A letter by Simon Whitney-Long, ‘Sustainability of the euro” (October 29), presents some of the usual rants of the English Eurosceptics disparaging the European Union and its institutions.
In voting for Brexit on June 23, the Eurosceptics, now rebranded as Brexiteers, have in all probability laid the basis for the greatest ever economic and social disaster to affect the United Kingdom. The dire warnings of the governor of the Bank of England and all the other despised ‘experts’ were swept aside and now, despite the awful fall in the value of the pound, the Brexiteers argue that those dire predictions did not materialise, ignoring the fact that the UK is still in the EU.
Jenni Russell wrote in The Times recently that the Brexiteers appeared to be looking for a scapegoat in the Bank of England’s Mark Carney to blame for the collapse of sterling because of reducing interest rates by a half of one per cent. Carney is a fine central banker who has been doing a fine job. The politicians who are trying to discredit him should understand that the interest rate mechanism is not the main factor in the popularity of sterling. They have only to look to the ERM debacle in John Major’s time, when the politicians raised the bank rate right up to 15 per cent. This only helped George Soros make more money.
The pound keeps falling be-cause of the insane conviction of the Brexiteers that England can do well outside of the European Union. Investors buy the pound when they have faith in the nation that issues it. When they lose faith, they sell and the pound falls.
Pushing even for a hard Brexit, the Brexiteers, led by a Prime Minister who speaks with a forked tongue, appear prepared to see the breakup of the UK to achieve their aims. They are prepared to alienate Scotland to the point of secession and to risk reigniting the civil war in Northern Ireland.
As to the sustainability of the euro, Whitney-Long makes valid points, because there is no doubt that the originator of the euro, Ecofin, as it was known (the Economic and Financial Affairs Council), set out the rules for the single currency which, sadly, were not adhered to.
The pound keeps falling because of the insane conviction of the Brexiteers that England can do well outside of the European Union
Kenneth Clarke, then chancellor of the exchequer, was the UK’s member of Ecofin. In his recently published memoirs, which I do recommend to readers, Clarke says: “Ecofin set out the structures but all the carefully negotiated rules were ignored when the euro was actually launched.”
Clarke also says that his role in Ecofin “was a constant source of merciless controversy in British domestic politics and a central feature of the absurd civil war that had now broken out within the Conservative Party about the European Union”.
To understand the sustainability of the euro, Eurosceptics must keep in mind that ‘man shall not live by bread alone’.
For us dedicated Europeans, the euro is sustainable because the EU is sustainable, and the EU is sustainable because all 27 countries are determined to see it sustained. Even Greece, which had such a hard time at the hands of the Brussels bureaucrats, never wavered in its determination not to Grexit.
The commitment is to an ideal. It is a great ideal: it sees a Europe united after all the useless slaughter of the 20th century. This ideal is sufficient to keep the EU whole, with or without Great Britain.
On the economic front, the fact that the euro is now more or less at par with the sterling speaks for itself. It is perhaps worth noting that the ‘pool’ of euros is the largest pool of freely convertible currencies after the dollar. In comparison, the Swiss franc, the Japanese yen and the sterling are, relatively speaking, ‘boutique’ currencies which cannot accommodate large cash flows.
For Anglophiles like me, it is sad to have to say: “Farewell perfidious Albion.”
Peter Apap Bologna is a chartered accountant.