A Greek tragedy for the Euro?

Greece’s financial predicament has become a rallying cry for the anti-European right and those who want to fuel the ‘debt panic’. David Cameron was quick to take advantage; announcing he would ‘never’ take Britain into the Euro and that the Conservatives would retreat from a common defence policy.

It shows how ideologically blinkered the Conservatives are that they think in a global market what happens in Greece and the wider Euro-zone wont effect Britain. Markets around the world rose and fell in reaction to the speculation regarding the rescue package for Greece. Furthermore, the bail-out of Greece has sent a strong message to currency speculators that their hawkish efforts to force Greece out of the Euro will meet determined resistance.

This kind of collective security is something that Britain may come to envy in the coming months. The Wall Street Journal points out that the pound has problems of its own:

People are starting to re-evaluate the pound,” says Simon Derrick, a currency analyst at Bank of New York Mellon in London. “The thing that has worried us is what a hung Parliament would do.” Mr. Derrick says sterling could fall below $1.50 as the election nears.

Who is to say this weakness could not encourage speculators who sniff blood? Meanwhile, for those who fear the Britain could go the way of Greece the Conservatives are pouring oil onto the fire of panic. Greece is a cautionary tale they say; look what happens when the government spends so freely they say. However, there are other factors causing the Greek crisis:

The current left-of-centre Pasok government in Athens inherited the disgracefully fiddled government financial books from the discredited outgoing conservative administration.

Meanwhile, the rich and professional classes simply ‘avoided paying tax’ Oddly enough you don’t hear David Cameron pointing to Greece and as showing the perils of non-doms for an economy. Conservative scaremongering should not be allowed to win the day on the debt or the Euro. If it does then the damage done to Britain will put Greece’s problems into the shade.

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About darrellgoodliffe

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2 responses to “A Greek tragedy for the Euro?”

  1. mommsen says :

    I really think that Greece would be in a better situation today if the Greek had kept their former currency instead of giving it up for the Euro .

    It’s such a shame that the place where democracy had been invented in ancient times has now become a place ruled by foreign goverments (among them the German one).

    Germany’s current economic policy is neither good for the vast majority of Germans nor for any other people in Europe. It’s only good for Germany’s export industry which lobbies quite successfully among the leading politicians in Berlin and in Brussels.

    It seems to me as if most German politicians serve only the interests of Germany’s export industry. The same is true for Germany’s mainstream media which supports this stupid policy.

    But whatever the German mainstream media may tell us – the numbers which were published recently by the OECD cannot be denied: Whereas Germany’s export industry has made tremendous profits in the last decade, real income of most German employees has decreased in Germany in recent years.

    In Germany there isn’t even a minimum wage!

    Low wages in Germany help to sell German products on foreign markets whereas countries like Greece have even lost their ability to devalue their own currency in order to help their own export industry now.

    This is not a way to run a “European Union”.

    Those who seem to be inspired by the maxim “divide and rule” (divide et impera) should stop pretending that their idea of Europe had anything to do with “Union”.

    Like

  2. darrellgoodliffe says :

    mommsen,

    I dont agree about the Euro; I see it as the future. I would have much preferred Britain to be in the Euro than out and feel our recovery would be stronger if we were.

    Greece’s problems stem from the corruption its government inherited not its position being in the Euro. However, I do take your point about democracy but to me what this shows is the need to press forward in fighting for wider and a more radically democratic Europe not to abandon the unity of nations that the single currency brings.

    I also take your point about the Euro mainly serving the export industary and the attendant problems of low wages but to me the Euro means more than a currency and supporting it rises above being a purely economic concern. It’s disgraceful that there is no minumum wage in Germany and like you say this is not the kind of European Union we want or should fight for but that doesnt mean the way forward is to rally calls for ‘national sovereignity’ and dissolve the Union.

    Like

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