The EU rushes out a press release to get in on the crisis

Days after it has become fashionable for national governments to launch reflationary packages, the EU is drawing up a list of recommended ways of doing it. This may include the ever popular cutting taxes, and the preferred continental route of increasing spending. I wonder how much high cost brain power it has taken to deliver this show stopper?

More significantly, have you noticed how the EU’s main economic policies have been suspended now there is a crisis? The Competition policy clearly no longer applies to banks, which are able to merge at the drop of a hat with no investigation. The state aids policy has been abandoned for banks, and maybe soon for autos as well. Governments can put any amount of cash they like into banks without a thought for the EU economic policeman or the competitors. Now we also learn that budget discipline has been abandoned. Apparently member states of the EU and of the Euro can now borrow more than 3% of GDP with no new limit.

I do not lose any sleep over the abandonment of policies and powers by the EU, but it just goes to show that the rules of the EU do not apply if France and Germany come to find them inconvenient. Northern Rock was not allowed to trade for new business, we were told, owing to EU rules. That was before big continental banks got into public difficulties. The banks that came after continental problems are allowed state rescue without it affecting their ability to offer new business.

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  1. Posted November 26, 2008 at 11:02 am | Permalink

    Latest PBR figures from the DT

    Of total expenditure of 623bn in 2008/09 the debt interest paid element is 34bn.

    By simple arithmetic this represents:

    at interest of 3.5% = debt of £971bn = 155% of total expenditure

    at interest of 4.0% = debt of £850bn = 136% of total expenditure

    at interest of 4.5% = debt of £755bn = 121% of total expenditure

    at interest of 5.0% = debt of £680bn = 109% of total expenditure

    Or am I missing something?

  2. Posted November 26, 2008 at 11:30 am | Permalink

    I read this morning that the net cost of the UK's membership of the EU is £57billion pa.

    By how much, Mr Redwood, would the basic rate of income tax fall were we to resign our membership and apply all the savings to this worth cause?

  3. Posted November 26, 2008 at 12:16 pm | Permalink

    "I wonder how much high cost brain power it has taken to deliver this show stopper"?

    – Very funny Mr Redwood ! lol

    Messrs, or should I say ( messer's ), Barrosso and Sargozy, seemingly float quietly along on the sidelines of growing economic problems for months until it turns into crisis, and then announce a 'strategy' to resolve the problem which countries are already dealing with in precisely the way 'they suggested'.

    It's rather like the lazy boy scout who watches his fellow scouts collect firewood who then expels a bellow of air just at the point the fire has been lit whilst proclaiming Je l'ai fait ( "I've done it" ).

    For further clarity I refer to Abraham Lincoln's speech when he said "You can't fool all of the people all of the time".

  4. Posted November 26, 2008 at 1:07 pm | Permalink

    The Irish got it right – they just did what was best for their own system without worrying about the eurocrats.

    Same with the German Chancellor when she guaranteed German deposits.

    The British government is too feeble to do what is right for Britain.

  5. Posted November 26, 2008 at 1:35 pm | Permalink

    Mr.Redwood just say it the EU is a totally corrupt sham. After 40 years of voting Conservative I will abstain or make a useless voting gesture unless there is a guaranteed EU referendum in the next manifesto.

    • Posted November 26, 2008 at 9:51 pm | Permalink

      I feel totally the same: what I usually do, though, is to vote Conservative for the Parliamentary Election and also for the Local Elections: I do not want the Labour in! Also, of course, the BNP is always there, waiting offstage.
      Meanwhile, for the totally pointless, undemocratic and hypocritical sham of the European Parliament, I vote UKIP.
      I do not know if you go on the Open Europe blog? Some of the behaviour on there is really, really appalling. Irish referendum, Common Agricultural Policy, pathetic pronouncements on the Congo and Russia, refusal to admit the very expensive corruption, and the running rings round poor old clumsy Mr Brown are all recorded, day by day.
      If it was not for Daniel Hannan keeping us all in touch, I should despair.
      I do not vote for the Regional Government which spreads new eco towns all over the region, because nobody has invited me to do so. I really think I should vote Neo Herodian if asked.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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