Douglas Carswell's Blog

What we should be saying to Angela, Silvio and the Euro gang ....

"We have to accept" says George Osborne "that greater eurozone integration is necessary to make the single currency work”. It is, he suggests, “very much in our national interest” that we encourage the Eurozone to move ahead with full fiscal integration to save the Euro.

Letting Angela, Silvio and the rest of the Euro crew know that you are relaxed about them going ahead with full blow fiscal union might make you feel popular when rubbing shoulders at Brussels summits. It is less clear how it is in Britain’s national interest to see our neighbours and trade partners ruined by grand monetary plans.

Our government has already lent support to the bailout-and-borrow policy European leaders have adopted to try to cope with this financial crisis. We’ve even helped pay for this disastrous approach long after it became clear that each bailout simply increased the debts of the indebted. Full fiscal union – which we now say we support - would merely institutionalise the bailout-and-borrow approach, rather than solve a problem caused by Eurozone countries living beyond their means.  

There is only one thing worse than the breakup of the Euro – and that is its maintenance at any price.  Encouraging millions of Europeans to live in countries with a currency designed for the needs of others will ensure their economies stagnate and their debts will grow. That is in no one’s interest.   

Instead of cozying up to the Brussels consensus on fiscal integration, British ministers should stick to the principle that a currency should exist for the advantage of the people, not the people for the advantage of the currency. We should have the confidence to propose a different approach; the three Ds – Decouple from the Euro, Default on the debts and Downsize the public sector.

The Centre for Economics and Business Research today tells us that they are “pessimistic” about the chances of the Euro surviving. With massive debts, rising interest payments and almost zero growth, the policy wonks can see that if one country defaults, “other euro members will face higher borrowing costs, making devaluing their currency by leaving the monetary union more attractive”.

We need to make sure that we are not on the wrong side of events yet again if that happens.

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