Journal Column – 14th December

Last week David Cameron made one of the most profound foreign policy decisions of recent years.   In using his veto against proposals to stabilise the Eurozone, the Prime Minister has effectively set the British state adrift from the wider European Union.   Wales, which finds itself on the edge of a centralised London centric political system, now find itself on the periphery of the periphery.   This will be desperately bad news for our manufacturing and export based businesses as well as agriculture.

The use of the veto at this time was an act of crass stupidity.   I doubt the wisdom of a deal based on strict fiscal rules – a super growth and stability pact; of fiscal integration; and of a solution based on no more debt restructuring or ‘haircuts’ for bondholders.   Also, personally I’m no fan of the current liberalising agenda of the EU which privates utilities which should remain in public ownership; the lack of power of the European Parliament over the technocrats of the European Commission; or the lack of transparency of the European Central Bank.   However de-railing a deal aimed at saving the European economy was insane.

If the Euro goes down – we go down with it.   With the UK Government’s austerity programme sucking away domestic demand and consumer debt and inflation reducing the purchasing power of households – the only hope for the economy is exports.   Our main trading partner is the Eurozone.   Our fates, whether the eurosceptic extremeists of the Tory party like it or not, are intertwined.   

Last Thursday a major credit rating agency warned of the credit downgrading of every 27 European country if the economic turmoil within the 17 countries of the Eurozone wasn’t resolved.   The Treasury seems intent on wreaking untold misery on everyone in order to preserve the triple AAA credit status, and therefore where is the coherence in UK Government policy.

It’s no wonder that business leaders are voicing their concerns with even the CBI wondering what’s the game plan.   If we are to build the rebalanced export based economy needed to get out of the mire we find ourselves in, being at the core of the single market is essential.   That does not mean adopting the Euro or everything that goes with it – but it does mean being at the core of matters and not a pariah state.  

When the Prime Minister talks about protecting the ‘national interest’ he is of course referring to the economic elite in the square mile.   The very people who have got us into this major recession in the first place.   As these events were unfolding I was attending a speech by HSBC Chief Economist Dennis Turner organised by the Farmers Union of Wales in Carmarthen.   It was probably one of the most interesting and entertaining speeches I have listened to recently.   As a high level banker he was delighted with the turn in events – which means the rest of us should be worried!

One Response to “Journal Column – 14th December” [latest first]

  1. This was an act of visceral little Englandism from Cameron. It was not even effective in that the other nations can still impose the regulations they want on the city through majority vote.

    Dave has done us nationalists a huge favour. Even Carwyn can see that attitudes like this do not accord with the persistence of the UK. Alex salmond must think Christmas has come early!

Discussion Area - Submit a comment

Your reply will be moderated and not appear immediately. You can prepare your text in a word processor before pasting it into the box, but formatting such as bold and colour will not appear.