The President of the European Commission Jean-Claude Juncker has now announced his plan to revive Europe’s ailing economy by splashing £250 billion on “investment”, but this will inevitably prove to be another exercise in futility and waste. The responsibility for stagnant growth in the Eurozone rests solely on the lap of Brussels.
When they conjured up the concept of the euro, was it not obvious imposing the same exchange rate on an ever increasing group of countries with very diverse economies would be a recipe for disaster?
The UKIP MEP Patrick O’Flynn was among the harshest critics of the plan, arguing “there is a fundamentally deflationary bias brought about by the euro across southern Europe.” The levels of unemployment in Spain, Portugal and Greece reflect this reality. There is no doubt making Germany and Greece share the same currency has proved to be a mistake of epic proportions. After the recession hit in 2008, Europe’s technocrats made a diagnosis and without any regard to the differing conditions in each Eurozone nation, prescribed the same medicine to all: austerity, and lots of it. If southern Eurozone countries were allowed to have a depreciated national currency it would have encouraged the flow of investment.
O’Flynn went on to explain: “The brutal truth is you don’t have €315 billion to spend. You don’t have anything like it.” There is a huge question mark as to where over £200 billion will be found. €16 billion euros will be provided from the EU budget and €5 billion from the European Investment Bank. Juncker’s plan relies heavily on private investment and despite his best efforts investor confidence and trust in the Eurozone will hardly have changed so drastically. This is exacerbated by the European Central Bank financial stability review today, stating “Systemic stress among euro area banks and sovereigns declined further to levels last seen before the onset of the global financial crisis in 2007.”
Juncker described his plan as a ‘watering can’ to deliver growth, an analogy taken up by the Tory MEP Syed Kamal who also objected strongly to the plans, saying: “How do we make sure it is a watering can that stimulates growth? How do we make sure that it is not a government flood that washes away private investment? How do we make sure that it is not a private irrigation system that is never turned on? What we need are detailed answers to some of our questions.
Juncker might be providing a ‘watering can’ to nourish the economy, but it is a fruitless task if the soil is barren and the tree already dead. As O’Flynn also commented “The euro is what motor traders in my country would call a lemon, it should be scrapped”.
The Pope warned the European Parliament of such an approach stating that “unity doesn’t mean uniformity of political, economic and cultural life or of ways of thinking” instead stressing the European Union would be “more united when each of its members is free to be fully himself or herself without fear”.
This one-size-fits-all approach is characteristic of EU policy, but so is the denial of Europe’s leaders. The reason for lacklustre levels of investment in Europe is that it is being driven away to more competitive markets by the mountain ranges of regulation mass-produced in Brussels.
Six years on from the 2008 recession Europe’s economy is still on its knees, but the political classes have learned nothing from their self-inflicted folly. If your house has been burned down, the last thing to do is to mistake the arsonists for firemen. The most pragmatic thing to do is to Get Britain Out.