Saving the Euro?


According to Stephanie Flanders, BBC Economics Editor, the Euro has been saved. She believes if the Head of the European Central Bank had said a long time ago what Mr Draghi said this week, there would have been no Euro crisis! The BBC Economics Editor degenerated into putting forward  uncritically appraised Euro propaganda. She had no grip on the story at all.   At least they later interviewed Norman Lamont, who was able to explain all the hazards from here with the new Draghi plan. Let’s look at what she should have considered after hearing the Draghi spin.

Mr Draghi has said the ECB will buy 1-3 year bonds of problem countries. He will sterilise the intervention. Why does this make such a difference?

First, the ECB will not buy any more bonds of Greece, Portugal and Ireland who rely on money from the EU/IMF. So this statement does nothing to tackle the Greek  problem. Second, the ECB will only buy 1-3 year bonds of countries that can still raise money on public markets, if they have asked for help and have submitted to programmes of deficit cutting supervised by the EU and IMF. Spain seems reluctant to ask for such help, so no buying can take place.  Third, artifically propping up a bond market does not solve the underlying fiscal or balance of payments problems. They will bubble out in some other way. Fourth, how will they sterilise the intervention? Is thECB going to raise all the money needed for bond buying on its own credit rating? How easy will that be? Has Germany agreed?

The markets love the hint of easy money, and love the idea of quick profits at the expense of taxpayers who would be dragooned into propping up these bonds for a time. It does not solve the problems of the Spanish or Italian economies or budgets. It does not create a fiscal and political union.  The BBC should have put the other side of the case as well, instead of stating this has solved the Euro’s problems.

We have heard many times that the Euro area has at last solved its problems. We have heard of many big bazookas. We also hear that several of these countries remain in severe financial trouble, with overspending and overtaxing governments, declining output and high unemployment. Their political systems are no longer allowed to elect governments that speak up for the unemployed and offer a different economic strategy.

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  1. colliemum
    Posted September 8, 2012 at 5:40 am | Permalink

    This looks to me like an attempt by Mr Draghi to preempt a possibly unfavourable outcome of the verdict on the ESM by the German Bundesverfassungsgericht on Sept, 12th.

    And the little matter that the EZB is not supposed to print money can surely be overlooked for the sake of “saving the €”, can’t it?
    After all, what matter the tax payers in the EU countries, what matter the savings of the pensioners, what matter the general impoverishment of whole populations when weighed against the serious matter of the holy €, and the survival of the big banks!

    • Faustiesblog
      Posted September 8, 2012 at 8:15 pm | Permalink


      And doesn’t it make you wonder why MPs keep right on voting for every measure that makes it all possible? JR excepted, of course.

      How they bleat about what the government is doing … and then endorse it with their votes. Correction: OUR votes.

      I’m fast coming to the conclusion that our political system is so unsound that we need a clear-out, from top to bottom. The rot goes too deep for it to be reformed by those whose comrades know where their political bodies are buried.

  2. lifelogic
    Posted September 8, 2012 at 5:42 am | Permalink

    As you say Stephanie Flanders, the BBC Economics correspondent degenerated into putting forward uncritically appraised Euro propaganda. Well is that not what the BBC do every single time on the EU?

    All BBC debate on the issue are pre framed to distort the debate in the direction the EU would like.

    Norman Lamont was able to explain all the hazards from here with the new Draghi plan well he should know after his ERM experience obeying the orders from the absurdly foolish Mr Major and all those government experts. As of course should Cameron who was, reportedly, at Lamont’s side throughout Black Wednesday perhaps helping to pour a few more Millions down the black hole to not “save” the ERM.

    • lifelogic
      Posted September 8, 2012 at 5:52 am | Permalink

      You say “the BBC should have put the other side of the case as well, instead of stating this has solved the Euro’s problems.” The other side of the case is surely the only rational side to the case and should have been the main thrust of any intelligent inquiring journalist.

      I do wonder how the BBC keep their reporter so on BBC think message do they have some electric shock tag or something. Even if they are all recruited because they have the requisite BBC “think”, Guardian/Polly Toynbee/irrational (rather dim ex poly arts graduate type of views) why do none ever brake free as they start to think for themselves?

      • Oldrightie (@OldRigh
        Posted September 8, 2012 at 10:50 am | Permalink

        Unflattering personal comments about the BBC’s Economics Editor, about her family and income.

      • Robert Christopher
        Posted September 8, 2012 at 4:53 pm | Permalink

        It is like a cult, but instead of paying into it, as most cults expect their followers to do, they get paid for being a member, using the licence fees that we are expected to pay.

    • lifelogic
      Posted September 8, 2012 at 6:09 am | Permalink

      I see that even in the Spectator they are now in favour of the Norman Foster Thames Estuary Airport Plan (with an absurd Barrage). Do they not see that Heathrow and Gatwick are already in place, and are close to much of the motorways, links and population that uses them. Just get the new runways built and now.

      The local houses already suffer the noise and many have already put noise insulation double glazing in, a few more and less hanging about in the air waiting for a slot will be a very good thing. Many living in them only have jobs due to the airport.

      Not to mention all the staff and support industries that would have to move over to the East. Heathwick or perhaps Heathwick + Northolt (as Norman Tebbit suggests) is so clearly the right path to take. It is the cheapest solution and the best.

      The Spectator then goes on to suggest Heathrow airport should close and become an Enterprise zone another bad idea, Taxes should be neutral not selective by area. It just puts businesses in the wrong places for short term tax reasons. Anyway much of the business would be gone with the airport.

      • Muddyman
        Posted September 8, 2012 at 1:52 pm | Permalink

        Why not utilise the ex Greenham Common site ,with its exceptionally long runways ,proximity to rail and motorway – so it will put a few miles on getting to central London but with decent rail links etc. you will not see much difference in time.
        By the way , ignore Flanders,she’s a BBC ‘apparat-chick’ and there’s lots of these!.

      • Michel d'Anjou
        Posted September 8, 2012 at 2:53 pm | Permalink

        Lifelogic is right to highlight Northolt because it would be very cheap to extend, but slightly, the runway and motorway, tube and rail access is already in place around the site. Tony Blair removed it from consideration in the 2003 consultation. Incidentally he also removed the Thames Estuary Airport Co. whose letter to the Financial Times dated 30th July 2003 is worth a read. It states that “the Department for Transport has before it a submission from (us) with a statement of unequivocal and irrevocable funding to cover the cost of constructing an island airport and all supporting infrastructure. There would be no call on the Exchequer”. Would Lifelogic also please note that a so-called third runway is in fact a stand alone airport and it brings new flight paths and new homes under them. It really isn’t a case of “you moved near to a flight path and now there’s going to be more aircraft movements, so you should have known better”.

      • Robert Christopher
        Posted September 8, 2012 at 5:04 pm | Permalink

        “All the staff and support industries” would not have to move to Essex. Only those with specialised skills would move. The lower skilled would change jobs, both at Heathrow and in Essex!

        Surely we need to look at this long term, what we want over the next 60 years, not over the next three! Every Heathrow expansion appears to be the last one that is possible. yet we seem to manage to squeeze another, and another. At some point we will realise that we did one expansion too many. Is this the moment to pause and think.
        Why not leave a scaled down Heathrow for flights to London ‘City’ and available for emergencies, as Orly is? There would still be room for development.

        • lifelogic
          Posted September 9, 2012 at 6:41 am | Permalink

          We need a five runway hub airport. Heathwick/Northholt is simply the best and cheapest solution and in the right place for the population.

    • Timaction
      Posted September 8, 2012 at 8:08 am | Permalink

      Mr Redwood you are describing two problems. 1. The EU problem with its financial problems and continually kicking the can down the road.
      2. The leftist BBC and its obsession with all things opposed by the citizens of this country. It advertises for more EU, immigration, foreign aid etc and reports accordingly. When are the political leaders going to privatise this beast? Same answer as our membership of the EU. No more votes for the mainstream as all we get is more of the same. Everyone is waking up to the reality of politics.

      • lifelogic
        Posted September 8, 2012 at 10:33 am | Permalink

        Leftist, fake green, antidemocratic EU, BBC.

        See the Newsnight farce on the green issue this week with Peter Lilley.

      • Robert Christopher
        Posted September 8, 2012 at 5:08 pm | Permalink

        More to the point, how can we voice our disgust at how our licence money is being used for political purposes that are at odds with a vast number of people, the majority even, if they knew what propaganda they were viewing?

        We want to be able to influence, in a broad brush sort of way, what is broadcast and there appears to be no mechanism for doing this.

        • Alan Wheatley
          Posted September 9, 2012 at 8:20 am | Permalink

          Write to the BBC Trust and complain. They are charged with looking after the interests of the licence fee payer.

          • lifelogic
            Posted September 9, 2012 at 6:56 pm | Permalink

            Under the chairmanship of Lord Patten (absurdly appointed by Cameron) one wonders if it is worth the cost of the stamp?

    • Christopher Ekstrom
      Posted September 8, 2012 at 7:08 pm | Permalink

      I once experienced a massive round of applause for Major about ten years ago. Of course it was at the Theater and those applauding we’re gormless luvvies: BBC essentially.

    • Disaffected
      Posted September 8, 2012 at 8:01 pm | Permalink

      No surprise with the BBC. It receives money from the EU.

      54% youth unemployment in Spain and 35% in Italy. 18 million unemployed people in the EU and still mass immigration from the third world.

      Cameron would have done and will do anything to further his career. he has had two and half years to make some in roads on his promises, nothing of significance to date. Hot air and bluster. He has pulled the wool over the yes of many Tory MPs about who he actually is- he will not fool the public. 18 months and counting down to take any action before the campaigning starts for the election- it is a lost cause for the Tories.

  3. Mike Stallard
    Posted September 8, 2012 at 6:35 am | Permalink

    “Has Germany agreed?”
    We have the Somme to remember and Winston Churchill, the Germans have Weimar inflation and Hitler. They, like us, are determined to maintain their high economic status and this is now under threat. Their currency is sacred.
    There are, for the Germans, three options.
    1. The total break up of the Euro system.
    2. Continuing the present arrangements which do not have a future.
    3. Deflating the Euro so that the southern countries can keep up.
    I suspect that the third option is one which they will welcome.

    • Lindsay McDougall
      Posted September 8, 2012 at 12:21 pm | Permalink

      You have missed out the partial break up of the Euro system, which is the most likely outcome.

  4. Paul Perrin
    Posted September 8, 2012 at 6:49 am | Permalink

    Flanders is out of her depth. The BBC should stick to reporting news and not present amature analysis as fact. Look where taking Gordon Brown seriously got us…

    • Mike Stallard
      Posted September 8, 2012 at 4:38 pm | Permalink

      Her dad was funny though.

  5. Pete the Bike
    Posted September 8, 2012 at 6:51 am | Permalink

    The BBC are always uncritical of pro Euro propaganda, or any propaganda that agrees with it’s own left wing green agenda. Investigative reporting is a dead art at the Beeb. I remember a time when there were regular highly contentious documentaries exposing truths that would now go totally unreported. A sda decline and all the more reason to remove the tele tax and let them stand or fall on their own ability to earn money on a free market. They’d fail because nobody there has any experience of a free market. Too bad.

    • Max Dunbar
      Posted September 8, 2012 at 10:51 am | Permalink

      I rarely listen to the BBC and never watch BBC television. As for the “news”…… The few remaining justifications for the continuance of the BBC as a publicly funded institution are dwindling as the quality declines. It could have been argued, for example, that at one time Radio 3 provided high-brow music and discussion which was not commercial, but even that has descended towards banality. Off-peak periods on Classic FM are just as good if not better than Radio 3 now with people like David Mellor presenting them.

      • Alan Wheatley
        Posted September 9, 2012 at 8:31 am | Permalink

        Did you listen to the Radio 4 series of programmes that went in to great detail explaining how the Euro project came about and the way the politicians deliberately broke their own rules, leading to the disaster it has become?

        Classic FM do not do the Proms! This year you could watch the final night in 3D on BBC HD.

        There much that is wrong, or unappealing, with the BBC, but there is also much that is good which is unavailable elsewhere.

        • lifelogic
          Posted September 9, 2012 at 7:00 pm | Permalink

          The Proms and the Young Musician of the Year are dreadfully dumbed down – presented rather like Britain has talent. Even Radio 3 now has about 70% of drivel and silly wittering.

    • Lindsay McDougall
      Posted September 8, 2012 at 12:38 pm | Permalink

      Did you see Paxman, Peter Lilley and Natalie Bennett, the new leader of the Green Party on Newsnight with Jeremy Paxman? The introductory BBC footage on the shrinkage of the arctic ice suggested that the ice would all be gone by 2030 and wheeled out a professor to explain why.

      Peter Lilliey was livid. He said (rightly) that the footage was in direct contradiction to reputable international science, which states that 2070 is the earlist year by which all the artic ice could disappear. He also said that the professor that the BBC had wheeled out was a well known alarmist with little credibility.

      Jeremy Paxman made a mild attempt to defend the BBC’s footage but you could tell that his heart wasn’t in it. He was grinning all over; as an old media pro, he knew that Peter Lilley had just given him 5 mintues of good television.

      If you want a serious documentary, Jeff Randle’s Born Bankrupt programme on Sky was much more informative. It was simply a realistic assessment of the future that awaits our children as a result of the debt that we have piled up.

    • Electro-Kevin
      Posted September 8, 2012 at 5:17 pm | Permalink

      Radio 4 has become utterly childish in its bias – this channel is at serious risk of degenerating into sixth former-ish drivel.

      BBC TV news featured a big piece on polar ice caps – was this in reaction to the cabinet re-shuffle ?

    • Bob
      Posted September 8, 2012 at 5:55 pm | Permalink

      The Biased BBC blog contains a plethora of articles exposing the BBC’s bias on various issues.

      Chris Patten should bookmark the site and pick up on some of the issues raised.

      • lifelogic
        Posted September 9, 2012 at 6:46 am | Permalink

        Alas Lord Patten is BBC think to the very core. Why on earth was he appointed by Cameron? I can only assume because Cameron is BBC think to the core too.

      • Lindsay McDougall
        Posted September 10, 2012 at 12:49 am | Permalink

        When Chris Patten lost his Bristol seat in 1992, Norman Tebbit was heard to mutter “Tory gain”.

  6. Leslie Singleton
    Posted September 8, 2012 at 7:06 am | Permalink

    I increasingly worry that the europhiliacs are losing touch with reality. For me it has longed seemed obvious that if they want to save the Euro they should convert it into a hard currency (along the lines of the once mooted hard ecu) bring back national currencies to suit and run a system of parallel currencies but not a chance: all one can ever hear about is too much borrowing which though serious is not the problem (except perhaps when money is printed in unlimited quantities to buy it back).

    It is possible that the markets (and the German Court not to mention the forthcoming German elections) will bring all this down sooner rather than later but equally likely given the simply appalling human suffering shown in the jobless and other figures what I reckon will finally deflate the egos involved will be really serious public unrest with (unlimited) riots, an assassination or two and other consequences of the people taking direct action to bring down this pack of cards.

  7. Peter van Leeuwen
    Posted September 8, 2012 at 7:12 am | Permalink

    The ECB has a track record for what it has been most adamant about (2% inflation over the longer term). It now is also adamant about the euro’s irreversibility. The naturally slow and reluctant continental politicians and democracies will now have to follow – pooling more sovereignty. In spite of bumpy rides over the next few years, that is what will happen. From my perspective a good development.

    • Brian Tomkinson
      Posted September 8, 2012 at 7:39 am | Permalink

      So “politicians and democracies will now have to follow – pooling more sovereignty.” A dictat that you see as a good development. I don’t suppose you have ever wondered if the other people in those countries should be asked if that is what they want. You really are a fully paid up supporter of the anti-democratic EU.

      • Peter van Leeuwen
        Posted September 8, 2012 at 2:29 pm | Permalink

        Actually, next Wednesday Dutch people will have a say, in their national elections. The party which follows your line, and, contrary to your UK “democracy” has actual seats in parliament, is likely to fall from 24 (16%) to 17 (11%) seats. By whatever calculation, europhiles will have a large majority in the new parliament.

        • Lindsay McDougall
          Posted September 9, 2012 at 10:52 am | Permalink

          But Holland is part of the European mainland whereas we have our ditch, the English Channel, and that changes everything.

          Take one example, transport. Holland drives on the right and is fully integrated with the European road and rail networks. The UK drives on the left. It still marks distances on road signs in miles rather than kilometres. It has precisely ONE fixed link to continental Europe and that is not a road link.

          So logically how relevant are EU transport directives and interoperability requirements to the UK? Not very.

          Driving a UK car on the continent or driving a European truck in the UK is dangerous because the driver’s steering wheel is in the wrong place and his visibility for overtaking is very poor. Taking a UK car to the continent should be discouraged; if you can afford it, it is far better to hire a car in Europe. And there have been some horrendous accidents caused on UK roads by continental truck drivers driving on the wrong side of the road – an entire family of six people were killed in one such accident.

          And another thing. The lean burn engine that was being developed by Ford would have delivered 90% of the environmental savings that catalytic converters, which are now compulsory, deliver.

          EU influence on UK transport policy should concentrate on improving the structural gauge on UK rail lines so as to widen the scope and volume of UK – EU rail freight.

          Otherwise, as Helmut Kohl sneeringly but accurately said, the UK is a little bit peripheral, a little bit out of the way. We are a maritime nation and will always look to the open sea.

    • Alan Wheatley
      Posted September 8, 2012 at 8:28 am | Permalink

      I do not understand what you mean by “democracies” in the context in which you use it.

      In any event, that they “have to follow” sounds very undemocratic!

      • Peter van Leeuwen
        Posted September 8, 2012 at 2:41 pm | Permalink

        Cumbria has been familiar with (the threat of) floods for decades. The naturally slow authorities (local or national) had to follow by building some flood defences. That doesn’t make them undemocratic, and just like the continental democracies I wrote about they weren’t forced. They just belatedly followed the best course of action.

        • Lindsay McDougall
          Posted September 10, 2012 at 2:31 pm | Permalink

          But there are very different meanings attached to ‘had to follow’. Cumbria responded to a factual situation and nobody forced them to; it was clearly the best course of action.

          However, complying with the ‘Social Chapter’ is not clearly the best course of action but we are obliged to do so because of EU law and because the Labour Party threw away the opt out that had been negotiated.

          • Peter van Leeuwen
            Posted September 11, 2012 at 6:49 am | Permalink

            Labour’s different choice from Tories wasn’t “undemocratic” though. A country applying for the EU (leading to pooling sovereignty) is not an “undemocratic” decision.

          • Lindsay McDougall
            Posted September 11, 2012 at 10:01 am | Permalink

            For Peter van Leeuwen:

            What is undemocratic is that Labour’s renunciation is IRREVERSIBLE. This stems directly from the words in the Treaty of Rome – ‘ever closer union’. There is currently a one way rachet and the UK needs to break that.

    • Denis Cooper
      Posted September 8, 2012 at 11:32 am | Permalink

      You’ve got it partly the wrong way round, Peter.

      Draghi has been given charge of the ECB to do what Merkel wants, and it’s Merkel who’s adamant that no country must ever leave the euro.

      Because in her view

      “Our goal must be that all EU member States join the euro one day”

      and clearly that process of imposing the EU’s currency on all its member states, including the UK, wouldn’t be helped if any EU member state which had joined the euro later left it.

      She and her colleagues in the German political elite may make threatening noises in order to intimidate the Greeks, but in the end she would never willingly allow them to escape from the eurozone even if they wanted to.

      I should say that I name “Merkel” because she is the present German Chancellor, but the same would apply to any likely replacement, quite irrespective of the state of public opinion in Germany about keeping Greece in the eurozone or compelling it to leave.

      • uanime5
        Posted September 8, 2012 at 8:45 pm | Permalink

        Were Greece forced out of the Euro on the condition it would rejoin when if met certain criteria this would allow Greece to leave the euro while having to join it at some point in the future. So your claim that Germany won’t allow a country to leave the euro is flawed.

        • Denis Cooper
          Posted September 9, 2012 at 9:50 am | Permalink

          That is JR’s recommmended course of action, that Greece should be returned to the status of “a member state with a derogation”.

          Ie Greece would no longer be in the euro, but would be back on the conveyor belt into the euro to that it might eventually rejoin.

          As I pointed out previously when JR suggested that, there is nothing in the treaties to allow that to happen; as Peter correctly states below “”opting out of the euro “on second thought” is not in the treaties”; and as I stated in a comment further down which is still in moderation for some reason:

          “The present EU treaties only lay down the process for a country to join the euro; quite deliberately they provide no mechanism for a country to subsequently leave the euro; so if any country left the euro that exit would have to be under ad hoc, illegal, arrangements, retrospectively legalised through treaty changes; the departure of any country, even Malta, would set an immediate precedent, and because that precedent would have to be accommodated in the treaties it would become permanently embedded as a latent threat to the euro project.”

          • APL
            Posted September 9, 2012 at 11:53 am | Permalink

            Denis Cooper: “As I pointed out previously when JR suggested that, there is nothing in the treaties to allow that to happen;”

            The treaties are not worth the paper they are written on. The restraints in them are ignored whenever it suits.

            Why we our country should be obliges by treaties that most other signatories have abrogated frankly, escapes me.

          • Denis Cooper
            Posted September 9, 2012 at 2:26 pm | Permalink

            Reply to APL

            “The treaties are not worth the paper they are written on.”

            When some part is found to be an impediment to the process of “ever closer union” it’s not worth the paper it’s written on; otherwise the EU treaties and laws springing from them are “the law”, “our international obligations”, “our solemn commitments”, blah blah blah, and they have the power to not just restrict but totally wreck people’s lives, and even lead to their summary deportation and indefinite imprisonment in foreign countries without charge let alone trial, and all in the cause of promoting EU integration.

      • Peter van Leeuwen
        Posted September 8, 2012 at 10:11 pm | Permalink

        Denis, opting out of the euro “on second thought” is not in the treaties and the Tories don’t carry that much weight anymore to get such a change in the treaties which all countries have voluntary signed up for. By the same token, Britian has a real opt-out which the EU will have to respect. Only a voluntary British choice to join could change that in future, e.g. if it were considered to be in the City’s interest.
        Countries like Poland though may take a long time to join the euro, and they are quite right in that.

        • Denis Cooper
          Posted September 9, 2012 at 10:09 am | Permalink

          Cameron was certainly in a position to demand an EU treaty change of that kind back in late 2010 when Merkel started pressing for the EU treaty change to give the eurozone states the new legal right to set up the ESM; however he chose not to propose any other treaty changes as a quid pro quo which would be in UK national interests, and so he got none.

          The Bill to approve that radical EU treaty change prior to its final ratification by the UK will start its committee stage in the Commons tomorrow:

          • Peter van Leeuwen
            Posted September 9, 2012 at 3:55 pm | Permalink

            Cameron may also have calculated that he was lacking enough allies for that. Being the awkward kid on the block isn’t a long-term strategy to get any candies. Being cooperative may be a smarter way to ultimately get a new relationship for the UK inside the EU or even outside but within EFTA.

          • Denis Cooper
            Posted September 10, 2012 at 9:55 am | Permalink

            Reply to Peter.

            Merkel wanted a radical EU treaty change and like all the other EU leaders Cameron had a veto over that happening; even if none of the other leaders agreed with him he still had a veto and could have stopped Merkel getting what she wanted unless he got something in return.

            What could Merkel have done then? She could have dropped the idea of an EU treaty change and tried to make a side treaty, but that had already been done with the establishment of the EFSF and the reason she wanted an EU treaty change was because she knew that the EFSF was illegal under the existing EU treaties and feared that the German constitutional court would block German participation.

            As stated on page 5 of the House of Commons Library briefing paper which can be accessed here:


            “The EFSF, which does not have a basis in EU Treaties, but was rather created as a separate Special Purpose Vehicle, was the subject of a legal challenge to the German Constitutional Court launched on 21 May 2010 on the grounds that, among other things, it breached Article 125 … From October 2010, it was acknowledged that any permanent loans facility should be placed on a sound legal footing through a revision to the TFEU.”

            It was not a secret that Merkel was afraid that the German court might strike down the EFSF; if I was aware of that at the time through published literature then certainly Cameron would have been aware of it, but he chose not to take the opportunity to demand any quid pro quo in British national interests.

        • Lindsay McDougall
          Posted September 9, 2012 at 2:00 pm | Permalink

          One thing that we don’t like is that an opt out negotiated by a Conservative government can be surrrended by a Labour government but cannot thereafter be reclaimed. I think that the Social Chapter came into that category. This is totally unacceptable to UK Eurosceptics, both Conservatives and UKIP. NO treaty or agreement is irreversible to a sovereign state.

          You should also be aware that the only referendum we have had in the UK on EU treaties was on the original decision (and that was 3 years after joining). None of the Single European, Maastricht, Amsterdam, Nice and Lisbon Acts has been endorsed by a Referendum. There was a Party called the Referendum Party that contested the 1997 election and that played a small part in bringing down John Major’s government.

          The Lisbon ‘Treaty’ (constitution) appointing an EU External Service based on Herr von Rumpy Pumpy and Baroness What’s-her-name gets in the way of our independent foreign policy and is a complete waste of money.

          • Peter van Leeuwen
            Posted September 9, 2012 at 4:04 pm | Permalink

            I believe that there are examples of countries revoking (part of) treaties if they are determined. E.g. the “European Communities Act, 1972” is a piece of national legislation, the EU cannot amend it, the UK could in principle. Obviously there would be anger across the Channel in such a case.

          • Lindsay McDougall
            Posted September 10, 2012 at 10:38 am | Permalink

            There are people who want to repeal the “European Communities Act, 1972” but that is the one that has been approved in a referendum. More clear cut are the UK Acts acceeding to the Maastricht, Amsterdam, Nice and Lisbon Treaties. None of these has been approved in a referendum, so we don’t need a referendum to repeal them.

            I’m sorry if any of this will cause anger across the Channel but you have to be angry with the right people. A basically Eurosceptic UK electorate has been bullied and lied to by the pro-EU elite, ever since Edward Heath’s time. The villains have been led by Messrs Major, Blair and Brown.

            The Single European Act passed by Margaret Thatcher in 1986 has also not been endorsed by a referendum. However, it gave us the Single Market and the loss of soveignty was much less than that surrendered later.

    • Mike Stallard
      Posted September 8, 2012 at 4:40 pm | Permalink

      What do you think of a Euro devaluation for everyone though? It might help German exports and allow the Greeks and Italians and Spanish some leeway.

      • Peter van Leeuwen
        Posted September 8, 2012 at 9:59 pm | Permalink

        I had seen your 3 options, but I wonder if devaluation without high inflation would be possible. For pensioners like me, price stability and the value of the euro is rather important – even if a lower euro might temporarily help Dutch exports.

      • Sebastian Weetabix
        Posted September 9, 2012 at 3:41 am | Permalink

        The structural inequities of the Eurozone would remain so it would not help. What the PIGS need is a devaluation relative to the northern Europeans; 40-50% would be about right.

    • Robert Christopher
      Posted September 8, 2012 at 5:15 pm | Permalink

      What would be the consequences of “not following”?

      You mean, there is no choice! So it’s not just undemocratic, it is authoritarian!

      When European Central Bank supremo Mario Draghi vowed earlier this summer to do ‘whatever it takes’ to save the euro, he really meant it!

      • Peter van Leeuwen
        Posted September 8, 2012 at 9:56 pm | Permalink

        please see my reaction to Alan Wheatley above. It follows from necessity (the earlier political trade-off to bind a re-unifying Germany into a common currency, one which I happen to like – I don’t keep five collections of foreign currencies for my continental journeys anymore)

  8. ralphmalph
    Posted September 8, 2012 at 7:19 am | Permalink

    Personally I think Frau Merkel has allowed the ECB to do this because it has been decided that Greece will be kicked out and left to its own defences. When the trioka announce that Greece has not done enough and gets no more money then the ECB will finance Spain and Italy whilst the situation stabalises.

    Then the interesting times will begin because other countries will be able to see whether it is better to be in the Eurozone or out of the Eurozone.

    • Denis Cooper
      Posted September 8, 2012 at 11:42 am | Permalink

      I don’t think so; the single currency is primarily a (geo)political project, not an economic project, and once a country joins the euro the prison door slams shut and the key is thrown away; that door will never again be opened to release it, no matter what the economic costs to that country or to other countries.

      • Peter van Leeuwen
        Posted September 9, 2012 at 6:37 pm | Permalink

        “prison”? Do people generally queue for UK prisons and apply for entry?

    • Lindsay McDougall
      Posted September 8, 2012 at 1:04 pm | Permalink

      But if the ECB finances Spain and Italy, it will eventally lead to a weak Euro or to Germany picking up the tab. Are you sure that the situation is going to stabilise without all 5 PIIGS leaving the Euro zone?

      You have to remember that in Spain’s case, it’s not just the current level of government debt; there is regional government debt that is going to be transferred to central government and there are regional banks that will be bailed out. It doesn’t have to be that way – the Spanish government could refuse to bail out regional government and banks – but it will be that way because the Spanish government thinks that bail outs are its duty.

      And in Italy, there are a lot of zombie banks that are too poor to lend. We haven’t heard all of Italy’s bad news yet.

    • Leslie Singleton
      Posted September 8, 2012 at 3:57 pm | Permalink

      Ralphmalph–I believe you have it totally wrong and that Merkel will do anything rather than have Greece leave on her watch. Remember some of the stuff she spouted not too long ago about how she maintained that the IMF, far from being begged to help, would never be allowed in to help. She knows, correctly (and if only), that it all falls apart (even more quickly) if Greece has to leave. God help the poor Greeks I say.

  9. Nicola Clubb
    Posted September 8, 2012 at 7:22 am | Permalink

    I think someone needs to give the BBC a kick up their backsides as it seems to me that they just spout what ever they hear in spin. This is yet again an example of why the licence fee is wrong and they need to be force to compete with the rest of the TV Broadcasters or they need a total re-vamp at the top.

    • Alan Wheatley
      Posted September 8, 2012 at 8:32 am | Permalink

      The failings you correctly identify are not a consequence of the licence fee. Indeed, the licence fee ought to make the BBC beholding the those who pay it; that is where the change is needed, and the government should do so.

      • James Sutherland
        Posted September 8, 2012 at 9:09 am | Permalink

        It is beholden to those who *make* us pay it: the statist side of the government, and the EU’s tolerance of a state broadcaster in the face of free-market rules which oppose state airlines, phone companies and other monopolies.

        Make the license fee optional – encrypt their TV channels and use smartcard conditional access, like Virgin, TopUp TV and Sky do for the channels they charge for – and the BBC will suddenly re-discover the other end of the political spectrum from the blinkered state-worship their present existence requires.

      • forthurst
        Posted September 8, 2012 at 12:46 pm | Permalink

        “Indeed, the licence fee ought to make the BBC beholding the those who pay it; that is where the change is needed, and the government should do so.”

        What if the ‘government’ has been captured by the same anti-English globalist forces that infest the BBC?

        • Alan Wheatley
          Posted September 9, 2012 at 8:39 am | Permalink

          The answer is in the hands of the electorate.

      • Bob
        Posted September 8, 2012 at 5:49 pm | Permalink

        @Alan Wheatley
        “…the licence fee ought to make the BBC beholding the those who pay it…”

        It would be beholden if the licence fee payers had a choice.

        The choice at present = if you watch TV broadcasts you need a licence, even if you only watch Freeview.

        There is no longer any justification for such a system.

        • Alan Wheatley
          Posted September 9, 2012 at 8:41 am | Permalink

          If there was no licence fee you would not have Freeview.

          • APL
            Posted September 9, 2012 at 9:46 pm | Permalink

            Alan Wheatley: ” fee you would not have Freeview.”

            Freeview is a technological solution to a problem no one, except the techies (possibly) cared about.

            We would be no worse off it it hadn’t been invented.

            It has been expensive to implement and of marginal significance, other than to allow the BBC to broadcast notices for ten of twenty four hours advising viewers that the channel is shut down and resume broadcasting at bla bla bla.

  10. Brian Tomkinson
    Posted September 8, 2012 at 7:33 am | Permalink

    Stephanie Flanders is the economics editor of the BBC not just a simple correspondent. Her contributions are seldom worth listening too as they never seem objective. She is not alone in that at the BBC. I have noticed an increasing tendency to have the BBC ‘s presenter offer their account and then for “balance” they ask a politician or someone else to offer an alternative view. For the listener or viewer the “debate” is then between the s0-called objective report from the public service broadcaster against the partisan alternative view. If they want to behave in this way, which is akin to a newspaper’s editorial bias, then they shouldn’t be allowed to confiscate our money via the licence fee to exercise their subjectivity.

    • Alan Wheatley
      Posted September 8, 2012 at 8:40 am | Permalink

      Yes, the editor; as I recall taking over from Evan Davis when he moved to the Today programme.

      As to BBC behaviour, it should be as we, the licence fee payers, want. The licence fee should mean that the BBC are uniquely place to be totally independent and objective. The government needs to act to make sure this is what happens, primarily by changing the Trust so it does properly represent the best interests of the licence fee payers.

    • Barry Oblivion
      Posted September 8, 2012 at 2:56 pm | Permalink

      I have noticed this trend too; often accompanied by some nonsense graphics.

      Its worse on BBC News 24 when the journalists interview each other because they have no expert on hand…. Its very poor journalism.

      • lifelogic
        Posted September 9, 2012 at 7:07 pm | Permalink

        Indeed it is like listening to a fairy story and always the same one.

    • Bob
      Posted September 8, 2012 at 5:36 pm | Permalink

      Mr Redwood,

      A week or so ago you stated that ownership of a TV required a licence. Do you still believe this to be true?

      • Bob
        Posted September 9, 2012 at 1:24 pm | Permalink

        Mr Redwood
        Are you there?

        • lifelogic
          Posted September 9, 2012 at 7:09 pm | Permalink

          It seems it is watching tv “live” transmissions that needs the licence.

        • APL
          Posted September 9, 2012 at 9:52 pm | Permalink

          Bob: “A week or so ago you stated that ownership of a TV required a licence.”

          Come on Bob, do you really expect MPs to know the law? I mean they only there to be herded through the lobbies by the whips, quite a few actually boast about not knowing what they vote for, case in point Ken Clarke ( now paid £110,000 per year for doing nothing, but he is such a cheeky chappie so easily worth every penny ) on one or other of the EU treaties, ‘ of course I haven’t read it’.

  11. JimF
    Posted September 8, 2012 at 7:36 am | Permalink

    In summary, then, quasi-democratic forces are slowly chipping away at the economic reserves of European peoples and throwing them into a pit where they benefit only themselves, a select few who can skim and take a profit, and the underclass who pick up the crumbs.

    This text persuades me further that scientists should sit alongside economists as at least their equals during these manoeuvres. To a scientist, it sounds as though economists are trying to persuade us that water can run uphill, or that we can control the amount of matter falling into a blackhole. In the end, the forces of science and nature will win out, and these clever games won’t seem quite as clever.

    • Robert Christopher
      Posted September 8, 2012 at 5:25 pm | Permalink

      … but, please, not climate scientists!

    • lifelogic
      Posted September 9, 2012 at 7:11 pm | Permalink

      Indeed but not scientists paid by the state to follow “BBC think”.

  12. Gary
    Posted September 8, 2012 at 7:38 am | Permalink

    The euro had a slim chance to survive until this announcement. Now, like the pound, they will debase it away.

  13. Iain Gill
    Posted September 8, 2012 at 7:53 am | Permalink

    according to the governement immigration is well on its way down to the tens of thousands, equally laughable

    there is lots of fantasy in the political and media bubble

  14. Richard Sage (@rjs26
    Posted September 8, 2012 at 7:53 am | Permalink

    Could it be that you are so anti everything European that you cannot countenance an argument that is contrary to your negativity? Stephanie Flanders has written on the Euro crisis many times and has been quick to criticise the ECB and the EU when she has felt this justified. This week ECB announcement has certainly been seen as a new approach the should at least be given serious analysis, not dismissed out of hand.

    Reply: I offered some of that serious analysis today in my piece, the very issues Stephanie Flanders failed to discusss.

    • James Sutherland
      Posted September 8, 2012 at 9:55 am | Permalink

      Richard, she may have criticised the ECB itself, but when has she seriously considered whether or not the Euro should exist in the first place, or the wisdom of trying to prolong it? That is the question we need asked now, not “HOW should we save the Euro?”, but “SHOULD we?” How much thought has she given to the options for an orderly exit?

      From a quick search, she seems to regard this as a choice between “a big leap forward, or a wrenching break-up” – pre-judging the issue, assuming the end of the Euro to be a negative outcome in itself. Why can’t she have an open mind about whether or not the Euro should be kept?

    • lifelogic
      Posted September 8, 2012 at 8:32 pm | Permalink

      Stephanie Flanders, from all I have seen of her and her Stephanomics program, is a complete joke – yet another Oxford PPE, I learn from WIKI – perhaps she should stick to singing comic duets rather than just reading out the EU PR line as if it were fact.

      Also interestingly it is reported on Wiki that she previously dated Ed Balls and Ed Miliband, if true she clearly has little taste in men too it seems. Too much post neo-classical endogenous growth theory from the Balls area it seems. She makes Evan Davis look good in comparison – quite an achievement.

  15. merlin
    Posted September 8, 2012 at 8:16 am | Permalink

    The BBC is a state controlled left wing propaganda machine that should have been privatised many years ago. I watched Peter Lilley on Thursday night complaining about a piece by a well known green alarmist on the melting of the artic ice. He actually stated that he was brought on the programme not to talk about the completely unscientifiacally checked green propaganda but something totally different. So that’s 2 days on the trot that the BBC have been found out, I hope somebody from the Coalition makes a noteworthy public complaint about the BBC’s predjudices, because the left wing bias pervades all there programming schedules as well.

    • Michel d'Anjou
      Posted September 8, 2012 at 3:41 pm | Permalink

      Sir Andrew Green was due to appear on the Today programme on Thursday 6th Sept to discuss immigration. His slot was at 8.30 leaving time for a proper discussion. In fact the item ran at five to nine giving him at best two minutes to cover the subject (set against him was someone from the Oxford Migration Observatory). He very publicly complained, on air, over this treatment of the subject, but was simply told other items had overrun the available time. Of course they did, and no doubt will again.

    • Bob
      Posted September 8, 2012 at 5:41 pm | Permalink

      The Tories are scared of the BBC.
      They saw what happened to Murdoch.

      • lifelogic
        Posted September 8, 2012 at 8:35 pm | Permalink

        The BBC line pro EU, green tosh, big state drivel is clearly exactly what Cameron and Clegg want – why else would they have put Lord Patten in place at the trustees.

  16. Brian Robinson
    Posted September 8, 2012 at 8:44 am | Permalink

    Isn’t it tragic that a broadcaster that used to be the model for all others has become so discredited. I now find myself sceptical of all their news. EU, Climate, Israel, Syria. I can’t trust anything they say.

    • lifelogic
      Posted September 9, 2012 at 7:13 pm | Permalink

      Certainly not on those topics you list.

  17. Acorn
    Posted September 8, 2012 at 8:47 am | Permalink

    The ECB, like the BoE, does not “borrow” money, it is the currency issuer for the Euro, it can actually print / digitise new money into existence. Sterilisation makes the banks deposit cash at interest or buy long term Treasury debt to balance out the increased cash in the banking system. There is no evidence that that increased cash will generate any inflation in such a heavily depressed “demand side” of Eurozone economy; as it hasn’t in the UK.

    The ECB has, so far, bought 7% of Eurozone governments’ debt. The BoE has bought 36% of UK government debt. The ECB is acting as a sovereign currency issuer and a de-facto Treasury. The various funds dreamt up, like EFSF / ESM etc etc, are poor substitutes for a Sovereign Treasury. At the macro level, the Central Bank and the Treasury are one and the same in a sovereign fiat currency nation.

    It is a Sovereign Government choice that it act as a “user” of the currency and lets its Central Bank be the sole issuer of the currency; that is, it pretends to have to tax and borrow like a currency user, a household for instance, when there is no operational requirement to act this way. But, it does fool the public into thinking the government is like a typical family household; and, makes the job of Her Majesties Revenue and Customs a lot easier, collecting taxes in the one currency they will accept in payment.

    • Denis Cooper
      Posted September 9, 2012 at 9:35 am | Permalink

      “it pretends to have to tax and borrow like a currency user, a household for instance, when there is no operational requirement to act this way.”

      That depends on the law, and of course whether the law is observed.

      Notionally under the 1998 Act the Bank of England has independent control of monetary policy, which it must lalways direct primarily towards meeting an inflation target that has been set by the Chancellor, a member of the government; that is unless Parliament agrees that the Chancellor may invoke reserve powers under the Act and then give the Bank instructions on monetary policy, which no Chancellor has yet done.

      Notionally under the EU treaties the ECB has a higher degree of independence than the Bank of England, it is strictly forbidden for anyone outside the ECB to even try to influence its decisions, and there are no provisions on reserve powers whereby politicians could start to give its instructions.

      In either case if the law was actually being observed then it would be perfectly conceivable that a central bank might insist on maintaining the arms length relationship prescribed by law and refuse to collude with a government by creating new money to fund its budget deficit.

  18. Vanessa
    Posted September 8, 2012 at 9:16 am | Permalink

    The BBC is so biased as to be a waste of time watching or listening to. They do not report the truth as they used to be known for but as much propaganda as they can get away with. After all they take “loans” from the EU of £141 million the last time I looked and so they cannot report anything against the EU because then they will have to pay them back. I flatly refuse to pay my licence fee because of this corruption. There is a website called “biased BBC” which says it all !

  19. frank salmon
    Posted September 8, 2012 at 9:35 am | Permalink

    IF the BBC had to live in the real world of competing markets, it would be more dynamic, more accountable, more efficient and less corporatist (with all that that brings with propaganda and a virtual war machine on climate etc.).
    IF the EU had to live in the real world of competing markets they would be trying to encourage free markets with less subsidy and less bankrolling of whole nations within the EU.
    We nee to rid ourselves of BOTH institutions.

    • uanime5
      Posted September 8, 2012 at 8:53 pm | Permalink

      Given the quality of programs on competing channels I’m glad the BBC doesn’t have to compete. All competing results in is bland, dumbed down programming made to appeal to as broad an audience as possible; reality shows; and lowest common denominator humour.

      • Alan Wheatley
        Posted September 9, 2012 at 8:47 am | Permalink


        • Will F
          Posted September 9, 2012 at 11:37 pm | Permalink

          Stockholm syndrome. The BBC constantly tells us its programmes are high quality, but having lived in the U.S. for two years, I’d take their range of channels any time over the formulaic, politically correct dross we’re stuck with here.

          And with regard to the other TV channels, if half their market share wasn’t taken from them by the BBC, it would be more worth their while to make a wider variety of programmes.

          If you were forced to pay £10,000 per year to one car company, which then offered its cars for free, other car companies might struggle to compete, and you would probably then think you were getting a good quality car for your £10,000.

          • Lindsay McDougall
            Posted September 10, 2012 at 10:44 am | Permalink

            Surely the world’s worst ever car was East Germany’s Trabant, although I understand it has now attained cult status. Possibly we should pay our licence fees in used Trabants, or even better parts of used Trabants.

  20. merlin
    Posted September 8, 2012 at 9:36 am | Permalink

    It appears that in order for the ECB to buy bonds it is going to have to print money, now where have we heard this idea before, both the UK and the USA have used this technique . The manufacturers of printing presseses must be rubbing their hands with glee and the cotton industry looks like it will probably boom over the next few years. The overall picture of printing and borrowing has been the only solution that the western world has been able to come up with. Further down the road this will ultimately lead to inflation if not hyper inflation and the gold and silver market will boom since fiat currencies will become worthless. The solution to, europe’s problem is growth of sovereign nations, this will never happen under the EUSSR and it is possible that kicking the can down the road may continue for many years to come with virtually no growth at all, the effect of this on individual nations will be catastrophic, look at Greece as an example. The Euro has devastated countries and is continuing to do so, the bureacrats in Brussels don’t care as long as they can pursue their unrealistic idea of the united states of europe. The euro gravy train rumbles on with the eurocrats enriching themselves at the expense of the poor bloody citizens and it’s all happened before remember soviet russia and the politbureau. The EU has learned absolutley nothing from the past and the EUSSR is just repeating history all over again and because it is anti democratic and the general public are not interested in Europe it will get increasingly more powerful as time passes. At present I see nothing getting in the way of this march to serfdom unless there is a revolution or germany pulls the plug, The UK is almost irrelevant and is unable to do any thing since all 3 parties are pro EUSSR.

  21. David Edwards
    Posted September 8, 2012 at 9:55 am | Permalink

    Ms. Flanders’ hubris is symptomatic of the ‘sugar rush’ effect that these sorts of announcements from Draghi et al evince in some quarters. I am no economist but it seems self evident that whilst this measure has bought some time it is in no way a cure for the fundamental problems that will inevitably lead to a break up of the Eurozone.

  22. davidb
    Posted September 8, 2012 at 10:05 am | Permalink

    Ah the BEEB conundrum. Just dont watch it. Dont listen to its radio news output. I have a much better command of world affairs since I stopped reliance on aunty. We have the internet. Read widely. Read Spiegel which is at once very interesting, and informs you of the German view without our own media filtering.

    There are Spanish, Greek, Danish and more newspapers published online. The comments in the Economist are very good – if overwhelming. Read blogs. Watch Mr Farage or Mr Hannan on you-tube – always good for entertainment value alone.

    The really interesting thing about the BBC is why it is not privatised. It must be fairly valuable. It is a known international brand. Turn it into a subscription service and sell it off.

  23. Atlas
    Posted September 8, 2012 at 10:17 am | Permalink

    Certainly there is quite a contrast in questioning depth between S. Flanders and A. Neil on matters economic – and I know which one I find more credible.

    • lifelogic
      Posted September 8, 2012 at 8:39 pm | Permalink

      A Neil to me seem to be competent and fairly central politically everyone else is clearly way off to the pro EU, pro green tosh, ever bigger state lunny left.

      • Alan Wheatley
        Posted September 9, 2012 at 8:56 am | Permalink

        A. Neil, according to his autobiography, when Editor of the Sunday Times had the wherewithal to phone up the Home Secretary in the middle of the night, getting him out of bed and coercing him into getting the Police to act, as opposed to watching, while a businessman was besieged in his own premises by rioters (strikers) and in fear of his life.

        • lifelogic
          Posted September 9, 2012 at 7:15 pm | Permalink

          Good for him.

  24. Neil Craig
    Posted September 8, 2012 at 10:23 am | Permalink

    The BBC is not a news distributor.
    It is as much a state owned propaganda organisation as Pravda ever was (& isn’t now), willing to slant, censor and indeed outright lie to promote Big Government and the scare stories it relies on.

    When Orwell wrote of the Ministry of Truth in 1984 it was a satire of the BBC, for whom he had previously worked.

    • lifelogic
      Posted September 8, 2012 at 8:40 pm | Permalink

      Perhaps that is the real reason not to have a statue of Orwell at the BBC.

  25. NickW
    Posted September 8, 2012 at 10:34 am | Permalink

    The BBC admitted in a letter to a Tory MP that it has received nearly £3million in grant money from the European Union over the past four years.
    Other grants totalling £16million came from local authorities across the UK. The money was spent on “research and development projects”.
    The broadcaster also disclosed that its commercial arm BBC Worldwide borrowed over £141million from the European Investment Bank since 2003. Of that figure £30million is still due to be repaid by the end of May this year.

    etc etc

    The BBC should not receive public money.

    • NickW
      Posted September 9, 2012 at 12:50 pm | Permalink

      I have just looked up the Wikipaedia entry for Ashley Mote, and I now realise why this comment was not posted. I agree with that decision, I was not aware of the history behind this man. My apologies.

  26. Denis Cooper
    Posted September 8, 2012 at 10:41 am | Permalink

    The plan as announced by Draghi may encounter obstacles and may need to be modified, but that could be done with relatively little opposition now that the ECB has followed EU politicians and other EU institutions by abandoning the rule of law.

    In a strange and rather ironic sense the ECB was the last bastion defending the rule of law within the EU; now it has finally fallen, and anything that is seen as being necessary to preserve the present eurozone intact will be done no matter what the legalities – or the “technicalities”, as some such as Stephanie Flanders would describe them.

    I’ve repeatedly warned over the years that confident expectations that the euro would eventually “collapse” or “break up” were misplaced, because the eurocrats would do everything they possibly could, legal or illegal, ethical or unethical, to stop any country ever leaving the euro, even if it was only tiny Malta and in economic terms it would hardly be missed in the eurozone if it reverted to its own currency.

    The present EU treaties only lay down the process for a country to join the euro; quite deliberately they provide no mechanism for a country to subsequently leave the euro; so if any country left the euro that exit would have to be under ad hoc, illegal, arrangements, retrospectively legalised through treaty changes; the departure of any country, even Malta, would set an immediate precedent, and because that precedent would have to be accommodated in the treaties it would become permanently embedded as a latent threat to the euro project.

    So I would now say that the chance of the present eurozone emerging intact from this crisis has risen to over 80%, and add another guess that then there’d be maybe a 90% chance that we would join it within the following 20 years, rising towards 100% over time.

    Anyone who thinks that the British people could prevent that happening through a referendum should understand that if a future government wanted to get us into the euro and it didn’t want to risk asking us in a referendum then it simply wouldn’t hold a referendum, whatever it had said in its manifesto for the general election, and “notwithstanding any provision of the European Union Act 2011”, even if that “referendum lock” law was still on the statute book.

    • Denis Cooper
      Posted September 9, 2012 at 9:15 am | Permalink

      Missed for moderation.

    • Denis Cooper
      Posted September 9, 2012 at 10:11 am | Permalink

      JR, is there a particular reason why you’re declining to publish this comment?

  27. Terry
    Posted September 8, 2012 at 10:45 am | Permalink

    How this woman ever got that position at the BBC, I will always wonder. Economics is an abstract subject and in the case of Flanders, a dedicated follower of Socialist fashion, she views all things from the left side of her brain. Never from the real, factual, side.

    The reality is that the ECB are ruled by the Germans, as is the EU and the Eurozone and on September 12, next Wednesday, the German High Court will rule whether the ECB plan is legimate in German Law. My guess is that it will not be a positive outcome for the ECB. But that is a guess and I am prepared to await that result. Unlike Flanders, obsessively pro EU and Eurozone, with her Red Tinted glasses.

    • uanime5
      Posted September 8, 2012 at 8:58 pm | Permalink

      The left side of the brain is the logical side, the right side is the creative one. So if Flanders is using the left-side of her brain she’s using the logical part of her brain.

      Were she to use the right-side of her brain she’s probably come up with some nonsensical idea about letting the markets fix everything via the trickle down effect.

      • Lindsay McDougall
        Posted September 9, 2012 at 11:10 am | Permalink

        As an ex- girl friend od Ed Balls, Muzz Flanders has only a left side to her brain – and it ain’t logical.

      • Terry
        Posted September 9, 2012 at 3:40 pm | Permalink

        Well, uanime5, we both appear to speak English but you have a different interpretation of my words. I write with Political undertones and you read as though I was referring to Neurology. Thanks for responding, though and it does go to prove that we really do have to be careful what we write and what we say.

        No wonder Politicians are they way, they are! Guarded and non-committal.

  28. Roger Farmer
    Posted September 8, 2012 at 10:50 am | Permalink

    Another way to kick cans down the street. The practical problem here in Spain is that their largest industry, tourism, in it’s widest sense is now in a very different position to that pertaining in the sixties through eighties.
    Holiday competition from places like Thailand and Goa is a very real choice for northern european tourists. When they get there holiday life is much cheaper.
    APD for a family of four is in excess of £100.00. to come to Spain and probably about a third of that to leave. Money they cannot spend at their destination.
    So called budget airlines rip passengers off in so called school holiday periods and I see they are trying to sustain it for the grey market outside holiday times.
    Package companies using Spain as a destination offer all inclusive deals. The consequence of this is that the restaurants get many fewer customers. This affects employment.
    Property purchase an aspect of tourism has been hit by a treble whammy. Too many were built so remain empty. Prospective buyers from northern europe no longer have the means to purchase. Spanish central government has been slow to control regional and local government where corruption was rife, a factor that no doubt makes people who want to purchase somewhere in the sun to think of elsewhere.
    The solution as I see it is for Spain to revert to the Peseta and then take control of it’s own economy, devalueing and thereby making itself financially attractive again. Should this happen government would need to put in strong controls to prevent price hiking of the sort that occured when Spain joined the Euro. When they did, at I think about 263 pesetas =E1.0 ,a cafe con leche went from 150 pesetas to 1.0 euros a cup.
    Am I holding my breath in anticipation of politicians taking the radical steps necessary, absolutely not whether it be in Spain or the UK. Politicians with real business experience and the drive to redress all the failures are about as rare as rocking horse droppings. They prefer to sit on the fence waiting for someone else to take a positive step.

  29. zorro
    Posted September 8, 2012 at 11:06 am | Permalink

    Overall, I do not agree with her analysis. It depends how you define ‘save’ the Euro. If she means long term, I doubt it or at least it depends on several other factors. In the short term, probably yes although as you say markets rally on the whiff of making/gettingg easy money.

    However, I think that she is correct in saying that if they had (notwithstanding the legality of any of this) set up around a 3 trillion Euro back up/strategic reserve/serious intention about 18 – 24 months ago, they may well have avoided some of the damage which has happened to Greece and could have given themselves a chance to engage in some serious reforms. That is a big ‘if’ which they chose not to/felt unable to undertake….


  30. Publius
    Posted September 8, 2012 at 11:23 am | Permalink

    I admire you, Mr Redwood, for having the fortutude to listen to BBC economic analysis (if analysis is the right word). I can hardly bear to do so. It is bad for my blood pressure.

    The great irony, I often think, is that the goons at the Beeb are cheering on the very people who are robbing them. Clever robbers, eh?

  31. merlin
    Posted September 8, 2012 at 11:24 am | Permalink

    As a committed europhobe I keep up to date with the latest developements in the EUSSR through

    referring to the recent events and Draghi and bond buying

    It is getting to the stage where we are seeing warnings of stock market bubbles, where the herd rules. By contrast, even the tulip mania psychology looks sensible. the worst of it all though is that there is no knowing when this MADNESS will end. Once it gets like this, there is no way of predicting what will happen next.

  32. Matthew
    Posted September 8, 2012 at 11:29 am | Permalink

    THE ECB is attempting to paper over what are solvency problems by this action. They’re going to need a big bucket and a lot of paper.
    The Euro is the ECB’s job – where would they be without it? Its not surprising that they make these announcements from time to time.

    The euro fringe countries require very large and permanent transfers of wealth from the North – or they need to balance their budgets. This must be the fundamental issue.

    A lot of BBC reporting is somewhat limited.

  33. Lindsay McDougall
    Posted September 8, 2012 at 12:13 pm | Permalink

    If Mr Draghi is allowed to get his way, it will eventually lead to the printing of more Euros and the Euro becoming a weak currency. Even if Angela Merkel is minded to fudge it, I doubt if the German electorate and the Bundesbank will let her.

    What is distressing is the effect on this country. Every time Mr Draghi half convinces the markets of his credibility, the FTSE rises. Every time that doubts set in again, it goes down.

    Why, oh why, can they not let the PIIGS leave the Euro zone and get their economies growing again, to the benefit of us all?

    • uanime5
      Posted September 8, 2012 at 9:00 pm | Permalink

      Probably because the PIIGS don’t want to leave the eurozone.

      • Lindsay McDougall
        Posted September 9, 2012 at 11:02 am | Permalink

        But none of them want to stay in on strict German terms. That’s what the aggro is all about. Very soon the EU, heavily influenced by Germany, is going to tell Greece that they can have no more than one extra year to adjust. Then you will find out what Greek opinion really is.

        Opinion on staying in the Euro is not something that can be decided in the abstract but only once the full extent of the pain and the degree of surrender of sovereignty to Germany are known. That applies to all 5 PIIGS – and will one day apply to France.

  34. Bernard Juby
    Posted September 8, 2012 at 12:17 pm | Permalink

    ‘Twas ever thus with the ECB sticking its head in the sand and the BBC following its usual Europhile twaddle.
    Will the new head of the BBC change its ethos? I doubt it so we have to put up with this bias and are forced to pay our taxes, licenses to support it. It’s as bad as the old Trades Unions days when one was forced to be a member whether you supported it or not. No Membership Card – No job. Time the Beeb came up to speed.

  35. Johnny Norfolk
    Posted September 8, 2012 at 12:51 pm | Permalink

    I thought her comments were pathetic. Just propaganda in favour of the EU with no pros & cons. She should have explained what had taken place,Said what they would like to acheive and then explain the risks. Such poor reporting she should be ashamed of herself.

  36. Conrad Jones (Cheam)
    Posted September 8, 2012 at 12:56 pm | Permalink

    Mr Redwood, I agree with your appraisal of BBC Economics Editor Stephanie Flanders. Equally applies to other Editors such as Robert Peston who also spout nonsense about the Economic Crisis and other Bank related subjects. Perhaps this is due to the Fact that many Journalists have said that if they print a story that the Government does not like, access to the Inner Circle of Government will be blocked. That might be worth considering too.

    • lifelogic
      Posted September 9, 2012 at 7:22 pm | Permalink

      Indeed Robert Preston is another joke and has a silly irritating voice to boot – with idiotic pregnant pauses before the drivel is finally delivered.

  37. Conrad Jones (Cheam)
    Posted September 8, 2012 at 12:57 pm | Permalink

    Stephanie Flanders said:
    “…it does provide an answer to that crucial question I raised at the start. In effect, the ECB has said, if governments are doing the right things, the central bank will do its bit to save the euro.”
    What exactly does she mean by “doing the right things”? In who’s perspective?
    Treasury Bond holders and Banks? What about the tax payers?

  38. Conrad Jones (Cheam)
    Posted September 8, 2012 at 12:59 pm | Permalink

    Stephanie Flanders famously said in her description of how QE works that “money is created at a push of a button, LIKE ONLY A CENTRAL BANK CAN”.

    This was later removed when somebody informed her that Private Banks create most of the World’s currencies – so the line was quickly removed without explanation as it would have drawn peoples’ attention to the fact that governments are not in control of their Nation’s finances.

    A government can only create Notes & Coins (2.6% of total money supply), but can also create money as debt in the form of Treasury Bonds which are backed by the Government’s ability to Tax its people.

    Treasury Bonds can be attacked by the Markets – currency created debt free by Governments, are harder to attack and incur no debt.

  39. BobE
    Posted September 8, 2012 at 1:13 pm | Permalink

    Yesterday the Euro was worth 72p. I remember it at 95p. Its slowly being devalued. Is that the plan?

  40. Conrad Jones (Cheam)
    Posted September 8, 2012 at 1:20 pm | Permalink

    It’s right that the BBC should create this new subject called Stephanomics as it bares little resemblance to real economics and – legally; Stephanie Flanders can say anything she likes as they can say that she is discussing “Stephanomics” and not Economics.

    It is sad to think that – although highly qualified and also highly awarded; she still does not grasp the basics – perhaps this is not her fault but more and indication of how poorly Economics is now taught – narrow and unrealistic assuming that Money, Debt and Banks do not affect the Economy. If this is true then why do we have “Too Big to Fail” Banks hungrily scoffing up tax payer bailouts consisting of Central Bank Money Created for the sole use of Private Bank Reserves and not injected directly into the Economy.

    Why bailout a Bank rather than Rover Cars? Because Rover Cars didn’t create our money supply, except when they borrowed money from a Bank.

  41. Conrad Jones (Cheam)
    Posted September 8, 2012 at 1:46 pm | Permalink

    As Treasury Bonds are so susceptible to market fluctuation, financial manipulations and the whims of foreign Governments, why do we still issue Treasury Bonds?

    Would it not be far more stable creating the money directly? Treasury Bonds were invented to push increases in taxation into the future to allow Governments to get the money now and spend it now – especially on War.

    Government’s can access funds through Treasury Bonds – increasing the debt interest payments on a future Government. Labour did just that with Treasury Bonds and PPI schemes so are now laughing at the Conservatives saying what a mess the economy is in realising that the debt we are in was down to them and previous Governments.

    If you want Governments to be responsible – Treasury Bonds must be banned. Government’s should be allowed to create enough money to plug the gap when Banks reduce lending, but the decision of how much money to create must be that of an Independent body working to Government stipulated Inflation Policy.

    Why Treasury Bonds are so dangerous is that Govenments who believe that they are going to lose the next election will go on a spending spree by increasing the issue of Treasury Bonds, this debt is then passed onto future Tax Income and future Governments. Treasury Bonds are bad because:
    1. Ticking time bomb of future debt and demand on future tax revenue
    2. Used as a weapon on opposition Party’s to burden the next government with debt from a previous Government.
    3. Wide open to Market Manipulation and Fluctuations in Interest Rate hikes (Greece, Spain, Italy, Portugal … ).
    4. In the current climate of de-regulation – market speculation can ruin Government’s through the Bond Market.
    5. Pension Funds favoured investing in Government Debt (backed with Tax Payer interest payments) rather than investing in Productive Enterprises that create wealth and value.
    6. Treasury Bonds are a way of Government create debt to be funnelled towards malinvesmtent through Wars and Armaments selling as Foreign Aid – i.e. India, Pakistan etc.

    Labour’s Liam Byrne, the former Chief Secretary to the Treasury, left a handwritten note in his desk, warning his successor that there was no money left.

    Now, it has emerged that Mr Byrne, who is still a Labour MP, accepted a severance payment of £19,589 when he left the Government.

    These people really don’t care about Public Service, it’s just a big joke to them as long as they get their payoffs. Liam Byrne is precisely the type of person who would dramatically increase Treasury Bond issuance to get back at the Conservative Government. It’s probably an inside joke in the corridors of Parliament. In fact, the System almost demands that a current Government increases debt inorder to maintain the money supply and trigger a Boom economy.

    The Trick is to get out of office before the Bust and then blame it all on the next Government. Debt brings forward purchases today at the sacifice of future spending. By Issuing Treasury Bonds we restrict future spending therefore, we are locked into Boom-Bust cycles – despite what Gordon Brown and his incompetent rabble of acomplices said.

    To get rid of Boom and Bust – Treasury Bonds would have to be abolished as part of other Banking System reforms.

    • uanime5
      Posted September 8, 2012 at 9:05 pm | Permalink

      The Trick is to get out of office before the Bust and then blame it all on the next Government.

      So Labour failed to do this because the banks needed bailing out when they were in power?

      • Lindsay McDougall
        Posted September 9, 2012 at 11:06 am | Permalink

        The banks didn’t NEED bailing out. Gordon Brown and Labour CHOSE to bail them out using our money. It was all totally unnecessary. Barclays preferred to get funding from abroad rather than submit to Gordon Brown’s nationalisation drive. That’s why you all hate Barclays so much.

        • Lindsay McDougall
          Posted September 9, 2012 at 1:43 pm | Permalink

          Just to bring you up to data on the numbers: The Brown government spent £65.5 billion on buying shares in RBS and Lloyds (£45.5 billion on RBS shares, £20 billion on Lloyds shares).

          Their value is now about HALF of that (Source: “This is money” 22nd February 2012). So that’s £33 billion of our money that the Labour Party has flushed down the toilet. In order to avoid mistakes of that nature and magnitude, there is a process called DUE DILIGENCE that you are supposed to go through first. Have you heard of it?

          • APL
            Posted September 9, 2012 at 9:59 pm | Permalink

            Lindsay McDougall: “So that’s £33 billion of our money that the Labour Party has flushed down the toilet.”

            Not to be forgotten that while RBS was inadequately regulated, Lloyds TSB was not too bad until Brown forced the merger with BOS, so that is £20billion that is a liability of the Labour party.

            How much should we surcharge Mr G Brown.

          • Conrad Jones (Cheam)
            Posted September 9, 2012 at 11:08 pm | Permalink

            When Brown’s UK Gold Sales are taken into account, it’s even more than that.

            Why would he sell Gold (used as Money for 5000 years) and trade it for the EURO (a currency that did not go into circulation until 2002). Gordon Brown decided to sell our Gold in 1999 and later invested it in a currency that didn’t even exist when he made that decision.

            If the Bank of England suddenly announced that it was going to buy Gold, the price would skyrocket, so we can’t even buy it back.

            It’s like that scene at the end of the ‘Italian Job’ when the coach is dangling half way over the edge with Michael Caine and Co at one end, and the Gold at the other end hanging over the edge. If they move towards it, the Gold starts sliding further away, making the coach tip down more. If anyone get’s out – everyone else goes over the edge. We need the Gold but we can’t move towards it thanks to ‘Brown’s Bottom’.

          • Conrad Jones (Cheam)
            Posted September 9, 2012 at 11:27 pm | Permalink

            A recent story said that Gordon Brown sold the Gold to help (word left out) Banks. (A named bank-ed) was wildly short Gold in 1999. Gordon then dumps almost 400 Tonnes of Gold in a way designed to get the worst possible price for the Country, Gold Price Drops and the (…) Banks are saved. Tony Blair then gets a plum Job with J P Morgan. Labour then get thrown out of Office, suffer from chronic amnesia about how they messed the Economy up (continued deregulating the Banking System allowing it to turn into a massive Casino) and blame the Conservatives for the mess they got us in amd say that reducing public borrowing and spending is precisely the wrong thing to do, instead of saying that tighter Bank Regulation or a complete Banking/Monetary Reform is required.

          • APL
            Posted September 10, 2012 at 6:04 pm | Permalink

            Conrad Jones (Cheam): ” If the Bank of England suddenly announced that it was going to buy Gold, the price would skyrocket, so we can’t even buy it back. ”

            Price of an ounce of gold today £1083.99

            Price of an ounce of gold today 2002, £205.40

            Looks like the price of gold has already skyrocketed. Or the value of sterling has plummeted.

        • Conrad Jones (Cheam)
          Posted September 10, 2012 at 1:05 pm | Permalink

          If the Banks were not Bailed out – the money supply would have collpsed.

          Gordon Brown allowed the Economy to get into a state of excessive debt with a Credit Fuelled Housing Boom. Bank Regulations were reduced or ignored.

          We need to look at the way Money is created. To let the Banks fail would have caused total chaos. Imagine everyone going shopping and no Debit or Credit cards are processed ? What would happen then? This is a direct result of slack and irresponsible and ignorant Government when it comes to Banking and the Economy. “The BoE sets Interest Rates” – can you spot the obvious contradiction in that statement when applied to a Free Market Economy with Price Discovery ? Banks create our money – not the government- if the Government created the money we wouldn’t care about a Bank failing. Bankruptcy is normal in Capitalism – we should let Banks experience it too – but with our system; a Bank fails and we all fail.

  42. pipesmoker
    Posted September 8, 2012 at 2:40 pm | Permalink

    If you want to know what’s going on then read the German Press!

  43. Barbara Stevens
    Posted September 8, 2012 at 2:47 pm | Permalink

    What do you expect from the bbc, its long been infiltrated by leftists, and its sound bites are no longer taken seriously. Its journalists follow the path laid down for them and follow like mice, with no real independant discussions. Has for the Euro, again the bbc don’t tell it has it is and try to make us believe the impossible; even the not so financial educated can see the demise of the euro coming, there is no light shining only dark clouds gathering, and one day the storm will hit. Its time we were relieved of this burden once and for all, but the cowards in parliament won’t listen, till it’s to late.

    • Conrad Jones (Cheam)
      Posted September 8, 2012 at 10:26 pm | Permalink


      Let’s hope they listen – and understand; before it’s too late.

      At the moment they are listening to the wrong people. The glimmer of hope is that Politicians like Mr Redwood at least have seen the light regarding the incompetent ramblings of BBC Economics and Business Editors.

      Douglas Carswell MP, Steve Baker MP and Michael Meacher MP (nobody from the Liberal Democrats) are also listening and leading on Financial Reforms. But we need more than just a handful of MPs to get real change.

      When I say change, what I mean is, to correct the system to work the way that most people are led to believe it works anyway. That being Free Market Capitalism with a currency controlled by the Government and not private businesses (like Banks).

      Anyone following the Gold Price last week would have noticed sharp increases – expect more as this is a reflection of the incompetent policies of the European Fiasco. It’s also an indication that the CPI Inflation Figure is manipulated to pretend that money debasement isn’t as bad as it actually is. The usual dips occurred when New York opened for business, but that is because New York deals in paper Gold and London deals in the real stuff, and so is harder to manipulate downwards.

  44. Antisthenes
    Posted September 8, 2012 at 2:59 pm | Permalink

    Stephanie Flanders credentials are not that good having been very close to the two Eds in the past and perhaps still is. That alone tells us that her reasoning powers like all those on the left and far right if it comes to that are extremely suspect. On top of which she like most of her fellow journalists is lazy in research and is unable to think outside of the box or with any depth and clarity of mind. She fails to see the bigger picture as do most of us. The euro is not the crisis but part of a much larger one. We have built economic and social models that are unsustainable, simply put we are living beyond our means, we are following social practices that are undermining standards and values and we are implementing policies that hinder wealth creation. Having built these models instead of recognising that it is the models that are the problem we continue to use them and expand them. The idea that the euro is saved because we are going to use the same formulas that we tried before and have failed is nonsense. In the short term the euro may carry on but the larger problem will still exist and as long as the systemic economic and social crises are not addressed the decline will continue and crisis will follow crisis. Indicators that we are tackling the causes would be the demise of the euro, the dismantling of the EU back to a free trade area and the abolition of the politburo in Brussels. Then nation states have to roll back social democracy to more affordable levels and build an environment that encourages wealth creation.

  45. Lady Carole
    Posted September 8, 2012 at 6:51 pm | Permalink

    Correct ,yet another sticking plaster ,should last all of 3-4 days .

  46. Caratacus
    Posted September 8, 2012 at 6:55 pm | Permalink


    John … how can I put this gently? If you keep coming out with sensible statements like this you will never be invited into the Cabinet. Where you belong. Preferably in the seat currently occupied by that fathead Mr. Cameron.

    • Conrad Jones (Cheam)
      Posted September 8, 2012 at 11:11 pm | Permalink

      Don’t put him off.

      He may not get into the Cabinet but he’ll have more genuine support than Mr Cameron ever will.

      I predict that Mr Cameron will end up the same way Mr Blair has. A monkey working for the J P MOrgan Grinder (or similar).

      He’ll go on lecture tours and write his memoirs. When his book is published, the launch day will be tarnished with flying eggs, with a soundtrack of boos and hisses – just like Tony, but not as bad as Tony. A permanent body guard of people holding machine guns will be assigned to Mr Cameron to protect him.

      And one day, Mr Cameron will avoid looking into the mirror because he won’t like what he sees there.

  47. Conrad Jones (Cheam)
    Posted September 8, 2012 at 10:33 pm | Permalink

    PositiveMoney have an article on how the BBC is misleading the general public on how Banking and Finance work. Perhaps misleading is too strong a word, perhaps they are just getting their fact wrong. Doesn’t matter because it amounts to the same thing.

    PositiveMoney produced a table of:

    1. What the BBC say
    2. How it is perceived
    3. Why it is Wrong

    Interesting article. Backs up everything Mr Redwood is saying.

    • Conrad Jones (Cheam)
      Posted September 8, 2012 at 10:52 pm | Permalink

      The BBC were kind enough to reply to my complaint concerning the “How do Banks Work” Video by saying:

      “They’ve in turn raised their comments with Robert Peston who clarifies that the clip in question is about the basic structure of banks and why they are so vulnerable, not about how they create money”

      The fact that Banks create money is the reason why our savings, pensions, mortgage debt and salaries are so vulnerable. Annuity Rates are directly affected by QE, this fact was conveniently missed from stephanie Flanders explanation of QE. Her pension will be fine as it is backed by License Payers. Thanks a lot Stephanie.

      The Bank of England were also polite enough to reply to my email concerning the BBC film:

      “Having viewed the film it seems clear that it is a fairly simple film aiming to describe nothing more than the basics of banking. If you are not happy with the content of the film and feel that it may in some way be misleading, you may wish to contact the BBC directly with your views. ”

      This was a clever reply because it would cause undue problems for the Bank of England to be openly criticising the BBC. It won’t cause them problems with the BBC because they haven’t agreed with me, but they haven’t said I’m wrong either by saying that the Film only describes the basics of Banking. An example of diplomatic genius that could do wonders with dealing with Iran. Has anyone form the Foreign Office thought of asking the Bank of England to help find a diplomatic solution to the Iranian “Problem”? (No I’m not joking. Hilary Clinton would learn a bit from this instead of saying that Assad should go, before attempting a negotiation with the Syrian Government).

  48. David Langley
    Posted September 9, 2012 at 8:47 am | Permalink

    Unlimited money, really! Where on earth is he going to get this unlimited money from. Would this mean that in effect bailouts and free money would be given for ever? Because there is not a cat in hells chance of getting the money back. The existing loans will be subject to massive hair cuts in the future if not throat cuts.
    This plan is full of holes, I really cannot understand why anybody is interested in Draghi’s pontificating. As for the markets well as we know money is made on the way down as well as the way up. The last things markets want is stability this means no casino betting and no millions to be made by bankers croupiers.
    Lets get out of the EU mess ASAP, the more I see and hear and read the more exasperated I get.

  49. NickW
    Posted September 9, 2012 at 9:59 am | Permalink

    The German argument for a referendum on Europe. (In English)

    The extremist view is now the desirability of blocking any attempt to restore democracy in Europe by means of referenda. The moderate view is that it is time to restore democracy by asking the people if they consent to the loss of sovereignty and financial cost entailed in fiscal union.

  50. Derek Emery
    Posted September 9, 2012 at 1:49 pm | Permalink

    German unit labour costs increased by around 5% over a decade. Over the same period PIIGS unit labour costs increased by between about 20 and 40%. At the same time Germany made massive investments in automation to keep jobs in Germany.

    During this period globalisation proceeded apace so it became ever easier to move jobs and money to other parts of the world. Increasing numbers from the rest of the world developed the same skill levels as in the EU but having very much lower wages.

    Even if PIIGS wages were somehow brought down by 40% they would still be much higher than elsewhere. The gains in efficiency from EU integration will be at the most a few percent. This will nowhere near cover for the much lower wages for the same work in the rest of the world. The PIIGS will never have the sort of money that Germany had to invest in automation to allow more jobs to be retained.

    I suspect this will mean the EU will remain an area of high unemployment whether integrated or not.

    • Jerry
      Posted September 9, 2012 at 2:27 pm | Permalink

      At the same time Germany made massive investments in automation to keep jobs in Germany.

      Isn’t that an oxymoron, automation causes people to loose their jobs, perhaps you meant …keeps production in Germany.?

  51. Derek Emery
    Posted September 9, 2012 at 2:34 pm | Permalink

    The ECB produced a paper in 2010 on the impact of high and growing public debt on growth in the euro area See

    ….Confidence intervals for the debt turning point suggest that the negative effects from high debt may start already from levels of 70-80% of GDP, which calls for even more prudent indebtedness policies. We also find evidence that the annual change of the public debt ratio and the budget deficit to GDP ratio are negatively and linearly associated with per capita GDP growth…

    Isn’t the UK close to 70% public debt/GDP ratio and isn’t this figure predicted to rise for several years?
    If so should the UK really expect to have any positive GDP growth?

  52. PT
    Posted September 9, 2012 at 5:14 pm | Permalink

    Such is the direction of the property market, the ever deepening supply shortage. and the worsening prospects of young people thanks to globalisation, future high taxes and student debt, inheriting property will be the only way many can hope to get on the housing ladder.

    Furthermore, there’s been an explosion in buy to let property investments. Many parents will want to hand down these assets in order for their children to enjoy the fruits of their investment e.g. a supplementry rental income.

  53. John Harrison
    Posted September 10, 2012 at 8:06 am | Permalink

    While reading this with the radio news on, I heard that the government would like to reduce the VAT for home insulation from 20% to 5% (why not 0%/) to encourage people to do it. Apparently they can’t because EU law does not allow us to alter the VAT rate for insulation products.
    What on earth is going on?

    • Lindsay McDougall
      Posted September 10, 2012 at 11:09 am | Permalink

      Is it really necessary for the EU to harmonise VAT rates so much? I think not. The EU likes high VAT rates because they are entitled to a proportion of VAT receipts.

      In particular, I would like one of our beloved Europhiles to explain why (other than self interest) the EU should want to dictate to a Member State its VAT rate for home insulation.

  54. Walter Macqueen
    Posted September 10, 2012 at 10:12 am | Permalink

    mentioned Greenham common as a possible site for a new airport with its long/strong runways.
    Fortunately they no longer exist. They were deliberately removed and part of the site turned into an ENTERPRISE ZONE, it was said at the time to forestall any suggestions that the site would make a good place for a LONDON A/P.
    Thank goodness, as a near resident who experienced the noise of those enormous US bombers taking off and landing when the site was used as a US Airbase, [prior to the siting of their Cruise Missiles there].

  55. Willy Wireworm
    Posted September 10, 2012 at 4:13 pm | Permalink

    Living abroad, I am subject to the ghastly BBC World News, where newsreaders say ‘Hi everyone!’ and every story is milked for its liberal propaganda value. Today I caught Al Jazeera and was amazed how superior it is to BBC WN in every way.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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