Douglas Carswell's Blog

All the credibility of a Greek bond

For the past twenty months Europe's elite have been merrily bailing out and borrowing to try to fix the Euro crisis - encouraged and at times supported by our Treasury.

And for the past twenty months this blog - and others - have consistently opposed what they've been doing.

Bailout-and-borrow economics only makes things worse. More debt piled upon more debt. Instead, Eurozone countries should be allowed to default on their debts and decouple from the Euro.

When I met a top Treasury official last November and ran through what Argentina had done in not dissimilar circumstances, I was met with a superior smirk - and told the problem would be sorted out in about six months.

When some of us suggested in the House of Commons that Britain might be wiser to pay for countries to leave the Eurozone, rather than remain in, there were those on the Treasury front bench who rolled their eyes and grinned.  Ho ho.  

When some of us helped mobilise Commons opposition to the bailout-and-borrow madness, how they scoffed.  "Scaremongering" said one.  "Tin eared Tories" wrote the The Economist . 

But it wasn't opponents of bailout-and-borrow economics who were failing to look and listen.

The tragedy in all this is not that the "official mind" of Whitehall was so wrong.  But that because it has been so wrong, we have missed a golden opportunity to press for the kind of reforms that Europe needs, and that are in our national interest.   Imagine if we have been prepared to push for the re establishment of national currencies, with Britain, Germany, France and the IMF providing ballast to the fledgling currencies?    

Instead they stuck to the old clichés.

"We need stability in the Eurozone" was their mantra.  Thanks to their approach, we'll now see some cataclysmic volatility - replaced in time by the stability of a corpse.

"Fiscal union is the next logic step" they keep saying. Do the maths. How much good German money do they think will be needed to keep Italy afloat these next twelve months?

Don't believe the spin about how Whitehall was sticking to all this in public - but privately - nudge, nudge - they knew it was all wrong.  They really have been that clueless.      

This tragic episode is not just a disaster for the Continental elites. It reveals that our own Whitehall elite are bankrupt - bereft of ideas and at the mercy of events. Shades of ERM.

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