How patient are the Germans?

 

            Yesterday I attended a fascinating breakfast seminar about the Euro, where we heard the Greek, Spanish and German viewpoints from a panel of experts.  The German speaker  prompted me to think more about the evolution of the German position.

            Germany is being told that a fiscal union and a banking union are being constructed to protect German financial interests. Worried by the prospect that too  much German tax revenue and earnings will be needed to bail out dangerous banks and to pay the bills for excessive debts and deficits in other member states, Germany argues that the Euro area will not become a transfer union. They claim they can have a single currency where each member state has to be responsible for controlling its own debts and deficits without common funding. They are assured that the new banking union will prevent future excesses by banks within the Euro system, so a scheme for mutual deposit protection and financial support will be fair and affordable. They want to believe that you can have a fairly integrated economic government to reassure German taxpayers, without having to send large sums from rich areas to poor areas to make it work.

               West Germany has long experience of the true cost of establishing a premature currency union. The East German union of the 1990s proved to be very expensive for West German taxpayers, as East Germany struggled to catch up with West German living standards. Many East Germans migrated to get better jobs in West Germany, frustrated by the lack of economic progress near to home. This experience is leading many German voters to worry about the extent to which Germany is now going to be committed to financing the large areas of Euroland that are deep in recession and deficit.

                  Mrs Merkel seeks to assure her voters that Germany will not undertake the same massive transfers of cash and finance to the southern states of Euroland in the way they did to help fellow Germans in East Germany. She talks tough at home. Greece and the others have to tighten their belts and borrow less.  However, Germany is already committed to substantial financing of the rest of the Euro zone. German surpluses deposited at the European Central Bank, allied to Germany’s payments and promises to the various bail out funds, mean Germany already has at risk or has promised far more than E 1 trillion of money for weaker states and banks.

                  Some Germans are now thinking the unthinkable.  They ask whether Germany herself may have to pull out of the Euro to prevent the costs spiralling out of control. The mainstream still thinks it is Germany’s destiny to be the voice for prudence and austerity within the Euro area, and to send more money after the money already spent in trying to make it work.

                    Meanwhile, Mrs Merkel on a visit to London warned the UK that it would not be comfortable outside the EU. I suspect such a warning is counter productive.  Many UK voters hearing that would  be more inclined to become more Eurosceptic as a result, rather than being intimidated by the talk.  It is difficult to know what she really means by it. Countries like Switzerland and Norway are the richest in Europe whilst not being members of the EU. The UK is a far larger country than either of those, with a wider range of global interests. If none of the UK’s legitimate fears and disagreements with the centralising EU are to be dealt with or taken seriously, why would the UK wish to stay locked into a club which clearly does not have sympathy for our views?  On the continent it may be about a union, about the mutualisation of various tasks and liabilities, about solidarity and common tasks.  In the UK it is quite simply about whether we can once again  be self governing or not.

 

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

122 Comments

  1. Brian Taylor
    Posted November 21, 2012 at 6:26 am | Permalink

    I wonder how many Greman voters think they could manage as a country outside the EU.
    It seems that sometimes the voters have more faith in there country than the MPs and civil servants or is an easy life they like!!!!

    • Jerry
      Posted November 21, 2012 at 9:07 am | Permalink

      The might of the German manufacturing and economy is such that Germany could easily “manage” outside of the EU, do you really think that people buy Mercedes-Benz, BMW, Siemens, BASF or BOSCH etc. etc. because they are from the EU or because they are excellently engineered products?…

      • Nicol Sinclair
        Posted November 21, 2012 at 2:01 pm | Permalink

        Jerry: “because they are excellently engineered products?…”

        Indeed. And they WORK unlike many of the Chinese products that function for about a fortnight, following which one has to replace the item.

        • Lindsay McDougall
          Posted November 21, 2012 at 9:22 pm | Permalink

          And that’s why rich Chinese buy so many BMWs. Soon they will be able to get better value for money. Tata have agreed to a Chinese factory making Jaguars. Good for Britsh prestige but not for British employment. I’ll be interested to see what the quality is. The Chinese will probably hire a few Brits for critical roles in the production process; they’ve done it before.

          • Jerry
            Posted November 22, 2012 at 9:11 am | Permalink

            @Lindsay McDougall: All very true, and let’s not decide who sold off the ‘family technology’ in the first place (back in 1988), don’t blame it all on Tata. It was obvious even then, to anyone who knew anything about the workings of the international motor industry, that it was only going to end in tears for the UK.

            Strange how the French motor industry also went through the same industrial pain, both rubbish designs and shop-floor, as their UK competitors yet both Renault and the PSA group have a thriving market share even if not in 100% good health.

    • Robbo
      Posted November 21, 2012 at 11:28 am | Permalink

      Switzerland can unpeg from the Euro as and when it suits Switzerland, just as UK was able to exit the ERM when necessary.

  2. lifelogic
    Posted November 21, 2012 at 6:35 am | Permalink

    Indeed how will the Germans react and the German politics work when push comes to shove?

    In the UK it is, as you say, quite simply about whether we can once again be self governing or not. Is UK democracy and Westminster government still real in any sense? They do not seem to be able to have a sensible energy policy, to control the borders, to evict criminals, to have sensible tax regimes, to fix insurance premiums based on real risk, to have sensible rubbish systems, to fish our waters as we see fit ……….. What is the point in voting for people who have so little power to do anything – they are, so often, just actors telling lies for expenses and good remuneration.

  3. Daniel Hewson
    Posted November 21, 2012 at 6:53 am | Permalink

    Merkal is wrong, we wouldn’t be on our own outside the EU, we’re in NATO, the OECD, G7, G8, G20, NATO, UN, Commonwealth, WTO and on the UN security council, something Germany isn’t in.

    • Alan
      Posted November 21, 2012 at 9:37 am | Permalink

      Yes, but if we want to be ‘self-governing’ we might wish leave all these. It could be argued that they all constrain our ability to act independently.

      I think it is in the nature of the modern world that nations must collaborate and act with one another. That doesn’t make them any less self-governing in my view.

      If we are members of all these organisations that restrict our independence then the argument that we must not stay in the EU because it constrains our independence loses its potency.

      • zorro
        Posted November 21, 2012 at 2:24 pm | Permalink

        None of those organisations to which we belong constrain us in any way, shape or form like what the EU does……..what percentage of our legislation is a direct result of our membership of those organisations? What percentage of laws passed withi Westminster have their origin as a result of EU bureaucracy?

        zorro

        • martyn
          Posted November 22, 2012 at 11:30 am | Permalink

          Well have you heard of the euro fighter?

  4. alan jutson
    Posted November 21, 2012 at 6:53 am | Permalink

    We simply have to face a number of facts with regard to the EU.

    There are now two divisions within the EU, those who are the members of the Euro, and those who are not.

    Those who are members of the euro are in the first division, and given that there are more Country’s in the Euro than not, the greater power and influence for the future is within those Country’s.

    Those who are not in the Euro are in the second division, (simply because they are less involved in overall discussions) and given that there are fewer Country’s in this position, their influence for the future will be less.

    Germany are the powerhouse of the Euro, and will not continue to fund everyone else without seeking some important financial controls, simply because the German people will not put up forever, with them having to fund everyone else.

    Given we are clearly in division two, and will have less influence over future EU policy, our future is out.

    At the moment we are trying to stay in division one by bribing them with more and more of our money, in compensation for not being in the Euro, in the vain hope of more influence.
    This is a stupid and short term fiasco that is unsustainable, and it simply will not work for the long term.

    Yes they take our money, who would refuse if we are stupid enough to pay more than we need, for some services that we cannot access (bailouts), but when it comes to the crunch and votes on policy, we are simply outnumbered and out voted by those who have one thing in common (the Euro), and they put themselves and their needs first.

    Time for us to take or money and ourselves out, and let them get on with it.

    • Disaffected
      Posted November 21, 2012 at 9:05 am | Permalink

      Spot on Alan JR is also correct.

    • lifelogic
      Posted November 21, 2012 at 11:04 am | Permalink

      Indeed.

    • zorro
      Posted November 21, 2012 at 2:26 pm | Permalink

      The German people will put up with it as long as the politicians can show that they will effectively control the economic hinterland within Europe…..That’s my ‘beach hut’ theory grown large…..

      zorro

    • Mike Stallard
      Posted November 21, 2012 at 4:16 pm | Permalink

      Well said!

    • History Fanatic
      Posted November 21, 2012 at 7:48 pm | Permalink

      Your comment is slightly puzzling. Apart from the fact that you can’t spell, there are gross errors. Also what does the thrust of your argument have to do with the essential problem of our relationship with the EU? Please explain. I’m rather baffled!

  5. Gary
    Posted November 21, 2012 at 7:02 am | Permalink

    Switzerland is as good as in the euro. It has pegged the franc to the euro.

    A currency union imposes currency discipline and stops individual govts inflating. What we need is currency discipline and self government within the euro.

    • Jerry
      Posted November 21, 2012 at 9:24 am | Permalink

      Gary you forgot to mention one important point, whilst Switzerland might well have pegged their CHF to the Euro they still have the freedom to un-peg it or peg to another currency, say the USD or nearer to home the GBP or NOK.

      What we need is a free trade agreement but individual governments and currencies, strange how the RotW manage to trade with each other but not 20 odd european nations!

      • Gary
        Posted November 21, 2012 at 12:32 pm | Permalink

        Floating currencies are an abomination. When the currency rate(price) is fluctuating then the prices of goods and services, as determined by supply and demand of those goods and service, are masked. So market participants are unable to discover , without becoming currency traders, whether a price is rising due to increased demand of the goods or services or decreased supply of the goods and services and hence invest accordingly, or if the goods and services prices are in fact constant but the currency price is fluctuating.

        This causes companies to waste energy and expertise speculating in currencies, it causes discrepancies of supply and demand of goods and services to go unaddressed, not least productive problems. The entire economy becomes a currency rate casino.

        Sovereign control of the currency is code for “we reserve the right to inflate and destroy our own productive sector for short term bribes so that the electorate will vote for us and our bankers can reap extraordinary profits”

        Currency union is not bad, it is good. Political union is bad. We should be in the euro but on condition that we retain our own govt.

        • Jerry
          Posted November 21, 2012 at 10:22 pm | Permalink

          @Garry: “Floating currencies are an abomination.

          You make a very good case for a world government, and one currency! Funnily though almost every other country [1] outside of the EU manages with either floating or (voluntarily) pegged currencies, only the member states of the EU seem to have a problem, so really the problem is the EU and not floating currencies!

          [1] the exceptions are mostly pegged to a currency of choice

          Currency union is not bad, it is good. Political union is bad. We should be in the euro but on condition that we retain our own govt.

          Except that you can’t have one without the other, it is not the borrowing that have caused the problems in the PIIGS (remember the UK has as large debts), the problem is that the PIIGS are locked into a currency they can’t alter to suit their needs – de-value in other words.

          • Gary
            Posted November 22, 2012 at 10:11 am | Permalink

            The eu countries are being forced to restructure and become more productive because they cannot just print currency. That is a good thing. It looks messy, it is messy, but if they come through it they will thrive.

            We, on the other hand, are masking our structural problems, ignoring our productive problems and storing up big trouble in the future by printing money.

            You can have currency union(fixed exchange rate currencies) without political union, Bretton Woods was one example.

          • Jerry
            Posted November 22, 2012 at 2:33 pm | Permalink

            @Gary: Any country that needs exchange rate stability can peg their currency, they don’t need to change their currency into something that they have no control over. An interest rate that is good for France or Germany might not be good to the UK and is certainly not good for many of the PIIGS – the only solution to this is full federalism (your debt is my debt, my debt is your debt).

    • lifelogic
      Posted November 21, 2012 at 11:09 am | Permalink

      We shall see how long the Euro/Swiss franc rate stays fairly stable. I think I would prefer to hold Swiss francs rather than EUROS at the moment.

    • Denis Cooper
      Posted November 21, 2012 at 12:06 pm | Permalink

      As I understand, while some refer to it as a peg in fact it’s not so much a peg as a cap on the value of the franc against the euro:

      http://www.guardian.co.uk/business/2011/sep/06/switzerland-pegs-swiss-franc-euro

      “The SNB pledged to enforce a “substantial and sustained weakening of the Swiss franc”, adding that it might move to an even lower exchange rate against the euro if needed.”

    • Roy Grainger
      Posted November 21, 2012 at 12:08 pm | Permalink

      “Switzerland is as good as in the euro. It has pegged the franc to the euro. A currency union imposes currency discipline and stops individual govts inflating. What we need is currency discipline and self government within the euro.”

      The reason Switzerland has temporarily pegged the franc to the euro is to prevent a massive influx of safe-haven funds pushing the franc’s value to uncompetitive levels. This is hardly “currency discipline”.

      On the other hand, as has been demonstrated by Iceland, the ability to devalue one’s own currency is a very effective way to recover from the current crisis. “Currency discipline” isn’t doing Greece much good.

    • graham
      Posted November 21, 2012 at 8:08 pm | Permalink

      Switzerland is very happy to peg to a weak currency. They tried to devalue the Swissie for donkeys years without success, now they don’t have that worry.

      Germany is very happy in a weak currency as well – it is the foundation of their success. They are part of the cause of the Euro problem, because they are so much stronger than any of the other countries. The EU will never get its economies in line and the Euro will crash as presently constructed. Rather than Greece leave the Euro, it should be the Germans who leave. The Mark would rocket, trimming Germany’s sails and the euro would tank, letting all the weak ones effectively devalue and reach a truer position and make them more competitive. Of course Germany doesn’t want this – it likes things fine the way they are, if they can just get those pesky southerners to live in poverty while they rake it all in. They will have to leave, sooner or later, no doubt about it. Whether the Euro remains or explodes is another matter.

  6. Peter van Leeuwen
    Posted November 21, 2012 at 8:05 am | Permalink

    Although I cannot construe Mrs. Merkel’s words as intimidating, I’m intrigued how different people from Germany and Spain think from some British. How come? Then I realised that it was only a decade before I was borne that Britain still held on to ruling 25% of world population, that still shrinking proportion now down to less than 1%. While my life was embedded in a continent, coming together in a peaceful, supranational manner, in which a voluntary club of 6, expanded to 27, and new applicants queuing up, a patriotic British babyboomer would have had to live through the agony of imperial decline (1945-1997). Should I (we) not have more understanding for that? Would that explain why the British tend to bring up their glorious past in any debate over such issues as the EU? Maybe we should respect the British more for needing time (decades?) to come to terms with their changed situation, that one day it might become “just another country”. Although most North Europeans would want to keep the UK engaged with the EU, we should respect its right to make its own mistakes and accept that.

    Reply That’s very sporting of you. Most of us just want the Germans and French to leave us alone, instead of trying to govern us from the continent. We are happy to trade with them and do other things by mutual agreement where there is mutual benefit, but we do not fit easily into an EU state and have no wish to be dragged further in.

    • Brian Tomkinson
      Posted November 21, 2012 at 9:09 am | Permalink

      Peter,
      How patronising! You are happy to be a citizen of a country called Europe and be goverened by it. You are happy to let people over whom you will have no effective democratic control make your laws and control your economy. We reject all of those impositions and it is nothing to do with empire, it is the belief in our own self determination.

      • Peter van Leeuwen
        Posted November 21, 2012 at 12:54 pm | Permalink

        @Brian Tomkinson: Although I like to tease occasionally, I don’t see my reaction as patronizing at all and it wasn’t about democratic control. I do have democratic control over the directly elected MEPs, and over the ministers and prime-ministers that do our negotiations in EU councils. On Dutch politics I might actually have far more democratic control than you over British ones, although I’m not proud of that (we had 5 national elections over the last 10 years). Your self-determination may not be as strong as you perceive, when you pencil in the might of special interest groups in your country like The City. And also, I’m not all against your self-determination.

        • Lindsay McDougall
          Posted November 21, 2012 at 9:27 pm | Permalink

          But there’s a built in conflict in your country’s situation. When Dutch MEPs disgree with Dutch MPs, who holds sway? Don’t tell me it’s the good old unelected European Commission. The UK in theory has the same problem; that is why we elect UKIP MEPs.

          • Peter van Leeuwen
            Posted November 22, 2012 at 9:07 am | Permalink

            @Lindsay McDougall: 11 different parties – 11 different EU policies. MEPs would rarely deviate from their Dutch party, although it does happen occasionally. They have (to take) their responsibility (We don’t have “whips”)

    • martyn
      Posted November 21, 2012 at 9:27 am | Permalink

      Peter: the reply is absurd. I am sorry you have to read it. “most of us want the Germans and French to leave us alone”. It tells you everything. The words playground and inane come to mind.

      • Brian Tomkinson
        Posted November 21, 2012 at 12:04 pm | Permalink

        martyn,
        It is you who is being childish, or something more sinister, by editing our host’s sentence and then trying to codemn it. Presumably you have nothing constructive to say?

      • Jerry
        Posted November 21, 2012 at 1:48 pm | Permalink

        @martyn: Why is the wish for self-determination “absurd”, do you really have such a low regard for not only your own ability to decide how this country is run but think that everyone is like you. Some of us still have the ability to think for ourselves thanks!

    • Jerry
      Posted November 21, 2012 at 9:36 am | Permalink

      @PvR: What you need to ask yourself is, not how many countries the UK still wish to rule over but this, how many countries in the world have English as their first [1] language? Surely it is a sign of maturity that the “mother land” should allow her fledglings the freedoms to fly, rather than ever more desperately attempt to keep them in the nest and if at all possible under her wing?! Perhaps it is because the British came to this maturity some 65 years ago that we have our current disdain for those like the EU who wish to keep their ‘brood’ in the nest and under the wing.

      [1] or use English as an alternative national language, as I believe even the Dutch do

      • Peter van Leeuwen
        Posted November 21, 2012 at 1:11 pm | Permalink

        @Jerry: “allow her fledglings the freedoms to fly” is a rather skewed be it creative reading of your recent history, but my country may be no better when describing its colonial past. A Dutchman would say that the Dutch just traded and didn’t force their language and culture on all the natives.
        But let me acknowledge that it’s great that English is an ever expanding global language. I could envy Erasmus, who in his days could travel Europe and use Latin everywhere, maybe one day I’ll be able to use just English in any country I’ll travel to (mind you, I’ve still learned as many languages as your Nick Clegg because it is the way to understand other people’s culture). As far as the EU is concerned, you know that countries are queuing up to become a member, and only one (Greenland) has chosen to leave. It is now simpler than ever with the article 50 in the Lisbon Treaty.

    • backofanenvelope
      Posted November 21, 2012 at 9:49 am | Permalink

      As you say Mr Redwood, very sporting of you Peter. Of course, we might bring up our glorious past because it was glorious. Unlike, say, the German past.

      • Peter van Leeuwen
        Posted November 21, 2012 at 1:12 pm | Permalink

        @backofanenvelope: Very true, if done in moderation, nobody would mind.

    • Rob
      Posted November 21, 2012 at 10:14 am | Permalink

      I was born long after the Empire was history, and I can assure you that I couldn’t care less about it. Neither does any other eurosceptic I know. You may as well fixate on WW1.

      Yet I want out of the EU. I consider the EU to be a foreign government, as many other Brits do. I have zero sense of inclusion, it’s not /my/ government, and it’s not welcome. Frankly I couldn’t care less about influence, or even economics – self determination is the cornerstone of proper governance. Even if the UK was materially worse off leaving I would still want to leave – not that I believe that we would be.

      This despite the fact that the UK has been part of the EU for my whole life, and I’ve travelled around Europe quite a lot. Maybe the island mentality is to blame? Who knows. Who cares. I don’t like being governed by what is to me an alien government though, that’s the bottom line.

      • Peter van Leeuwen
        Posted November 21, 2012 at 1:33 pm | Permalink

        @Rob: Your Prince Charles announced 1997 as the end of the British Empire so you could be very young indeed! For you, like others in this blog, “self-determination” is the most important criterion. I can imagine that. It may be strange for you to imagine that if I had my way, I’d be (self) determined to live in a peaceful European family of peoples in ever closer union. I’d really really like that. It doesn’t homogenize cultures, if anything they tend to become more visible in their variety. It is also the principle of the non-military approach and the respect for human rights (read the Copenhagen criteria). How could I be so “alien” to myself that I wouldn’t want this supranational European structure, co-founded by us, where “war” and “dispute” is settled at the conference table only. I’ll respect it if Britain wants to leave the EU, although my very extensive British family in law would all be much against that. So let’s wait and see.

        Reply A majority of UK people would rather leave than stay on current terms or be dragooned into ever closer union.

        • Brian Tomkinson
          Posted November 21, 2012 at 8:45 pm | Permalink

          Peter,
          Why confine yourself to Europe? Why not live in a peaceful World family of peoples in ever closer union? Or perhaps your next goal after taking over Europe is world government. Incidentally, did you support the so-called Arab spring and the collapse of the USSR? If so, why?

        • Lindsay McDougall
          Posted November 21, 2012 at 9:46 pm | Permalink

          The British Empire effectively ended in 1956, when Eisenhower and Dulles stuffed us out of sight at Suez. If you are looking for an American friend of the UK, treasure the name Casper Weinberger. More or less single handedly he ensured that the US supported us during the Falklands war.

          Amen to JR’s reply. Norway’s deal is preferable to being a province in a European Superstate. Just read or listen to Angela Merkel’s words. It’s not as if she’s disguising her ambitions for Germany.

    • Peter van Leeuwen
      Posted November 21, 2012 at 10:50 am | Permalink

      @Mr Redwood: in the Europe of variable cooperation and integration that I see emerging, there must be a way to keep the UK engaged to its own satisfaction. I’m pretty convinced that some à la carte solution will be negotiated. However, the eurozone issues are the most urgent now, and solving them will still take years. As long as a “spanner in the works” impression can be avoided, Britain will continue to have friends in Europe.

      • Denis Cooper
        Posted November 21, 2012 at 12:25 pm | Permalink

        Peter, you cannot have a “Europe of variable cooperation and integration” based on treaties which commit countries to an unremitting, unlimited and largely uncontrollable process of “ever closer union”.

        While that is still the paramount obligation in the EU treaties, any “variable cooperation and integration” can only be a temporary transitional state before all countries accept all EU norms and eventually cease to exist as sovereign countries in any meaningful sense.

        As for eurozone problems being most urgent now, I see no reason why we should set aside our own national requirements so that other countries can attempt to deal with problems which are very largely of their own making and which are being ruthlessly exploited to further a process of “ever closer union” which is inimical to our long term national interests.

        On the contrary, the UK government should be in there demanding radical changes in our interests as the price for co-operating on radical treaty changes demanded by other countries, and it should have started on that back in 2010.

        As it is, our Parliament has just approved a radical EU treaty change demanded by Merkel and conceded by Cameron on March 25th 2011 without asking for anything substantive in return:

        http://www.legislation.gov.uk/ukpga/2012/15/pdfs/ukpga_20120015_en.pdf

        “European Union (Approval of Treaty Amendment Decision) Act 2012″

        • Peter van Leeuwen
          Posted November 21, 2012 at 10:19 pm | Permalink

          @Denis Cooper: I value your comments but partly disagree and partly meant it differently from how you interpreted my reaction.
          This time, I meant Europe as wider than just the EU: Schengen is wider than the EU, so is the European Convention. For clarity, google for “EFTA wiki” and look at the Euler diagram at the end of that article. All these ellipses are treaties. While the EU treaties, among other goals, “is determined to lay the foundations of an ever-closer union among the peoples of Europe” (NB “peoples” isn’t the same as “countries”, as we discussed before), there is now the principle of enhanced cooperation among a subset of EU members (on patent, divorce, FTT, etc.) which also leads to a multi degrees of cooperation. I could well imagine an extra future ellipse to describe the future unique UK relationship, although some British prefer their country to be in the dark-blue area (“freedom at last!”) in which there should have been the Belarus flag already.

          “cease to exist as sovereign countries in any meaningful sense” I see as typical eurosceptic waffle, based on not understanding the nature of supranational democracy.

          I’m not suggesting you set aside your national requirements, just that you’ll achieve more of your country’s interests by being sensitive, strategic and diplomatic. When I read in Dutch newspapers that one month ago, your minister of finance actually had to be shut up by the Luxembourg chairman for his arrogant behaviour, I do wonder what happened to these famous British diplomatic skills. Making enemies and fuelling anti-UK resentment is not in your national interest believe me.

          Even the quid-pro-quo the UK, according to you, never got for your “radical EU treat change” (of 2 sentences) should have been played out softly and with a smile, not shouting as though you still rule the waves (only the sound waves). Anyway, your sovereign and supreme parliament has just approved this treaty change. It can always repeal it, like it can with the European Communities Act 1972, as a sign of always having remained a sovereign country.

          • Denis Cooper
            Posted November 22, 2012 at 10:32 am | Permalink

            It has to be understood that “enhanced co-operation” is a backdoor route to get something established for a group of member states because not all member states are prepared to take part in it at that time, but always with the view whatever it is will eventually be extended to all member states.

            Similarly it has to be understood that allowing one or more countries an “opt-out” from something is always viewed as nothing more than a temporary expedient to permit the establishment of a new EU norm, but always with the view that eventually all member states will conform to that new norm.

            That is why Margot Wallstrom rather cryptically said that “An opt-out is also an opt-in”, and why when Angela Merkel said “Our goal must be that all EU member States join the euro one day” she made no exception for the two EU member states which have treaty “opt-outs” from ever having to join the euro.

          • Denis Cooper
            Posted November 22, 2012 at 10:39 am | Permalink

            As I’ve pointed out before, the importance of a treaty change can’t be measured by the number of words required; just putting in a single word, such as “not”, can entirely alter the meaning of a treaty or any other legal provision.

            Every time you see a reference to the ESM eurozone bailout fund, just bear in mind that its legality under the EU treaties depends upon that treaty change which you try to represent as being of minor importance.

      • Posted November 21, 2012 at 6:16 pm | Permalink

        Peter: for many of us, the intended level of “integration” is none. If other countries will accept and support that option, they will be our friends; try to twist our arms into accepting rule from Brussels and the imposition of foreign laws while demanding ever-increasing sums of money from us, they will not.

        The acid test is imminent: do we have enough of these friends to reduce the financial burden the EU imposes, or not?

        • Peter van Leeuwen
          Posted November 21, 2012 at 10:29 pm | Permalink

          @James Sutherland: the Dutch net contribution to the EU (per capita) a significantly higher than the British one. personally (not my country) I don’t think this financial burden is all that high. WHo in the UK is prepared to go beyond the tabloids and study the details?

    • Bill
      Posted November 21, 2012 at 11:04 am | Permalink

      Thank you, Peter, for trying to understand. It seems to me that the strong pro-European position is either taken by those who remember the two wars of the 20th century. For example Edward Heath, the Prime Minister who took us in to the EU, was on a tour of Germany in 1939 and saw national socialism’s nasty face first hand. Helmut Kohl, the German Chancellor in a later period, had lost a brother in WWII. Or, the pro-European position is taken by those who see layers of governance and bureaucracy as opportunities for employment. This is my own finding from having conducted a large survey of young Europeans. Multi-lingual young women from many countries see European administration as providing lots of potential for professional development.

      The only question I have concerns the failure of the European Free Trade Association which was formed in 1960 as an alternative to the (then) small EU. How do we know that a future EFTA would succeed?

      • Peter van Leeuwen
        Posted November 21, 2012 at 1:45 pm | Permalink

        @Bill: If I’m correct here, Britain initiated the EFTA. Britain and Denmark were the first to abandon it. Britain also initiated the WEU (Western European Union, a defence cooperation). Both show that the UK was never comfortable with what was happening among the 6 countries which started this strange “supranational cooperation” way back in 1952 with the ECSC (European Coal and Steel Community). Maybe a British return to EFTA will happen, but then it will probably feel the same uneasiness it felt after 1960?

    • Denis Cooper
      Posted November 21, 2012 at 11:59 am | Permalink

      A tired old argument, Peter, which had more traction fifty years ago than it does now. Many young people in Britain have only vague ideas about the extent of the previous British Empire, and have no angst about its loss, but they still don’t see why their country should now be ruled by politicians (and/or lawyers) from other countries. And you forget that while the British Empire was the most extensive other European countries also had overseas empires, including your own country, and apart from some vestiges they’ve all been dismantled as no longer sustainable, in some cases dismantled in a generally more civilised way than in others. I’d even suggest that just going by the character of the senior politicians they’re producing the people who still allow themselves imperial dreams are not the British, but the Germans.

      • Peter van Leeuwen
        Posted November 21, 2012 at 10:33 pm | Permalink

        Denis, I don’t see the German believe in con-federation or federation as imperial dreams.

        • Lindsay McDougall
          Posted November 22, 2012 at 9:24 pm | Permalink

          Germany wants a full blown political union, with control over fiscal policy, monetary policy, foreign policy and defence policy. There is even a working group under the chairmanship of the German foreign minister to work out details. Germany insists that the Euro will be a hard currency, that there will be specific limits on Member State borrowing, and that there will be no transfer payments from rich Member States to poor Member States – all outcomes in Germany’s interest. This union would involve at least the 17 current Euro zone Member States.

          You say that this isn’t a German Empire in the making, but if it walks like a duck and quacks, it’s a ……………………………..

    • zorro
      Posted November 21, 2012 at 2:31 pm | Permalink

      It’s not surprising that you don’t find those words threatening as you are in the folds of Frau Merkel’s skirt, and she is clearly talking to the UK about things being less ‘comfortable’ outside the EU…..a veiled threat. It is akin to a mafia member telling a shop owner that things can be uncomfortable without their protection…….So who should the shopkeeper fear?

      zorro

      • Peter van Leeuwen
        Posted November 21, 2012 at 10:34 pm | Permalink

        @Zorro: couldn’t it be a concerned motherly overture? Cameron is still such a young guy.

        • zorro
          Posted November 22, 2012 at 9:36 am | Permalink

          I don’t know about others, but the mysterious Frau Merkel does not strike me as the motherly type somehow……..and as for Cameron being a young guy……at the same age Napoleon lost the battle of Waterloo having been Emperor of France for 11 years and a General for over 20 years. Age doesn’t come into it……

          zorro

    • Posted November 21, 2012 at 2:42 pm | Permalink

      Only (someone who knows no history? ed) could describe the 20th centuary of “Europe” (no such thing exists) as the tale of “peaceful supranational” cooperation. Interesting that the fading UK , despite the termination of its imperial arrangments, might yet as England demonstrate its superior qualities in 21 centuary. Not in the cards for Holland.

      • Peter van Leeuwen
        Posted November 21, 2012 at 10:37 pm | Permalink

        @Christopher Ekstrom: You just be proud of your country. that’s ok. Your reading of supranational cooperation is meant to start around 1952, not 1900.

    • Barry
      Posted November 21, 2012 at 5:22 pm | Permalink

      “a patriotic British babyboomer would have had to live through the agony of imperial decline”

      Agony? You think?

      Believe it or not, most British people had more immediate concerns, just like everybody else.

      • Jerry
        Posted November 21, 2012 at 9:13 pm | Permalink

        @Barry: Indeed although most people I know who are of the Baby Boomer generation seem to think that the 1950s, ’60s and early ’70s were times of opportunity, the UK was no more loosing an Empire than a mother and father loose their children when they leave home.

      • Peter van Leeuwen
        Posted November 21, 2012 at 10:39 pm | Permalink

        @Barry: Most British people aren’t patriotic babyboomers. I may of course be wrong in my assesment, I was looking for plausable explanations.

        • Jerry
          Posted November 22, 2012 at 9:21 am | Permalink

          @PvR: Unfortunately, as is the case so many times, you are wrong. What the British are, and this is a difference between the British and a lot of European countries (and indeed the USA), we are reserved about our patriotism but that doesn’t mean we are not patriotic – for example, other than for specific state occasions and some official buildings etc. it is the exception to see people flying the union flag rather than the norm.

          • Barry
            Posted November 22, 2012 at 10:09 am | Permalink

            Jerry – exactly.

            And, in my experience, the only time the empire comes up in conversation is when a person from somewhere else (often American) brings it up. It’s one of the few things they know about Britain and they think it defines us. It doesn’t.

    • Alte Fritz
      Posted November 21, 2012 at 6:32 pm | Permalink

      Well Peter, at least you, unlike many Europhiles, have a sense of humour. The serious point arising is that your mock criticism would have held some truth when we were bludgeoned in by the late Mr Heath, and conned in a referendum. But that’s all a long time ago, we have moved on and so has the debate. Read this for a good modern view of the issue http://www.telegraph.co.uk/finance/comment/9691240/Business-needs-to-engage-in-shaping-Britains-post-EU-future.html

    • Lindsay McDougall
      Posted November 21, 2012 at 6:35 pm | Permalink

      @Peter van Leeuwen
      That’s all a bit Jungian. Try something simpler and look at a map. There’s a ditch there called the English Channel. It changes everything, and it’s slowly getting wider. Meanwhile, in the north west the land is rising – roughly on an axis from Antrim to Ibrox Park.

      • Peter van Leeuwen
        Posted November 21, 2012 at 11:01 pm | Permalink

        @Lindsay McDougall: I just looked at the maps and I see lots and lots of rain and flud warnings. Why don’t you just cross that sea and come live in the well protected Netherlands (6 m below sealevel here and haven’t had a flud for a very long time! we just turn up the pumps a notch) Alternatively, you could acquire some good advise on flud protection from us (we need the money), just like we helped New Orleans and may be helping New York soon.

    • History Fanatic
      Posted November 21, 2012 at 7:53 pm | Permalink

      Peter van Leuwen – Your comment has nothing to do with the posts that have already been made! Our objection to the current direction of the EU has nothing to do with our past. It has everything to do with the utterly undemocratic way in which the EU is being run! Surely you can see that.

      • Peter van Leeuwen
        Posted November 21, 2012 at 11:20 pm | Permalink

        @History Fanatic: There has always been British discomfort with (the direction of) the EU, way back since 1955.
        If the British were so concerned about democracy, they would have repaired their own long ago. Britain is a democracy of course! But . . . it could be a so much better democracy if,
        the slightly geriatric mother of parliaments had rid itself of unelected life-long heredatory legislators, if life-long safe-seat MPs (one from the sixties!) would not be continued, if half of the population (women) were properly represented in parliament, if party membership reflected the population better (average Tory member ages 64), if the electeral system would result in a proper. proportional representation of voter views at the time of elections, if Britain hadn’t been ruled by minorities of the popular vote for most of the post WWII period, if . . . need I go on?
        Why does a party like the Greens only have 1 seat in a 650 seat parliament? Why does UKIP can only have its voice in the (supranational) European Parliament and not in the parliament which has to decide on the “amicable divorce” from the EU)
        In other words, you have your work cut out for you right at home, why lecture the EU on its democracy (which I’d agree needs further improvement)?

        Reply We are not lecturing the rest of the EU on democracy – live and let live is our motto. It is just that our democracy cannot function well if the EU makes most of the decisions! How we choose to make them here is a matter for us.

        • Barry
          Posted November 22, 2012 at 10:19 am | Permalink

          Peter van Leeuwen – Britain’s democracy evolved naturally over hundreds of years to produce our present system. If we had devised it recently from scratch, we would probably have opted for something entirely different.

          The EU does not have that excuse.

        • martyn
          Posted November 22, 2012 at 11:36 am | Permalink

          Peter: what the EU needs is our House of Lords. A perfect example of how to do things fairly and properly without landed vested interests.

  7. Glenn Vaughan
    Posted November 21, 2012 at 8:08 am | Permalink

    My memory could be playing tricks but I cannot recall the German people ever embracing the Euro enthusiastically, instead seeing the Deutsche Mark as a virility symbol of Germany’s economic power.

    • David Kelly
      Posted November 21, 2012 at 11:28 am | Permalink

      My mother knew someone (a work colleague?), an Englishwoman, whose daughter emigrated to Germany quite a few years ago. My mother heard stories about the German people being extremely unhappy about losing the Mark. Of course, the German political class didn’t care about the people any more than their counterparts in any other European state care about the people who have to pay their overgenerous salaries and pensions.

  8. ian wragg
    Posted November 21, 2012 at 8:14 am | Permalink

    I would take Mrs Murky’s advice as a covert threat. Germany (or at least ex East Germans) still crave power over the west (etc). If left to her, she would make trading as difficult as possible. This of course would be difficult as the UK is a major recipient of German goods. With the demise of the peripheral states she is already losing any advantage which the Euro offered.
    I think if the UK left, it would act as a catalyst for other countries to follow.
    Germany together with Austria, Holland and Finland should leave the Euro.

  9. JimF
    Posted November 21, 2012 at 8:22 am | Permalink

    So why the need to go through all the pallava of twin referenda stretching over a few years?

    Is this is your committed view why not go straight to the heart of the matter and suggest a referendum based on us not wanting to be part of the mutualisation of debt?

    One simple question “Do you wish the UK to pool its debt with all members of the EU, now and into the indefinite future?”

    • Alan
      Posted November 21, 2012 at 9:29 am | Permalink

      I think we have one of the biggest debts in the EU so this sounds like quite a good deal to me. If the EU is going to take over our debt then we should stay in.

      However, I don’t think they will. In or out we have to get our economy running properly.

    • Jerry
      Posted November 21, 2012 at 9:49 am | Permalink

      @JimF: Well yes if you want to use a biased question and thus attempt to fix the result, unfortunately those sorts of questions tend to back-fire on those who ask – as Mr Clegg found re AV, PR and FPTP! Also without vast explanation notes, that could also become biased (and thus open to legal challenge) your question doesn’t actually have a simple Yes/No answer.

  10. Nigel
    Posted November 21, 2012 at 8:26 am | Permalink

    Your German “expert” sounds like some of those we see on the BBC, and must be living in cloud cuckoo land.

    • Jerry
      Posted November 21, 2012 at 9:52 am | Permalink

      @Nigel: Well yes, if anything one personally doesn’t like must be from cloud cuckoo land… On the other hand anyone who bothers to read anything more (in depth) than the Daily Mail, Sun, or Telegraph etc will understand that it is a fair summary.

  11. Brian Tomkinson
    Posted November 21, 2012 at 8:47 am | Permalink

    The crux of my opposition to the EU has always been the question of self governance. Added to this is the deceitful way in which those who run the EU have and continue to deprive the peoples of the member countries of their democracy. Many of us have long recognised that the aim is to have a country called Europe, despite years of denials including senior members of the Conservative Party. Our own Prime Minister and Chancellor are actively promoting this within the Eurozone. Being lied to over the last forty years has made the prospect of this goal even more repugnant. Those who favour this effective coup d’etat regularly extol the virtues of self determination in other countries around the world whilst working assiduously to remove it within the EU. We can only hope that the German people wake up to the reality that they will be paying for this and reject it.
    In the UK our MPs should be determined to reassert the authority of Parliament. Our government should be in Westminster not Brussels.

  12. Jerry
    Posted November 21, 2012 at 8:57 am | Permalink

    Some Germans are now thinking the unthinkable. They ask whether Germany herself may have to pull out of the Euro to prevent the costs spiralling out of control.

    Other than for eurocrats, why is Germany leaving the EZ “unthinkable”, the real problem is that German economy is simply to strong and the rest of the EZ to weak, so unless the real agenda is (as most now suspect, even amongst some europhiles) to keep the Euro-project alive at all costs this is actually one realistic solution.

    Meanwhile, Mrs Merkel on a visit to London warned the UK that it would not be comfortable outside the EU

    As you point out, both Switzerland and Norway seem comfortable within either a EEA or EFTA framework whilst most of the RotW countries are comfortable to simply work within the WTO framework and considering that 60% plus of the UK trade is actually with RotW countries…

    • Denis Cooper
      Posted November 21, 2012 at 11:40 am | Permalink

      But while it may look like a simple solution, it seems to me that if Germany were to pull out of the euro then the rest of the eurozone would quickly disintegrate.

      Germany can be seen as the keystone; it’s the strong and deep-pocketed leader holding together disparate countries which otherwise wouldn’t have ever considered that they should share a currency.

      Possibly the Benelux countries might have eventually agreed to share a currency without also sharing it with Germany, but that seems unlikely; possibly Spain and Portugal might have eventually agreed to share an Iberian currency, but that also seems unlikely.

      Why should pairs of countries like Ireland and Slovenia, or Malta and Finland, and so on, agree to continue to share the same currency, if it was no longer the case that all of them were sharing it with Germany?

      Without Germany those countries might look to France to hold the eurozone together, but does anyone really believe that France could step into Germany’s shoes?

      • Jerry
        Posted November 22, 2012 at 9:26 am | Permalink

        Denis, no France couldn’t and nor would it want to, France needs to be subjected to some devaluation also, the EZ is starting to damage France in the same way it has already ravaged her more southern neighbours.

  13. Mike Stallard
    Posted November 21, 2012 at 9:04 am | Permalink

    I am constantly baffled by the sheer wrongheadedness of so many politicians. In no way is this personal. Since Pontius Pilate and Romulus and Remus, the wrong decisions have been taken quite regularly and for the best of reasons.
    Can’t Mrs Merkel see that she is placed in an impossible position having to pretend to the Europeans that Europe is the centre of the world and that she wants to be a loyal European, while, at home, having to promise that everything will be just fine? How can she sleep at night? Lies, lies, lies.
    From the sidelines, we can see that Europe is becoming more and more inward looking – “Brixit” is bad. “Grexit” is bad. Like being thrown off the planet.
    We English know that Scotland, however ungrateful Alex Salmond may be, is supported by large wads of our borrowed cash. And, no doubt it always will be too. Why is the Germano -Greek situation different?
    Have you heard the new joke, by the way? Headline in German Newspaper: “Fog in Channel. England isolated.”

    • Lindsay McDougall
      Posted November 21, 2012 at 9:59 pm | Permalink

      There is one saving grace. It is that European and British politicians usually lie only to their own electorates. The reason that people like Peter van Leeuwen are so upset with we British is that ‘ever closer union’ is there in the 1957 Treaty of Rome in black and white.

      Have you noticed that Europhile Conservative PMs never win two General elections? Macmillan won in 1959 and was gone by 1964. Heath won in 1970 and lost in February 1974 (when the big winner was Enoch Powell, who wasn’t even standing). Major won in 1992 and lost in 1997. David Cameron won in 2010 and …. in 2015. It’s up to him to show what he is made of.

      I was too young to vote in 1964 but I played my part in eveicting Heath in February 1974 and Major in 1997. I could do it again. Country comes before party.

      • Jerry
        Posted November 22, 2012 at 10:17 am | Permalink

        What are you twittering on about Lindsay, please stop trying to rewrite history!

        Harold Macmillan resigned as leader due to (apparent) ill health caused by a botched operation whilst his successor Alec Douglas-Home lost in 1964 because of the fail out from the Profumo affair and the major socail changes that came from the awakening of youth in the late 1950s who by 1964 also had their vote. Also lets not forget that Harold Wilson wasn’t opposed to our entry into the EEC either whilst sup[porting our membership of the EFTA.

        Heath lost due to industrial strife, whilst Major lost due to the Tories basically being unpopular [1], and unless you are suggesting that Tory voters simply sat on their hands in 1997 how come an even more Europhile government obtained a landslide. As I said to Tad from Cambridge a few days ago, voters didn’t keep voting for Blair and his Europhile government because they wanted a “more Tory” government…

        [1] it was often joked after the 1997 election that a wet paper bag could have stood against many a Tory in 1997 and won (whilst many Tory support would respond with, “and they often did”, an indication of the apparent quality of some new Labour MPs)

        • Lindsay McDougall
          Posted November 22, 2012 at 8:50 pm | Permalink

          Harold Macmillan was very unpopular when he resigned from ill health in 1963. Most people reckon that Alec Home did very well to keep the defeat small in 1964.

          In both 1970 and February 1974 there was late swing in the final week of the campaign, in Heath’s favour in 1970 and against him in February 1974. In both cases, that was when Enoch Powell stormed into the campaign. If you look at the trends in the polls during those election campaigns, the evidence is irrefutable.

          In 1970, Labour’s lead in the poll of polls shrunk from 7% to 1% on the eve of poll, to a Tory lead of 3% on polling day. The swing was fairly uniform across the country and was based on perceptions about immigration policy.

          In February 1974, Harold Wilson agreed to reduce Labour campaigning on 2 days when Enoch made 2 major speeches about Europe. Heath was winning on an anti trade union ‘who governs Britain?’ platform until very late in the final week. Enoch countered by saying ‘who governs Britain?’ was exactly the right question when talking about Europe. This time the late swing was not uniform but massive in Enoch’s West Midlands stamping ground.

          In 1997, getting rid of Major was the first step in a purge of the Conservative Party. Letting Labour in was the price we had to pay. Labour had a lot of popular support but not because of its European policy.

          So I’m not rewriting history.

          • Jerry
            Posted November 23, 2012 at 7:11 pm | Permalink

            Lindsey, the Tory party was unpopular in 1964, not just the leader(s), they were seen as relics from a previous age.

            Heath was unpopular by the end of 1973 due to the industrial strife he caused and his general personality, when he asked the nation who should run the country he was told not you – Europe wasn’t a major aspect of the Feb ’74 election, industrial relations were. Heath lost again in Oct. ’74. Both Labour party manifestos of ’74 were broadly supportive of EEC membership but they wished to ask the wish of the British people, something heath refused, and this was why Powell basically switched sides within a week of the Feb election not because Labour was anti EEC.

            As for your comment about 1997, your in the clouds of fantasy, as proven by the fact that the Tory party elected several “more Tory” leaders (compared to Major) after 1997 and lost every election between 1997 to 2005, after which they elect a more moderate leader and won the next election! Not forgetting the fact that they would have had an outright majority if it wasn’t for UKIP, who still have no MP after 18 years… As for your claims that Labour didn’t have much support for its European policy, that would be why in 2010 Support for Labour moved to the LDs and Greens, two far more Europhile parties than even Labour.

            What do you not understand, the country has moved on from the 1970s and ’80s, it is not about being “more Tory”…

    • John Doran
      Posted November 24, 2012 at 9:32 am | Permalink

      @Mike Stallard, hi.
      One reason Merkel can lie so easily is that she sincerely believes she is on a “higher mission”. She believes in a one Europe govt, as a stepping stone to a one world govt. This is tied in to UN Agenda 21, which is a blueprint for this world in this 21st century. This is a plan for “sustainable development”, to save the world from overpopulation & pollution etc. Google it & be frightened.
      Merkel believes she is saving the planet, lies are a mere bagatelle.

  14. Chris
    Posted November 21, 2012 at 9:13 am | Permalink

    An article in Der Spiegel “Germany’s trouble with the truth”, challenges Angela Merkel to tell the truth to voters about the realities of a future with very large transfers of money to poorer countries in the EU being the norm, and the only way in which the eurozone can survive. The opening paras below give a flavour.
    http://www.spiegel.de/international/europe/commentary-on-germany-s-trouble-with-the-truth-about-greece-a-868125.html
    “At some point, even the best tricks — the aimless chatter of “other solutions,” the putting-off of painful decisions — don’t help any longer. At some point, Greece’s rescuers in Berlin, Brussels or Paris will have to admit that saving the country is going to cost a lot of money. That is, billions of euros, short more than just interest when it is paid back, as the German government has wanted to make its citizens believe so far. No, the money will simply be a loss for Germany and the other creditor nations. They’ll have to make it up some other way, such as raising taxes or cutting expenditures.

    There’s just one problem, though. This moment of insight and clarity is still a long way off. For the time being, it seems as though the euro-zone countries are just going to keep carrying along as they have been. That is, muddling onward and delaying reality for as long as possible.. …”

  15. Alan
    Posted November 21, 2012 at 9:22 am | Permalink

    It’s not, in my opinion, a debate about whether we are self-governing or not. We quite clearly are self-governing, otherwise we would not be allowed to consider leaving the EU: we would be told to stay in. Mrs Merkel’s warning that we will uncomfortable outside the EU is hardly in the nature of a tyrant issuing an instruction.

    I think it is a debate about the extent and the nature of our collaboration with other EU members. If we leave the EU we will continue to work with them on many things. If we stay we collaborate with them on more subjects and in different ways.

    In my view talking about not being self-governing obscures the substance of the debate. It over-simplifies a complex topic.

  16. oldtimer
    Posted November 21, 2012 at 9:22 am | Permalink

    If reports in the International on line edition of Der Spiegel are to be believed, Merkel and Schauble are in danger of “cooking the books” to conceal from the German public that supporting Greece will require money transfers from Germany. It is driven by the German electoral timetable. They are in a hole and are still digging. But Der Spiegel and others appear to have noticed and are reporting on the evolving financial machinations. So far the Greeks seem to have played a canny hand, politically, in the sense they judged correctly, so far, that the EU do not want a forced Grexit.

    I have always assumed, and argued here, that in the final analysis Germany would pull back from the inflationary consequences and implications of a full fiscal and banking union. So far I have been wrong about that. It seems, from your report, that German belief in the full union rests on the realisation of fairy land assumptions about the self-discipline that will be exercised by politicians in the member states. Good luck with that assumption.

    We can expect lots of intimidatory remarks from the EU Commission and other EU members about the prospect of a Brexit. This will indeed intimidate some UK voters. But I agree with you that it will prove to be counterproductive in the minds of many others. I do not see how the UK can continue to plunge itself into the EU construct as it is presently evolving.

  17. Chris
    Posted November 21, 2012 at 9:29 am | Permalink

    As a post script to my comment above, the elections in Germany next autumn are key to how Angela Merkel “manages” the patience of the German electorate. Der Spiegel reports, as I understand it, that she is content to muddle through until after the elections with short term fixes of every variety in order that the true scale of the rescue needed for Greece and others is not revealed, nor the fact that this flow of money to poorer countries will be a permanent feature of managing the eurozone, and that the money will never be repaid. From Der Spiegel, same link as above:
    “…The German chancellor wants to push back Greece’s necessary payday by at least 10 months. That’s because she hopes to be re-elected in the fall of 2013. And in a political campaign, broken promises and billions worth of outstanding credit aren’t very popular..”

  18. Winston Smith
    Posted November 21, 2012 at 9:33 am | Permalink

    Over the weekend I read that German exports to the emerging economies and particularly China, are increasing rapidly. Much faster than ours. As Europe declines, Germany will prosper thanks to its manufacturing might and the low value of the Euro. Without the PIIGS, its currency would not be so competitive.

    • martyn
      Posted November 21, 2012 at 1:02 pm | Permalink

      Also due to rising tensions between Japan and China. The Brits should be there as well selling their stuff to fill the gap. If the Germans can do it and they are in the EU so can we.

  19. Martin Ryder
    Posted November 21, 2012 at 10:21 am | Permalink

    Mr Redwood: You say. “Meanwhile, Mrs Merkel on a visit to London warned the UK that it would not be comfortable outside the EU. I suspect such a warning is counter-productive. Many UK voters hearing that would be more inclined to become more Eurosceptic as a result, rather than being intimidated by the talk.”

    Are you sure about your second and third sentences? Certainly most contributors to this blog, including me, are not intimidated, quite the reverse, but is that true across the electorate? Many is not ‘most’.

    What are the BEM communities’ views of our membership of the EU? Why would they be against it? Our membership of the EU means that they can move elsewhere in the EU if they wish to. They may well be against Eastern European immigration and may well realise that it costing them, as well as everyone else, a lot of money but are these sufficient reasons for them to vote for withdrawal from the EU?

    Also what about the female vote? There are, I am sure, many women who think that the UK should be free but what about those millions of women who have other things to think about and never give the EU a passing thought. When asked if they would like to be cast out into the outer darkness and be totally friendless, what will their reaction be? There are probably many males who are the same.

    Then there are the left-wing voters. They probably see the EU as a great socialist society and, as patriotism is a sin to them, they will vote against freedom for the UK.

    A referendum will not be a ‘walk in the park’ for those of us who wish to see the UK make its own way in the world. If the Conservative Party is not sure of its ground and cannot put the idea of withdrawal in its manifesto then we do need the two referendum approach if we are to achieve success. The first to be sure that the majority of those who vote in the first round agree with the idea of renegotiation; they might not. The second to confirm that the negotiations, which will hopefully ensure that we stay within a good trading and political relationship with the EU are acceptable to the electorate.

  20. Posted November 21, 2012 at 10:39 am | Permalink

    What I dislike about the EU is the bureaucracy, waste, mismanagement and potential for corruption at what Bernard Connolly called ‘The Rotten Heart of Europe’ (Faber and Faber 1995). Every setback to the Euro, every demonstration in Greece or Spain is an opportunity for the Eurocrats to ratchet up the idea of a Federal Europe governed, not by the people of Europe, but by a bunch of bureaucrats drawn from the second and third rank of politicians enjoying ever-increasing financial benefits and power without responsibility. There is no democratic control over these people. Witness the article in, I think, yesterday’s Telegraph about the ludicrous expense and inefficiency of moving from Brussels to Strasburg several times a year. When MEPs voted to reduce the number of times this should happen per year by one, the French immediately appealed to the European Court on the grounds that it would break pre-existing treaties.
    Indeed, I have no idea who my MEP (or MEPs?) is/are. I did get an inkling once and emailed him to ask if it was true, but never got a reply.

  21. Atlas
    Posted November 21, 2012 at 10:41 am | Permalink

    Quote: ” In the UK it is quite simply about whether we can once again be self governing or not.”

    Quite John, that is exactly the point that exercises me!

  22. Richard1
    Posted November 21, 2012 at 10:48 am | Permalink

    Para 4: E1 trillion surely?

    The UK is the only EU country not either in the Euro nor committed to join. That should provide a face-saving way for the other EU countries to cut the UK a ‘special’ deal to keep us in – which they must want to do. We should go for: much lower costs inc protection from the costs of Euro bailouts; derogations from expensive social and green legislation; freedom to join NAFTA and to do other free trade deals. This would be a good platform for the election also – who would want Labour or LibDem ministers negotiating this?

    • Denis Cooper
      Posted November 21, 2012 at 12:31 pm | Permalink

      Denmark also has a treaty “opt-out” from ever having to join the euro; all other EU member states are under a legal obligation to join it once conditions are deemed corerct, and that same legal obligation is automatically imposed on all new EU member states under their treaties of accession to the EU. Insanely, the UK government has even allowed that to be part of the treaty of accession for Croatia which is presently being approved by Parliament through this Bill:

      http://services.parliament.uk/bills/2012-13/europeanunioncroatianaccessionandirishprotocol.html

  23. A Different Simon
    Posted November 21, 2012 at 11:37 am | Permalink

    The German case since 1945 certainly warrants inspection .

    If politicians had of been in charge of the rebuilding of Germany after WW2 it wouldn’t be where it is today .

    Any country which thinks David Hasselhoff is the King of Rock-n-Roll clearly is not right about everything and many Germans are very fixed in their thinking .

    However , the UK could do worse than invite Germany’s input in several areas :-
    – housing ; implementing rent controls and preventing massively destructive housing bubbles
    – personal responsibility ; encouraging a culture of saving rather than borrowing
    – creating a more balanced economy ; valuing engineers instead of only financial engineers , lawyers , the humanities and letters
    – education

    • zorro
      Posted November 21, 2012 at 2:40 pm | Permalink

      Those German values you mention have certainly helped the avoid the very British house price snobbery that exists, and the resultant house price inflation. It has allowed them to ensure that they invest their capital wisely in productive capacity, whilst also maintaining some social stability…..

      zorro

    • pete
      Posted November 21, 2012 at 2:43 pm | Permalink

      they have so many good things about their country. at least our government appears to be valuing apprenticeships now, still a long way to go

  24. forthurst
    Posted November 21, 2012 at 12:07 pm | Permalink

    In much the same way as the weather continues to make the case for CAGW scepticism, the unfolding situation in the EU makes the case for euroscepticism; in both cases, the proponents of these causes are now seen by many as either deceitful or at best misguided, seeking to financially benefit at the expense of others’ wellbeing and livilihoods.

    For how much longer will the Germans continue to accept that the earnings of their industrial powerhouse should to be used not to reward their hard work, but the sloth of others? For how much longer should they be prepared to treat France as an equal in the premier division, when its credit rating has been downgraded; for how much longer will Germany’s credit rating survive with unlimited amounts of its assets earmarked for propping up others’ dysfunctional banks and dysfunctional economies?

    If Mrs Merkel is really a German, perhaps she should learn the lessons of her ancestors in not trying to fight wars on too many fronts at once. Our experience over the centuries is that periods of being dragged into or voluntarily entering into alliances and conflicts with the continent can be painful and expensive. We belong to the world; we are neither constrained by history nor geography to an intimate association with the European continent.

  25. sm
    Posted November 21, 2012 at 12:52 pm | Permalink

    How patient are the germans?

    As long as they can continue to export and prosper and living standards don’t fall?

    It is noteworthy that the EU is now proposing
    1) country by country reporting,
    2) an EU wide robust general anti avoidance principal,
    3) a unitary tax which could ensure multinationals are taxed where the real economic activity and profits take place – (ref taxresearchblog)

    This looks like patience and long term strategy.

    We could easily agree to enact similar legislation and co-operate outside of the EU, or indeed whilst still in (with a view to our exit).

    Culturally, Germans like to play by the rules ( respect for the law) i think, if it can be shown that these are generally upheld and enforced equitably throughout the union germans could be persuaded.

    If it the corruption cannot be controlled or they literally cannot afford it ,then they will seek to leave. We should also cleanup our act, in short order.

  26. Lindsay McDougall
    Posted November 21, 2012 at 1:25 pm | Permalink

    Germany has state debt that is approximately 80% of GDP. It simply does not have the resources to bail out all of Greece, Spain, Portugal, Ireland and Italy by making transfer payments, even if it wanted to. Even if the Netherlands, Finland etc chipped in, it still wouldn’t be enough.

    Eurobonds and the printing of additional Euros would lead to the Euro becoming a soft currency. German assets and remuneration would depreciate with no compensating advantage. Again, Germany would be the loser.

    Never forget the reason that Germany wants the UK in the Euro zone. It is that the EU would have a second paymaster, easing the burden on Germany.

    The IMF now believes that Greece is past the point of no return, that it has to default, and that European Member states must accept “haircuts” on what they are owed by Greece. Christine Lagarde is a Europhile who is trying to protect the IMF’s interests; she wants to avoid a “haircut” on the IMF’s loans to Greece. And Greece is only one of five.

  27. RD
    Posted November 21, 2012 at 1:49 pm | Permalink

    Mrs Merkel may be right… it might be hard being free. Just think of the terrible burden of OUR Parliament; our elected representatives doing as the public wish without having a ‘Big Brother’ EU telling us that criminals must be alowed to vote and when a carrot is a fruit (when you make jam with it, since jam can only be with ‘fruit’). What an onerous prospect… But there again things are not soo good where we are; I’ll give it a go thanks… it’s called democracy.

  28. C. WHITE
    Posted November 21, 2012 at 1:50 pm | Permalink

    Good point about German experience of premature currency union with E Germany
    In an article in Economics section on http://www.telegraph.co.uk Matt Persson of Open Europe (they want reform not departure) quotes a poll that 2/3 Germans do not want to pay more cash to EU. Because of the oceanicly complacent decision-making by Mssrs Chirac, Schroder, etc a decade ago their nightmare has come in to existence; even the hawkish Chairman of the Bundesbank does not seem to have grasped that all the contingent liabilities that Mr Redwood mentions will hit Germany’ s budgetary position, at least in part. Clearly written-off payments to ‘ClubMed’ governments and banks will have to be financed by borrowing or cuts to spending in Germany.
    I believe that the softening in Mrs Merkel’s attitude to Greece is to ensure that the first charges don’t come through until after their election next autumn. The Social Democrats have talked of red lines being drawn and then WEEKS later being ignored.
    If you drive through red lights as EU leaders did in 1999-2001 you will be in a crash, even if it takes 8 years to materialise and is in ‘SLOW MOTION’ (Stephanie Flanders on her blog BUT NOT TO CAMERA).

  29. Antisthenes
    Posted November 21, 2012 at 1:58 pm | Permalink

    The fact that the peripheral countries inside the euro if they were to restore their national currencies would see massive devaluation against the euro is not Germany and other core countries doing exactly that which Germany did for the ostmark at very heavy cost. It is a fallacy if Germany believes she can ameliorate the hemorrhaging of money from the richer countries to the poorer ones. This farce that is the euro-zone is going to take a very heavy toll and Europe is going to be a much poorer place in consequence. The EU concept stood for security and prosperity for Europeans it is failing on both counts as the euro crises is fermenting discontent and division and is destroying wealth and wealth creation. Added to which what democracy the Europe had is being daily eroded and in it’s stead we are as a consequence of statism and centralization seeing the rise of a soviet style system and we know how well that worked out.

  30. pete
    Posted November 21, 2012 at 2:41 pm | Permalink

    I wonder how long this la la land will continue.

    It has been said time and time again that you cannot have one thing without another, had they merged their banks and economies when they went into the EZ countries would not have been able to borrow in the same way and it would be functioning regardless of the democratic consequences.

    One day even the German electorate will wake up once they start seeing their taxes rise even higher to support other states – I know the Germans having lived there, they will not put up with this.

  31. Chris
    Posted November 21, 2012 at 2:56 pm | Permalink

    Regarding Mrs Merkel’s remarks which you refer to above: “Meanwhile, Mrs Merkel on a visit to London warned the UK that it would not be comfortable outside the EU.
    I would make the point that it is very uncomfortable being inside the EU, with all the bullying behaviour/remarks made by MEPs against the UK in the E Parliament, as reported by Daniel Hannan today. Any country that gets in the way of the behemoth that is the EU is belittled and worse. Our place is not inside this sort of undemocratic structure and the sooner we are free of it the better.
    http://blogs.telegraph.co.uk/news/danielhannan/100190810/well-only-be-popular-in-europe-when-we-leave/

  32. Bert Young
    Posted November 21, 2012 at 3:09 pm | Permalink

    Comments from Germany are very understandable firstly , if we do pull out of the EU Germany’s burden increases ; no wonder that they have tightened up constraints in the ECB to protect their interests ; secondly , the disciplined nature of the Germans is vastly different to most of the other EU countries and they know how unreliable and untrustworthy they can be . Germany is not an easy fit in the EU and the only reason they remain in it is because out of it the DM would soar out of all recognition and make their products uncompetitive in world markets . There is a point of no return however to the strength of their economy and to the limits of their patience , that point is getting close and is not helped by the increasing threat of the UK pulling out . Germany views the UK as the only other truly disciplined country in the EU and will pull all the stops out to keep us in it ; unlike Germany the £ has settled its value with the rest of the world and , once free of the constraints from the EU , can re-adjust much more reliably. The interests and investments we have scattered around the globe are a substantial base to build on .

  33. Barbara Stevens
    Posted November 21, 2012 at 3:12 pm | Permalink

    Germany has set the Eurozone and the EU to suit it’s self with France’s help, but now its racking up bills which is liable for its begining to panic at the thought of having to ask ordinary Germans to foot the bills via taxes. Merkel has decieved them all. She believed everyone would fall into line and not question things, she is mistaken and about the UK expecially. We would be better off just having a free trade agreement, then the rest can do as they wish, without interruption from us. We could then seek trade with others on an open trade agreement, has we are doing where we can.
    They are in denial about the eurozone and when the crunch comes they, Germany, will expect all the other members to stand and support it, we are not in the eurozone but they will still expect us to stand with them. I say NO to that. I just hope tomorrow when Cameron faces them all, he stands fast, and firm. Indeed, he, and the rest of the Conservative party are on trial from Thursday. If he fails, then they may fail come the next election. Miliband is waiting in the wings, and we all know what that means; my heart aches for this country and what we have come down to. Cuts are taking place which affect sick people, and that cannot be right, but its Labour’s spending which help towards this. The global financial crisis as been terrible and its a warning to the West. We are living in dangerous times, and we must have stablity within our country for all our sakes. I just hope Cameron rises to the occasion this week.

  34. Liz Elliot-Pyle
    Posted November 21, 2012 at 3:43 pm | Permalink

    John, you say that Norway and Switzerland are the 2 richest countries in Europe whilst not being in the EU.
    Might it not be that they are the richest BECAUSE they are not in the EU?

  35. Pleb
    Posted November 21, 2012 at 4:08 pm | Permalink

    John, I havn’t been able to confirm my comment above. I did just beleive the Guardian. Please can you delete the comment above as I can’t confirm that it is true.
    Sorry.

  36. Edward
    Posted November 21, 2012 at 4:48 pm | Permalink

    My concern ref the EU is its majority voting system, which I read with QMV is going to get worse soon.
    Its a shame its not organised like many businesses are, ie you own shares in relation to how much you invest into the organisation and each share gives you proportionate voting powers.

    At present with approx one third of member nations contibuting to the “pot” and two thirds taking out of the “pot” it isnt a very fair situation when it comes to a one member one vote.

  37. Normandee
    Posted November 21, 2012 at 6:24 pm | Permalink

    So do I vote for an openly Pro-European Tory or an alternative party who want exactly what you want ?

  38. Jon
    Posted November 21, 2012 at 9:09 pm | Permalink

    Its all a contradiction. The German voters get told its great for solidarity, union and a new federal country with regional boarders that break up the country. Then at the same time being told they can keep their boarders, country and wealth and they seem to believe it.

    At the other end the Mediterranean countries are told they will benefit from transfer of wealth. So both ends like what they hear about the euro and the EU but the messages contradict each other.

    I think the eurozone leaders will probably see the need to step up the propaganda and control more of what is delivered as news to their voters.

  39. davidb
    Posted November 21, 2012 at 10:52 pm | Permalink

    Norway and Switzerland are atypical countries. Norway has a considerable trade surplus by virtue of its energy exports, and has a small population. Switzerland has a fairly protected industrial sector of high value manufacturing and benefits by its location next to Bavaria and by its financial services strengths – and secrecy. Britain is not quite like either of these places.

    Unfortunately we have a history of economic mismanagement in the UK ( 13 years of it during the last administration ). Its very patriotic to think we’d thrive outside the EU, but that would be easier to contemplate if we had some direction in our country and if both sides of the political divide put their country above their personal ambitions. Oh, and if we ran a trade surplus.

    A decoupled Germany could well see their currency soar in value ( as indeed Switzerland has seen ), but the displaced industry that may thus arise would not necessarily find its way into other European countries, but may go the the USA or to places like Brazil. Its probably in Europe’s interest to have a large exporter selling the cars,etc that allows the rest to import the oil and gas and food they need while maintaining a broad trade balance. I note incidentally that Scandinavia and the Netherlands also run large trade surpluses.

  40. David Langley
    Posted November 22, 2012 at 7:07 pm | Permalink

    If Greece doesnt get the “German” money, it will crash and burn. The EU fanatics will not allow that to happen they will pour good money after bad for ever to keep this farce on the road. The German electorate will be conned as we are being conned by our own government into believing that Cameron has some position he can spout about. He might have just as well sent an e-mail saying he had to go the doctors today he will come another time. Has nobody given him a proper brief yet about the EU, OH sorry he has one but it means no jobs for the boys when the fat lady sings.

  41. Derek Emery
    Posted November 25, 2012 at 9:12 am | Permalink

    Germany did well from the creation of the Eurozone in terms of trade from the the EZ which was established on Germany’s terms. This was that each country would be responsible for its own debt. Borrowing by the PIIGS was now cheap at German interest levels so they borrowed on steroids inflating their salaries and pensions and buying German goods in quantitiy. Economists knew that the party would run out after a decade or so when these debts grew large enough. All it needed was markets to realise that German debt was far less risky than PIIGS debt and the party was over.
    Germany was a large lender to the PIIGS so has much to lose by EZ collapse which will make its lending losses real.
    There is no way out for Germany. It will cost over a trillion Euros if the EZ survives or if it sinks.

    There is no way the EZ will ever deliver in practice. Its not based on economic analysis. As usual for the EU everything is based on political pipe-dreams. Reality never gets a look-in.

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page