In surely the nuttiest news of the
day week month century, former British Deputy Prime Minister (an office of “great repute“) Lord Heseltine suggests that Britain will join the Euro.
From the Grauniad:
Britain will join the euro, Conservative peer Lord Heseltine has claimed. The former deputy prime minister, a long-time supporter of the single currency, said the public had “no idea” of the potential impact its collapse would have on the UK.
But he believes Franco-German “determination” will secure the euro’s future and pave the way for Britain to sign up. Lord Heseltine, who now heads up the government’s regional growth fund, told BBC1’s Politics Show on Sunday: “I think we will join the euro.
“I think the chances are the euro will survive because the determination, particularly of the French and the Germans, is to maintain the coherence that they have created in Europe.”
The problem is that there is no coherence. Nobody is really in charge — not van Rumpuy, nor Barroso, nor Draghi, nor Merkel, nor Sarkozy. The thing is a total hodgepodge, a hyper-bureaucratic, hyper-leveraged mess. Nations were free to borrow and spend as much as they liked — without the ability to monetise debt, and without any real lender of last resort or safety net. Europe has no coherent political or decision-making structure, no single culture of work, no single language and little workforce mobility.
The idea of Britain giving up its monetary independence (and thereby — as Greece is discovering — fiscal independence) to such an incoherent, bureaucratic and anti-democratic cabal is absurd and dangerous.
I suppose there is one kind of coherence in Europe, though.
Goldman Sachs has a finger in every pie and a minister or central banker in (almost) every government. And — as Papandreou discovered, when he suggested Greece hold a referendum on austerity — if you don’t play ball with Goldman Sachs and the cult of international finance, you are quickly disposed of and replaced by a Goldman-endorsed technocrat.
From the Independent:
Fortunately for Europe (and the world) Goldman’s 21st-Century-Schizoid loot-and-pillage hyper-fragile economic model doesn’t offer any kind of long-term prosperity, and is bound to fail. Japan — and more recently, America — is ample evidence for that. Bailing out zombie financial institutions, piling on more debt, and preventing liquidation just tends to lead to the stagnation and zombification of the wider economy.
Certainly, with European sovereign debt now in a Lehmanesque downward spiral (demand collapse) there is no chance of Britain joining the Euro. But the end of the Euro in its current form does not necessarily the end of this mess.
How much productivity, industry, opportunity and wealth will be destroyed by the cult of financialism, hyper-leverage, endless centralisation and no-haircut-bailouts? No-one knows.
The real question is what long-term damage has been done to liberal capitalism as a political and economic system?