GREECE VOTES TO HELP GERMAN EXPORTS ?

Greek people can be incredibly kind.  The recent vote of 29.5% in favour of staying in the Eurozone is evidence of their kindness.  Well its evidence of the kindness of 29.5% of the 60% who took the trouble to vote.  I never imagined they would be prepared to preserve the low value of the German Euro ( aka Deutsche Mark) and so enable magnificent Germany to live in the certainty of a continuing healthy export performance.  In effect Greece and the other struggling European countries are subsidising Germany and definitely not vice versa. Without the poor relations in the Eurozone the Euro's value would soar stacking up no end of trouble for  Europe's stronger economies. 

Many commentators ( especially those down at the dear old BBC ) warn of immediate perils if countries leave the Eurozone.  Immediate perils to whom ?  Certainly not the countries leaving the Eurozone.  And few commentators look at the longer term.  I have blogged before to say how much better Greece, Italy, Portugal, Ireland and even Spain might be if only they had the courage to revert to their original currencies, proud once more to stand on their own feet making their own decisions in the best interests of their country.  True the drachma, for example,  would assume a unit value less than the current unit worth of the Euro. But therein is the advantage.  The relative trading position of Greece would improve immediately and with it the opportunity to strengthen its trading position in geographical Europe and worldwide.  Likewise German exports would slow down as progressively they became more expensive. Somehow the German economy would need to adjust to the changed characteristics of the playing field !

The Eurozone with Greece as a participant is probably finished.  A vote to stay in the Eurozone by 18% of those allowed to vote does not solve anything.  By tomorrow a new Greek government may be cobbled together.  However, it will have to be a rather special type of government to take the Greek people where they don't want to go.  I reckon the chance of success is zero.  But then, going forward,  (and hopefully civil unrest is avoided) the Greek people can think and vote yet again.  Perhaps to vote in huge numbers to revert to their own currency, and move on by setting a splendid example to the other struggling Eurozone economies. 

BRING BACK THE OUZOZONE AND STUFF THE EUROZONE

Much to the apparent irritation of some BBC news programmes and Ed Balls, the U.K. today announced its economy had grown by 0.5% in the third quarter of 2011.  No one, including the Chancellor, was upbeat about the future, but maybe he was mindful that discretion is the better part of valour?  In fact it was a bloody good result - although as I've hinted you wouldn't think so based on the BBC news. And Ed Balls, bless him, could barely hide his miff.  


I don't want to get boring but just remember that in August 2011 the Guardian reported that the French economy failed to grow.  Yet on 13th May 2011, under the headline "UK left behind as French and German economies surge"  it had enthusiastically reported "Germany and France, which together account for nearly half of the eurozone's GDP, grew by 0.4% and 0.3% respectively in the fourth quarter."


Read it again if you need to and come to your own conclusions !


Of more fascination, and great fun,  is the dire position of Greece, and the effect its behaviour will have on the eurozone if, as expected, the Greek people reject the remedy imposed by eurozone leaders. And who could blame them !  Whether or not there is a referendum is academic.  Without a referendum there would certainly be an election and the Greek population are unlikely to vote for a pro-eurozone party longing as they do for the return to favour of  the beloved drachma, retirement for all at 50,  long sunny days sucking olives and quoffing ouzo, and the confidence to care not a monkey's about the world around them.  


Fortunately on these matters I have no need to show discretion when it comes to predicting what will happen.  Neither do I care if I turn out to be wrong.  So what's likely ?  


After six, maybe twelve, months of struggling the U.K. economy will begin to grow strongly as it lessens its reliance on eurozone markets. Greece will return to having its own currency and gradually slip back into the sleepy, relaxed sort of country it's comfortable with being and which visitors so loved.  Likewise Italy, Spain, and Portugal may see the benefits, economically speaking, of being able to do what they want, when they want, and how they want.  They would reap the benefits of rubbing along just as though nothing had changed. Mañana !!


Of course a few hangers-on will remain, (amongst others I'm predicting a definite Holland and a maybe Eire ) inexplicably  content to risk becoming yet more economic parasites robbed of the right to decide their own economic policy, or create their own laws, or simply act in their own country's interests and sod the neighbours.   


Let me think..... Yippee ! Bring on the champers.  This could well be the beginning of the end of the eurozone as we know it.  And no real surprise either.  The eurozone is subscribed to by a mixture of nationalities.  Each nationality is substantially different to all of the others.  Different in language, behaviour, morality, outlook, work ethic - the list is endless.  Let them trade together if they wish.  But that's it.  


Let them have back their own currency, their own laws, their own morality and, most of all,  their dignity.