Douglas Carswell's Blog

Commons votes through the next round of Eurozone bailouts

The Eurozone is on the edge of a sovereign default crisis – and last night the government approved giving the IMF £9.2 Billion to make things worse.  Make no mistake, this additional money for the IMF will be drawn into Eurozone bailouts. 

The decision to raise our IMF subscriptions by 88 percent was first mooted when Gordon Brown was in charge – but was okayed by the current government last October.  While Canada, Switzerland, Holland and Belgium all managed to keep the increase in their subs low, whoever negotiated the deal on our behalf seems to have preferred to have UK taxpayers assume greater debt liabilities so that they could sit on a bigger chair at the various international summits they attend on our behalf.

Alongside fiscal policy and monetary policy, our approach towards the bailouts and the IMF shows that there has been remarkably little change in economic policy at the Treasury since Gordon Brown was in charge. 

Faced with the worst financial disaster in modern European history, the Treasury continues to drift along with a bail-them-out-and-hope-that-fixes-things approach. What should HMG be doing instead?

First, we should be minimising our exposure to the Euro debt implosion – not adding to it like the government did last night.

Second, we should insist that the IMF does what it has historically done so successfully when rescuing debt-stricken countries. That means encouraging key Eurozone members to devalue their currency, default (or restructure) their debts, and downsize their public sector.

That would necessarily involve establishing new currencies. Britain and the IMF could play a leading role in helping that to happen by offering to hold a certain portion of foreign exchange reserves in new drachmas and new liras. 

Instead, we continue to throw good money after bad – and in doing, make the problem worse. Every single Eurozone country that has had an IMF/EU rescue package imposed on it is in more debt than before it was “bailed out”.

Austerity at home, but a £9.2 Billion increase in our IMF subscription. Money for the supranational technocrats, but not for the folk who use local public services. Not good.

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