The Euro crisis has not been resolved. It is a rolling crisis, a series of accidents and market falls, often made worse by rows around the Council of Ministers table or by unfortunate and diverse spin from member states governments.
This week Portugal and the markets have returned to the issue of how that country will finance itself in future. Portugal has to pay more than twice as much as Germany to borrow money. This week her credit status was downgraded again. The Opposition in Portugal do not agree with the latest austerity programme. Many are worried that more cuts, more tax rises, and no final resolution of the borrowing problem leaves the Portuguese economy weak and unable to grow itself out of trouble.
Last night the UK Parliament was asked to approve a motion to “take note of draft European Council decision EUCO 33/10 (to amend Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism of Member states whose currency is the Euro)…”
The goverment wished to assure that the UK would not be part of the bail out mechanism after 2013, and had to go along with these changes to help Euroland buttress its position. Some of us have asked before that the UK government use their need for our assent to this Treaty change to get some powers back for the UK. We also want clear language which gets us out of all obligations to help bail out Euro memebr states in trouble, now as well as after 2013.
We were not offered such an approach by the government, so we were not able to back the government’s motion. The Oppositon, of course, did not wish to vote against the government, so there was never any chance of Parliament turning this all down. An amendment which Bill Cash drafted which I supported was not allowed for debate and the vote has been postponed.
Euroland is rushing towards stronger economic governance, and to some relaxtion of the purse strings so the stronger member states do bail out or support the weaker. The EU wants to press ahead with tax harmonisation, and tougher controls over budget deficits for Euro members. That all makes sense for those who share a currency, but none of this should apply to the UK who wisely kept out.