Douglas Carswell's Blog

Bailout-and-borrow goes on ....

You’d have thought by now they might get it.  After two years of bailout-and-borrow in the Eurozone, you’d have thought they might see it had not worked.

How has throwing all those extra zillions at the crisis made the underlying debt problem any better?  Three more Eurozone banks have been given public money to rescue rich men from the consequences of their own foolish investment decisions in as many days.   

As I put it to the Chancellor in the Commons yesterday “You can call it ring-fencing, or recapitalisation, or resolution, but what the UK government is ultimately advocating is more bailouts. And bailouts simply beget more bailouts.”

“When will the Chancellor advocate a new approach? Instead of yet more bailout-and-borrow, when will he advocate default and decouple?”

This was George Osborne’s reply: “The break-up of the euro would be absolutely calamitous for the British economy, and it is not in our interests to advocate that.”

That's what they once said about the breakup of ERM.  Surely the one thing worse than the breakup of the Eurozone is maintaining it at any cost?

He went on “It is profoundly in our national interest to try to make monetary union work”

How does consigning our closest trading partners to a life of grinding debt and economic sclerosis help either us or them?

“Monetary unions” he added “can be made to work”. 

“Made to work”? At what price? 

It sounds to me as if the grand designs of Europe’s political class have become pre-eminent.  Political dogma elevated over economic necessity – and we’re happy to go along with it.   

The European people are being made to serve a currency, when we ought to have currencies serving the needs of the people. There may well be an iron political will in Paris, Brussels, Berlin – and, it seems, London - to make the Euro work. But that is like saying there is an iron will to change the laws of maths to make 2 + 2 equal 5.

Just like ERM, Establishment thinking is again on the wrong side of one of the great public policy issues of our time.

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