What Mr Cameron should say to Frau Merkel

Mr Cameron should of course be charming, polite and friendly to the German Leader. He should feel no need to seek favour or to apologise for the UK’s healthy Euroscepticism. He should speak truth to power. He should say that our scepticism about joining the Euro has made the problem of the Euro much less, and our scepticism about so much detailed European government regulating EU economies offers a way through to greater prosperity and freedom for the European peoples.

Those of us who opposed the formation of the Euro pointed out that if they rushed too many European countries into it before their currencies had stabilised and their economies converged, there would be trouble. We said that if they allowed some countries to borrow too much at the common interest rate it would create strains. We said that if a country like Germany worked hard and was very competitive, the other countries would have to cut their wages to stay in. Prior to the establishment of the Euro Germany was more competitive, and regularly revalued its currency against many of the weaker performers. This was the easy way of cutting living standards in Italy or Spain, and reducing their imports, and cutting back on Germany’s exports. Today, within the Euro, the adjustment has to be made by cutting wages in the importing countries, a more painful process as we are discovering.

By keeping the UK out of the Euro we made a huge contribution to its possible success. If the Uk had been in the Euro over the last year it would probably have broken it. The Uk is too different, and the level of UK state borrowing so huge. The UK had a large devaluation over the last two years to cut its living standards – the outgoing government which engineered that would not have engineered a similar pay cut if we had been in the Euro. Mr Cameron should say that the UK wishes the Euro well, and will help with advice and political support for measures to assist it, but cannot offer a pound of UK money given the state of the Uk finances.

He should then say that he is very worried about how the EU generally is becoming an area of slow growth or no growth. The EU has inflexibile product markets, owing to far too much EU regulation. It has inflexible labour markets, owing to labour regulations, social security systems and the wide range of languages spoken. If the EU wants to help the prosperity of its citizens it needs to cut out much of the damaging or needless government its visits upon us and our businesses. Decent welfare standards and different langauges are a given, so the adjustment needs to be made by less European government intervention.

He goes to see her just after she has personally triggered a major fall in world markets by her decision to impose a German ban on short selling government bonds and bank shares. She used inflammatory language to tell us all the Euro is at risk, and then introduced a panic measure which will ensure more financial business is transacted outside Germany. She did not even bother to consult her EU partners.

I am sure Mr Cameron will be too polite to rub salt into the wound of her clumsy interventions, but he should refer to how apparently popular regulations can make economies worse. We hear from Euroenthusiasts that now is the time for the UK to have influence. Those of us who are sceptical about EU policies and their impact on living standards will judge this claim by how far the Uk can now get in persuasing the EU that it is part of the problem.

We need a less expensive and less regulating EU to get Europe back on the road to prosperity. The Euro, the EU’s finest achievement to date according to its supporters, is visibly damaging growth and income levels. The EU which demands spending cuts of its member states should lead the way by cutting its own spending. I am not expecting it to see the problems it creates, as its answer to everything is more European government.

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34 Comments

  1. FatBigot
    Posted May 21, 2010 at 7:48 am | Permalink

    "Those of us who opposed the formation of the Euro pointed out that if they rushed too many European countries into it before their currencies had stabilised and their economies converged, there would be trouble."

    I would go further.

    Even if their currencies had stabilised and their economies converged that would only make the Euro project feasible while those conditions remained in place. Yet they never could remain in place for long.

    A country with an economy dependent on manufacturing is a totally different beast from one dependent on tourism, they might converge for a while due to political manipulation of conditions, but it can never last. The manufacturer might boom while the tourist trap goes quiet, or vice versa. Either way the pre-condition for both countries using the Euro disappears.

  2. Mike Stallard
    Posted May 21, 2010 at 8:55 am | Permalink

    You make several trenchant comments. Well said! I agree with all of them. I just hope our new PM comes good and "speaks truth unto pow(d)er".(I can't attribute this quote).
    By far and away the most important point is the end of bossy, interfering, expensive, crass Socialism. Lots of people, justly, joke about the EUSSR. It's true!
    We English have our own, very different history. As Bomber Harris, whose wartime biography I have just finished, noticed, the Germans get every detail right. It is just the large things that they can be depended on to get wrong.
    What we need, of course, is a concert of Europe and I can attribute that – to Metternich, or de Gaulle.

    • DBC Reed
      Posted May 22, 2010 at 9:32 am | Permalink

      Bossy interfering expensive crass socialism! It is right-wing laissez faire that has saddled every "freeborn Englishman" with a 100k upfront debt for the sterile land underneath their houses , charging them for residence in their own land.God help them if they want to move from areas without work to prosperous cities or buy a house in their native village in the countryside.
      Then when all the 100k's are aggregated from the monthly tribute of mortgar repayments ,the markets sit over national and transnational economies like hawks ready to intervene with swift ,fat-fingered jabs at the computer keys ,ruining lives en masse.
      Good luck to Angela Merkel if she is trying to take this lot on!

  3. alan jutson
    Posted May 21, 2010 at 9:15 am | Permalink

    John your last sentence sums it up.

    The EU die hards will say that its policies are failing at the moment because there is not enough Political Union, not enough of the same type of regulation where one size fits all, and to a degree they are right.

    Unless all of the member States have exactly the same tax laws/regulation, employment laws, business laws and regulation, benefits system, health policy, foreign policy, defence programme etc etc under one President, or Chancellor, for each of these departments, for the whole set of Nations, then I believed that it would eventually fail.

    Many of us in the past have said that the Countries of the EU are too different and diverse in culture, lifestyle, business methods, etc to be combined under one set of rules. They have tried, they have thrown money at it in an attempt to make it work, but it really is flogging a dead horse.

    The solution is for the Eu to become what we (most of the population) voted for, a collective of trading Nation States, no more. But to do that turkeys have to vote for Christmas, and the gravy train has to stop. What chance !

  4. Donna W
    Posted May 21, 2010 at 9:31 am | Permalink

    What Mr Cameron SHOULD tell Mrs Merkel is that the British people will accept no more integration; they want their sovereignty returned and they want the CAP reformed as was promised when Blair agreed to give back our rebate.

    Failing that, he will hold a Referendum on our continued membership. He won't though – he wants Britain in the Grande Franco-German Reich so the British people will just have to put up with the consequences.

  5. Javelin
    Posted May 21, 2010 at 9:56 am | Permalink

    I agree, why should we bail out the Europeans when we have similar levels of debt as the club-med countries.

    I also think Cameron should be told that the markets won't be following his time table of a spending review in the autumn and budget later in the year.

    I have always believed that the UK debt problem will come to a head in the autumn – before the spending cuts are announced. In fact I have 1/4 million riding on it.

  6. david
    Posted May 21, 2010 at 10:07 am | Permalink

    I see that Oborne in today's Mail reckons that CamClegg will form a new party, by combining the ConDems: will you be a member? I get this feeling you may not be asked.

  7. Robert K, Oxford
    Posted May 21, 2010 at 10:07 am | Permalink

    These are interesting and valid points.
    On a separate matter, I would be interested in your view on the changes to the 1922 Committee. As an outsider it is hard to gauge how significant the changes actually are.

  8. Brigham
    Posted May 21, 2010 at 10:22 am | Permalink

    The euro problem, seems to me, to be one of lack of regulation. From what I hear in the news, the Greek, Spanish, and Portuguese governments, have spent above their means, in the same way Brown did here. These governments should have been regulated by the EU. Instead they were too preoccupied in feathering their own nests. I would prefer to be out of Europe, as I consider them to be a load of crooks, but while we are in let us try to get rid of the Commissioners who seem to be milking the system without doing anything constructive, and stop all the corruption that has meant the accounts not being signed off for many years.

  9. Peter van Leeuwen
    Posted May 21, 2010 at 10:52 am | Permalink

    Talking about structural deficiencies of the euro and about an overkill of EU regulation will show common ground between Britain and Germany. That is the easy part.
    The hard thing would be to make Germany (or the EU) believe that the UK would actually want to help creating a better functioning eurozone (while staying out of it of course) rather than just to oppose it as convinced eurosceptics do.
    Maybe this suggestion that the UK has remained outside the eurozone as not to cause it more harm will bring a smile to Mrs Merkel's face and will be smart diplomacy.

  10. Acorn
    Posted May 21, 2010 at 12:18 pm | Permalink

    When Germany dumped the Deutsch-mark for the Euro – 01/01/2002 – you could get 3.2 D-Marks to the Pound. If it still existed, you would only get 2.2 D-Marks to the Pound. Not a lot of people know that.

    Mind you, at the same time, you would have got 1.62 Euro to the pound. Now you get only 1.15. Turn those numbers upside down, and you have to wonder why we are not exporting gizmo's and widgets like crazy; and, running a current account surplus like Germany.

    I still think the EU can't work unless there is a political union supporting the economic union. To do that it would have to be structured like the USA ; Canada or internal structure that Germany has currently. A Federal structure where the current nations are broken up and replaced by regions; provinces or such subsidiarity concepts. Which is exactly what the EU Committee of the Regions is trying to do. The Lisbon treaty has quietly boosted the CoR mandate.

    If CoR gets its way, the EU will not be 27 nations but 172 "regions". Those regions will have boundaries that may not be currently recognisable. They are getting some local help, like the following:-
    http://www.medway.gov.uk/index/council/economicde

  11. Freeborn John
    Posted May 21, 2010 at 12:34 pm | Permalink

    The EU Parliament has in the last week voted to increase the allowances of MEPs by 1500 euro per month. Multiplies by 750 MEPs this means that MEPs will claim an ADDITIONAL amount of 13.5 million euro per year from now, dwarfing the entire £2m cost of the Westminster expenses scandal.

    The EU Commission has this week proposed a 6% increase in the EU budget for the 2013-2020 period.

    And of course the German government is today tabling ‘European economic government’ proposals at an EU Council of finance ministers, that would likely mean further European treaty revisions. Yesterday the German government called for new taxes on financial services either at G20 level or (if the Americans do not agree) then within the EU or (if the British do not agree) within the eurozone.

    And Cameron has not said one word against any of this. The likelihood of cast-iron Dave being a euro-pushover was instrumental in him being judged unfit by the British people to form a majority government two weeks ago. The French and Brussels press are full of stories about him ‘mellowing’, with confident predictions that he will become more EU-friendly as time goes on.

    The one silver lining is that with AV i can vote UKIP first and Labour second to get rid of this chump next time around without a second preference vote for Labour being interpreted as being supportive of more EU federalism. The pity is that we have to wait 5 years because of his stitch-up with Clegg.

    • MaxVanHorn
      Posted May 22, 2010 at 10:31 am | Permalink

      On the mark.A retirement home for failed politicians,with a failed philosophy, who further insult the voting public with dubious auditing and scandalous expense claims.The only conclusion one can draw form this, is that the only people to benefit, are the politicians.

  12. Peter Stroud
    Posted May 21, 2010 at 12:51 pm | Permalink

    A very sound statement. I admit that in the early days I really thought the Euro could never be allowed to fail. Perhaps it wont, but it looks pretty ropey at the moment. Perhaps it should never have been attempted without full political union, but even the most fanatical federalist must surely doubt this will ever come to pass.

    We have only one thing for to thank Gordon Brown. That his bloody mindedness with Tony Blair kept the pound. Thank God Blair was not a Eurosceptic.

    By the way, well done telling that awful woman on This Week to grow up. Later on Eric Pickles said much the same to Andrew Neil.

  13. Y Rhyfelwr Dewr
    Posted May 21, 2010 at 1:30 pm | Permalink

    We hear from Euroenthusiasts that now is the time for the "UK to have influence."

    But don't we already play a central role in Europe, according to those same Euroenthusiasts? I thought we were denigrating our great influence by failing to place ourselves at the heart of Europe.

    Yes, of course we need a less-expensive and less-regulated Europe. It's not as if the EU doesn't recognise this itself, and has adopted initiatives in the past to review and revoke some of the regulatory burden. The problem is that, such is the EU's mania for "ever-closer union" via yet more regulation, they create masses of new regulations to replace the old ones.

  14. Frugal Dougal
    Posted May 21, 2010 at 1:35 pm | Permalink

    Well said! I'm so glad that you and your colleagues are senior partners in the Coalition.

  15. Newday
    Posted May 21, 2010 at 2:33 pm | Permalink

    It would be nice to think he would say that – can't see it though bearing in mind how easily he has conceded to our coalition partners here.

  16. Jonathan
    Posted May 21, 2010 at 2:50 pm | Permalink

    Well said Mr Redwood.

    Being polite is important but as with Mr Sarkozy yesterday, the PM can robustly defend our view on the euro and point out the ways in which the Conservative position has been correct all along.

    Our european masters seem to have no understanding of how free markets work in producing growth and increasing living standards. Instead they seem to believe that markets exist simply to allow technocrats to have more power and control over our lives.

    Europe is gradually drowing under debt, low growth and complacency. The Uk should not follow it down this path but needs to grow its trade with other parts of the globe as well as improving our education system and competitiveness so that we can have true economic growth rather than debt induced bubbles.

    ps Can I congratulate you on your response to the coalition so far. Not having a majority is a dissapointment but to have any hope of a proper majority next time requires conservative MPs to look to the national interest and behave with maturity.

  17. Robert George
    Posted May 21, 2010 at 2:57 pm | Permalink

    How about saying NO!… one can insert more or less any question she is likely to have.

  18. alex p
    Posted May 21, 2010 at 3:16 pm | Permalink

    good stuff as ever.
    when do you put "MP" back on the top banner-is it when you've been sworn in or is it after the state opening?

  19. A.T.
    Posted May 21, 2010 at 4:23 pm | Permalink

    Frau Dr. Merkel.

    It's a bad error to underestimate those who oppose us, and attribute stupidity or clumsiness to them.

  20. TomTom
    Posted May 21, 2010 at 6:00 pm | Permalink

    e should speak truth to power

    Where will he do that ? Merkel is finished. Her obituary is written daily in the press and Roland Koch and Horst Seehofer have just given her a taste of the endgame. she removed Friedrich Merz and botched the 2001 election horribly. Her election in October 2009 was on a tax-cutting agenda and consolidation of public finances. Instead she has given in to French ploys to rescue French banks heavily loaned out to Club Med satrapies. Merkel has destroyed German politics and buried the CDU of Ludwig Erhard in a profligacy unseen in previous administrations.

    German voters would probably prefer Per Steinbrueck back as Finance Minister – at least he was more stringent than Schauble with his legacy of the Schreiber Affair und Kohl.

    Cameron should wish Merkel well as she fades from the scene. He should also recall that British history was better served up to 1906 by being allied to Germany and at loggerheads with France; the reversal of this alliance has been the disintegration of British power

  21. Denis Cooper
    Posted May 21, 2010 at 8:55 pm | Permalink

    For our own benefit and for the benefit of other nations we need a fundamental re-negotiation of the international treaty arrangements within Europe, a re-negotiation which starts with a clean slate and does not assume that any feature of the existing EU will be retained.

  22. John Moss
    Posted May 21, 2010 at 9:17 pm | Permalink

    John – headline title of your blog is still describing you as the Conservative candidate for Wokingham – I assume you won!

    Reply: not on the version I see – I changed back to MP following election for "About" and "Contact" – where else does it appear?

    • Norman
      Posted May 21, 2010 at 10:14 pm | Permalink

      No doubt I'll be about the tenth to say this but it still says 'Candidate for …..' at the blue bar at the top of the actual application – the bar which has the minimise, maximise, close buttons.

      I believe this was set by the tag back when I used to know about these things but no doubt it's all done by machines nowadays!

      Reply: I can't see that on my control page.

    • Acorn
      Posted May 22, 2010 at 8:20 am | Permalink

      JR, if you "bookmark" your home page in IE, you are still a candidate.

      Reply: And how do I change that?

  23. Brian Tomkinson
    Posted May 21, 2010 at 10:21 pm | Permalink

    Glad to see you are getting more air time to express your thoughtful views but can't help feeling that the media are just hoping you are going to give them a headline about splits and rebellions. Although I think your talents are wasted by the government it is good to know that you will continue to present your intelligent and sagacious opinions.

  24. Stuart Fairney
    Posted May 22, 2010 at 4:56 am | Permalink

    Somewhat OT but how about this one?
    http://republicanwhip.house.gov/YouCut/

  25. Winston's Black
    Posted May 22, 2010 at 10:46 am | Permalink

    More spin and deceit from Mr Cameron being faithfully reported by the BBC.

    Much ado being made of his saying the UK will veto any further treaties to take powers from Westminster to the EU.

    Well woopy doo! Cameron knows full well that Lisbon grants the EU the power to do well nigh what it likes via qualified majority voting and, if the UK wishes to stay in the EU, there is nothing we can do about it!

    If Cameron genuinely is not aware of that then he is not competent to be Prime Minister in my humble opinion.

    Still I'm sure the Tory acolytes will try to convince us that Dave won't be pushed around by "Europe."

    They must think we came down with the last shower!

    Answer this please: Are we shelling out £13 billion (or more) to bail out a currency we do not belong to or not?

    If the answer is "YES" then we ARE being pushed around by the EU.

    • Alan
      Posted May 24, 2010 at 10:32 am | Permalink

      We are not shelling out money to bail out a currency we do not own. We are shelling out money to bail out British banks which were foolish enough (or maybe clever enough) to lend to Greece under the impression that it was as safe as lending to Germany. If we do not bail them out they will not have sufficient capital to provide loans to our companies and our economy will fail to recover.

      I'm not clear whether the banks were foolish or clever, because it may well be that British banks were clever enough to realise that they could lend to Greece as though it were as safe as Germany because they realised that they could force us to bail them out if it went wrong.

      Either way, it is the banks that seem to be pushing us around, not the EU which looks as powerless as the UK government when it comes to controlling the financial markets.

      So the answer to your question is, in my opinion, "No". We are not being pushed around by the EU (not in this regard anyway).

  26. TWHITE
    Posted May 23, 2010 at 12:09 am | Permalink

    The EU is run by the people who want to control as many countries as possible, and no way will the UK top politicians want us to leave because once they have finished in Westminster there is a good chance they will get one of the 'jobs for the boys' as an unelected Commissioner, Councillor, or even President.

    They know which side their bread is buttered, and why rule one country when you can rule many, and to hell with what the people want. Who cares what the people want anyway, so why even ask them. That is their philosophy. They don't give a damn.

    They talk about immigration and the need to control it without mentioning the mass immigration from Eastern European EU countries and the law that says that after two years they will be entitled to access to housing, and all the rest. Utter madness which is draining the resources of richer EU countries and undercutting the wages of the indeginous workers.

    Blair, Brown, Cameron, Clegg, the lot of them, all the same. Not a pick between them while we are being ruled by the EU.

    Meanwhile their EU crazy experiment means the richer countries are having to bail out the rest who are not, hence we will all eventually end up in poverty. Where the hell will it end? Madness.

    Spread the wealth is OK with the pro EU politicians mindset as long as its not their wealth.

    Every one of these politicians will end up millionaires, so why should they care as long as they get the power.

    This country is going down the drain fast, and will continue to do so until we leave the EU and regain our sovereignty, and stop the mad EU experiment from imposing itself on us.

    Shame on those career politicians who have and are selling our birthright to further their own political careers. Disgusting people. May their spin be seen for what it really is, a load of lies. The EU deserves to fail, it is dragging us all down in its wake. We are drowning in it.

  27. Derek Buxton
    Posted May 24, 2010 at 4:45 pm | Permalink

    It is sad to see that you suffer the same myopia as Cameron and Hague when it comes to the EU. The EU cannot be changed, end of story. It works precisely the way it was designed to work, as first suggested by a British civil servant either just before or just after the war, to provide eventually a single EU state of the regions. This removes that awkward member England with it's kingdom and Empire, who fought and beat the Dutch, Spain, France and Germany twice, for their freedom as well as ours. Monet and his low life friends knew that they dare not suggest a takeover in so many words so they resolved on a long term strategy. One of the earlier moves was the Iron and Steel Federation, quotas for who could do what. Eventually we got the EEC, including "the commons" hence the CFP. there was admittedly a referendum on this, headed by Ted Heath's guffawing over "no loss of sovereignty", a lie, the first of many, and it continues to this day. Gradually this EEC morphed into the EU led by the same tissue of lies from our own government, but this time although it gave away our rights as a Nation, we the people who owned those rights did not get a say. And so the degradation went on, and on and now after the Lisbon treaty/Constitution we cannot do a thing about it.
    The current problems with the EUro are in their terms a beneficial crisis, they will call for full harmonisation of all Countries economies run by the ECB, and taxes will be taken directly by them, our "government" will just be a group of tax collectors for the EU.
    Of course, it could be that a strong government would come to power who would say enough is enough, we are getting out of the EU, we will trade but as a sovereign Nation as before with all other nations of the world, but it will be free trade, anathema to the EU.

    Reply I voted "No" in 1975 so don't blame me. What is your proposal on how you intend to get out of the EU, when the British people havce just elected another Parliament with a Europhile majority?

  28. Derek Buxton
    Posted May 25, 2010 at 1:39 pm | Permalink

    I did not vote for them. As to the people voting for a "Parliament" of EUrophiles, they voted largely to get rid of the three main parties, they did not vote for a coalition, they voted on the grounds of three separate "mandates", not one mentioned a coalition or tackling the EU question. In fact none of the main parties mentioned the EU at all. In off hand comments Cameron occasionally mentioned "Europe" in marginally sceptical terms but he "doesn't do Europe". Which is why I did not believe him and still don't. Those who do that are lying to us by trying to conflate Europe with the EU, they are not the same and the one is not a synonym for the other. His other phrase "in Europe but not ruled by EU" is of course absolute nonsense, as instead of "EU" he says Europe.

  • 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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