One of the most annoying things in politics is to be dismissed as loony because you have the foresight to predict things that may not seem obvious to most at the time. Many economically sound people in UKIP, including former MEP and Economics Lecturer Dr. John Whittaker, have been explaining how it was inevitable that Greece, followed by the likes of Portugal, Italy and Spain, would one day have to leave the euro. That it was bound to end up hurting their respective economies just too much to remain viable. That the political idealism behind this strand of the EU superstate building project would prove to be too costly. And that it didn't matter what the EU said or did, such suffering and fallout would be inevitable, sooner or later.
Today the Greek government are being advised by the Centre for Economics and Business Research in London to leave the euro so that they can devalue their currency as is badly required to boost their dismal export market. Perhaps one day such economists will come to another conclusion, a conclusion that those in UKIP drew before anybody else: that Britain would be far more prosperous outside of the European Union.
4 comments:
Nonsense!
If Greece leaves the Euro, they won't carry out the basic structural reforms that they so much need to make, but will carry on in the old ways, without the reforms they need to make, constantly devaluing as they did in the past; and inflation means robbing the savers, which is a bad thing.
No. The Euro is going to force Greece and Spain and Portugal and perhaps Italy to carry out the necessary structural reforms. It may be painful, but it is very necessary.
The big question is whether Britain, outside the euro, will carry out the structural reforms necessary to get us back on the straight and narrow, or whether ‘quantitive easing’ is going to lead to runaway inflation.
There is much that is wrong with the EU, but give the devil his due. Their policy towards Greece has so far been right, and the reforms are being made, as they have been made in Ireland and in Lithuania. You mustn't be a short termist!
Best wishes
Andrew Selkirk
andrew@archaeology.co.uk
The seeds of the financial disorders now being reaped were sown by George Friedriech Knapp's Theory of State Money, which, it is alleged, destroyed the Classical Gold Standard. It did not. It had to be abolished by Parliament. Politicians destroyed it because State Money, based on nothing beyond the statement that it is worth what the State says it is, gave them powers beyond anything previously dreamed of by any tyrant. 19th C Germany was the "best governed State in the world, everything was controlled". One thing was not, their currency, as it was Gold based. Such a thing was an abomination in a socialist state. "State Money" brought all under political control. Since all politicians are essentially dishonest n their management of such currency it began the age of inflation.
Ludwig von Mises:
“…the Gold Standard… renders the determination of the monetary unit’s purchasing power independent of the policies of the government and political parties. Furthermore it prevents rulers from eluding the financial and budgetary prerogatives of the representative assemblies. Parliamentary control of finances works only if the government is not in a position to provide for unauthorised expenditures by increasing the circulating amount of fiat money. (As seen in “quantative easing”, for which we are probably about to pay, dearly).Viewed in this light the Gold Standard appears as an indispensable implement of the body of constitutional guarantees that make the system of representative government function.”
How you get back to honest money I know not.
Well, largely I agree. However, leaving the euro to reinstate the drachma so they can devalue...err, that is no magic wand solution. What if they devalue by 50%? That means that, all things being equal, if we can go to Athens, Cos, or the Peloponese and have a very cheap holiday indeed. But the sterling we spend (pounds have to swapped for drachma at some point) accrue to them in the Greek exchequer at half the previous rate. So they, as a nation, can buy half as much of our stuff as before. Imports are twice the price too. Not a universal solution for all economic ills then.
But we have jumped ahead. What caused the problem? Was it prodigal and profligate socialist spend-and-be-happy policies? Yes!! It was. So, they need to make the all the unnecessary state sector add-on posts redundant, and cut the benefits for all for life culture back to sane levels. And reduce taxes - then the people have an incentive to work and declare their income because the robbing govt. will not spend it on ridiculous public sector wage inflation and the Olympic Games which they could not afford and then let nearly all the stadiums they built go to rack and ruin. In short, they need to get rid of the socialists and get some good and sensible Thatcherites in their. I can do it for a consideration...I speak a little Greek, "Ya sas", "Parakalo", ktl.
Yes, it's really discouraging when there is already a premonition that something unpleasant will happen yet many especially the politicians are not listening. Unneccessary events could have been prevented if people believed and listened to reliable predictions and foresights of experts.
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