THE DEATH KNELL OF EUROPE AND THE EUROZONE

Could we be on the brink of a New Europe? Jean-Claude Juncker may well live to regret his recent comments - bless him!! 

The EU and the European Commission is now perceived as a collection of dysfunctional legal and administrative units propped up by many apparently self-centred politicians and Commissioners; likewise the Eurozone has all the markings of a failed "project". What country, having regard to the well-being of its own citizens, would choose to remain part of such a shambles?

Europe is constantly warned of these dangers by parties such as Britain's UKIP.

In the current global economy struggling countries like Greece, Italy, Spain, and Portugal would surely do better outside of the EU. They need only take the decision, readopt their own currencies and leave. The same principle applies to stronger economies in the EU. Having the well-being of their citizens at heart, they too should rid themselves of the eurozone, get out of the EU and return to a common trading arrangement supported by their own currencies. 

Could this be the beginning of the end for the Eurozone, the death knell of the EU ? Is it the spring-like dawn of a new and harmonius Europe united by trade? Let's hope so for the sake of the peoples of Europe.

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. 

FRANCOIS HOLLANDE

The new French President has been quick off the mark bless him !  Maybe he will learn in time that more haste and less speed is worth thinking about ? Or put another way engage brain before opening mouth.

A quick look at the value of the Euro's performance following his election must surely tell him something.  Here's a man - a nice man -  who is against the austerity measures introduced by agreement with his predecessor.  But here is a man, methinks,  whatever he now says, who would actually welcome the return of the franc and bugger the Euro.  Well we all know what I think of the Eurozone so nice one, Franky !!

I could actually grow to like the man if otherwise he didn't appear to be so financially naive. He would like to see Europe wide taxes to "neuter" the City of London.  No surprises there then !!  Just a heads up though, Franky, Angela will make sure that Paris always plays second fiddle to Frankfurt - oh and by the way, good luck with your meeting on 16th May. Make sure you put a newspaper down your trousers !

This Presidential fellow suggests the UK is indifferent to the fate of the Euro; well surely that just shows a complete lack of economic understanding.  And to remark that the UK is attentive only to the interests of the City of London smacks just a little bit of envy?  If only France had such a magnificent and successful financial centre eh, Franky ??  Well no chance of that in the near future.

No. I'm really interested to see how this fellow gets on.  I'll wager it wont be too long before he has to change his spots. 

Above all I wish France and its people all of the very best and I hope that their choice of President brings them what they want.  But I have already heard someone utter the inevitable words "Come back Sarkozy; all is forgiven."

INCOMPETENT EUROPE?

When I was a lad the "Continent" was the word we used to describe  European countries "over the Channel." Frankly, as kids, we always felt a cut above them. Maybe the proximity of the Second World War ( to be re-christened I understand as The European Civil War !!) had something to do with it. Then in the sixties the word "Europe" crept in big time. Gradually the U.K. started a rather unwilling closer association with things European. They were spurred on by Ted Heath whose other great love was playing his organ. As time went by there was even a phase when new-born Eurocrats started mumbling about a United States of Europe !!  And then we began to hear more and more about the Eurozone.

Well ,as I have blogged before, the Eurozone seems now about to fall apart; and whatever the reasons, the consequence today is reflected by the currency.  And the rest of Europe could be dragged down with it whether or not they use the rapidly devaluing currency.

Can we really understand what's going on ?  Of course we can.  It's the same old story of politicians, bureaucracy, and incompetence. How for example is Europe organised? Well it isn't.

There are a load of countries in Europe. Some of the countries are members of the European Union, formerly the European Community and itself formerly the European Economic Community, and some of them are members of the Eurozone. Now some of the European countries are not actually members of the Eurozone but use its currency ( i.e Andorra, Montenegro, and Kosovo). And some European countries are not members of the Eurozone but are members of the European Union. Some countries, the clever ones, don't belong to either.  I could go on......It's a buggers muddle. 


So many of the poorer European countries will benefit when (maybe if) the Euro collapses and countries return to their original national currencies. The stronger economies will suffer in the short term. Perhaps that is equitable. 

COLLAPSE OF THE EURO AND THE EUROZONE

I can't help thinking this is the calm before the storm.  Have you noticed there is almost a news blackout on the struggling European countries and their economies? It's almost as though Greece, Portugal, Italy, Ireland, and Spain no longer have any financial problems !! Ponder this for a moment.  Is it all too good to be true?

True there are some parts of Europe where confidence is returning.  But therein lies the problem. Now is the time the stronger countries of the Eurozone could contemplate "pulling up the ladder."  They will see a way forward for themselves but not for their weaker Eurozone partners.  How strong Eurozone loyalty when really put to the test ?

No this is the calm before the storm.  What form of storm might well be the issue.  Watch this space.

SPAIN - WHAT IS HAPPENING TO IT ?

Poor old Spain.  It really is struggling.  Take some time and walk around the southern coastal areas.  What's evident?  What's evident is that a lot of building has been going on over the past few years but a lot of selling has not.  .......O.K.  When was the last time you saw loads of Spanish tourists outside of Spain?  Well there are some; mostly in USA.  But the average Spaniard seems to take a flat by the sea and hang out there when they have the time.  And who can blame them when they have such a beautiful country and coastline?   In their droves over the last twenty years or so other Europeans cashing in on the beauty seem to have purchased similar flats, duplexes and better.  But no longer.  Building has come to a virtual standstill.  So if you do want to buy property in Spain it's there for the taking.  Well, there for the taking when the unfortunate owners are eventually forced to sell because of their particular predicament.   Now on its own this is not necessarily anything to get worked up about..  Taken with other evidence of stagnation it may be.  Unemployment seems to be at a dangerously high level, and in particular a high level in the younger age groups.  Poor quality graffiti also appears to be at an all time high, and coupled with beautiful streets defaced with doggy dos ( my euphemism is an attempt at being kind ) I begin to wonder what has happened to Spanish pride.  It's the possible loss of pride which is the major concern.  There's a lot of talk about the Greek, Italian and Spanish problems.  And Spain I'm led to believe would be last of these three to fall.  Well let's hope that none of them "fall".  But sadly I wouldn't bet on it.

WHY IS EUROPE AND THE EUROZONE STRUGGLING?

Brace yourselves.  I've been thinking.  What do the countries of Europe have in common?  Well they're in the same geographical area.  So that's a start.  Otherwise?  Frankly very little. The peoples of the individual countries of Europe are different one to the other in almost every respect.  And that is something to be celebrated.  Why on earth would they want to get on together?  Well obviously they don't want to fight each other.  But then do we really need a European Union to achieve such peace??  Look around.  The Belgians don't like the Dutch and vice versa. Nobody likes the Brits or the Greeks, the French like the Germans because they have to, the Portuguese dislike the Spanish and vice versa, the Italians seem to like everyone from time to time, and so on and so on.  Trying to make these various European countries get on with each other is actually asking for trouble.  Take the Greek situation at March 2012.  Here is a country which is being told what it will do when it will do it and how it will do it!!! Unbelieveable.  Leave the Greek people alone and they will solve their problems in their own way and in their own time.  Otherwise take the consequences.  Next to be given dictates no doubt it will be the Portuguese and the Spanish.  LEAVE THEM ALONE !!!  How,  one wonders,  would France and Germany react to such intolerable interference.

No the only thing most Europeans have in common is the Euro.....and the only reason they have the Euro is because it suits a couple of over-assertive European countries.  

The only way to get real confidence back in Europe is to let each European country make its own decisions in its own time in accordance with its own traditions, work ethics, and under its own motivation.  The confidence will return to each country as and when the time is right.  A message to Brussels !! Dissolve yourselves sooner rather than later and have the maturity to leave the individual countries of Europe alone........of course there's a fat chance of those particular fat cats letting go of things.  Unfortunately there is a perception, maybe wrong,  that  Members of the European Parliament think more about their personal situation than the situation of the country they represent.  What do you think?

EUROZONE - EUROPE AND ITS VICE PRESIDENT

Just watched an interview of this woman on BBC World.  It confirmed my suspicions that the UK should have absolutely nothing to do with Europe as forced down the throats of its participants by "Brussels."  The woman was asked many interesting questions; she didn't give one straighforward answer, bless her.  But marks out of ten? Nil points.

However the impression she gave was that pretty much everyone in the European Community will fall in line - repeat will fall in line - with dictates from Brussels.  Even when asked about the threat to put Hungary into liquidation unless it changed its laws to comply with a particular dictate she ducked.  Nevertheless the impression I was left with was one of blackmail; change your law or you don't get the money!  Perhaps I'm wrong; maybe it was a language problem?  But whatever - that's the impression I got.

And the final killer question?  What will happen to Greece?  Well of course she didn't get anywhere near answering that one.  But we'll find out any day now.  Will Brussels ditch them?  I'm going to say yes. Sooner than you think.  But if not, then definitely later.

No the UK ( or England and Wales if it comes to that ) can do without any further "Brussels" involvement.  Quite frankly, unlike the majority of real people in Europe ( including the real residents of Belgium !),  they're just not our type.

PORTUGAL AND GREECE FINANCIAL EMBARRASSMENT

Portugal.  What a lovely country and great people. But what a shame their economy, like many in the eurozone is screwed. How could things have got to this sorry state?  Maybe it's something to do with the futile dream of some of their northern European neighbours for a "United States of Europe"? 


How can you have a united anything when, quite reasonably, each of the countries in Europe, and each of the countries in the Eurozone consider themselves first and foremost independent countries?  Unlike the splendid role model across the Atlantic, the countries of mainland Europe  show  no signs of becoming happily united  - except of course to the extent of being a sort of expensive social club.


The current European practise of bunging these failing countries more money, and so increasing their financial and moral debt is flawed. It simply beats them up some more and hangs them out to dry. Nice eh? To add insult to injury they then poke rather large European noses into the struggling countrys' fiscal and social governments  . Ask yourself how you would feel if another country began to interfere with the running of your country.    

Beware! If interference continues then, God forbid, social unrest moves up the agenda. 


The Greek situation has now gone rapidly down the drain and the only long-term solution - which should be clear for all to see  - is to let them escape the Eurozone and get on with governing themselves once more without interference from grossly overpaid Brussels Eurocrats.  And the same goes for Portugal.  Leave them both alone for heaven's sake!! Let their own currencies re-emerge, let their economies rebalance, and give them back the respect they deserve. 

EUROZONE - BLESS THEM

O.K.  Not a lot to say about the fun over dinner last night.  But well done Cameron.  Assuming, that is,  we have been given the whole truth.  

The eurozone, and the euro as it is currently known, is now finished not saved.  It will take a couple of days for the commentators to pluck up enough understanding and  courage to say so.  But let me be one of the first.  It doesn't matter therefore whether or not the UK had agreed to suck up to our French and German over-the-English-Channel neighbours. Either way the market consequences are the same.

What really matters to the U.K. is not what the Europeans think of the U.K..  What matters is what the rest of the World think of the U.K., and what the rest of the World think of the remaining Eurozone participants !  On those opinions depends the long-term success of the U.K.

Not to say that mainland Europeans ( the individuals I mean ) are anything but splendid.  They vary in character and attractiveness.  But they are nevertheless splendid and the UK is lucky to have such a mixed bag of sorts just across the water.  Shame the European mainland people have to put up with apparently stupid governments.  Well of course long-term they may not.

END OF THE OUZOZONE?

Look out. Here they come again !! Mr Papandreou has been "forced" to changed his mind and no longer seeks a referendum. Wicked !!  By all accounts he changed his mind because German and French "friends" from the current eurozone  threatened his country with bankruptcy. Nice eh?  


Now call me a kill-joy but I thought that was just the problem.  I thought they were already bankrupt. Let's not get all technical and revert to econotalk; its simple. Greece can't meet its liabilities.  The only way out - for a while -  is for some poor sots to write off half what it owes, and for eurozoptimists to bail it out somehow.  And, not unnaturally, these benefactors would require Greece to put in place very severe measures to turn around their economy. Dream on !! 


Do we really need to ask why, given the chance, most Greeks would have voted against the plan and its severe measures, and yet also would have voted to stay in the eurozone?! Possibly something to do with the quite understandable longing to preserve their roots, return to the beloved drachma, retirement for all at 50,  long sunny days sucking olives and quoffing ouzo, with the confidence to care not a monkey's about the world around them ?


For me this is the crux of the matter.  And if the eurozoptimists insist on trying to change a nation's character, then they might well get their fingers burned more than just the once. Some countries need to have their own currency; and there could be quite a few of them in Europe. They need a currency which reacts to the country's character, its roots, its work ethic, and so on.


It still seems to me inevitable that Greece will default; if not now,  then later. It would leave the Eurozone.  Now according to the intelligensia, the UK would then be doomed by some powerful knock on effect. Frankly I doubt it - but maybe.  Think of it all in family terms.  It's sometimes worth drawing the line, declaring bankruptcy, and starting again with as clean a sheet as possible.

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.