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Don’t get me wrong, I think that Great Britain is the greatest nation on Earth, but we do have an Achilles Heel. Indeed, for the past 50 years and more it has been the relationship with Europe, and the European Union. This running sore continues, and manifests itself currently in Prime Minister David Cameron in squirm inducing attempts to hold the line between traditionalists in his party and the Europhiles in the Liberal Democrats. This is an impossible task, and is the reason that Sterling is currently plummeting on the foreign exchange markets. One Pound = One Euro is back on the agenda by the end of this year.
This is because there is simply no way that this particular issue can be finessed, faced off, or simply kicked like the proverbial can down the road. Indeed, rather than going through the motions of a referendum, it will be far more preferable in the Government to simply tell the EU that we are leaving the party. Ironically, the best scenario may actually be that the EU tells the UK to head off into the sunset on the basis that apart from the issue of agreeing on a single market – possibly, there is nothing this particular club offers that we want. The situation could be likened to someone wanting to be a member of a nudist colony, but not wanting to take their clothes off: in our case this includes wanting to keep our currency, keep our central bank, and even our great institutions like the BBC and MPs expenses fiddling. We also want to blame the EU for anything and everything that goes wrong – a bit like Alex Salmond does for the UK versus Scotland.
But worst of all, we do not understand what that the basis of the EU is that it was set up not just to facilitate business, but really to act as an insurance policy against war and economic disaster. So far it has just about managed to do this, with the bailouts for the PIIGS. They have been handed billions by the ECB and could receive billions more. Unfortunately, after paying into the EU insurance policy for decades, when UK banks collapsed in 2007 – 8 we had to bail ourselves out via the Bank of England to the tune of hundreds of billions, because of our precious Pound. Now we have austerity and a taxation witch hunt due a a £1 trillion deficit. How clever was that? The point to note apart from how badly we played the banking collapse is that UK (and U.S) banks were the first to collapse after the sub prime meltdown, not those in the Eurozone – they were brought down by the credit ratings agencies.
As I said to start this article, we have a blind spot on this issue and are happy to blame the EU for everything from Global Warming to bad breath. The best thing is if we get out, or are thrown out before we make even bigger fools of ourselves, our currency and our economy. However, this is unlikely to happen very soon or very easily as UKIP will split the right wing vote to hand the next election to Labour, and anyway, once voters cotton onto an anti EU vote being an anti welfare state vote – we will probably be lumbered with the Brussels gravy train brigade for an extended period.
For more on the EU / Euro debacle read Zak’s Amazon eBook bestseller, Lessons From The Financial Markets For 2013 by clicking here
