Gary's News and views

Gary writes a weekly article which appears in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here.

 

Monday 14 November 2011

DEAL OR NO DEALON THE EURO?
Predicting the future is a mug's game, but I am going to have a go. I predict that last week's deal to save the euro will not work and that within a few months this crisis will be dominating our headlines again.
We still do not have the detail of the deal thrashed out by our Brussels overlords last week, and the devil is always in the detail. Secondly any settlement that is dependent on the governments of Italy and Greece getting their deficits under control is surely doomed to failure. As we know from our own UK experience, deficit reduction is very hard work for governments and painful for electors. People get used to one level of government spending and understandably resent less being spent on their pensions and public services. I have no confidence that the fragile governments of those countries will be able to see this enterprise through. Finally, any agreement that depends on China coughing up substantial sums of money to support the ailing west is pure fantasy. They have their long term plan to be the world's economic powerhouse and they are sticking with it.
So what will this mean? Prediction two: Led by France and Germany, some of the euro-zone countries will push for much greater integration to make the euro work (possibly cutting out the weaker brethren) and the EU will of necessity become a two tier EU. To which I say good! This will afford the UK an opportunity to lead the outer (non-euro) zone and shape it much more into a single market with powers being returned to member states, thus abandoning the "ever closer union" project much loved of Brussels bureaucrats but unwelcomed by the people. So the EU is likely to change shape over the next few years. At that time, when events have taken their course, we should have a referendum to approve or reject the new relationship.
I voted for the referendum in the heady debate in the Commons last week for two reasons. First I wanted to send a strong signal to party leaders that the status quo on the EU will no longer suffice and the time was right for the British people to have their say. Second, I knew from the overwhelming reaction from you, that this was your clear preference. The vote was lost, but from what I set out above, please do not despair. The times they are a-changing.

posted by Gary @ 08:12