Monday, 13 December 2010

Not in the Eurozone but we still have to pay for it

It was sad to see John Major on the AM Sunday show claiming his decision to not take us into the Euro as a great triumph which ensures that eurozone troubles are not our problem. This is simply not true. Under the Lisbon Treaty we have had to contribute directly to the EU Greece and Ireland bail out fund and indirectly via the IMF our share of that component of the fund. The latter is unavoidable under the Bretton Woods IMF arrangements.

More insidious is the Marr europhile argument that as the Eurozone is our biggest export market it is in our interest to support the Eurozone in its current problems for the sake of British business. Nothing about us being the Eurozone's biggest export market and the balance of trade being hugely in the Eurozone's favour.

Meanwhile Merkel and Sarky edicts on eurozone sovereign bond holders haircuts are jacking up borrowing costs for Greece, Ireland, Portugal and Spain. The Greeks are now having to pay four times the interest rate the Germans are on their bonds. The are hving to pay so much to service their debt that there is little left to pay for essential public services. Something has to give soon. 

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