The emerging United States of Euroland

It has long been permitted to talk of political union on the continent, just as surely as it has been regularly denied in the UK. On 22nd June the “five Presidents” of the Euro area (EU Commission President, Eurogroup President, the President of the Euro Summit, the President of the ECB and the President of the European Parliament) set out their vision of how to deepen economic and monetary union.Their wishes include a common Euro area Treasury with binding commitments to converge the economies of the zone, controlling and disciplining fiscal policies for each nation and completing a financial union.

They recognise that there is too much divergence of economic performance across the zone and they are not happy with 18 million people unemployed in the area. They are concerned about the lack of social cohesion and the shortfall in democratic accountability. It’s good they have noticed these obvious weaknesses of the Eurozone. Their solution is more central control, moving gradually to a common Euro area budget and Treasury. They do not go into the detail of how this would imply substantial transfers of money from the richer to the poorer parts of the zone.

The Euro has always been an orphan currency in search of a country to be its parent.The 5 Presidents wish to get close to a United States of Euroland to act as the sponsor of the currency, and to direct the economic policies of the differing regions of the zone. They aim for a White Paper in 2017. They wish to direct national economic policies more strongly through the European semester process. They want each country to have a competitiveness authority to seek to bring economies more into line with each other. They wish to buttress their single banking regulatory system with a common deposit insurance fund and a single resolution mechanism for banks.

They seek an Advisory Fiscal Board to creep towards controlling budgets more directly, and a common macro economic stabilisation function with access to finance.They want the Euro area to have a single representative on the IMF and to speak with one voice in world economic fora. They want to supplement the economic changes with stronger social policies.They are vague over how democratic accountability can be strengthened, mentioning both the European Parliament and national Parliaments.

All this points to the creation of a United States of Euroland. Single currencies need single budgets, single social policies,and massive transfers of money within the zones to enable them to work. The EU first created its currency and is now belatedly trying to create the country to back it. The UK should understand the force of this movement, and should be clear it cannot join any part of it.

The UK now needs to stress to the EU that they cannot use the EU budget for these purposes. There will have to be a separate Euro area budget to take in extra tax revenue from the Euro area and to distribute it for their common welfare and regional policies. I raised this in the Commons yesterday with the Treasury Minister taking through the EU Finance Bill.


  1. Old Albion
    June 24, 2015

    The EU will do what the EU wants. You can’t stop it. Your government can’t stop it (if it had the will to do so)
    If the (dis)UK stays in? The (dis)UK wil do as it is told.

    1. Ex-expat Colin
      June 24, 2015

      Trouble is they do little of any use..or nothing as with this terrible ongoing Calais thing.

      We need to deal with the EU very harshly on this problem. How about heavily fining them as they love to do to us?

      Hope somebody in authority is going to move fast on this stupid game!

      1. DaveM
        June 24, 2015

        None of them seem to know what to do – they’re too busy taliking about money or making up stupid rules about vacuum cleaners and high vis clothing. That’s what you get with career politicians.

        This is the one time the EU actually needs to cooperate, or at least France, Italy, and the UK, and all they do is hold talks and play the blame game. Quite illustrative of the true cohesion in the EU and the true capability of the bureaucrats and politicians running it!

      2. Iain Gill
        June 24, 2015

        Why are the queues at Calais all they have to do is get an Indian outsourcer to sponsor an uncapped intra company transfer visa and they and their families are in, never ever to get kicked out again

        Or get to Sourthern Ireland cross the land border and come across on the ferry with no passport checks

        Open doors we have them

        We are creaking at the seams and Cameron talks tough and does nothing

    2. joeb
      June 24, 2015

      Your reply is a good sign the top is close. The Euro will collapse sometime ’18-’21, to be followed by the EU itself soon thereafter.

      At the very latest, the whole lot will be gone by ’24.


      1. DaveM
        June 24, 2015

        That’s what my money’s on….Euro collapse led by southern Europe, EU collapse led by the UK, then France, then the NL, and so on.

      2. bigneil
        June 24, 2015

        Even if the whole thing collapses – the so-called leaders will all be very rich – they will have ensured that.

      3. Lifelogic
        June 24, 2015

        Well perhaps it will but will it matter as:

        Prince Charles has assured us (in March 09) there was only 100 months to save the Word for the global warming catastrophe. So after 2017 we are all doomed anyway it seems. Surely he would not have said it unless he has some evidence for its veracity. Perhaps he could enlighten us I have seen none for his claim?

        Anyway we will soon see, as we clearly have not reduced C02 output. Yet temperatures have not risen for 18 years. Indeed world temperatures seem remarkably stable over the past 100+ years.

        Not that Charles seems to have adjusted his personal £1M PA travel arrangements I note.

        The real climate catastrophe is the huge waste £billions on greencrap that could be use to save real lives now with clean water, basic medical care, decent nutrition, more jobs and warmer pensioners. The greencrap religion is the problem not the solution.

        1. Hefner
          June 24, 2015

          Maybe, just maybe, you could for an instant take your horse blinkers off and look at bit farther than the British Isles. Not everything is so rosy in some other parts of the world? No? Is it too much of an effort?

          Apart from that, I agree with you about clean water, basic medical care, decent nutrition, more jobs and warmer pensioners.

      4. turbo terrier
        June 24, 2015

        I do hope so.

    3. Richard1
      June 24, 2015

      I note that the Scottish separatists are planning to take powers to seize private land arbitrarily if the owner is felt by the separatist commissar to be blocking ‘sustainable development’, a vague term which no doubt the separatists will define as they like to expropriate property from their political opponents and anyone else they don’t like. It is this kind of abuse of power which leads many Southern European populations to prefer rule by Brussels, unsatisfactory as it may be, to Rule by corrupt leftists at home. We may have to make the same diabolical calculation in the UK if the left retains control of the Labour Party and looks like taking power again.

  2. Peter van Leeuwen
    June 24, 2015

    The Dutch minister of finance (Dijsselbloem) acts as one of these 5 presidents (for a few more weeks?), but his prime-minister (Rutte) told parliament last night that he wants to focus on the short-term and not engage with these long-term dreams. Therefore no emerging “united states of euroland”. When agreement of many countries is needed (19 in this case) it will all take a little longer than planned.

    1. petermartin2001
      June 24, 2015

      If the

      1. petermartin2001
        June 24, 2015

        If there is to be no emerging “united states of euroland” then euroland will inevitably fail -sooner or later. I expect there will be a “sticking plaster” fix for the present Greek crises but there will be other crises to follow. You can’t bodge up a bad system indefinitely.

        There needs to be a system of fiscal transfers, not loans, to make any common currency union function effectively. There may be deficiencies in the way the Greeks, Italians etc run their economies but they can’t be remedied by piling up un-repayable loan on top of un-repayable loan.

        Until you Dutch and Germans take a look at how things work in the USA and apply those lessons to your USE then the EZ is going to remain a very sick puppy indeed.

    2. Denis Cooper
      June 24, 2015

      So basically “it will never happen”.

      Thanks for the reassurance, but we’ve heard that one before.

    3. Andy
      June 24, 2015

      That’s as maybe. The reality is there will have to be much more integration by the EuroZone countries to make the stupid Euro work better, but you should remember that the Euro ‘group’ of 19 countries is NOT the EU as a whole. The EuroZone nations will have to establish separate structures which they pay for. You cannot expect the other nations to pay for your delusions.

    4. libertarian
      June 24, 2015

      Peter vL

      Fair enough Peter except for one tiny problem. You already have the Euro, you already have 18 million unemployed, you already have negative growth. The EU is in dire straits and as our host points out the ONLY way to make their plans work is to make the EU a federal country……now. If you insist on persisting with a failed experiment then I’m afraid you’ve got to take it to its logical conclusion as soon as possible.

      This is the crux of the matter as far as a majority of UK citizens are concerned. We DO NOT want to be party of a Country called Euroland, we have declined to join the Euro because we realise the only way a common currency can work is to have a common country.

      1. sjb
        June 24, 2015

        “already have negative growth”? Both the eurozone and EU28 bloc economies have been growing since early 2013.[1]

        1. libertarian
          June 25, 2015


          Yes, growing unemployment. Greece is growing in Debt Spain is growing empty properties, Italy is growing refugees. Not very useful though is it?

    5. Richard1
      June 24, 2015

      Peter, the point is the emerging USE emerges not because of dreams but of necessity to make the euro work. It seems Greece is to be bunged another few €billions on condition their parliament agrees to ‘reforms’. What if they dont agree reforms, or then don’t implement them? The irrefutable logic is the EU must find a mechanism to take more and more central control of eurozone economies, with democracy at the level of those countries becoming an irrelevance. If they don’t, populist leftists in other countries will advocate syrizia-type policies at the expense of the solvent countries – rather like the SNP in the UK. That’s the way the EU has to go if the euro is to be preserved. There is no majority – or even significant minority – for that in the UK. So the UK needs a ‘special deal’ or people here will decide we are safer out, insulated from the slow-motion train wreck of the euro.

    6. JJE
      June 24, 2015

      I disagree with Rutte. The short term will never be stable until these issues are settled. The instability arises because the job is less than half done. Things must go forward in the direction the five presidents outline, or else they must dismantle the Euro. Their proposal to me is logical. A currency needs a country.

      I am sure no one expects the UK to join in with this, but it would be a good time to make formal a two track approach for the Euro zone and the rest of us.

    7. formula57
      June 24, 2015

      @ PvL Indeed so, “When agreement of many countries is needed (19 in this case) it will all take a little longer than planned.” Well done the Eurogroup! It is almost as though words such as these were never said: –

      “To me consensus seems to be —the process of abandoning all beliefs, principles, values and policies in search of something in which no-one believes, but to which no-one objects — the process of avoiding the very issues that have to be solved, merely because you cannot get agreement on the way ahead.” (M. Thatcher, 1981)

    8. Kenneth
      June 24, 2015

      Peter, it is my impression that many people in the Netherlands are getting pretty fed up with being a long term net contributor to the eu and with the high costs imposed on it.

      I appreciate that a big difference between the UK and the Continent is that WW2 affected the civilian population in a way that we perhaps cannot comprehend and the idea of peaceful co-operation is therefore more precious.

      However, with the tension between rich and poor countries and the tension with Russia, not to mention the possibility of even greater transfers of wealth to poorer countries, do you think the Netherlands will sometime soon join the UK in wanting to renegotiate the terms of its eu membership?

      1. turbo terrier
        June 24, 2015

        Wait untill they get the hit from the courts passing a judgement on renewable energy and CO2.

        Great when you are wearing the wig, But who pays?

        Methinks the sticky and smelly will be hitting fan very soon

  3. Lifelogic
    June 24, 2015

    Indeed as you say, the UK should understand the force of this movement, and should be clear it cannot join any part of it.

    The United States of Europe will clearly never be democratic in any way. There is not even a sensible Demos with common interests, history or even a common language. The EU has shown itself to be against any real democracy over and over again. Just the fake veneer of very expensive but virtually powerless MEPs.

    The UK could send 100% of UK MEPs who wanted to leave the EU but they would still be powerless to change anything.

    Cameron is clearly not even asking for anything real or substantive not that he has told us much. The choice is simple, democratic rule from Westminster by people we can elect and remove at elections or an undemocratic & socialist super state with rule by unaccountable, over taxing, bureaucrats for ever more. Or at least until it collapses.

    Do we really want to subsidise all the poorer EU countries in the way we do Scotland, Northern Ireland and Wales for ever more?

    1. Peter van Leeuwen
      June 24, 2015

      @Lifelogic: Why not leave the concerns about democracy to people who live in proper democracies, like mine. It seems to me that focusing on democratic problems in your own UK would be better than regurgitated misinformation or misunderstanding about the EU or eurozone.

      1. DaveM
        June 24, 2015

        “proper democracies, like mine”

        Thanks PvL, that’s the first belly laugh I’ve had in weeks.

      2. CdBrux
        June 24, 2015

        PvL: Are you suggesting that whilst NL is a proper democracy and UK isn’t? If so on what basis?

        If NL chooses to integrate fully into a single political and monetary entity of the eurozone where money is transferred (not loaned) to the less well off parts, currently Greece, Spain, Italy,…, and that transfer decision is taken at a eurozone level and any objections even a large majority in NL may have is quite immaterial, then fine. We should let you even if we may think that is a poor decision. Accepting this as the arrangement needed to make the euro work properly it follows the non EZ EU countries must then need a different arrangement. A ‘two speed’ europe as has been proposed in the past, even by euro federalists I think. Would you disagree?

        1. ChrisS
          June 24, 2015

          In a two speed Europe and in the unlikely event that the Eurozone ever becomes a single entity, the South will require such huge fiscal transfers that the economies of the Northern Countries will be dragged down to their level.

          The outcome will be that those countries that are outside the Euro that will be the only ones in the fast lane !

          1. CdBrux
            June 25, 2015

            Or on a 3 lane motorway:
            Inside lane: EZ, nice looking car but a lot of deadweight & eurocrats slowing it down
            Middle lane: non EZ EU – functional car with many good bits but some old components as well
            Outside lane: Some other countries around the world with fast & nimble cars

            What’s more you can now be fined for hogging the middle lane (and not before time, but that’s a different topic!)

      3. Denis Cooper
        June 24, 2015

        That’ll be a proper democracy where elected representatives are to be denied the fundamental freedom to associate as they wish because the majority reckons there are too many groups in the parliament.

        “A majority in the Dutch lower house of parliament on Monday called for stricter house rules on MPs leaving a party to start their own faction. Since 2012 elections, the number of parties in the 150-seat house has risen from 11 to 16, because of secessions from large parties.”

        Oddly enough, a similar thing happened in the EU Parliament.

      4. Andy
        June 24, 2015

        Rather arrogant and rude PvL. The UK is/was a functioning democracy before the Netherlands even existed. You might not like our system, but frankly it is none of your business. How Europe is managed and run is a matter for us all, and one notes that when you Dutch rejected an EU Treaty what happened next ? It was rammed down your throats anyway. And still you believe. . . .

      5. Lifelogic
        June 24, 2015

        The UK democracy is far from perfect I agree. But at EU level there is not even a sensible Demos, let alone any real democracy. MEPs are just an expensive toothless veneer to try to hide this reality.

        The EU is effectively deciding or manipulating governments in many of the PIGS.

      6. dave roderick
        June 25, 2015

        their is no democracy in the uk any more as those who rule think they have the right to ignore we who pay their wages

    2. formula57
      June 24, 2015

      @ Lifelogic Yes, ” we really want to subsidise all the poorer EU countries” for ever more. And why not? We are not subsidizing them to a better standard of living than we enjoy (as Slovakia and others do for Greece though) and we do not get unceasing whinging and ingratitude or worse in return. Even if those conditions applied, it would only put such countries on a par with Scotland where we had the chance to cease the subsidy but did not, apparently for reasons of history, sentiment and politics.

    3. Mitchel
      June 24, 2015

      “Do we really want to subsidize all the poorer EU countries……..”and Kosovo,and the Palestinian Authority and (increasingly)Ukraine (and there are probably others).

  4. agricola
    June 24, 2015

    Wish Europe well in conducting it’s social and financial experiment. We should stay well clear. Cooperate with them, trade with them, but please do not let us be suffocated in this re-run of the USSR. There is a whole new World out there and we should be an independent part of it.

  5. Margaret Brandreth-J
    June 24, 2015

    For goodness sake, we all know how frustrating it is for someone else to speak for us and guide our lives into a direction which we do not want and this is on a huge scale.

  6. Roy Grainger
    June 24, 2015

    I see as part of the predictably fudged Greek deal the EU are promising them Euro 34 billion of “structural funding”. The fact the EU can hand out such massive amounts of money (lots of it effectively coming from the UK I suppose) on the whim of one or more of their assorted Presidents shows how unaccountable they are. The aim is the same as Gordon Brown’s tax credit system – take money off poor countries and then hand it back to them from the central authority making the country entirely dependent on hand-outs and so more easier to control. The only problem will be finding an answer when Spain, Italy and Portugal ask for their “structural funding” too.

  7. Roy Grainger
    June 24, 2015

    On another point, it will be interesting to see during our referendum debate how the Labour party explain their enthusiasm for the EU given the extreme austerity the EU is imposing on Greece – it is a paradox.

    1. David Price
      June 24, 2015

      Just as confusing is the SNP’s attitude to EU membership.

      1. Roy Grainger
        June 24, 2015

        Yes. The only plausible explanation that I can see, supported by evidence, is that the SNP is motivated entirely by anti-English sentiment.

        1. turbo terrier
          June 24, 2015


          You must have been walking the streets in dictatorship Scotland without telling us!

          They hate us and the sooner we let them get on with their pipe dreams the better. Only difference is that the UK will not be paying for the tune.

          They want the EU? Nobody has ever asked us living here.

          They want the safety net they percieve it will provide. Oooops I forgot to mention Greece.

    2. Denis Cooper
      June 24, 2015

      There is an article by Vicky Pryce in the Guardian today, pointing out that while the proposed deal would achieve the political objective of keeping Greece in the euro, at least for the time being, it would load on even more “austerity”.

      for Greece

      1. Denis Cooper
        June 24, 2015

        “This is a deal that heaps more misery on Greeks”

        “The price of averting Greece’s exit from the euro, and even the European Union, is further painful austerity – surely a recipe for social turmoil”

        “The truth is, there won’t be sustainable growth again until the huge debt overhang (180% of GDP) is dealt with decisively. Greece would need to grow by at least 4% a year to service its current debt. If forced down that road, nothing can be seen ahead for the Greek people but continuous belt-tightening and misery.”

        But then the Greek government has already been forgiven about €100 billion of its debt by its private creditors, back in 2012.

      2. Roy Grainger
        June 24, 2015

        That’s Vicky Pryce who was jailed ….. ? She’s done well for herself since getting out of prison hasn’t she, job on the Guardian.

        Surely it is a good thing that former prisoners can live decent lives and pay their own way? She has paid the price for her mistake.

        1. Lifelogic
          June 24, 2015

          Chris Huhne is also endlessly on the BBC. He should really have been sacked by Cameron, for his absurd views on greencrap long before his local difficulties with the police and his wife. But he just replaced him with another greencrap believer.

          1. Lifelogic
            June 24, 2015

            And now, it seems so far, yet another one in Amber Rudd – we shall see.

  8. Jerry
    June 24, 2015

    “It has long been permitted to talk of political union on the continent, just as surely as it has been regularly denied in the UK.”

    But such talk has and is still reported here in the UK even if our politicos won’t and/or issue denials, thus I’m at a lost as to why so many eurosceptics and europhobes keep suggesting that the UK electorate are being kept in the dark or even lied to.

  9. oldtimer
    June 24, 2015

    And what was his answer?

  10. Sean
    June 24, 2015

    We need to leave the EU hell hole full stop!

  11. socrates
    June 24, 2015

    Looking at the MATT Cartoon in today’s Telegraph prompted me to remember a paraphrase of Virgil I thought of some years ago, as Laocoon might put it now :- “Euro ne credite, Teucri, quidquid id est, timeo danaos et debitos ferentis”

    Reply It might help other readers if you supplied a translation

    1. socrates
      June 26, 2015

      As Churchill said I will translate for the benefit of any old etonians present!

      The original in latin is ‘Equo ne credite, Teucri , quidquid id est, timeo danaos et dona ferentis’ which in english is roughly ‘don’t trust the horse, Trojans, whatever it is, I fear greeks bringing(bearing) gifts’.

      My updated version hopefully translates as “don’t trust the Euro, Trojans, whatever it is, I fear greeks bearing debts’.

  12. Ian wragg
    June 24, 2015

    Bit late in the day to try and stop us being submerged in a USE. For years you’ve ratified treaty after treaty under the guise of a technicality or a single market measure when we all knew it was about the destruction of the sovereign state.
    I don’t really think the people of Europe are ready or willing to be ruled by a Soviet style politburo.
    It won’t end well.

  13. Brian Tomkinson
    June 24, 2015

    This has been clear to many of us for years during which time, as you write, “it has been regularly denied in the UK”. It must be remembered that although 19 of the 28 members of the EU are in the eurozone there are only 2 countries – UK and Denmark – who have an opt out from adopting the €. Any new memberof the EU – at the moment there are I think 6 applicants – will also have to adopt the €. It is not feasible to believe that such a minority will be given any meaningful and lasting consideration by the eurozone.
    Should we be so foolish as to vote to remain in this organisation it is clear that adoption of the € will follow “in order for us to exert our full influence at the top table”.
    Our small and dwindling parliamentary soveriegnty is under further threat – aided and abetted by the pretence of negotiation which are designed to endorse our membership of the EU and all its ambitions for a country called Europe.

    1. Denis Cooper
      June 24, 2015

      It’s certainly interesting that the plan is to defer the necessary treaty changes until after the UK has had its “in-out” referendum.

  14. Brian Tomkinson
    June 24, 2015

    Further evidence of Conservatives’ attitude to the EU:
    From the UKIP website it is reported that:
    “Conservative MEPs are supporting legislation which would make it compulsory for all British jobs, apprenticeships and training programmes to appear on a European Commission website aimed at workers across the EU.

    The website, called EURES, tells anyone in the EU who wants to work in the UK that there are 850 Eurocrat advisers available to them ‘to provide information, advice and recruitment/placement (job-matching) services’ in Britain.

    The amendment which Cameron’s Conservatives have tabled says that any job, apprenticeship or training programme advertised in the UK be put into this EURES system.

    The website also gives information on British welfare benefits available to foreign workers looking for jobs in the UK. ”

    Eurosceptics? Pull the other one.

    1. Denis Cooper
      June 24, 2015

      Proposed by Anthea McIntyre, who was originally installed in the extra seat that the UK was awarded when the EU treaties were amended to allow three surplus German MEPs to keep their seats legally rather than illegally. It took a couple of years from when the Lisbon Treaty came into force on December 1st 2009 for that treaty amendment to be agreed and ratified and come into force, and for the whole of that time the EU Parliament was unlawfully constituted. It was as if the House of Commons assembled after a general election and the Speaker noticed that there were three people sitting there who had not been elected and had no right to be there, but he chose to turn a blind eye to that and nonetheless allow them to speak and vote.

  15. Bert Young
    June 24, 2015

    We have all known for some time that the ambition was to create a United States of Europe with all that that entails . It is a long way adrift from what I voted for and what is now on the cards is not acceptable to me . Our society is very different to much of Europe and it does not make sense to integrate with it or to fund it in any way .

    The voices in Westminster are coming out more strongly now against the attempts Cameron is making to “reform” our relationship , some already stating they will defy the whips . This is good news to me because what Cameron wants does not include genuine independence and sovereignity ; he wants to stay “in” on very false motives . The opposing forces must come out of hiding and , if necessary , move to a vote of no confidence in our leadership .

    1. DaveM
      June 24, 2015

      What you say would appear to be true, but I’m not sure I have even an ounce (sorry, a few grams) of an idea what Cameron is after except for a personal career map within the Euro institutions.

      1. Lifelogic
        June 24, 2015

        Indeed it is pathetic and counter productive of Cameron not to put his demands clearly before the EU and the voters. It seems he just want to stitch up worthless (transparent?) fig leaf or two.

        He clearly has zero understanding of how to negotiate effectively. He does however seem good at ensuring it is not a fair referendum.

  16. formula57
    June 24, 2015

    You say “The UK now needs to stress to the EU that they cannot use the EU budget for these purposes” and that must be correct. The Cameron veto needs to be used afresh.

    Yet as Roy Grainger points out in his comment above, as part of the “Greek deal the EU are promising them Euro 34 billion of “structural funding”” so controlling the enhanced Eurozone is going to be a very difficult task as it will often never be clear whether monies are spent for EU purposes or EZ purposes – as a practical matter surely it will often be possible to claim it is for both.

  17. Atlas
    June 24, 2015

    I suppose the only viable model is that of the USA, which the Eurocrats for some curious reason don’t want to copy.

  18. Graham
    June 24, 2015


    You can talk about it all you like in the HoC but the truth is that the attendees (apart from a sparse few) are so financially illiterate that the concept would just go over their heads.

    It’s good that you keep battling away despite that.

  19. acorn
    June 24, 2015

    The United States of Eurozone (EZ) as you describe it JR, makes sense. But the “States” word, may eventually get replaced by “Regions”. But the EZ has to have a federal Treasury with its own tax base. Having 19 Treasuries spending Bonds to buy market Euro, rather than spending “reserves” with a keyboard, like proper sovereign fiat currency nations; is daft IMO.

    The techies have a plan to mimic the US FED structure, to depoliticise the ECB. That is, to do away with the 19 Eurosystem Central Banks (that own the ECB in effect), and replace them with five or six “regional” Central Banks (mini-ECBs).

    These would cover economic areas across and through boundaries of EZ member States; based on NUTS 2 Regions. This would mimic the US FED that has 12 regional Central Banks, that cover balance of payment factors in those regions; and, are deliberately divorced from any State political / financial interference.

    In the EZ, this would do away with with the large “national” TARGET2 imbalances at ECB level and there would be no highly politicised “national” bail-outs anymore; like Greece; Ireland etc.

    PS. I may have got the wrong impression in the last few days but, for what it is worth, the non-Euro part of the EU, better come up with a consolidated plan. There are some continentals who see the EU splitting into two. The Euro Economic Area and, as a working title, The Non-Euro Economic Area (non-EEA EFTA ?). I don’t think the UK will fit into either!

    1. acorn
      June 24, 2015

      Interesting comments from some Eurozone number crunchers – in English mind you! Why the **** would the Eurozone want to be a member of the IMF, when its balance sheet is currently eight times the size of the IMFs.

      Also, “… if Greece decides not to pay the IMF what it owes, it will be the IMF that has the problem not Greece! Greece could tell the ECB and the IMF to stick it where the Sun don’t shine; both of the latter, would be buying large quantities of toilet rolls.

      Reply Greece could walk away from the IMF if the EU does not mind, but it cannot simply walk away from the ECB as the ECB stands behind the Greek banks and is actively financing them at the moment

      1. acorn
        June 25, 2015

        The Greek Central Bank would disconnect from Target2 and become the currency issuer, and internal payment clearer, for Greek commercial banks. The Greek Euro would float away from the ECB Euro. Greece would become like the UK, with its own sovereign fiat currency (tax credits).

        An exchange rate would be proffered by the FX market within hours and the new Greek Euro / Drachma would find a level where foreigners were prepared to hold it. Importing essentials would be expensive for a while and may have to be rationed. From then on Greece will be a repeat of Iceland style recovery.

  20. Denis Cooper
    June 24, 2015

    One problem is with that date, 2017. The plan is to defer any treaty changes which are needed to the second stage, after 2017 and therefore after the UK referendum.

    That means that Cameron cannot propose that the “full-blown treaty change” he says he wants to make the EU more acceptable to the UK electorate should form one half of a package of treaty changes, with the other half being the treaty changes that are seen as necessary to strengthen the eurozone.

    The so-called “golden opportunity” to strike that kind of bargain, which previously came and went in the autumn of 2010 without Cameron making any use of it, will not recur under this plan running up to 2025, possibly:

    1. David Price
      June 25, 2015

      Just as the deferred EU referendum was used by Cameron as a ticket for the last election I reckon final, negotiated agreement on treaty details will be used for the next. There will be no concerted resolution until a way to stay in the EU can be finagled. The can will continue bounding down the road, Cameron will continue his role as administrator rather than leader and we will continue to receive new directives, impositions and charges from the EU.

  21. terry
    June 24, 2015

    Euroland is the the round hole and the Southern States are the square pegs. It was blindingly obvious to me and thousands of other ordinary folk that those countries with a poor rate of productivity were not going to be able to compete with those that had the highest. Even Gordon Brown realised that fact although PM Blair did not, along with far too many other politicians here. No surprise there, though because they were mainly the liberal socialist types. With no FX “Hedge” the less productive nations were always going to suffer. And so it came to pass.

    Given the glaring disparities I cannot see how it can ever work. Regardless of forming a US of Euroland. Unless those weaker ones, especially in the South, are prepared to take huge reductions in salaries and pensions to make themselves more competitive. I’m sure that would go down like the proverbial lead balloon. We only have to watch Greece for an insight to the Euroland of the future. We Brits want absolutely no part of it. Absolutely.

  22. Denis Cooper
    June 24, 2015

    Another problem with this plan is that it does not envisage that any country which has already joined the euro should be permitted to change its mind and make an orderly withdrawal, rather than be subsumed into the federal United States of Euroland as is now being proposed, and nor does it envisage that EU member states which have not yet joined the euro should be relieved of the treaty obligation to do so. So in effect in due course the federal United States of Euroland would approximate to the federal United States of Europe, with only the UK and Denmark being free from any legal obligation to ever join it. Is that what Cameron wants, so that eventually we get pushed or pulled into it as well, and legally subordinated in a federal United States of Europe?

  23. DaveM
    June 24, 2015

    Your penultimate paragraph is exactly right, but I can only imagine this working if the Euro area consisted of Germany, France, and BeNeLux. Possibly Austria. (Anyone else’s social policies and economies would be too different, as we are seeing now with the PIGS and Ireland.) And if that was the case there would be markedly less requirement for massive transfers of money – apart from possibly to France in the first instance.

    But then isn’t what I just described pretty much what the EU was meant to be when it was first created?

    June 24, 2015

    Grievous Bodily Harm was done to the UK Body-Politic in the first instance when our elected representatives to the British Parliament and to British Local Government decided without anyone’s permission but their own to open the doors to our country to millions of migrants.

    In some areas the Labour Party was instrumental in denying that social housing was prioritized to some categories of migrant, that even household appliances were being provided free. Even though neighbours of migrants, council workers and ALMO staff, not to mention the migrants and their children indicated quite openly and honestly that this was the case. In some areas anyone protesting about the situation was surmised racist.

    The British Establishment has built communities, as they call them, in our midst and now through the media warns us that a (few? ed|) in these communities are subject to violent and mass murdering influence “via the internet” .

    Obviously we should reject foreign control of the UK by abstracted EU bureaucrats. But note should be taken that our electorate was blind to the wrong doings of the British Parliament and Local Government in the first place. etc ed

  25. bigneil
    June 24, 2015

    Instead of writing this article, you could have saved time and just put – -the EU is a dictatorship.

    Reply I am trying to get the people who make the decisions to understand what is going on and to do something about it. Hurling abuse around is not the way to do that.

  26. Elliot Kane
    June 24, 2015

    This has been on the cards from the very first moment the Euro was mooted, if not before, so I doubt anyone is surprised.

    Every sensible commentator (Including yourself, John, IIRC) has always said that the only way a single currency can work is with a single central bank and a single financial system – ie becoming, for all intents and purposes, a single nation.

    I wish those countries that genuinely want to become part of a federal superstate all the best; and I wish they’d leave us out of it. Britain has no place in such a thing.

  27. ChrisS
    June 24, 2015

    We all know that the unelected heads of the EU in Brussels will carry on planning for their United States of Europe regardless of what voters or the UK or any Eurozone government thinks about it.

    The problem they face is that voters within the Northern Eurozone countries, particularly those in Germany, have no appetite whatsoever for massive financial transfers of their taxes and others, particularly those in France, want nothing to do with external control of their economy which ultimately means control from Berlin.

    Their scheming continues on the basis that they are arrogant enough to believe that they can change public opinion over time. This seems extremely unlikely.

    Money talks and I can’t see the leaders of either countries going into their 2017 general elections on a manifesto that includes these propositions.

    If they do, they will make Michael Foot’s and Ed Milliband’s ‘s suicide notes look like vote winners.

    To add to the difficulties, in France, Hollande has Marie Le Pen as a serious contender wanting out of the Euro altogether. Any attempt to move towards deeper political and economic union is likely to see the Front National in charge of the Elysee Palace.

    That would mark the end of the whole Euro project for sure.

    While we need to protect our position, I really can’t see that we have anything to worry about on this matter, at least.

  28. REPay
    June 24, 2015

    Oh dear – we know how bad governments are at planning. Unfortunately this will have a bad effect on the whole of Europe. It will also now be so easy for national politicians to blame the European Central Bank for everything that goes wrong…the democratic deficit plays to opponents of the union.

    I think the chances of the euro unwinding have just increased but the political class will spend most of their voters’ money to defend it!

  29. Richard
    June 24, 2015

    Mr. Redwood is absolutely correct in pointing out how our EU contributions are going to be used by the EZ countries to prop up the failing Euro.

    But even worse for us will be the Freedom of Movement rule for all the 485m people in the EU which will ensure that we continue to receive a stream of EU migrants leaving impoverished EZ countries.

    This migration will increase as the economies of the EZ countries worsen and as the EU continues to expand to include Kosovo, Macedonia, Montenegro, Serbia and Turkey. Plus the Ukraine and all the countries of Eastern Europe as far as the Urals according to a speech given by Mr. Cameron (Kazakhstan speech 01/07/2013).

  30. turbo terrier
    June 24, 2015


    Just having returned from Sussex and seen what is really going on what with construction, grid locked traffic no thoughts regarding water and sewerage and jobs could you please realy really consider standing for PM. Enough is enough. The ship is sinking under a burden of debt and we need people in place with real experience not a degree in three fifths of naff all.
    At the moment it is shades of Lions led by Donkeys AKA WW1

  31. bluedog
    June 24, 2015

    What should we make of HM Queen’s comments in Germany, warning against division?

    Bearing in mind that both HM Queen and her Prime Minister can claim Hanoverian descent, are we seeing the stirring of some dynastic and as yet unexpressed longing? On the one hand Cameron says that the UK will never be subsumed within the EU, but while in Germany his Monarch speaks of ‘irreversible friendship’. We must hope that remark does not hint at a northern European political union which may be part of a Plan B, to follow the seemingly inevitable implosion of the European Union in its current form.

    If one’s surname is arguably Schleswig-Holstein-Sonderburg-Glucksburg, one can imagine the attraction of a potential dynastic expansion.

  32. lifecell
    June 26, 2015

    Why users still use to read news papers when in this technological globe the whole thing is existing on web?

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