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.