IslingtonTribune

The independent London newspaper

Euro threat to the EU

01 December, 2017

• STEPHEN Horne gives an elegant summation of EU blackmail: “…the creditors made it clear that Greece could only remain in the eurozone if it accepted the bailout terms” (Wedded to the euro, November 24). In other words, accept a third bailout which had been comprehensively rejected by your own people or we will confiscate your currency.

It appears incomprehens­ible to me that Alexis Tsipras could promise to reverse budget cuts while promising to remain in the euro. Membership of the euro was the cause of the damage to Greek society which the bailout was intended to cure. This encapsulates the economic rationale of the EU: mint a coin with heads both sides, flip it in the air and call “tails”.

The truth is the euro is the existential threat that will terminate the EU. They should reform it at once with the aim of reverting to national currencies. The first step would be for Germany to leave the eurozone and revert to the Deutsche Mark, which would be valued at a higher rate against the euro. This would rebalance trade within the EU and return the trade surpluses accumulated by Germany back to the other member countries.

The result will be the return of liquidity which, coincidentally, the European Central Bank is attempting to achieve with quantitative easing and negative interest rates. It would allow the Bund­esbank to give positive interest rates to savers in Germany and bring over­due relief to the long suffering people of Greece.

STEPHEN SOUTHAM
Mildmay Grove North, N1

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