain be hoping for out of the Merkel Sarkozy pending proposals for the euro?

  4. #4
    If the EU had not been created would the UK have been better off? Who knows?

    Maybe our Commonwealth trading partners would have wanted to buy more British cars when we'd bought more of their agricultural goods.

    Politically? Again, I don't know but without the EU there is the possibility that Europe would have been less stable and we might have had at least one more war between western european countries since WW2.

    Is the existence of the single currency relevant? Yes, even the USA is concerned about the situation and you'd think it would effect us more than the USA.

    What should we be hoping for? An end to the present uncertainty, but this will take time either way - the eurozone could not be broken up overnight even if it wanted to and if kept the solution cannot be found overnight either as it shall need treaty changes and these things take time.

    Let's hope that we are not in the same situation of total uncertainty this time next year.

  5. #5
    For the stability of the UK (banks etc.) we need the Euro to survive and be sorted out QUICKLY, but with Merkol/Sarkozy inventing more rules to advantage their own countries. (Yes, possible UK bias on my part there).

    Quite why we would want to be deeper within such an undemocratic union as the EU is beyond me
    -what gives Merkol/Sarkozy the right to keep having these private discussions where they decide the fate of 17 (or 27) countries ?
    -what gives Merkol the right to dictate to the laughably "independent" ECB

  6. #6
    At least I think we agree that it needs to be sorted out quickly, but I'd say that would be impossible due to the fact that there has to be an element of democracy and you can't make treaty changes without at least pretending to go through the democratic process.

    There isn't even a 'let out' clause for countries to leave the eurozone; the only method is to leave the EU altogether (no bad thing you might say for some countries).

    How democratic are we?

    Apart from the freedom to complain re. freedom of speech very few citizens seem to have much say in the decision making process and there is certainly very little feeling of 'being involved'.

    It's sad to say that many of us don't even vote in elections; is it apathy or a genuine feeling of hopelessness?

    Some democracies (e.g. Australia) make it a legal obligation to vote; when so many millions died to leave us the gift of democracy it's strange that we don't appreciate it.

    The tide of regulations coming from 'Brussels' aren't all evil and designed to enslave us - many people will have enjoyed better and safer working conditions and products as a result but then 'maybe' conditions were worse or better 'over there' than 'over here'.

    I'm not in favour of over-regulation but then it's probably impossible to legislate for 'common sense' and UK law has a far more sensible legal base (common law, statutory law and case law) than continental (mainly Roman) law.

    I used to joke that the EU was going to phase in driving on the right side of the road (lorries and buses first, before cars) but maybe one should write a list of all the good and bad things the EU have brought before just claiming its a dictatorship and nothing else.

    One solution MIGHT be the introduction of dual currencies; the euro PLUS a local currency where EU debt was switched to the local currency at a fixed rate of exchange and would be then worth less in euro if the country devalued its existing currency BUT

    Any NEW debt in euro would then be at a lower rate but cost more if the country devalued its own currency or at a higher interest rate if made in the new weaker currency where investors would want a greater return if the currency was weaker. The new euro debt could be issued by the ECB and only on the condition that the economic rules re. Maastricht were applied; if they failed the conditions the country would have to borrow its own currency at market rates.

    Oh well, I'm not an economist but I feel that the only solution will involve some debt forgiveness FOR ALL OF US if the present crisis isn't going to continue indefinitely.


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