Greek government legitimacy


          The “wise heads” of the EU establishment think the Greek New Democracy (Conservative light) party should join forces with Pasok (Socialist light) party yet again in coalition and carry on with business as usual. These parties were rejected by two thirds of the Greek electors. What part of “No” does the EU establishment not understand?  Once again they do not get this democracy idea. The two parties themselves decided not to undertake this task, but more negotiations lie ahead.

           Yesterday morning I listened to a Greek commentator saying the people had elected a Parliament of clowns and worse. He objected fiercely to the people not knuckling down and voting for candidates who were prepared to tell them that the European dream meant  the continuing reality of austerity in the form of ever higher taxes and further attempted  reductions in state spending. He should understand that the people voted as they did because they think the Euro dream has become a nightmare, and they want change.

               It is true that many Greeks think they can  have both the Euro and less austerity. I presume they think the EU authorities should send them more money on easier terms to pay the bills. That is unlikely to occur on a big enough scale to save the day. The best answer the EU authorities could give to the Greeks is this. They should make it crystal clear that they have understood the Greek people hate the current EU imposed policy. They should be told they can change the policy as they wish, if they leave the Euro. The EU should facilitate early exit of Greece from the Euro, by undertaking the necessary secret planning to bring this about.

               Greece has to form a new government. It would be best if that new goverment was a government of politicians who oppose current EU austerity policy. They after all collectively won the election, which was a decisive rejection of EU austerity. They then need to be talked to firmly by the EU authorities with a simple choice. Either accept EU austerity and go back and tell your voters you were wrong, there is no alternative, or work quickly and confidentially with us to achieve the exit from the Euro the country needs as soon as possible.

            Once Greece is out of the Euro then it can follow its own policies to put recession behind it and to show some growth. It can at least make more rapid progress in righting its balance of payments deficit.  It will not, of course, mean the end to the need to cut the state deficit, as Greece’s borrowing will depend for some years on the IMF, as it does already. If they print enough but not too many drachmas  and stabilise their banks after the devaluation, they might have some growth, which would help. They will still depend on a fairly lethal mixture of reneging on debts and presuming on international organisaitons to lend them more money to pay the bills for excess state spending.

            Mrs Merkel’s vision of a German disciplined EU with strict control of budget deficits is merely producing a no growth Europe with very high taxes. Rich and enterprising people are leaving the most stressed countries, or sending their money abroad. The tax base is falling. The private sector is being squeezed too much. People are voting against it, and against incumbent governments. The cash economy is thriving as people run shy of the tax collectors.  Just like the Exchange Rate Mechanism before it, European monetary ideology is taking too great a toll of people’s jobs and living standards. I recommend my scheme for early exit of Greece, available as the third download “The future of the Euro” on this site. The Euro area has now reached the point where even if they fix the banks in the main countries and print some more Euros, the money is not going to circulate in Greece to stimulate the economy there.

             Germany and France should want Greece out of the currency. Far from worrying about contagion spreading if Greece leaves they should worry about contagion spreading if Greece stays. For Greece to remain in the other states have got to provide a lot more money for Greece. That in turn will weaken the other states’ finances even more.

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  1. Martin Cole
    Posted May 8, 2012 at 6:20 am | Permalink

    Hear, hear! Bravo!

  2. lifelogic
    Posted May 8, 2012 at 6:22 am | Permalink

    Exactly “Far from worrying about contagion spreading if Greece leaves they should worry about contagion spreading if Greece stays.” The EU is clearly hugely anti democratic from top to bottom.

    Just like Major and the ERM fiasco but more damaging still. EU “group think” will just take them all over the cliff again together I suspect. Nor do I expect any apology this time either from those responsible. What has the great BBC sage and “thinker” John Major got to say on the issue?

    • uanime5
      Posted May 8, 2012 at 5:18 pm | Permalink

      Yes it’s anti-democratic with its elected heads of state and Parliament elected using proportional representation. Perhaps they should follow the UK’s example and use First Past the Post so 70% of the votes don’t matter.

    • Bazman
      Posted May 8, 2012 at 8:03 pm | Permalink

      Having the country run on the whims of a small percentage of extremely wealth people would be by definition be anti democratic. Though of that one?

  3. Mike Stallard
    Posted May 8, 2012 at 6:29 am | Permalink

    You got France and Germany right a couple of days ago. Well done. The only surprise was Angela Merkel leaping to her own defence over the Schleswig Holstein rejection of her government. Stung by their firm refusal to cough up for Greek loans, she told the world where the German people stand and snubbed poor M. Hollande on the very first day of his Presidency.

    Now Greece. I hope you get that right too. If only the Masters of Berlaymont cared enough about actual people! I suspect, however, that, being very comfortable themselves, they will let it all drift.

  4. Duyfken
    Posted May 8, 2012 at 6:39 am | Permalink

    There is much to consider in your fine article but I should like to limit my comment to just one aspect: Is it possible for Greece to survive as a democracy?

    Although the present emphasis is on the economic wreckage, the country is also in such a political pickle, one wonders how it can extract itself from continuing political and social unrest. It seems that the population will only accept discipline imposed upon it rather than exercising self-discipline.

    Either that rigour could come from without (Merkel) or from within (eg a return to the Colonels) but either way the Greeks seem to have lost or just given away the possiblity of governing themselves through popular consent.

  5. Martin
    Posted May 8, 2012 at 6:57 am | Permalink

    If Greece left the Euro it would still have a vast bloated pulic sector wage bill like Britain. The solution for Greece is to cut the public sector wage bill 25%. It doesn’t matter what the currency is. A floating Drachma currency will not help as the public sector will use the situation to pay themselves more Drachma.

    Britain’s economy stumbles on because the government has ducked the fundamental truth about the public sector pay bill. It is also 25% too high. Instead the government wrecks savings by the QE policy and wonders why things are not getting better.

    • D K MCgregor
      Posted May 8, 2012 at 8:46 am | Permalink

      Don’t forget their pensions , which will sink us for generations to come.

    • Robert Christopher
      Posted May 8, 2012 at 11:22 am | Permalink

      “The solution for Greece is to cut the public sector wage bill 25%.”

      Why limit it to Greece?

      • lifelogic
        Posted May 8, 2012 at 4:46 pm | Permalink

        A 50% cut is what the UK needs I would have thought even more was needed for Greece.

    • lifelogic
      Posted May 8, 2012 at 1:46 pm | Permalink

      This is mainly true, but a devaluation cuts both state sector pay and the debt. I agree they still need to fire half of the state sector – both in Greece and the UK and reduce state sector pension promises too.

      • Bazman
        Posted May 8, 2012 at 8:10 pm | Permalink

        The problem being that in the 21st century firing half the states workforce and the knock on effect with no alternative employment of income source is not real. It’s not as if we or the Greeks can suddenly become peasant farmers in the next year. This is the crux of the problem. The ones most effected will be the lowest in society and the ones who have done the least well either legally or illegally. if you follow Greek news there is countless numbers unable to buy food or have basic living standards already. Just more silly right wing fantasy no less, maybe all the poor could just go and live somewhere else. In fact many might do. Refugees in Britain if the situation was made worse, by firing half the state sector maybe?

        • lifelogic
          Posted May 10, 2012 at 6:52 am | Permalink

          Each person (who was doing nothing useful) fired from the state sector will create perhaps three jobs in the real economy by making the private sector less uncompetitive. The person fired can also do something more useful too perhaps.

          • Bazman
            Posted May 10, 2012 at 4:58 pm | Permalink

            Where did you get this fantasy from?

    • Tad Davison
      Posted May 8, 2012 at 4:12 pm | Permalink

      That’s the knub of the domestic problem. The Tories are allowing themselves to be dominated by a party (the Lib Dems) that absolutely loves big government, the Nanny State, and bureaucracy. Hence their love of the EU. The size of the public sector needs to be cut, but Cameron isn’t fighting hard enough against this waste, and that makes me suspicious of his motives. A True Blue would have absolutely no truck with waste whatsoever!

      Am I so wrong to think of him as just another pro-EU con-man in Eurosceptic clothing?

      Tad Davison


      • Susan
        Posted May 10, 2012 at 8:35 am | Permalink

        Tad and lifelogic,

        This is why the right-wing does get a bad press. Taking Bazmans point, you cannot just go about firing people in the public sector, on a large scale, unless there are jobs in the private sector they can go to. This is peoples lives that the Government is dealing with. Yes it is necessary to cut waste and unnecessary spending.

        Growth in the private sector is the only solution and this is going to be very difficult for a Government to achieve which has no money to spend, high taxation, far too much regulation on business, and a lack of skilled workers.

        All the Government can do at the moment, I believe, is instill confidence in the UK economy, try to unlock some private investment and wait to see how the measures so far have helped the economy.

        Unfortunately because of the measures the Government have taken up to now, which is to put taxation up etc before any real cuts to Government spending began, the message is wrong for the economy. People now believe if they work hard and save they will be punished for doing so, if they act with irresponsibility they will be rewarded and protected by Government. This has ensured that people will not spend because their income has been squeezed by taxation and their savings eroded. The public also believe more taxation will be coming down the line.

  6. colliemum
    Posted May 8, 2012 at 7:02 am | Permalink

    It is perfectly true that the EU does not understand “No”, not from the Greek people, not from te Irish who were made to vote twice when they rejected the Lisbon Treaty.

    I also believe that politicians across the €-zone (and here) do not get it that people will reject ‘austerity’ as long as they see that those who govern, especially those in the various layers of the EU bureaucracy, are exempt.

    Furthermore, I wish some enterprising investigative journalist would dig out the actual numbers, not just relating to Greece (what have they already received?) but also relating to the EU. After all, we who are paying for our EU membership should be told as a matter of course. We do not have the option to tell our own tax people to research our incomes eyc for themselves, we have to bring them these numbers, so those who spend our money must be made to tell us.
    That goes for Greece as well, or especially, because the information about who paid whom and who owes what are hugely biased, depending on people either wanting to bash the Germans or on blaming the Greek.

    One thing is certain, though: the EU has a huge democratic deficit, and has a history of cloaking decisions in obfuscation. One such example is the ESM (which does not yet concern us, as we’re not et in the €-Zone) – where the EU says this binds states, not governments, so that a new government cannot repeal this.

    In conclusion – people rejecting ‘austerity’ do not exclusively because they want to keep getting ‘money for free’ – it is much more because people do see the huge democratic deficit prevailing in the EU.

  7. Anoneumouse
    Posted May 8, 2012 at 7:16 am | Permalink

    Graecum est; non legitur

  8. Lord Blagger
    Posted May 8, 2012 at 7:18 am | Permalink

    I presume they think the EU authorities should send them more money on easier terms to pay the bills.


    No. They think that the fraudsters who lied about things like debts and off balance sheet debts should be jailed. They think the same should happen to those that were in cahoots with the fraudsters to get the Greeks into the Euro.

    So perhaps there will be European arrest warrants for heads of state to get them sent to Athens.

  9. Lord Blagger
    Posted May 8, 2012 at 7:20 am | Permalink

    Notice too what is missing from the article. Who pays for the mess when Greece leaves?

    Yep, you and me because the muppets in government have lent billions of yours and my money to them.

    • Morvan
      Posted May 8, 2012 at 1:55 pm | Permalink

      Lor Blagger

      It is not only the UK. The question is can France, Germany, and Spain to name but three of the others stand the loss. I am presuming that Greece would default on all Euro denominated loans and other debts.


    • Bob
      Posted May 8, 2012 at 4:07 pm | Permalink

      “…you and me because the muppets in government have lent billions of yours and my money to them.”

      On very good terms according to George Osbrown.

  10. Antisthenes
    Posted May 8, 2012 at 7:21 am | Permalink

    I suspect one of the main driving forces of Merkel’s insistence on austerity, deficit reduction and budgetary discipline is so that it will make further European integration and therefore wealth redistribution from North to South more palatable to the German people. Without budgetary discipline the cost of that redistribution would politically and economically be wholly unsustainable. Turn away from austerity then the greater integration project is not going to happen and unless the EU turns into a European free trade area then the EU is going to be no more. Unwittingly this anti-austerity movement is sowing the seeds for the demise of the euro and possibly the EU. It should be no surprise that most ordinary people would eventually repudiate austerity as it continued to eat away at their standards of living and the privileges they had hitherto enjoyed. Of course this talk of moving away from austerity to growth is in the end going to be just that, talk. It is hard to conceive that any policies designed for growth will work until austerity actually does the job of reforming economic, political and social models that allows for an environment that encourages wealth creation through being competitive and having social democratic institutions, policies and practices that are affordable. Of course on the other side of the coin austerity cannot work even if the electorate accepted it’s continuance whilst wedded to the euro and the commissars of Brussels heaping of evermore draconian regulations on the member states that are increasing costs and decreasing competitiveness. It appears to me that the euro is now doomed. It’s demise will still not reverse austerity but it will make it more manageable and reduce it’s severity and it’s time scale.

  11. Martyn
    Posted May 8, 2012 at 7:23 am | Permalink

    Greek legitimacy problem? What problem – Greece will simply be instructed to hold another election until the desired EU solution is reached. Job done!

    Just read your “The Future of the Euro”. Excellent summary and a model of clarity, thanks. What a shame that so few Europhiles can admit that the Euro as it stands at the moment is rather like a house of cards – a puff of wind and down it goes……

    • uanime5
      Posted May 8, 2012 at 5:21 pm | Permalink

      There’s no need for another election. If Greece wants the EU bailout they have to meet EU conditions.

  12. Tedgo
    Posted May 8, 2012 at 7:34 am | Permalink

    I am sure the EU has a technocrat or two already lined up to take over the Greek government, just like Italy. This would be the easiest way out for all the elected parties. Pass the buck.

    • forthurst
      Posted May 8, 2012 at 11:03 am | Permalink

      Someone like Lucas Papademos? The Greek people voted against the banksters and those who did their bidding.

    • Norman
      Posted May 8, 2012 at 1:28 pm | Permalink

      i was thinking along similar lines but lets give democracy a chance. in tried and tested EU fashion lets have another election and if the dunderheads in Greece still get it wrong then send in three technocrats.

  13. alan jutson
    Posted May 8, 2012 at 7:50 am | Permalink


    I understand your perfectly logical explanation and proposals, but unfortunately the Greek people seem not to.

    They appear to want even more Euros and less austerity/cut backs in State spending, from the snippits of interviews I have seen.

    Clearly they should leave the Euro, return to their own currancy, but then what of the debt, do they now default on new loans just given and recently negotiated, if so where does that leave our Billions which could have funded change back here at home ?

    If Greece is allowed to default, what about Ireland and Portugal, why should they cough up ?

    I have some sympathy with the Greek people, they did not overspend on borrowed money, the politicians did, just as in almost every other Country.

    The politicians hid the truth from the EU (who deliberately turned a blind eye) and the people for years, it is the politicians who should pay, but as usual they will probably get away with their own fortunes still intact.

  14. Alan
    Posted May 8, 2012 at 7:50 am | Permalink

    In my view leaving the euro will not solve Greece’s underlying problems. I think one of the benefits of the euro is it makes it clear that a government has made a mess of the country’s finances, and puts pressure on it to address the real problems, not hide them with devaluation.

    I’m unhappy at manipulating the value of a country’s currency, either by deliberate devaluation or by changing to a new currency in order to avoid commitments. That seems to me an example of a government putting the state’s interests before that of some of its citizens. I think it should be part of Conservative philosophy to protect individuals, in preference to manipulating society as a whole.

    • Susan
      Posted May 8, 2012 at 2:30 pm | Permalink


      I agree.

      I floated this question of “does devaluation really work” sometime ago. No one really answered the question and it got lost in anti EU rhetoric. It seems if people are against the EU they no longer question what the EU may be doing right and what the UK may be doing wrong. Being in the Euro does expose the true financial state of a Country and does force the Country concerned to take action to address that issue. The UK may have devalued but I can see no real difference between how the UK is dealing with its debt than the EU except that the austerity measures in the UK are happening at a much slower pace. Instead of asking where the EUs growth is going to come from, perhaps the UK should be asking where its growth is going to come from. No one yet has answered that question to my satisfaction. Yes the banks could lend more, but is there that much demand and if there is are they the sort of business models that they should be lending to. Cheaper energy seems to be another way forward but I see no evidence that any progress is being made on this. Infrastructure projects require spending by Government unless private investment is forthcoming. Tax cuts could help but only if people decide to spend instead of hoard and this would require Government cuts to accommodate the cost. There seems to be a lot of theory and not a lot of solutions.

      It is obvious that the population of Greece will not vote for austerity when they are told by some politicians that there may be an alternative way to deal with the debt and still remain in the Euro. When it is made clear that there is not, if they still want to remain in the Euro, I believe they should be allowed to.

      Reply: Devaluation can help solve the problem of the b alance of payments deficit, and allows it to be financed by markets. Having your own Central Bank could help mend your banking system and get the right amounts of credit flowing to the private sector.

      • Sean O'Hare
        Posted May 8, 2012 at 5:11 pm | Permalink

        Greece, Italy and Spain have a history of almost continually devaluing currencies. It is now ten years since they adopted the Euro and during those ten years the pressure has built up tremendously. Eventually they will all exit the euro and a massive devaluation will take place undoing every perceived gain from joining it.

        • Susan
          Posted May 9, 2012 at 7:56 am | Permalink


          To my knowledge, part of the reason the Euro came into force in Europe in the first place was to do away with competitive devaluation which was causing too many problems.

      • uanime5
        Posted May 8, 2012 at 5:25 pm | Permalink

        “Having your own Central Bank could help mend your banking system and get the right amounts of credit flowing to the private sector. ”

        Then why hasn’t this happened in the UK. The banking system still has too many people on bloated salaries and as lifelogic keeps pointing out banks aren’t lending to the private sector. If it doesn’t work in the UK why would it work in Greece.

      • Susan
        Posted May 8, 2012 at 7:08 pm | Permalink

        I understand what devaluation is for Mr. Redwood and also how having your own Central Bank should help get credit to the private sector. My point is that despite devaluation the UK cannot claim to be in any better position than the EU with regard to growth or deficit reduction. Therefore it is not the panacea claimed.

        I actually do not believe with weak banks and debt such as we have in both the UK and the EU there is any alternative to a long period of austerity with little or no growth.

        Reply: The UK is much better tplaced having her own currency than in the Euro. Remember the UK had much bigger banks that got into trouble relative to the size of the economy, but does not face all the problems of Ireland or Greece.

        • Susan
          Posted May 9, 2012 at 8:41 am | Permalink

          I am not making a case for the Euro Mr. Redwood, I am merely saying that manipulating the value of the currency is not an answer to the UKs problems.

          Nor do I believe that if Greece left the Euro it would help them one bit, I think it could make their situation worse if that was possible.

          The banks in the UK, to my mind, are still in a weak position. There is still too much debt and potential debt on their books.

        • StevenL
          Posted May 9, 2012 at 7:15 pm | Permalink

          Didn’t the Fed bail out RBS, Barclays and HSBC? Mr Bernanke’s spreadsheets seems to suggest it did!

      • davidb
        Posted May 8, 2012 at 8:01 pm | Permalink

        Re your reply sir.

        Im not sure in the case of Greece a devaluation will have much effect on its balance of payments. What do they produce there? Olive oil and feta cheese? Both being aquired tastes I doubt they are price sensitive. There will have to be some massive devaluation to make Greece attractive to people who routinely holiday in Turkey nowadays where once they went to Hellas. Has our B of P altered that much following our devaluation? And despite it all, we still manufacture.

        • Susan
          Posted May 9, 2012 at 8:05 am | Permalink


          That is right the Greeks export very little, but they import a lot. If they leave the Euro and devalue their import prices would rocket as the devaluation would have to be considerable. This would soon see high inflation and the spiral down despite cheap holidays.

      • BobE
        Posted May 8, 2012 at 9:15 pm | Permalink

        Susan, If Greek holidays suddenly became 50% less we would all flood in.
        They would start to earn again and we could start to travel again. The EU germanic one size fits all is pathetic and is bound to fail. Luckily.
        Merkel will be up for election soon and with luck will follow sarko into oblivion. (Much as the Lib Dems will do in 2 years 10 months time)

        • Susan
          Posted May 9, 2012 at 7:34 am | Permalink


          Bob I am not suggesting that a one size fits all currency will work across a wide range of different economies that was not my point. My point was that devaluation does not work either. Taking in the downsides of this policy it has not improved the economy sufficiently to say that it is worthwhile. Taking Alans original point devaluation is to help Government not its people. The UK is not really in any better position economically than the EU, it would be wrong to make this claim. The UK is not dealing with its debt, in the EU they are being forced to face up to this problem.

          You may find that the Euro drops so much in value that that cheap holiday to Greece is well within your reach pretty soon. Of course this will defeat the object of devaluation and make our exports more expensive. Will we need more devaluation do you think?

        • alan jutson
          Posted May 9, 2012 at 7:44 am | Permalink

          Bob E

          Ref ……We will all flood to Greece for our holidays ……..

          George Osbourne will make a fortune on the Aircraft Tax as well.

      • Conrad Jones (Cheam)
        Posted May 9, 2012 at 11:13 pm | Permalink

        Mr Redwood,

        If Governments could create more of their own currency instead of letting Private Banks do it, and spend this Government created money (which requires no interest payments) on public expenditure instead of issuing interest bearing Treasury Bonds, wouldn’t that help the economy too?

        Why is it that we are led to believe that issuing Treasury Bonds is less inflationary than issuing Currency? The problem with Greece (and the UK) is it’s National Debt created from issuing Treasury Bonds. The European Bailout money – as you well know; is helping noone except the Banks and Private Investors who bought Greek Treasury Bonds.

        At what point in the future do you think Greece will have such a rediculous amount of debt that it will not be able to even pay the interest on it? And so won’t. As you mentioned in a previous comment of yours, they will resort to small holdings and small communities, eventually sticking two fingers up at the rest of Europe and there claim for borrowed money that was created out of thin air.

        Reply: Greece hasd already passed that point and has reneged on E105 billion of debt.

        • Conrad Jones (Cheam)
          Posted May 9, 2012 at 11:24 pm | Permalink

          Put another way – can you explain how the English Monetary System worked from 1100 AD to 1834 AD – 634 years?

          Who devised it and why ?

          Did England and the rest of the British Isles prosper during this period?

          • Conrad Jones (Cheam)
            Posted May 11, 2012 at 11:46 pm | Permalink

            Put another way – can you explain how the English Monetary System worked from 1100 AD to 1834 AD – 734 years?
            Ans: Tally Sticks

            Who devised it and why ? Ans: King Henry I in an effort to enhance or maintain his control, through the money system.

            Did England and the rest of the British Isles prosper during this period?
            Ans: “The British Empire, which was the most powerful nation in the world, was built on the Tally Stick System.”

            The key point about Tally Sticks is not that they were bits of wood but the quantity of them were controlled by the State.

            “Financed by the money changers, Oliver Cromwell overthrew King Charles, purged the Parliament and put the King to death. The money changers were allowed to immediately consolidate their financial power.”

            The Roundheads were the Bad Guys. The Royal Family were the ones wearing the White Hats (no I can’t quite believe it either). The money lenders have been financing our Politicians for Centuries.

            “When Queen Elizabeth the first took the throne she was determined to regain control of the economy. Her solution was to introduce gold and silver coins from the public treasury and take away control of the money supply from the money changers.” – that annoyed a small group of people.

            So what was the Civil War in our Country really about?

            “The English Civil War has many causes but the personality of Charles I must be counted as one of the major reasons.” – The King was a bit stubborn which justified the whole country trying to smash each others brains out did it? The 1641 Irish Uprising – financed by Land Speculators, sparked Tensions in England leading to the Civil War.

            Religion was also used as a source of tension, but Catholics didn’t hate Protestants just because they were Protestant, they hated them becasue they stole their Land.

        • Conrad Jones (Cheam)
          Posted May 11, 2012 at 12:12 am | Permalink

          “The most amazing aspect of this second Greek bailout is that the country’s debt has INCREASED. Private holders of Greek debt were forced to take E105 billion in write-offs but with the addition of the new loan of E130 billion, gross debt has increased E25 billion. The total debt of Greece (sovereign, municipal, corporate and bank) has increased from E912 billion to E937 billion. Borrowing your way out of insolvency is never easy. With a collapsing economy and surging unemployment, more loans will surely be required.”

          The correct definition is for RENEGING, as in to re-negotiate a deal.

          You are correct, they have re-negotiated the deal, in favour of the lenders. Imagine a single Bank with the original E105 Billion recorded as an Asset on it’s ledger, they now have an Asset of E130 billion, an increase of E25 billion.

          This doesn’t seem like a bailout, this seems more like a scam.

  15. Lindsay McDougall
    Posted May 8, 2012 at 8:02 am | Permalink

    But it isn’t just about Greece any more. The anti-austerity fiscally incontinent Member States are becoming a majority. Nevertheless, Germany has a perfectly legitimate national point of view and can object to being the paymaster. Germany may leave the Eurozone.

    • Sean O'Hare
      Posted May 8, 2012 at 5:12 pm | Permalink

      That would almost certainly be the least messy option.

  16. GJ Wyatt
    Posted May 8, 2012 at 8:09 am | Permalink

    The buzzword “growth” means very different things, depending who is speaking. For Hollande, Balls and the left generally it is code for increased public expenditure and increased deficits, i.e. contrived growth in in aggregate demand. For Merkel, Osborne (I hope) and conservatives generally it means growth in private sector supply, enabled by the loosening of policy-determined constraints such as labour market restrictions (hours, holidays, minimum wages etc.), planning regulations, restraints on trade, taxes, greenwash and so on.
    Though demand side “growth” policy is a chimera, storing up larger adjustments for the future by “kicking the can down the road”, it may have a discernible effect in the short term. In contrast, supply side “growth” policy will have a genuine effect over the longer term, but it will not solve an urgent problem like the Euro crisis quickly.
    Unfortunately we can only infer what “growth policy” really means by relating it to the speaker’s underlying political views. It is truly obfuscatory.

    • uanime5
      Posted May 8, 2012 at 5:27 pm | Permalink

      I can’t recall Merkel “loosening of policy-determined constraints such as labour market restrictions (hours, holidays, minimum wages etc.), planning regulations, restraints on trade, taxes, greenwash and so on”. If anything she seems to be increasing protections for employees and trying to get more green energy.

      • ian wragg
        Posted May 9, 2012 at 6:02 am | Permalink

        Germany opened 11 coal fired power stations in the last year. Some of them burning filthy lignite. How green is that

      • sjb
        Posted May 9, 2012 at 4:41 pm | Permalink

        Germany now gets about 20% of its electricty from renewables; the UK just 8%.

  17. Brian Tomkinson
    Posted May 8, 2012 at 8:13 am | Permalink

    JR: “What part of “No” does the EU establishment not understand? Once again they do not get this democracy idea.”
    I’m afraid it is you who doesn’t get it – the EU is an anti-democratic organisation so there is no surprise that they ignore the results of referenda or elections. They want a United States of Europe and will brook no opposition to their plans, least of all from the citizens of the countries they intend to make totally subservient to their diktat. Your own colleagues in the cabinet are encouraging the acceleration of this within the Eurozone. They will then tell us that we have no alternative but also to surrender to this coup d’etat. You believe in democracy but I’m afraid you are being employed as a “useful idiot” by those who do not.

    Reply: I deeply resent your response. I voted No when we had a referendum and voted for a referendum recently. What did you do to help the cause?

    • Brian Tomkinson
      Posted May 8, 2012 at 5:13 pm | Permalink

      I apologise, no personal slight was intended. You are one of very few politicians I respect.
      I know you think you are doing your best but those in power who don’t share your views are happy to see you and others asking for repatriation of powers from the EU which they have no intention of giving but it helps to keep the plebs quiet. In fact, the coalition agreement expressly prohibits repatriation of powers.
      Since you ask, I voted against our membership of the Common Market after attending many rallies and realising that this was always a political rather than an economic project and that the people of this country were being lied to by the advocates of membership. I voted for UKIP in the last EU elections as I realised that your party has and never has had any intention of taking us out of this anti-democratic organisation; an opinion confirmed in Christopher Booker’s article in the Telegraph on 28 April in which he writes: “..a confidential 1971 memorandum, clearly written by a senior Foreign Office official, headed “Sovereignty and the Community”. With chilling candour, this paper (from FCO folder 30/1048) predicted that it would take 30 years for the British people to wake up to the real nature of the European project that Edward Heath was about to take them into, by which time it would be too late for them to leave.”

      I don’t think it is too late to have our own sovereignty and hope to live to see the day when we do, which can only be by withdrawing from membership of the EU.

      • Bob
        Posted May 9, 2012 at 7:53 am | Permalink

        @Brian Tomkinson

        Have you seen the material on “A Case for Treason” website?

        “The signing of the Lisbon Treaty this has pretty much sealed our fate and this single document has handed this highly corrupt European Union the power to dissolve Parliament and effectively take us over. We also have evidence that implicates mainstream media networks such as the BBC and ITV that they are also involved but don’t take our word for it begin researching this immediately by looking at the evidence and video’s we present, use Google to see the scale of the problem, we are in the final years of this take over.”

        A political elite has for some time manipulated the electoral system to deprive the people of true democratic representation by constructing a party political system that has allowed, indeed encouraged, acts of treason to have been committed.

        • Brian Tomkinson
          Posted May 9, 2012 at 8:30 pm | Permalink

          Thanks for alerting me to “A Case for Teason”. Certainly a very interesting website. I wonder if our host has viewed it and what he thinks?

          Reply: No, I have not viewed it

    • Sean O'Hare
      Posted May 8, 2012 at 5:18 pm | Permalink

      Reponse to JR’s reply:

      You should not take umbrage John. Although I’m now a UKIP supporter myself you are one of the few Conservative MPs I have time for. I’m pleased to read that you voted “No” in 1975 I wish I had the nous to do likewise! I think Brian’s comment can be put down to a deep frustration that collectively the anti-EU majority seems unable to get its way in what purports to be a democracy.

      • sjb
        Posted May 9, 2012 at 5:18 pm | Permalink

        But what happens to this “anti-EU majority” come polling day, Sean?

        • Brian Tomkinson
          Posted May 9, 2012 at 8:43 pm | Permalink

          As all three main parties are determined to stay in the EU the “anti-EU majority” is effectively disenfranchised in general elections but in the European elections then they can vote UKIP with the expectation of coming top of the poll which I predict will happen next time.

    • Martyn
      Posted May 8, 2012 at 5:44 pm | Permalink


      Your last sentence is quite unfair to John, whose experience, common sense and communications abilities far outweigh those whom you suggest are using him for their own purposes – I doubt that they have the wit or ability to con someone as astute as John in the way you suggest and am not surprised that John finds your personal remark distasteful.

  18. Richard1
    Posted May 8, 2012 at 8:17 am | Permalink

    A new definition has entered the lexicon of BBC-speak over this weekend: 2 alternative economic policies are ‘austerity’ and ‘growth’. France for example under this terminology has voted for ‘growth’. Ed Balls uses the same defintions (Lord Leveson ought to be looking into connections between Mr Balls and other Labour figures and senior BBC economics & finance editors and journalists). ‘Growth’ in this usage means more borrowing and spending, although stangely its advocates are often also in favour of very high marginal rates of tax. As recent data and debates on this site have shown, there is one very clear statistical correlation for economic growth – small govt as a share of GDP and low tax rates.

    • uanime5
      Posted May 8, 2012 at 5:30 pm | Permalink

      “As recent data and debates on this site have shown, there is one very clear statistical correlation for economic growth – small govt as a share of GDP and low tax rates.”

      Care to explain why Germany and Sweden have been growing despite their large Government and high tax rates. Just because the wealthy want to pay less taxes doesn’t automatically mean it will lead to more economic growth.

      • Richard1
        Posted May 9, 2012 at 7:00 am | Permalink

        Both Germany and Sweden have run balanced budgets / surpluses providing stability and confidence whilst Labour here was running deficits. Germany has been a huge beneficiary of the Euro due to exceptional labour market productivity improvements as is extensively discussed every day in every newspaper. Sweden has done the same since the early 90s, with massive reforms in the labour markets, in welfare and in govt spending. BTW Sweden taxes dividends at the CGT rate, has no inheritance tax and has lifted a large number of poor people out of tax altogether. Looked at over 20 years both Sweden and Germany offer excellent examples of the success of free market / sound public finance policies. Check out a few other countries: Switzerland, Canada, Australia, the US, Singapore, Korea……and Zimbabwe.

  19. oldtimer
    Posted May 8, 2012 at 8:35 am | Permalink

    My impression, from reported news and interviews from Greece, is a reluctance on the part of the Greek political class to face up to the reality of their situation – at least in public. Many Greek voters seem to think they can have their cake and eat it too, that is stay in EZ and be bailed out again and again. Where will the leadership come from to dig Greece out of the mess that it is? If not a Eurocrat taking charge (no doubt with bodyguards) will it be the military again?

  20. Sue
    Posted May 8, 2012 at 9:01 am | Permalink

    “What part of “No” does the EU establishment not understand? Once again they do not get this democracy idea?”

    You are a fine one to talk about democracy.

    What part of NO and this idea of democracy do the coalition not understand.. over half the population now want out of the EU.

    Reply: I voted for a referendum on the issue.

    • Conrad Jones (Cheam)
      Posted May 8, 2012 at 3:05 pm | Permalink

      “I voted for a referendum on the issue”

      I wouldn’t do that if I were you Mr Redwood, otherwise we might all wake up to Lloyd Blankfein in the House of Commons answering Prime Minister’s Questions.

    • Tad Davison
      Posted May 8, 2012 at 4:38 pm | Permalink

      But we sure as hell didn’t get one, did we John?

      You’re lucky you had the chance. If only the people were given the same opportunity, but the ruling political elite weren’t going there!

      Oh no,no, no, reference to the people would never do! Couldn’t trust the blighters to get it right, and withdrawal might end all the perks and the cushy jobs.

      No matter that we pay an exorbitant amount to belong to the EU whilst families struggle to make ends meet because of things like higher fuel prices. And that the country is awash with EU nationals who take the jobs our young people should have.

      Our say on such things would be very nice, and as the late Lord Hailsham once said, ‘If we don’t give the people social reform, they’ll give us social revolution!’

      Only a fool would fail to heed those wise words. 68% stays ways is just for now, an indication of the level of disaffection they feel with mainstream politics.

      Tad Davison


    • sjb
      Posted May 8, 2012 at 8:16 pm | Permalink

      Sue wrote: […] over half the population now want out of the EU.

      Over half, eh? Then why did they not take the chance last Thursday to vote for UKIP?

      • APL
        Posted May 9, 2012 at 7:01 am | Permalink

        SJB: “Then why did they not take the chance last Thursday to vote for UKIP?”

        Perhaps they fell for continual drip drip of the BBC propaganda ‘UKIP, the far right party’.

        It has been noticed too, the chairman of the Tory party has started to tippie toe around that sort of political smear too.

  21. English Pensioner
    Posted May 8, 2012 at 9:29 am | Permalink

    My reaction is that the best solution would be for Germany to withdraw from the Euro.
    The other countries which seem to oppose the austerity measures to balance their budgets could them continue as usual and the value of the Euro would go down, just as the franc and the drachma did in the old days. Any other countries in the Euro who favour a strong currency would also presumably opt to revert to their old currency. Surely a far simpler solution, and probably less chaotic than Greece leaving the Euro, probably followed in turn by Italy and Spain.

  22. Chris
    Posted May 8, 2012 at 9:32 am | Permalink

    I understand that the leader of the party who got the second highest number of votes is looking to forming a government from a coalition of parties against austerity, and that if unsuccessful he is considering forming a new party, whichwould be a coalition of the anti austerity parties. Thus, as a “party”, rather than a grouping, it could claim the 50 extra seats which are automatically granted to the party with the highest number of votes. I suspect the EU will not permit this.

    • Denis Cooper
      Posted May 8, 2012 at 3:14 pm | Permalink

      I suspect that would only work if it had already stood as a new party at the election.

    • EJT
      Posted May 8, 2012 at 4:59 pm | Permalink

      If the new party was in place for the (probable?) election re-run in June, it’s difficult to see how this could be objected to.

    • uanime5
      Posted May 8, 2012 at 5:33 pm | Permalink

      The EU need only tell this group that no austerity = no bailout and they’ll soon drop this anti-austerity nonsense because Greece needs these bailouts.

  23. Atlas
    Posted May 8, 2012 at 10:15 am | Permalink

    I think it would not be incorrect to say that the Germans want to have their cake, eat it and yet still have their cake. Germany’s economic growth is all as a result of the falling value of the Euro helping non-EU exports. So it suits the Germans to squeeze the rest of Europe as it keeps the appearance of prosperity at home – nicely in time for elections. That the Greeks and others are suffering is second in Merkel’s mind to the German Ballot Box.

  24. Neil Craig
    Posted May 8, 2012 at 10:19 am | Permalink

    It is not just the euro. I think even Greece, which being one of the poorer countries gets a fair bit of sybsidy, should leave the Luddite regulatory quagmire that is the EU. Turkey across the water, is achieving the world average growth rate of 7% & there is no inherent reason why Greece can’t too.

    The same obviously applies, in spades, to Britain, which noticeably fails to be a net recipient of subsidy.

  25. rd
    Posted May 8, 2012 at 10:28 am | Permalink

    The one thing that Greek and French elections have proved is that the public reject austerity… and that their votes don’t matter a dam inside the prison of the euro.

  26. Leslie Singleton
    Posted May 8, 2012 at 10:46 am | Permalink

    Asking the people from their perspective to accept austerity, let alone more austerity, is demented–as well turkeys for Xmas or frogs whether to drain the pond. “Austerity” is a ghastly negative word that nobody is going to vote for, ever. If we were to susbstitute “Living within our means” that might (repeat might) get some sort of favourable response. There are so many simple things we do not understand. Thus do we have a clue, I mean one solitary clue, why say Switzerland is a success while Greece is a basket case? I have nothing against Switzerland, indeed worked there for a while, but of course it has no sea border and unless you like skiing or yodelling it is cold and in many ways no fun whereas Greece, if it has little else, has a marvellous climate and beaches and a history to kill for for tourists. Could it be that the Swiss feel engaged by reason of their continual referenda and in this modern high tech age why not? Please no wretched statistics.

  27. Denis Cooper
    Posted May 8, 2012 at 11:20 am | Permalink

    But if it’s a matter of democratic legitimacy as gauged by the numbers of votes cast for different parties, then whatever new government emerges in Greece will not have the democratic legitimacy to take Greece out of the euro.

    As far as I’m aware all of the more significant politicial parties, at least down to and including the Communists with 8.48% of the votes cast, campaigned on the basis that Greece should stay in the euro.

    In fact with a turnout of only 65%, with 35% deciding that voting would make no difference, and with 19% of those who did vote apparently choosing “no hope” parties, it could be argued that the new government has more democratic authority to abolish parliamentary elections in Greece than to take Greece out of the euro.

    I emphasise the numbers of votes cast rather than the numbers of seats won, because the Greeks have a rather weird solution to the problem of hung parliaments, which is to award 50 bonus seats to the leading party – hence the 18.85% share of the votes won by New Democracy translates to 108 seats, while the 16.78% share won by Syriza gives it only 52 seats:

    Of course it’s for the Greeks to decide on the design of their electoral system, and they could certainly criticise our system; but it seems to me that if the people vote for a hung parliament then they should get a hung parliament, not one which has been arbitrarily adjusted to give one of the parties an overall majority of seats.

    No doubt the Tories would have welcomed the award of 108 bonus MPs after the 2010 election, but I don’t think it’s an idea we should copy.

    • EJT
      Posted May 8, 2012 at 4:57 pm | Permalink

      There is also a heavy majority for anti-austerity parties, when you discount the 50 seat bonus. As Mr. Redwood says, the Greeks are squaring that circle with an optimistic view ( which maybe right, maybe wrong) of what they can get away with and still stay in the euro.

  28. MajorFrustration
    Posted May 8, 2012 at 12:02 pm | Permalink

    “People voted as they did because they think the Euro dream has become a nighmare” Lets hope Dave gets the message, after all he has lost 400 plus seats in Local Governemnt elections- must be worth it just to touch base with reality. Time is running out Dave.
    If you called and election with David Davis as head of the Tory party he would get in with a landslide.

  29. Arunas
    Posted May 8, 2012 at 12:33 pm | Permalink

    “Once Greece is out of the Euro…” the German submarine and other arms contracts (French and German) will be re-written in drahma. Siemens and Merkel will have none of this, or there will be a war.
    Germans and the French are also salivating at the riches of Aegean sea shelf (but so are the US)….

  30. rose
    Posted May 8, 2012 at 1:01 pm | Permalink

    De Gaulle must be turning in his grave. The first thing that happens to the President Elect is that even before he has been inaugurated, or appointed a German speaking PM, he is summoned to Berlin.

    • Denis Cooper
      Posted May 8, 2012 at 3:11 pm | Permalink

      Surely it’s not unreasonable for Angela, Empress of Europe, to expect the new French President to visit her court and pay homage at the earliest opportunity.

  31. APL
    Posted May 8, 2012 at 1:09 pm | Permalink

    JR: “EU austerity …. Greek austerity”

    Simply means, the last twenty year bonanza party of borrowing and exceeding their income has come to an end. The sooner the Greeks learn to live within their income, the better for them.

    Now, closer to home.

    UK austerity simply means, the last fifty year bonanza party of borrowing and exceeding our income has come to an end. The sooner the British political class realize that and start to take measures to address the problem, the less catastrophic the end scenario will be.

  32. Conrad Jones (Cheam)
    Posted May 8, 2012 at 1:11 pm | Permalink

    Mr Redwood,

    I absolutely agree with you – austerity isn’t working because it reduces Government spending at a time when the Private Sector is hanging on to it’s cash, this casues money to be more scarce, making the recession worse.

    Taxation should be shifted to non-productive activites – such as Housing and Land Price increases. Income tax should be abolished as it attacks the very thing you have said we need – greater productivity. Or even the same productivity we had thirty years ago.

    Greeks are often critised for not liking to pay Taxes. Guess what – not many UK or US Corporations like paying Taxes either, that’s why most of them have offshore registered offices and subsidiary Companies based offshore – where taxes are slight if non-existent. Secrecy in these Offshore Havens protects outside tax payments while enforcing local residents to cough up their taxes. This leaves the public to pick up the tab.

    Greece has been attacked twice:
    1. Excessive Lending by Private Banks inflating the money supply
    2. Corporations and Banks operating in Greece (just like every other Country) not paying their fair share of Income and Corporation Taxes.

    UKUNCUT has brought to the attention of many how large corporations (some are High Street names), have “AVOIDED” paying tax due to increase “Tax Efficiency”.

    Getting the Drachma back assumes that the Greek Government will have some control over it – you have ignored the fact that the Private Banking sector will still be controlling the money supply through Bank Lending. Just like in the UK.

    Mr Redwood, I agree that the Drachma will be better than the EURO but can you state exactly how the Grek Government will be in a better situation if they become reliant on local Greek Banks to provide their money supply for them (at interest)?

    The UK is still paying over 43 billion pounds on interest payments alone, just servicing money it borrowed in the past. If the UK paid off this debt, the money supply would shrink. If it doesn’t, our national debt increases and interest payments increase . “Some Catch that Catch 22”

    Lip service has been given to cracking down on Tax Havens but nothing has changed.

    The way money is created is hardly ever discussed as many economists don’t understand the role of credit creation in the economy.

    When the Greek Government did suggest having a referendum – giving democracy a chance; they were quickly replaced by an ex-Goldman Sachs employee. An overthrow of a democratic Government by a Banking Dictatorship, leeching off the population like an Alien Invader.

  33. javelin
    Posted May 8, 2012 at 1:14 pm | Permalink

    Excellent article …

    “Show Me the ‘Savage’ Spending Cuts in Europe, Please”

  34. Acorn
    Posted May 8, 2012 at 2:52 pm | Permalink

    The easiest for Greece is to move to an intermediate currency before going back to a sovereign drachma. The best bet would be a currency attached to a very large economy, with some generous politicians; capable of supporting busted Greek banks. The US dollar is the obvious candidate.

    As suggested elsewhere, a $ for one Euro of Greek debt will give a 30% haircut for starters.

  35. Antisthenes
    Posted May 8, 2012 at 3:22 pm | Permalink

    I am not sure this is the right place to make a complaint. However it appears that my comments on your blog remain in purgatory (Your comment is awaiting moderation) more than anyone else’s I would appreciate knowing why. I can take criticism and am not easily offended so you may be candid.

    Reply: Anything long, with citations to sites and sources I dom not know, or with allegations about individuals and companies that migth be libellous are likely to take time to sort out.

    • Antisthenes
      Posted May 9, 2012 at 7:47 pm | Permalink

      My previous comment does not as far as I can see fall within any of those categories except perhaps a bit long but then many others are much longer. If you had said that my comments were a load of rambling tosh then that would have been more acceptable although only time will prove if they are or not. Then others can judge them if they ever get to read them.

  36. Barbara Stevens
    Posted May 8, 2012 at 4:18 pm | Permalink

    John, Greece is nearly bankrupt and the IMF will have to step in to save the nation, I’m worried about our involvement and the amount we appear to be making available. If more money is given to Greece we are then supporting a currancy not a nation, and I object to that strongly. Its obvious from the news that no party can form a government, they are now with the smaller parties, one who has Nazi tendancies. They will miss the next bail out for sure if they don’t have a government. How they will do that I have no idea, some want to rule but do not have the numbers to do so.
    Greece would be better off out of the Eurozone, but of course she has more than the bail outs, she as other benefits that go with being a member, all this will cease once she comes out. However, she could set her own rates and begin the process of getting growth again, slow, but its the only way forward. Nigel Farage said this some months ago, and warned the EU parliament it was crushing a nation, who are proud and had accepted democracy after years of militery rule. There lies the problem, France will face as well as Greece, and Spain will follow and Portugal; the freedom to set their own rates. Its obvious its not working and they are destroying nations with the dogmatic approach to ruling. I just hope more Conservative MPs come out and make this government of ours see the light, we want out, and its a disgrace that we have been denied that right to choose.

  37. NickW
    Posted May 8, 2012 at 4:18 pm | Permalink

    An interesting article in Der Spiegel, (in English) reveals that the German politicians driving the Euro project forward were perfectly well aware of the inherent problems but chose to ignore them.

    The suggestion at the end of the Article is that the German Government is becoming reconciled to handing over its Fiscal Sovereignty to Europe. I wonder if the German people agree with that proposition?

    How would you rate the European government for competence, on its record to date?

    • NickW
      Posted May 8, 2012 at 5:24 pm | Permalink

      Given the way that decisions are made in Europe this recipe will result in the systematic looting of all Germany’s wealth.

      If 10 Countries want Germany’s money and Germany is the only member wishing to keep the fruits of their own labour; Germany is outvoted.

      This is basically a Socialist Europe determined to reduce everybody to the same state of poverty and misery.

      • uanime5
        Posted May 9, 2012 at 3:52 pm | Permalink

        Given that some decision require the consensus of all member states expect Germany to keep its wealth.

  38. uanime5
    Posted May 8, 2012 at 5:16 pm | Permalink

    John it’s a bit rich for you to criticise the Greek Coalition for only having a third of the votes when most Government after WW2 in the UK have been rejected by two thirds of the electorate.

    I can’t recall any party in Greece campaigning to leave the Euro. John can you tell us which Greek parties were promising to leave the Euro and what percentage of the votes they got so it’s clear how many of the Greeks wanted to leave the Euro. Also who were these Greek parties that opposed EU austerity and what percentage of the votes did they get?

    Perhaps the Greeks could have a referendum on the Euro where they choose between keeping the Euro and austerity, or leaving the Euro and austerity. Austerity cannot be avoided by not using the Euro, as the UK has demonstrated many times.

  39. Kenneth
    Posted May 8, 2012 at 5:20 pm | Permalink

    I suspect the balance view in the German government is a preference for Greece and other troubled countries to exit the Euro but stay in the eu quango.

    This will force the burden of financial responsibility away from Germany and onto the wider world i.e. IMF/UK/eu quango etc.

    • uanime5
      Posted May 9, 2012 at 3:50 pm | Permalink

      If these countries left the EU, which isn’t a quango, then the EU wouldn’t have to pay to fix them. This would be good news for Germany as they contribute the most to the EU.

  40. Alte Fritz
    Posted May 8, 2012 at 6:52 pm | Permalink

    A few days ago, you remarked, with some weariness, that readers of the blog are quick to voice lack of confidence in today’s politicians. The Greek tragedy makes me wonder about the electorate.

    The desperate need for Greece to leave the Euro is hardly rocket science, yet it has been consistently and, presumably, accurately reported that a clear majority of Greeks wish to retain the Euro.

    The readiness of electorates everywhere to want the cake and h’penny is remarkable and depressing.

  41. peter
    Posted May 8, 2012 at 6:53 pm | Permalink

    You said it all – “The “wise heads” of the EU establishment think the Greek New Democracy (Conservative light) party should join forces with Pasok (Socialist light) party” – How can these wise old heads think that they have the right to say who goes into government in a sovereign state?

    This is all heading in a dangerous direction and the UK needs to start making more things that countries outside the EZ will buy in large quantities ASAP

    German austerity is only going to create poverty for years to come – the germans need to accept that the EZ model was setup for them so they should be merging their economy with others who wish to stay in the Euro or accept that struggling EZ countries need to hit that exit button ASAP

  42. Andy Man
    Posted May 8, 2012 at 7:30 pm | Permalink

    You are quite right, Mr Redwood, they should do as you say. it’s the correct and logical thing to do. Sadly logic plays little part in politics and none of what you suggest will happen.

  43. lojolondon
    Posted May 8, 2012 at 7:43 pm | Permalink

    Fortunately, John, the Greeks and the Europeans are united – they both want Greece in the Euro. I say fortunately because if Greece left the Euro 4 years ago, their problems would be long gone by now, the Drachma would be established, and devalued, and Greece would be the best value holidays in Europe.
    Instead, they are clinging to each other, and, like a mountain-climber hanging off a cliff, shackled to his fellow climbers, the problem gets worse the longer they try to save him, as the whole team is steadily weakening.
    Europe clings to the dream, the better chance that the whole team fall into the Abyss.
    It couldn’t happen to a nicer bunch of Communists.

  44. zorro
    Posted May 8, 2012 at 8:44 pm | Permalink

    Apart from what we have all mentioned as possibilities with regards to the Euro in the near future, what would you regard as the most realistic scenario for the Euro/EU over the next year? Using some horizon scanning, are there any other realistic possibilities that we have not considered?

    On the social/immigration angle, I think that there is a real possibility of an even larger influx of young Europeans coming to the UK in search of employment and I think that our juxtaposed border controls at Calais/Paris may come under some pressure from the French for nationalistic reasons.


    Reply I would have thought Greece will leave the Euro over the next twelve months, but there still remains huge political will to keep her in. Many of the southern young people will not come to the UK. They live cheaply at home with their parents, help on family smallholdings or with informal family businesses etc. The official unemployment figures overstate the problems, great though they are, as there is a strong family and informal economy in some of these places.

    • zorro
      Posted May 9, 2012 at 7:18 pm | Permalink

      Thanks John, I agree that Greece looks most likely to go now, but I think that Spain will be the killer as they too big to bale out. The signs from Spain are very worrying and I doubt that it is sustainable for even 12 months. They will have no choice but to leave the Euro mechanism….even with the political pressure.

      What you say about Spanish/Greek/Portuguese youth living with families in small businesses used to be true but not so much now. The same could have been said of Poland in that they have a large agricultural sector but it has not stopped almost a million coming to the UK. I suspect that living standards may drop so sharply in the Latin countries as to encourage a significant amount of migration of their younger people.


  45. Bernard Otway
    Posted May 9, 2012 at 12:03 am | Permalink

    Hello I thought I would try ONE WORD.
    Perhaps then I might not run the risk of censorship without any acknowledgement
    I say again HELLO

  46. waramess
    Posted May 9, 2012 at 3:44 pm | Permalink

    The sooner Greece gets out of this wreched German club the better; but why limit it to Greece? We will all be better out of their club.

    Let them put up tariffs to show us how much we need them. Frankly the UK and the rest will be better off out, rather than paying a kings ransom to belong to a club that is intent on impoverishing them.

  47. Bazman
    Posted May 9, 2012 at 5:02 pm | Permalink

    Many of the Greeks leaving might be engineers coming to Britain to find work and many of the British leaving Britain might also be engineers leaving for Germany because of the poor wages and conditions offered by employers here. Finally giving Europe the freedom of movement of labour that has so far not materialised and finally got the race to the bottom they always wanted and ironically supplied by the EU with their lefty ideas. Ram it.

    • Bazman
      Posted May 11, 2012 at 9:38 pm | Permalink

      We will be needing your religious opinion on this one lifelogic and like someone else, have been taking your time in coming.

  • 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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