The collapse of the Euro, and the “break-down in relationships” between European member states – as harsh as it is – should come as no surprise to the readers of my articles.
What have been the main points of my message for the past 5 years.
Increased power for the EU is not the solution; it is the problem…This is now broadly accepted.
The Euro is not sustainable, nor will it produce pan-European growth… A now proven Fact.
Different countries with differing output and needs, will ultimately suffer if interest rates are not complimentary to the state of their economy. Boy, are we suffering!
Not all countries can co-exist within a single financial union, because ultimately we are “tribal”: Therefore, rich countries in the “Union” do not want to finance, culturally different, less productive, neighbours, even though they have benefitted greatly from having a weakened currency….Ask Germans about how much more they want to throw at Greece?
Countries need to think more about themselves as individual entities; take responsibility for their own futures and when appropriate adopt more protectionist policies…Greeks want no more foreign imposed Austerity, and Hollande is going to renegotiate a fiscal pact, in accordance with what he thinks is right for France..And that is despite the fact that it was France who helped bully 23 other countries into signing it!
Like it or not, the EU project has been a complete failure, and those who still try to champion it are living in “cloud cuckoo land”.
How the whole of Europe can be destroyed by a country as small – and as insignificant – as Greece is beyond me. The fact that it is, illustrates clearly that the people in Brussels have more ambition than financial acumen.
There can be no option but for us to now plot a course for Greece, and possibly Portugal, to leave the EU, or at least the Euro-zone. I will admit that this is going to be a painful and costly operation, but in the long term it is better for them… and it is better for the rest of Europe.
The debts of these countries do not have to be wiped out – which is ideal for the lenders – but the debt will need to be restructured over an additional decade and at very low interest rates.
The resulting collapse of these countries and the devaluation of their “new” currencies, whilst distasteful, will ultimately bring about reduced labour costs and ultimately start to make them competitive.
Moreover, with support being made available from Europe and elsewhere – which will be forthcoming, as it is something we provide to numerous impoverished countries around the globe – there is going to be the finances available to keep these countries on “life-support”, until they are able to get back on their own two feet.
What we cannot do, is continue to lock these countries into a “fiscal compact”, with interest rates and a currency, which is not suitable for their economies.
I will admit that the Portuguese problem is vastly different to that of Greece, and at the moment many consider the efforts made by the Portuguese government in fulfilling the demands of the Troika have been admirable. However, if Greece leaves, Portugal will have a large target painted on its back, and therefore it may be better to plan for both countries to leave the Euro-zone together.
Cutting Greece and Portugal free, although costly, will leave Europe with enough “fire-power”, to hopefully support Spain and Italy better. And with the uncertainty gone about the two smaller countries, Europe may experience a little more stability.
We can expect a harsh period during the readjustments. But having shown its ability to “ring-fence” problems, and by allowing Greece to exit the Euro-zone, hopefully, the EU will be taken as a “more serious and capable” organisation. (It certainly isn’t either, but we can hope).
We are of course talking about massive cost. But what is the alternative to letting Greece go?…Years of insecurity across Europe, years of increasing debt without any decent restructuring of the misguided Union?
If it was a life or death situation, we would sacrifice the few to save the many…but it is not life or death.
The real situation is that – for political reasons – we have tied economically unhealthy countries on to the back of a vehicle with which they cannot keep up. This is not only slowing the vehicle down, but those in charge of the vehicle are dragging these countries along the cobbled-road, causing them severe pain and hardship…
What is the right thing to do? Should we keep going, or should we “humanely” cut them loose: Throwing them a few medical supplies, and give them a chance to mend themselves.
It is no longer about what is right, political or financially….we stopped doing that year’s ago. It is now about doing what is right for the people of Europe…both the majority and the minority.
Sure, people will argue and complain, but that is what we all do….especially politicians. Moreover, we will see various commentators saying what is right or wrong, and what will work or won’t work…but that is just media “crap”…Haven’t we all had enough of that!
My long standing view has been that the EU and its promoters have no interest in the lives of all European citizens – all they want is the Gravy train to get bigger – (which it sure is, as more and more people are being employed to solve this unsolvable problem).
Many in Europe know, through sad experience, that dictators never willingly give up conquered lands, and it should be no surprise that those in Brussels today will do whatever they can to keep Portugal and Greece as part of their empire…But the cost and the pain is too much for us to bear any longer.
This may be contentious, but my views have been the same for years…But what is important is this view – after being ridiculed for a decade – is now the main topic of discussion in most of Europe…especially in the north…which is, like it or not, where the decision will be made.