Friday, 20 May 2016

God save the Euro. Draghi can't.


As I sit here terrified in my reconditioned Anderson shelter (built out of Spanish Pilchard tins) awaiting the disastrous consequences Cameron has predicted from a Brexit vote: world war three, rampant terrorism, the end of the health service, the collapse of the pound and of house prices, I've begun to think leaving the EU will be so bad  it will make what the EU is doing to Greece look kind and well intentioned.

Then I realise that Brexit can't possibly be worse than joining the Euro as so many of the anti-Brexit people want, Kaletski claims that the Euro has been saved by printing money on an enormous scale by Quantitive Easing but this can't be more than a temporary boost like morphine for a dying patient (and a shot which hurts us because it brings the  Euro down making them even more competitive against us).The Euro can only work if it's backed by a system of redistribution to the poorer areas (which Germany won"t allow) a central budget and economic policy (which France won't allow) and the development of a federal state (which electorates won't allow)

Until then the less competititive countries will be forced to deflate to get down to German levels of inflation unemployment will remain high,particularly for young people and Germany will continue to drain demand and jobs from other members by running a great surplus in its trade with them and not redistributing it. 

Meanwhile we'll sit there on the periphery unable to influence what's going on but suffering from the deflation in our major market which will have to foist more goods and people on us just to keep going.Victory for Remain will tie us bound and gagged to all this  David Cameron  tells us that June's decision is for  life.But he's wrong. We're committed to another referendum if there's any change to the treaty which there will have to be if they're to make the Euro work. 

What a mess. It's no fun being shackled to a corpose

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