Jones on the Euro

June 12th, 2013 at 12:00 pm by David Farrar


Britain’s historic aversion to Europe reached silliness proportions after Waterloo and led to its unnecessary involvement in the Crimean War and ultimately, in the even more fabricated World War I. But as the saying goes, the winners write the history books. …

Britain has been a huge loser through this belligerent nationalism but, and there is a but, for once it has served them well, in staying out of the terribly ill-considered . Has there ever been a dumber construct in modern times? Essentially it amounted to abandonment of economic sovereignty and, more important, a denial of the wisdom of free-floating exchange rates to cope with trade and currency flow fluctuations.

So true. UK Labour were very keen to join the Euro, but could never find the right time to do it. In hindsight, their failure to join was a huge blessing.

The motives for the euro were excellent, being to facilitate trade by avoiding currency exchange inconveniences and costs, plus prevent inflation. It’s achieved all of those objectives. But the dangers were ignored, and I’m not being wise after the event as I’ve frequently written predicting its inevitable collapse.

In creating a common currency the unavoidable effect was to give Germany, in particular, an artificially low currency advantage, and the weaker southern economies, a contrived high one. This gave those weaker economies an unearned ability to raise cheap but unsustainable loans.

Currency union will only work if you have fiscal union also. Monetary and fiscal policy have to work together.

We now see the consequences with mass unemployment and increasingly desperate people, many ominously turning to political extremists for salvation. Talk about history repeating itself! That said, there’s a lovely irony in Germany pumping billions into the suffering economies, solely to save the euro. Aside from being money they can wave goodbye to, it’s insane, for even if the euro is “saved”, a collapse would only reoccur with this flawed common currency for uncommon economies. Germans are now awake to this and complain bitterly about Chancellor Merkel’s obstinacy in persisting at their expense. She faces an election later this year and her unpopular actions may result in her political demise.

Now finally, one of the euro’s original architects, Oskar Lafontaine, the former German Finance Minister, has seen the light and called for the euro to be dismantled. This will be incredibly messy but not doing so will lead to even greater catastrophic consequences.

They should allow the PIGS to leave the Euro, so their new currencies can reflect their actual economic situation.

Meanwhile, on the sidelines, some Brits continue pushing their anti-European sentiment, reflected by the rise of UKIP (UK Independence Party) which has the primary objective of Britain leaving the European Union. As the bulk of the UKIP’s support comes from Tory voters, Prime Minister Cameron has now promised a referendum on the issue. The latest polls show 46 per cent in favour of quitting. It’s madness.

But let’s face it. At the bottom of this sentiment is an antipathy not just to annoying over-zealous Brussels regulations, but also immigration. Talking to an English friend about this I suggested the Poms should be grateful for Polish builders and Indian nurses and doctors, otherwise they’re in big trouble. “Oh we are,” he said. “It’s the trouble-making blacks and Muslims flowing in we object to but we’re no longer able to say that.” Similar strongly held views are held across Europe.

Almost every bar maid in London now appears to be Polish. I’ve yet to find a friend who is complaining about this 🙂

What Europe needs is a larger but less busy-body union and an immediate end to the euro but, even so, the disastrous consequences from the ill-fated common currency venture will linger for years. It’s strange today to recall Jack Marshall’s continual back-and-forth trips to Europe, begging for special terms for New Zealand, with the advent of the European Union. Thanks to Britain going to bat for us we were given time, a challenge our exporters rose to magnificently. Who would have though four decades ago that Europe would become almost irrelevant to us, now taking a minuscule 7 per cent of our exports? Thank goodness for that.

For many years our distance from Europe was a major disadvantage. Now it is becoming an advantage as we have built better trade ties with our Asian neighbours.


20 Responses to “Jones on the Euro”

  1. anonymouse (891 comments) says:

    While I have reservations over aspects of the EU, I love the fact they have a common currency and almost no borders. Hence I am a fan of New Zealand and Australia removing as many barriers as possible.

    I don’t see much merit in political union (unless both islands gained statehood giving us more grunt in the Senate) but am persuadable on a joint currency ..

    So I take it you are now less persuadable on a joint currency with Australia than in the past 🙂 ???

    Vote: Thumb up 5 Thumb down 1 You need to be logged in to vote
  2. David Farrar (1,771 comments) says:

    Yep, unless there was a joint fiscal policy.

    Vote: Thumb up 4 Thumb down 1 You need to be logged in to vote
  3. Simon (1,604 comments) says:

    The modern welfare state is bankrupting one western country after another. The UK is finished it is just a matter of time. The Euro doesn’t matter. There is just too much debt and the size of the state is killing the UK. This or that currency isn’t killing the UK.

    The Euro is not the actual cause but a symptom. The problem is centrally planned economies don’t work. The Euro is product of central planning.

    Greek society has disintegrated not because of the Euro but because the Greeks didn’t default on their debt. The EU central planners ordered them not to. Default comes first.

    Argentina central planners have crashed that country. Didn’t need the euro.

    Iceland is shining example to the world. Can’t afford to repay debt then default.

    Vote: Thumb up 8 Thumb down 1 You need to be logged in to vote
  4. James Stephenson (3,056 comments) says:

    Sad to see Bob falling into such a lazy characterisation of UKIP. What the likes of Farage (and Hannan) are calling for is to leave the EU grouping heading for federalisation and re-negotiate along the lines of Switzerland and Norway.

    UKIP are not a middle-class version of the BNP, however much The Guardian would like to portray them as that.

    Vote: Thumb up 9 Thumb down 0 You need to be logged in to vote
  5. kowtow (13,237 comments) says:

    What Europe needs is a free trade zone that was what the Common Mrket was.Not an all powerful,undemocratic Federal Union which is what the European elites are striving for.

    Vote: Thumb up 8 Thumb down 0 You need to be logged in to vote
  6. Sean (313 comments) says:

    The best solution to the euro is not PIGS leaving, but Germany leaving. This would solve a number of problems overnight. The DM would instantly become a significant currency again (like the pound), while the euro member states would much more easily be able to align their fiscal settings.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  7. Alan Johnstone (1,087 comments) says:

    “UK Labour were very keen to join the Euro, but could never find the right time to do it”

    Far too simplistic a statement. Tony Blair was keen, the bulk of the party less so. Gordon Brown kept the UK out of the Euro, he killed all attempts to go for membership.

    Regardless, it would have required a referendum, which would have been lost.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. Alan Johnstone (1,087 comments) says:

    @Sean, almost right.

    Germany leaving doesn’t cut it, it’s integrated too closely with a “greater german” economic zone, inc Austria, netherlands, belguim, finland, czech republic; they’d all have to go.

    The best solution is to have two Euros, a northern and southern (italy, greece, portugal, spain etc) one and let them float against each other.

    Of course the big question is which one would France be a member of ? French pride says northern, practical sense says southern.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  9. mikenmild (23,665 comments) says:

    Jones: ‘…the even more fabricated World War I.’
    That old canard. the First World War was just as necessary for Briain as the Second: to prevent German domination of Europe.

    Vote: Thumb up 4 Thumb down 2 You need to be logged in to vote
  10. Alan Johnstone (1,087 comments) says:

    Churchill in his memoirs wrote

    “One day President Roosevelt told me that he was asking publicly for suggestions about what the war should be called. I said at once, “The Unnecessary War.” There never was a war more easy to stop than that which has just wrecked what was left of the world from the previous struggle”

    The first world war was even less needed, all that was required was a political solution to economic facts.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  11. mikenmild (23,665 comments) says:

    I’m not arguing that either war was necessary, more that they were made inevitable by German determination to dominate Europe. Something Britain could not accept.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  12. Harriet (7,545 comments) says:

    “How can we educate our political class to acknowledge what’s really going on in the world?” – was the title.

    “…..Britain’s “conservative” prime minister, David Cameron, is a typical Western leader who willfully ignores the fanatical and murderous goals of the ‘rebels’ in Syria or the ‘rebels’ in the UK.

    “When I see the official Syrian opposition, I see a group of people who have declared that they are in favour of democracy, human rights and a future for minorities, including Christians, in Syria,” he told the House of Commons on June 3.

    To which Scottish commentator Gerald Warner commented recently:

    “So, it looks as if the post-Assad Syrian government will be a coalition of Liberal Democrats and Greens, with a strong focus on equality, women’s rights and fast-tracking same-sex marriage. 😎 😎 😎

    “That is what Dave sees. Evidently he does not see a child being employed by those same rebels to cut off a Syrian soldier’s head, or Abu Sakkar, commander of the Independent Omar al-Farouq Brigade, cutting out a soldier’s heart and liver and putting the heart into his mouth with the exultant cry: “Oh, my heroes of Baba Amr, you slaughter the Alawites and take their hearts out to eat them!…………..” (Scotland on Sunday, June 9, 2013).

    In Britain, one out of ten British residents under the age of 25 is Muslim.
    The Muslims have a fertility rate of 3.5 versus the 1.3 fertility rate of the British.
    If you translate that into basic numbers, using 1,000,000 citizens as your sample group– the 900,000 British and the 100,000 Muslims will have the same number of grandchildren.
    In other words, the Muslim and non-Muslim populations will be equal in two generations.
    Those numbers do not even consider any conversions to Islam.
    The population shift currently taking place in Britain and in some parts of Europe is the fastest moving demographic population shift in history.

    Britian is gone and the Christians who remain there will be put to the sword – just like in Camerons idylic Syria! 😎

    Vote: Thumb up 9 Thumb down 2 You need to be logged in to vote
  13. Bob R (1,831 comments) says:

    ***UKIP are not a middle-class version of the BNP, however much The Guardian would like to portray them as that.***

    @ James Stephenson,

    Well no, but Jones is right that immigration is a major factor in their popularity. The Blair Government opened the floodgates and the European Courts & asylum rules make it very difficult to restrict entry. Their system is a bit of a joke really, which is why people want to look at alternatives.

    “A murderer who admits killing up to 400 people – many in bloody machete attacks – is living in the UK after being granted asylum.

    John Thuo has been living in a taxpayer funded home since sneaking in illegally from Africa in 2003, and his neighbours are totally oblivious to his grisly past.”

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  14. Bob R (1,831 comments) says:

    ***more that they were made inevitable by German determination to dominate Europe.***

    @ mikenmild,

    Have you seen Buchanan’s ‘The Unnecessary War’?

    “But where is the evidence that Adolf Hitler, whose victims as of March 1939 were a fraction of Gen. Pinochet’s, or Fidel Castro’s, was out to conquer the world?

    After Munich in 1938, Czechoslovakia did indeed crumble and come apart. Yet consider what became of its parts.

    The Sudeten Germans were returned to German rule, as they wished. Poland had annexed the tiny disputed region of Teschen, where thousands of Poles lived. Hungary’s ancestral lands in the south of Slovakia had been returned to her. The Slovaks had their full independence guaranteed by Germany. As for the Czechs, they came to Berlin for the same deal as the Slovaks, but Hitler insisted they accept a protectorate.

    Now one may despise what was done, but how did this partition of Czechoslovakia manifest a Hitlerian drive for world conquest?

    Comes the reply: If Britain had not given the war guarantee and gone to war, after Czechoslovakia would have come Poland’s turn, then Russia’s, then France’s, then Britain’s, then the United States.

    We would all be speaking German now.

    But if Hitler was out to conquer the world — Britain, Africa, the Middle East, the United States, Canada, South America, India, Asia, Australia — why did he spend three years building that hugely expensive Siegfried Line to protect Germany from France? Why did he start the war with no surface fleet, no troop transports and only 29 oceangoing submarines? How do you conquer the world with a navy that can’t get out of the Baltic Sea?

    If Hitler wanted the world, why did he not build strategic bombers, instead of two-engine Dorniers and Heinkels that could not even reach Britain from Germany?

    Why did he let the British army go at Dunkirk?

    Why did he offer the British peace, twice, after Poland fell, and again after France fell?

    Why, when Paris fell, did Hitler not demand the French fleet, as the Allies demanded and got the Kaiser’s fleet? Why did he not demand bases in French-controlled Syria to attack Suez? Why did he beg Benito Mussolini not to attack Greece?

    Because Hitler wanted to end the war in 1940, almost two years before the trains began to roll to the camps.

    Hitler had never wanted war with Poland, but an alliance with Poland such as he had with Francisco Franco’s Spain, Mussolini’s Italy, Miklos Horthy’s Hungary and Father Jozef Tiso’s Slovakia.

    Indeed, why would he want war when, by 1939, he was surrounded by allied, friendly or neutral neighbors, save France. And he had written off Alsace, because reconquering Alsace meant war with France, and that meant war with Britain, whose empire he admired and whom he had always sought as an ally.

    As of March 1939, Hitler did not even have a border with Russia. How then could he invade Russia?

    Winston Churchill was right when he called it “The Unnecessary War” — the war that may yet prove the mortal blow to our civilization.”

    Vote: Thumb up 0 Thumb down 1 You need to be logged in to vote
  15. Sb (96 comments) says:


    Your figures are wrong.

    The UK has a population of approx 62 Million. 30% are under 25 so that is 18.6 Million.
    The Muslim population of the UK is approx 6% or 3.7 million. 1 in 10 of under 25 would require 1.8 million of that
    3.7 to be under 25 – well that is not the case. its actually closer to 1 in 25. Or to put it another way 20-24 people in the UK out of 25 (under 25) are not Muslim.

    Then lets look at the fertility rates. Muslim fertility rates are dropping not rising, this occurs with the more generations that have lived in the UK. Its 4.7 for recent arrivals 3 for second gen and the same as non Muslim for 3+ generations.

    Your UK fertility rates are way off – 2009 is 1.96, 2010 is 1.98 and 2011 1.91.

    For your 900K non-Muslim they will have approx after two generations 820K grand kids
    for your 100k Muslims they will have approx 156K grand kids

    So they will still be outnumbered 5.2 to 1.

    Vote: Thumb up 1 Thumb down 2 You need to be logged in to vote
  16. gravedodger (1,704 comments) says:

    @ Bob R 2 31, have you read Mein Kampf, particularly the bits about Jewery and Lebensraum.

    The Prussian dominated general Staff could see where the two front war would end, and Herr Hitler was a corporal.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. Bob R (1,831 comments) says:

    No, I haven’t read it.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. mikenmild (23,665 comments) says:

    I’m unlikely to read a book by Pat Buchanan, especially one that verges on pseudohistory.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  19. wat dabney (4,135 comments) says:

    Bob R,

    Too much misinformation and ignorance in the article you quote, but suffice to say Hitler seemed to want war quite a lot. Declaring war on the United States whilst up to his neck with his invasion of the Soviet Union is probably a clue.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  20. mikenmild (23,665 comments) says:

    As I understand it, Hitler’s plans always included war against the United States. While he didn’t look for it in 1941, once his Japanese allies had attacked he thought it had become an oppurtunity to begin the war with favourable conditions.

    Incidentally, here is a review by the inimitable Christopher Hitchens of Buchanan’s book:

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote