Douglas Carswell's Blog

Why have we been drifting along with this Eurozone bailout disaster?

David Davis has an excellent article on Conservative Home this morning explaining the need for ministers to “stop pretending that preserving the Euro .... is in our national interest.”

Indeed. Bravo.

So how the heck did ministers manage to spend two years, and many billions of pounds, kidding themselves that it is in our interest to prop up the Euro?

Set aside the rights or wrongs of ministers committing large sums to sustaining a currency we chose not to join. Pushing more debt onto bankrupt nations will not reduce their debts.  Every one of the Euro bailouts since 2010 has left the debtor nations with more debt. None of the Euro periphery nations will return to prosperity until they have escaped from Europe’s recessionary mechanism. 

Yet instead of recognising any of this, UK ministers seem to have simply drifted along with established Treasury thinking, trotting out the same old clichés; dangers of instability, a zillion billion jobs at stake, blah blah blah.

Fourteen months ago, I met senior Treasury officials and discussed all this.  They seemed certain that the Euro crisis would be resolved by now. They – and the minister in the room - scoffed at my suggestion that instead of bailout-and-borrow, we ought to encourage an orderly debt default and decoupling from the Euro.   

Sooner or later, ministers will no doubt begin to let it be known, via pet pundits perhaps, that – nudge, nudge – they were never actually keen on all those efforts to bailout the Euro.  Yet somehow they were never doubtful enough to refuse to keep putting more of our money on the table.

Ministers only ever retreated from providing more support for more bailout-and-borrow under direct pressure from the Commons. Even then, they merrily went ahead and doubled our contribution to Euro bailouts via the IMF.

From policy on the Eurozone to our non-existent growth strategy, ministers seem content to merely drift along with established Treasury thinking.  It is beginning to look as if too little Treasury thinking has changed since Gordon Brown was in charge ....

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