Tuesday, 5 July 2011

Resisting The Urge To Say I Told You So

"I told you I was good at Monoply"
Private Eye has several nicknames for politicians which over time have proved to be accurate parodies of their subject.  The Grocer (Heath) and the Vicar (Blair) to go with their targets in Fleet Street Brillo-pad (Andrew Neil), Thirsty (Will Lewis, the former editor of The Daily Telegraph and News International executive who is rumoured to be Robert Peston’s source for NI stories) and Bighead for Mary Ann Sieghart.  That last one, on her appearances on Question Time, I thought was a little unfair.  Until yesterday when her column in the Independent was essentially a page saying I told you so about the Euro.

The true subject of her ire was those politicians who all thought that joining the Euro was such a good idea.  Blair, Kenneth Clarke, Mandelson, Heseltine, Clegg, Huhne and Alexander (Danny?, Douglas?) were all in her sights as she asked why, since the Euro was such a disaster none of those mentioned had felt the urge to apologise.

Yep, the arguments for the Euro were sound ones.  Conversion costs would be removed and costs would become more transparent.  However, the arguments against the Euro overshadow any advantages to joining.  Even more so since the wholesale failure of the banking system four years ago.

What is interesting though is that thinking back to the Major government, most of the prominent Euro-sceptics were on the right of the Tory party.  The main argument against entry to the Euro was that it would be a loss of sovereignty, it would see the removal of economic levers and see them transferred to Brussels/Frankfurt.  In short, we’re English we know best.  I don’t remember the economic reasoning being very high up in the mix.  The threat of monetary union being followed by political & fiscal union was being talked up (fiscal union is already with Eurozone members, witness Ireland’s treatment when they pursued their policy of aggressive Corporation Tax rates), however the arguments that bigger countries would bail out poorer countries and that some sort of external shock would hit smaller countries causing some sort of dislocation were not the arguments keenly pursued at the time.

This is ironic for two reasons.  Firstly, the first act of the next government’s (ie Blair’s first government) leading Eurosceptic (even though he never came out as one) was to remove some of those levers and hand them over, not to Frankfurt but to Threadneedle Street.  Brown was perfectly happy to remove political influence from decision making on Interest rates.

Secondly, the promoters of the Thatcher vision of Freedman economics cannot be found in the various parliaments across Europe, or in high offices.  Nope, the keenest promoters of Thatcherism in Europe are working for the European Central Bank and for the EU.  How else can you explain the list of terms & conditions attached to the Greek loan, including privatisation of their public services on a more radical scale than that attempted by Thatcher, Lawson & co in the mid 80’s, with no clause forcing tightening of their tax laws.  The Shock Doctrine is alive and well in Europe.

Sieghart’s closing shot – “How dare they sneer at us for being little Englander’s or xenophobic when we could just see that the economics were so obviously wrong” shows how much of the pre-Blair era has been forgotten.  Most of the right wing Euro-sceptics, the much praised Jimmy Fishpaste (to use another Private Eye nickname, for James Goldsmith) were perfectly happy to use rhetoric that made them look like little Englanders.  The people espousing the economic argument against entering the Euro were Tony Benn and Peter Shore, Euro-sceptic members of Harold Wilson & James Callaghan’s cabinet from 20 years previously.

Parallel to all of this is of course that the arguments about sovereignty have been re-ignited here in Scotland because of the Independence referendum, with the SNP favouring entry to the EU for an independent Scotland.  If the economics were “so obviously wrong”, no one has told the SNP.  Yet those same independence supporters who are pro-EU should really take note of what is happening across the water, not just in Greece or Ireland, but in Portugal and Spain.  The real paradox is that an independent Scotland fully signed up to the EU and the Eurozone would be too wee and too helpless to deal with the current crisis, while a fully independent Scotland outwith the EU could conceivably survive & flourish.

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