Just remember that every country in the Western world already has the disease.
In the days when I was more involved with euro-scepticism than I am today (we’re talking about the time of Maastricht, here) I was always rather puzzled by the arguments being put forward by my comrades about the Euro. They would complain that Europe was not an “optimal currency area” and that it would lead to a “one-size-fits-all” monetary policy.
And now I realise why I was so puzzled. They were wrong.
My argument against the Euro (should you be interested) was that freedom had a better chance outside a European federation than inside and so anything coming from the EU was likely to be a bad thing.
Anyway, the crisis that the Euro currently faces has nothing to do with “optimal currrency areas” (which I do not believe exist) and nothing to do with interest rates (at least not the sort set by central banks).
No, this crisis has one very simple cause: Greece (and others) borrowed too much. Actually, even that isn’t the crisis. The crisis is that other countries in Europe are worried that if Greece were to go bust their too-big-to-fail banks would indeed fail and disaster would ensue. Others of us, of course, think that trying to prevent this from happening will lead to an even greater disaster but that is by the by.
Now, getting back to the crisis, you’ll notice that none of this has anything to do with the Euro.
Well, kinda. There is the little matter of the Maastricht criteria. These were the levels of debt, deficit and inflation that all members of the Eurozone were supposed to meet. And after a state had received the EU’s imprimatur, it was not unreasonable for banks to think that they (the states) were a good credit risk.
So, there’s sort of an implicit guarantee here although frankly I would be inclined to remind the banks that they are ultimately responsible for assessing the credit worthiness of the people they are lending to and if they lend too much to such sub-prime borrowers then it’s their funeral.
“Their shouting could be heard down the corridor in the concert hall where an orchestra was about to play the EU’s anthem, Ode to Joy,” said an incredulous EU official.
All is not well between Merkel and Sarkozy.
There’s some sort of EU commission into Greece’s finances. Or is it the IMF? Or both? And Greek Prime Ministers and Finance Ministers keep getting interviewed on CNBC. And the whole issue keeps making the number one slot on the financial news. And there are ominous rumblings about Greece being chucked out of the Euro. The sort of ominous rumblings that can turn into ominous realities really quickly in much the same way that that ominous and ludicrous rumbling about sterling leaving the ERM all those years ago turned out to be ominously and ludicrously prescient.
But the deficit is “only” 12.7% of GDP. And it’s the overall debt level that matters. When that gets up to 200% then you’re in trouble. I don’t know where Greece is. And apparently, neither do they - lots of dodgy statistics and off balance sheet accounting making things very foggy.
But, hey, who cares? If Greece cannot finance her debts eventually no one will lend her money and she will simply have to stop spending the stuff. Problem solved.
At least, you would have thought so. I mean, at least I would have thought so. But all this activity suggests that something’s up.
I wonder if the fear is that if Greece goes bust, the Italians, Spanish, Portuguese and Irish might start to think they’re next. When that happens they might warm to the idea of the ECB printing money to pay off their debts (monetizing the debt as it is known) hence creating inflation. And they might lobby for it. If you’re German there’s a good chance you don’t want to pay for Greek pensions through inflation and perhaps you feel that now would be the best time to draw a line in the sand.
Thought: this shows that the real purpose of central banks is to finance government debt. In normal circumstances that is done by selling bonds. In extreme circumstances that is done by printing money.
Many readers will have seen the reports on the news yesterday about the banning of good, old-fashioned incandescent light bulbs and their replacement with these new-fangled, all-the-mercury-you-can-eat low-energy ones.
But, as Philip Stott points out3 there’s more to it than that:
- They can’t be used with all sorts of light fittings
- There are all sorts of people who won’t be able to use them
- Councils don’t know how to dispose of them1
- In terms of life-cycle costs they may not even reduce energy consumption2
- This all comes from the EU
1. So, how come they can deal with traditional fluorescent tubes then?
2. Mind you, if we go all-nuclear then this won’t be a problem. But then, why ban incandescent bulbs at all? Lobbying perhaps?
3. On Apple’s evil blogging system
A few little fact- and thought- ettes I picked up from last weekend’s conference:
- “Buying health insurance is like insuring against your tyres wearing out.” It’s going to happen. Insurance is really there for the catastrophic and unexpected. Like appendicitis, for instance…
- In Switzerland a few years ago they made health insurance compulsory. Prices doubled overnight.
- They also introduced laws against carrying guns in public. Street crime rocketed. Home invasions, where guns and their use remained legal, did not.
- In a lecture on the EU. I paraphrase: “European politicians love to be able to tell their publics that the EU has forced them to introduce such and such an unpopular measure.” Seeing as I’d never heard a British politician say this I had to ask. Turns out that the British are unique in this. They will never admit that Brussels has tied their hands.
- The Berlin government is £40bn in debt. That’s about £14,000 for each inhabitant. Makes the Shinkansens sound cheap.
Never thought I’d see Richard North write this:
A few years back, the EU dominated our thinking but now, as my co-editor observed, over a meal in our favourite London restaurant, it seems a distant irrelevance. It is merely a noxious irritant, filed under “unfinished business” that sooner or later must be sorted out, when our politicians finally realise that it offers nothing and costs us a fortune.
No amount of rhetoric or freebies is going to restore the drive afforded by the vision of its original founders. This is an organisation that has nowhere to go but down.
You can almost smell the (CAP-subsidised) cannabis fumes. For what it’s worth, I’ve been lolling on the bean bag of indifference on the whole EU thing for some time. But I’m not sure I want North and Szamuely to be joining me. There needs to be at least somebody keeping lookout.
Not that I think we need to worry too much. Like a bucket of iced water poured over the head, the EU is bound to do something stupid soon and snap our watchdog out of his stupor.
But it’ll be fun while it lasts. Man.
I don’t think I’ve ever used one of these round-ups to link to Samizdata before. My guess is that anyone who comes here also goes there. And also because - for various technical reasons - Samizdata articles tend to slip through the net, round-up wise.
But I think there is a principle here. If this is to be any good as a round-up I should be giving space to articles I like even if every single reader has already read them. This is where to find the best articles in the Blogosphere, n’importe quoi.
Anyway, Samizdata is always good but this week I particularly liked:
...as people get richer and no longer have to rely on big families to support parents in their dotage, birth rates fall. It seems to happen pretty much everywhere, including in those countries with very different religious and cultural traditions.
Right, enough of Samizdata. Now for what has been going on elsewhere:
- Adriana doesn’t think much of television:
I stopped watching TV a few years back soon after I started blogging on Samizdata.net [did I speak too soon?]. These days when I switch it on for whatever reason, it feels oddly one-way and restrictive. You can’t choose what and when you are watching something you are interested in, the controls are pathetic compared to what I am used to online.
That’s exactly how I feel about television these days. Who else one wonders?
- Christopher Hitchens writes on Ayaan Hirsi Ali and “bogus equivalences”.
- Douglas Murray reviews Nick Cohen’s new book and picks out this gem:
I feel like a class traitor when I say it but the first lesson from the “heroic” age of the Left in the Thirties is that it never works like that in a conflict in which your own society is involved. You can be a critical friend of one side or another, a very critical friend as often as not, but you have to choose which side you are on, and those who don’t usually end up as the biggest villains of all.
- And finally… Latvia: they do things differently there
... here are some of the items I’ve enjoyed reading/listening to over the past week:
- Ann Althouse describes her podcasting technique as putting nails into a rice pudding although you may find her distinctive style puts you in mind of a quite different dessert. (Hat-tip: Instapundit)
- Hydrogen. It’s a hoax. I particularly liked Zubin’s description of how difficult it would be to transport. (Hat-tip: Pajamas Media)
- When I first saw Apple’s latest Mitchell and Webb advertising campaign (the one in which the guy with the job is the PC and the layabout the Apple) my immediate thought was: “Well done, you’ve just lost a potential customer.” I was not alone. (Hat-tip: Tim Hall). Charles Pooter agrees.
- Mark Steyn takes a break from his own prophecies of doom to diss the climate change competition. Nothing particularly new, just good knockabout stuff.
- David Farrer blogs about Bavaria’s parallel currency, one of many to have emerged in Germany since the introduction of the Euro. Yeah… but… isn’t it just a teensy bit illegal?
- “In my darker moments I think guns should be not just legal but compulsory for sane, law-abiding members of the public.” David Copperfield outlines a multi-agency approach to crime prevention.
- And finally… this week’s link to English Russia: the rebuilding of Moscow. When I see photos like this I can almost believe that the Putin clampdown is only temporary.
Or maybe not.
What do you think of the new title for the spot formerly known as “Weekly Round-Up”? Cool or what? Anyway in case you haven’t already read them, here are a few of the items that caught my attention this week. Let’s start with a few quotes:
- “But what does freedom mean if I can´t slaughter my own pig in my back yard?”, a Romanian farmer learns about the downside of EU membership.
- “‘Global warming’ does indeed present a grave threat; as a tool of political power it is a threat to freedom, prosperity, trade, progress and all the health, wealth and happiness that those things make possible.” Thaddeus Tremayne vents the finest spleen in the blogosphere.
- “...if I may generalize about all computer geeks - is that they really like to overexplain the fucking shit out of everything.” Jackie adds that this also applies to hist and pol geeks. Warning noted.
And now for the serious stuff:
- Squander Two wanders into the abortion debate, makes some not entirely unreasonable remarks and ends up being called a misogynist, a wingnut and a Jew-hater. I knew he was the guy to do the Transport Blog redesign.
- McDonald’s, bad for agenda-driven documentary makers but, thankfully, not for normal people. And their coffee, apparently, tastes better than Starbucks’.
- Boris Johnson’s article on why women aren’t marrying these days - he thinks they’re all too well-educated (what, in state universities?) - is creating a bit of a buzz. For what it’s worth I think the answer is a lot more prosaic: housing is just too expensive, meaning that very few men can support a family on their own income. No prospect of a family = no point in being married. Abolish planning - that’s what I say.
- Harry Phibbs wonders if Doughty Street is the future of TV. Well, if it is, I’m a dinosaur. But he does at least give us this:
One irony was that among the coverage 18 Doughty Street launch was given was a hostile item on Channel 4. Krishnan Guru-Murphy declared: “They won’t have any obligation to be impartial or accurate.” This is astonishing audacity. Does anyone really imagine Jon Snow votes Tory?
- Chilling news on global warming. Scientists must say what politicians tell them to. In a similar vein (or should that be vain?), Al Gore agrees to an interview with his fiercest critic and gets a mysterious bout of cold feet.
- Oh dear, what a mess we free marketeers get into when trying to explain away highly-taxed Sweden’s economic success. Here’s Johann Norberg predicting disaster tomorrow. It’s always tomorrow, isn’t it? My best guess is that Sweden is just a bit odd. Whatever the case may be it’s an experiment that no one else has ever been able to repeat.
- Just to prove the virility of their continuing intellectual self-confidence, the former democracy of Belgium and that great model of Europeanism has banned the number 18.
- And finally… do check out these colour photos from Russia in the 1900s. For example:
Last night, I attended an excellent talk by Antoine Clarke on the French EU referendum at one of Brian Micklethwait’s regular “Last Friday of the month” evenings. (By the way, if you would like to come along to one of these please drop me an e-mail and I will forward it to Brian).
These events are at their best when you get to hear big, new ideas. Yesterday, was no exception. Antoine’s big idea was that EU is becoming more free market. His evidence was that the French left has turned heavily against the EU because (to them) it is too “liberal”. As Antoine pointed out they can’t all be wrong.
This is quite surprising. It certainly doesn’t feel like that from over here. Fed on a diet of the Booker column for the last decade, the EU has seemed anything but liberal. I have also lost count of the number of times that our politicians have claimed that “the arguments are going our way” when they patently haven’t. But maybe, finally, they are. Stephen Pollard seems to think so and I even heard a rumour last night that the Constitution may lead to the abolition of the NHS.
Someone else chipped in (I think it was Brian) that this is not entirely incredible. The EU’s purpose is to abolish the nation. So far it has employed socialist and social democratic methods but should liberal, free market methods prove more effective (and there’s every reason to think they might) then they will be the ones to be adopted.
So, should free marketeers start to embrace the EU? Not so fast. First, the EU might turn into a liberal despotism but it would still be a despotism. Second, while EU-wide liberalism might be better than EU-wide socialism, competing jurisdictions with their ability to make mistakes and to learn from them would (as David Carr pointed out) be better still. Third, my great worry about the EU is its ability to create war-inducing disputes. A liberal, free market EU is just as likely to create those sorts of disputes as a socialist one - just think about the row the abolition of the NHS might cause.
I have always been rather dubious about the claim that the EU and its predecessors have prevented a war in Europe and so I was looking forward to reading Helen Szamuely’s take down. Unfortunately, I didn’t understand it so I thought I’d have a go myself.
Wars start because states find issues on which they disagree. The First World War started because Britain thought Germany was too powerful and Germany thought she wasn’t powerful enough. Ditto the Second World War. The Iraq War started because the Allies didn’t like the look of Saddam Hussein. Saddam Hussein, underpants aside, thought his looks were just fine.
The Big Dispute in Europe between 1945 and 1989 was over communism. The Warsaw Pact thought that it should expand. NATO disagreed. That dispute could have escalated into a real war at any time but it didn’t. Two possibilities: the ever present threat of instant annihilation posed by nuclear weapons or the EU (oh, hang about that didn’t come into being until 1992, I mean the EC, oh hang about that didn’t come into being until 1986, I mean the EEC, oh hang about that didn’t come into being until 1958. No what I mean is the European Coal and Steel Community. Yes, that’s what Euro-fanatics would have us believe kept the peace between 1950 and 1958. That we didn’t get vapourised in the five years before was just good luck. )
No prizes for guessing which one I would plump for. But, hey, let’s give them a chance. Maybe, there was indeed a conversation in the Kremlin that went like this:
Boris: Let’s invade Western Europe.
Vladimir: No, Boris. They have the Common Agricultural Policy and a Common External Tariff. We’d never stand a chance.
OK, well that gets up to 1989. What then? Well, the problem is the absence of a major dispute between the major European powers. France doesn’t grieve over Alsace-Lorraine. Germany doesn’t want to invade Poland. No disputes, no war.
The funny thing is about the only disputes that do exist are the creation of the EU itself. Britain doesn’t like the Common Fisheries Policy. France doesn’t like Spain’s wine. Danes don’t like German immigrants. No one likes Britain’s rebate or Greece’s budget deficit. So far, they are survivable. But what if they got really serious, like a demand that Britain fund the Continent’s pensions?
I don’t remember the period before 1973 (when Britain joined the EEC) that well but I am not aware of any disputes we had with our neighbours. Nowadays, thanks to Europeanism we have them aplenty. How long before one of them starts a war?
David Farrer on airline compensation regulation:
Whenever I hear the word rights, I reach for my revolver
From Freedom and Whisky
You cannot stop someone from thinking something just because you make the symbols illegal.
From EU Serf
We have said it before, but it bears repetition, that the coming EU referendum campaign will be the first internet campaign in our history and I remain convinced that the material on the net will have a decisive impact on the course of the campaign.
"My colleague appears to be “indisposed"" says Helen of EU Referendum of Richard who has been banged up. This should be interesting. Perhaps it'll encourage him to cut down on the inter-necine attacks.
Did you know that the EU constitution did not exist in one place until this week? And did you also know that this is no thanks to the massive bureaucracy of the EU but the result of the efforts of a retired Brigadier and his son? So says Christopher Booker.
Update EU Referendum have also noticed this.