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Today Bruce Anderson wrote a really interesting article in the Independent in which whilst touching upon David Cameron’s changed policy following the ratification of the Lisbon Treaty, took a slightly different view and partly through the prism of the Euro. It is a good piece of journalism and whilst anti-EU in tone offers a rational insight which could be debated on many levels, again, well worth a read whichever side of the debate you are on:

http://www.independent.co.uk/opinion/commentators/bruce-anderson/bruce-anderson-the-eu-battle-isnt-over-for-cameron-1817278.html

A Key Issue

The statement “One size does not fit all…” when discussing the Euro, always brings out all sorts of funny squeals along the lines of “What about the USA, China, India, Russia…” In other words physically large countries, some with huge populations and economically and a great diversity from rich to poor across them. The reasoning being; “If it works for them, why wouldn’t it work in the Eurozone ?”

Somebody commenting upon Bruce Anderson’s article came up with this kind of stance, my reply was as follows and whilst I don’t swear by the exact figures, in principle they are not that far out.

Horses for Courses

No one size does not fit all is a fact unless, there is the combination of high wealth (tax actually) creation and sparsely populated areas to which substantial cash transfers are made from the centre to balance out the economic impacts of given policies.

Wales about 3.5 million. NI 2 million, Scotland 5.5 million, all the rest of the 61 million live in the area called England. As a Londoner, it is obvious that the South East is the most productive area in the UK at this time and as has been said by many London based politicians, a very high proportion of what is created there in terms of taxes, are “exported” to other regions in the UK which is the right policy.

The question is and Bruce Anderson makes the point quite well here, “The USA could run a common monetary policy despite wide regional divergences. But Uncle Sam devotes at least twenty per cent of GDP to fiscal transfers.”

And later on, “From 2012 onwards, there will be an almighty row over the EU’s budget. Forget US levels: it currently stands at 1.24 per cent of the EU’s GDP.”

Real Transfers of Wealth

This in a nutshell is the key issue which if you put the “problem” for the larger EU contributors in your personal terms it is like saying: “Today you pay 2,000 Euros in tax, tomorrow this must increase this by a factor of 16, therefore next year you will pay 32,000 Euros – OK ?” (based upon a 20 per cent transfer).

In order to finance EU expansion, Blair surrendered the “Maggie Rebate” so shortly, the UK will be paying around 7.8 billion (Sterling) pa, do you imagine that we could afford to pay in x16 that ? An eye watering 125 billion pa.

The point is that there is nothing wrong with having a single currency providing that either you have a totalitarian regime so no one argues or, you can generate sufficient transferable funds to ensure those who pay most, don’t feel robbed and those to whom it is transferred, feel that it is equitable in the general scheme of things.

Another Protest, Another Reply

Whether the Euro fails or not is largely irrelevant to the UK as it has kept Sterling and therefore can adjust or to be more accurate, the markets will adjust its floating value according to the UK circumstances and that is a useful device, both economic and political that is denied members of the Eurozone.

Whether this is a good or a bad thing can be debated from many different angles but what is a fact is that the impact of any policy on a large economy, say Germany will be totally different from the impact on say the Irish Republic. This of course is little different within the UK itself and Sterling, what suits the City of London will not suit the Yorkshire Dales or the Scottish Highlands however and just as Mr Anderson points out with regard to the USA, in the UK there are substantial transfers of funds to the various regions to balance things out.

You must understand that these transfers are significant and far larger than any “EU Rebates or Grants” and even EU Contributions from the major EU economies are chicken feed in comparison. Therefore and looking ahead and the main thrust of this article with regard to the Euro, is not whether it succeeds or fails, it is whether the Eurozone will move to making equivalent cash transfers from the larger economies to compensate the smaller ones, is there even the political will to do so ?

The Usual Wrong Language

As for your assertion, “…I still blame the dying embers of empire for all this…” is a foolish and ill informed statement. The people who “missed the idea of Empire” were of Harold McMillan’s generation, people who like him had fought in WWI, that generation passed long since and the one that followed which fought in WWII were more interested in living a better life afterwards than how many “pink spots” were on a Globe or World Map.

I was born in 1945, now coming up to 64, my youth was the 1960s and whilst I like history, living in the past would be stupid and I can’t think of anybody in my generation that hankered for the days of “Empire”. We were all pretty keen on a better world and the Common Market seemed like a good idea at the time, unfortunately it has turned into an undemocratic, authoritarian monster that both Stalin and Hitler would be proud of and that is not good news for Europe, it will end in tears sooner or later.

No I don’t wish it to but today we celebrate the Fall of the Berlin Wall…think about it, you cannot ignore the people forever, unless the EU changes rapidly, there will be tears before bedtime.

What I want is that the Britain returns to its roots, an island trading nation, trading globally with an adventuresome outlook, we really do not need the EU in order to survive, wish it no harm, nor the Euro, it is just that neither has much to offer the UK. I guess you will have to fall back on “Little Englander” for your insult to anyone like me who objects to the EU because “Empire” is a concept as outdated as your view of us.