Thursday, 16 June 2011

Euro in meltdown: Let's break free sooner rather than later

by Marc Glendening

The new Democracy Movement campaign, Out of the EU and into the World, gives 5 positive reasons why we need to free ourselves from the Little Europeanist vision that has so dominated the thinking of the political class for the past 50 years or so.

There is a huge opportunity now for those of us who have a more modern, international future for our country. A growing number of people are open to the idea Britain should liberate itself from centralised EU control.

The current crisis in the eurozone is completely undermining the once commonly held belief that a politically united Europe is 'inevitable'. The task we now face is to make the British people aware that unless our country leaves the EU we risk being sucked into the ideologically fanatical attempt to prop up the single currency. This will have terrible repercussions for ourselves, as well as the peoples of the other member states.

UK taxpayers have already been forced under Article 122 of the Lisbon treaty (a measure supposedly concerned with showing solidarity to countries experiencing 'natural disasters') to risk £12.5 billion as part of the bail-outs for Greece, Ireland and Portugal, even though we, together with Denmark and Sweden, have chosen to stay outside the euro.

ECB exposed

According to Brussels, we are obligated until 2013 to continue handing over money to sustain the euro,
in addition to our £17.5bn annual budget contribution. With many German and Finnish voters defying their EU-obsessed rulers on this issue, the Brussels based elite will probably attempt to make us stump up even more cash to finance further bailouts. Greece is in need of a second massive injection following the initial £110 billion it received last year.

In recent days, German officials have been reiterating to their British counterparts in the EU that we will be obliged under the terms of Article 122 to contribute more cash to the next Greek bailout. The Guardian (June 17) claims that Britain will have to find a further 15 billion should the second intervention reach 100 billion.

According to a recent Open Europe study (pdf), the European Central Bank is currently exposed to the tune of a staggering
444 billion worth of debt having provided cheap credit - in violation of the EU's own stated treaty obligations - to struggling banks and Eurozone governments. The ECB is holding 190 billion worth of Greek debt alone.

There is every possibility now that the increasingly toxic ECB will itself go bust within the next two years. Who will ultimately have to pick up the bill should this happen? Ostensibly, the national central banks and taxpayers of those countries within the eurozone.

Given the huge likely cost of recapitalising the ECB it is far from certain that the European political elite will be able to deliver the sums required from within the Eurozone alone. Just as Brussels forced taxpayers from the non-euro countries to contribute to the bailouts that have already taken place through a highly perverse interpretation of Article 122, there is absolutely nothing to stop them trying to pull off the same trick again.

Rule of law abandoned

It is the European Commission (the guardian and enforcer of the treaty), together with the Eurozone voting majority in the Council of Ministers and the European Court of Justice, that can determine what exactly are our financial obligations to the EU in this context.

As we have already experienced with Article 122, there are a range of elastically-worded articles in the treaty that are open to any self-serving interpretation the key EU bodies wish to construct. The rule of law simply does not apply in Brussels in any meaningful sense. So long as we are EU members, these unaccountable EU institutions will continue to enjoy supreme legal authority over ourselves and the other peoples of Europe.

Brussels is currently putting together a new package of measures designed to extend the degree of control the EU elite has over its subordinate entities. "Governing these very vast and equally diverse economies with a single currency is more of a challenge in a union of sovereign states than in a political federation," Jean-Claude Trichet, the ECB govenor, commented in a recent speech. "That is the reason the European Central Bank is stressing tirelessly the necessity of strongly reinforcing the euro area economic governance."

'Economic governance'

One plan is for
all governments to have to submit their annual budget proposals to the unelected European Commission for approval before they are shown and voted on by national parliaments. Brussels also wants to start taxing all EU citizens individually.

The EU elite appreciate that it is going to be very hard in future to persuade member governments to keep increasing their national annual contributions. Herman van Rompuy, Jose Manuel Barroso, Trichet and the others are commendably open about the need now to complement monetary union with fiscal union.

When opponents of the euro predicted this would eventually have to happen, they were derided by the likes of Ken Clarke and Chris Huhne as hysterical scaremongers.

The notion that Britain, Denmark and Sweden will be able to absent themselves from the forthcoming financial and political drives to save the euro from collapse is therefore naive in the extreme.
The full insanity of having established a European single currency in the absence of an already existing unified, Pan-European people prepared to support it with their taxes is now self-evident.

Jacques Delors and the other fanatical architects of the Eurozone believed that once they had set in stone the single currency everything else, by some functionalist magic, would fall into place. According to the EU-state-builders, the governments of the member states would then tamely accept the logic of the situation and agree to hand over ever more political powers concerning economic policy to Brussels, the business cycles of the diverse national economies would miraculously converge and the different European peoples would organically merge into one collective consciousness, complete with new sense of political identity and loyalty.

Germans would then not mind, so the theory went, being taxed to help out other parts of the Eurozone, any more than they currently object to having their contributions redistributed to other parts of the Federal Republic.

Silver lining

This scenario, of course, was a total and utter fantasy in the minds of some members of the political elite and, like the other authoritarian, grandiose political fantasies from the European past, has extremely dangerous implications for the ordinary citizens of our continent; the people who really have to live with the consequences.

The inevitable eventual collapse of the Eurozone will have unpleasant consequences for all European economies and beyond. However, the silver lining is that the EU in its current undemocratic form cannot survive. The problem though is that its collapse, or transformation into a much more diluted form, could be drawn out over a number of years.

As we are seeing, the EU political class will do everything possible in the short to medium-term to resist the inevitable and will throw huge sums of public money at a problem that is beyond their power to solve.

The imperative for the British people must now be that we minimise for ourselves the damaging implications of this disintegration and get the hell out, quick.

written by Marc Glendening

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