Wednesday, April 28, 2010

Beware of Greeks bearing gilts

Yes, I know Greece doesn't issue "gilts" - but I like the pun! OK?

I am, of course, referring to the decision to downgrade Greece's credit rating to "junk" status meaning that they are now paying the sort of interest on their borrowing that you or I might face on our credit cards - bad enough when you owe £1000, but a total disaster when you owe £1000 billion.

This will, of course, make borrowing prohibitively expensive for Greece and they will have to rely on handouts from the rest of the EU and the IMF to meet their financial commitments - and they'll have to slash public spending massively at the same time.

Greece is not going to be a nice place to be for the next few years - they are, effectively, in a deep depression which is going to last for a decade or more and it is only a matter of time before other European nations join them (including us). It wouldn't be so bad if they could rely on tourism - but what with the euro, Greece is just so damn expensive when compared to Tunisia or Turkey.

Anyway, my post isn't really about bashing Greece, but bashing their decision to join the euro - after all, it is that choice which has shackled Greece's ability to do anything about their debt and finance problem - and has hamstrung, Portugal, Spain and Ireland too - and made the country a much more expensive place to visit.

It also demonstrates just how wise a decision it was for Britain to keep out of the euro - a fact which most of the euro supporters have not mentioned over the last couple of years for some reason - particularly the Liberal Democrats who were once pushing for Britain to join as soon as possible, something which that nice man and financial genius, Vince Cable, seems remarkably reticent to talk about these days.

And let's be honest, here - the only reason the Tories and Labour parties didn't take us into the euro was because they didn't think they could get it past the British people. The truth is that they both favoured the idea privately - and some of them publicly - but knew that it was pushing the people too far too soon to make them ditch the pound.

Of course, all three main parties remain committed to our membership of the European Union and remain determined to take us into the euro as soon as they practicably can.

Just bear that in mind when you listen to them discussing how they would deal with this economic crisis (which hasn't even really started yet) in the run up to the election. They don't have any answers - so they'll just lie - but don't be fooled. If the politicians of all three of our main parties had had their way we would be as deep in the mire today as Greece.


Lightf00t said...

It always annoys me how anti-EU people like myself get dismissed as "little-Englanders", even when the EUSSR is crumbling.

Also, they can't seem to get to grips with the fact that there is a huge difference between being anti-EU and being xenophobic/anti-Europe.

There is simply no legitimate reason for the EU experiment to continue. I suppose you could say that there is now far less or even no chance of war between member countries, but is this one thing worth the sacrifices we all have to make, i.e. loss of freedom, economic devastation, etc.

We need out.

Stan said...

Totally agree, Lightf00t. Personally, I think the real "little Englanders" are those people who believe that Britain is incapable of standing up for itself - people like Clegg.

War between European nations remains a distinct possibility even with the EU. The only reason it never happened during the last 70 years is because of the threat from the Soviet Union and the presence of the US - but I believe war in Europe is not only possible, it is inevitable.

Lightf00t said...

I'm almost tempted to wish for war if it was to lead to the complete dissolution of the EU. The end justifies the means, sort of thing.

Who do you think we'd most likely end up at war with?

My money would be on Turkey, whether it becomes a proper member or not.

Stan said...

The EU will eventually collapse - as all attempts to create a nation from disparate peoples always do - but I don't think it will be a war as such that ends it. I do believe that when the collapse does come it will not be pretty - rather like the collapse of Yugoslavia.

When I say war is inevitable, I don't mean wars between nations - I mean internal, civil wars in various EU nations. It would take a long time to explain here, but basically, what I believe will happen - sooner rather than later - is something like an EU version of Chechnya. Except that, once it kicks off in one region, it will quickly spread to other regions.