Flawed euro is tearing Europe apart
REMEMBER how the European Union was meant to create peace and goodwill across the continent, bring ordinary folk closer together and help forge a sense of common belonging among 300m Europeans? How it was meant to make sure that the horrors of war and aggression were banished forever, to close a vile and despicable chapter of European history? Well, it’s not working that well.
There is, thank goodness, zero chance of armed conflict within the EU. But the rhetoric has spiralled out of control. Instead of forging peaceful co-operation, the flawed structures of the euro are pitting countries against each other, fuelling hate and rekindling bad memories. Compulsory unification and integration are merely creating disunity. It’s unedifying, depressing and dangerous.
Yesterday, Greece’s President Karolos Papoulias accused German finance minister Wolfgang Schaeuble of insulting Greece. The 82 year old Papoulias, who fought the Nazis during the war, asked: “Who is Mr Schaeuble to insult Greece? Who are the Dutch? Who are the Finnish?”. Greek newspapers have been publishing made-up, photo-shopped pictures of Angela Merkel dressed as a Nazi. Angry German holiday-makers are boycotting Greece – sensibly, given the possibility of violence.
Both sides are hopelessly wrong – it is astonishing that the Greek establishment, which has failed so spectacularly, somehow feels that it is entitled to handouts. But abolishing democracy by forcing all Greek parties to sign-up to austerity plans, as the Germans want, is equally wrong. Imposing reforms – even good ones – never works; change needs to be accepted by a nation if it is to be successful.
The answer, of course, is that Greece should leave the euro, regain full self-government and sort out the ensuing national bankruptcy on its own. Instead of wasting time with endless talks, which are merely building resentment, the EU should be preparing for a managed Greek default and expulsion from the euro. The financial markets are much less worried about contagion to Portugal and Ireland at the moment; their credit markets have uncoupled with Greece’s. This won’t be another Lehman after all. The simple truth is that you don’t get genuine unity by forcing people to accept a system they don’t want.
UNEMPLOYMENT CRISIS
JOBS, jobs, jobs. That ought to be the coalition’s mantra. Radical action is required. I don’t mean spending even more – the state spent a ridiculously high 49.8 per cent of GDP last year, the OECD says – or engaging in endless quantitative easing. These policies, aimed at managing total demand in the economy, have run out of steam. The only solution is to ensure that for a given, weak level of demand more jobs are created. That means making it more profitable for firms to invest and hire. It means halting the war on business. It means implementing in full the proposals outlined for Number Ten Downing Street by Adrian Beecroft to replace current rules by a new no-fault compensated dismissal system. It means making the UK a much easier place for entrepreneurs. It means allowing all workers to price themselves back into jobs. Many people won’t like this – but the alternative is that the present, scandalously high unemployment, including among the young, will become the new normal. This cannot be allowed to happen.
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