Did Davey do the right thing?

[Serial_Apologist]

eurozone in a nutshell ...or two ...

So, cut spending, and you deepen the recession. Carry on spending, and you risk economic collapse. In the end it's all the same result as far as the lenders are concerned: heads or tails - in the first instance it just takes longer, once the consequential throughput evens things out.

So... who are these lenders, and what do they expect? Is there someone "at the end of the line" who is going to benefit, or hopes to? It rather appears not. Maybe at some stage some farsighted genius of sufficiently powerful position will see that everyone owing everyone is synonymous with no one owing anyone; some kind of Bretton Woods equivalent will convene between the leading economies, and a debt write-off such as that implemented vis-a-vis the Third World agreed.

[Lateralthinking1]

Very good article. It doesn't though say whether centrally imposed penalties on borrowing above 3% were agreed in 1997. I suspect not which would mean that 2011 is significantly different.

However, it looks to me as if voters were abandoned by many politicians when they agreed to the borrowing limits in the first place. The only saving grace in terms of democracy was that clearly they decided they would ignore them.

Germany and France look appallingly bad from the figures shown. It seems to me that Blair and Brown must have sat back as the former let reunification go to its head. It was going for an expansion of political influence of which few were aware.

For both to set requirements on others that they themselves intended to ignore should encourage widespread contempt. Their attempts to reimpose those requirements with sanctions now should according to moral principle be deliberately ignored.

And, of course, what we see here is what we have been saying. The spending was not the main cause for this failure. I'm not even won over by the argument that a big problem was that wages rocketed under Berlusconi.

Italy hasn't even got a minimum wage. However, it has the fifth highest number of billionaires, 280,000 millionaires and an appalling record on tax evasion and fraud.

[Biffo]

It seems to me that Blair and Brown must have sat back as the former let reunification go to its head. It was going for an expansion of political influence of which few were aware.

What should they have done, sent in the tanks? There was little they could have done even if you accept that Germany 'let reunification go to its head' , which I don't.

[Lateralthinking1]

Not then no. But they should have argued forcefully against those limits. As it was, they stood ready to sign up to them, and hence to sign away our democracy, "when the conditions are right to do so".

Effectively, they were quite happy to tie us in to one very narrow form of economic conservatism for ever. This would not only have made socialist and green alternatives redundant at the ballot box. It would have limited the voting options for other forms of conservatism, and social democracy and liberalism, too.

[Biffo]

As the UK decided not to enter the Euro at its inception we had no say in the terms agreed on by those who did become members. We were rightly sidelined. The different formulations used by Labour ("when the conditions etc" ) and the Conservatives (Hague with his "save the pound") were just to paper over the cracks in their respective parties and a tacit acknowledgement that the electorate wouldn't have accepted the Euro on any terms.

Neither party was happy to tie us into one very narrow form of economic conservatism. The Tories got their fingers very badly burnt with 'shadowing the DM' and the membership of the ERM and were in no hurry to repeat the experiment. Brown was only too ready to abandon 'prudence' and splurge with public spending. If socialist and green options became redundant it was due to their own lack of appeal to the electorate. Incidentally, Germany, the arch-villain in your scenario, is one of the few countries (the only one?) where the Greens have commanded any widspread electoral support and actually tasted real power.

Prior to re-unification, West Germany was the greatest economic power in Europe and largely financed the European Union. It didn't need re-unification to give it the kind of dreams of dominance you seem to be implying. Germany has taken the lead in the recent negotiations and largely set the agenda because it is, in effect, taking on the responsibility of bankrolling the rescue bid (that is what it is). It is reasonable to expect some kind of guarantee that they are not going to throw money into a bottomless pit.

[Serial_Apologist]

As the UK decided not to enter the Euro at its inception we had no say in the terms agreed on by those who did become members. We were rightly sidelined. The different formulations used by Labour ("when the conditions etc" ) and the Conservatives (Hague with his "save the pound") were just to paper over the cracks in their respective parties and a tacit acknowledgement that the electorate wouldn't have accepted the Euro on any terms.

Neither party was happy to tie us into one very narrow form of economic conservatism. The Tories got their fingers very badly burnt with 'shadowing the DM' and the membership of the ERM and were in no hurry to repeat the experiment. Brown was only too ready to abandon 'prudence' and splurge with public spending. If socialist and green options became redundant it was due to their own lack of appeal to the electorate. Incidentally, Germany, the arch-villain in your scenario, is one of the few countries (the only one?) where the Greens have commanded any widspread electoral support and actually tasted real power.

Prior to re-unification, West Germany was the greatest economic power in Europe and largely financed the European Union. It didn't need re-unification to give it the kind of dreams of dominance you seem to be implying. Germany has taken the lead in the recent negotiations and largely set the agenda because it is, in effect, taking on the responsibility of bankrolling the rescue bid (that is what it is). It is reasonable to expect some kind of guarantee that they are not going to throw money into a bottomless pit.

Agreed up to a point, but I don't read Lat as targeting Germany as the main villain of the piece: just observing its character to be as by no means as unblemished as usually presented when imposing conditions on others it itself did not always observe.

As for the presence of the Greens in German politics, even their previous behind-the-scenes influence was sufficient to build the kind of infrastructure - integrated transport systems etc - that has advantaged Germany over other countries where their voice has not been at the table. Were the Greens to gain more suport in other EU countries, which is not out of the question as the existing way of doing things grates more and more in the popular mind, one wonders where those who always highlight their lack of appeal will stand.

[Lateralthinking1]

I don't think there was anything about being outside the Euro to prevent us speaking up for democracy. All it needed was the desire. Unless, that is, there is a clause to say that people are gagged if not a full part of it. I can see that natural diplomacy requires a healthy distance - of course it does - but we can be too precious about such things when democracy is at stake.

No, I think that New Labour did want to join it at "the right time". Even now, none of the members of those Cabinets are saying that privately they were very much against it. But actually my beef is not about the Euro which I might have joined under the right conditions. It is that a borrowing limit requirement would never have been an acceptable condition to me. Trust is the key.

I also have some doubts about the increasingly accepted mantra on New Labour's high spending. I don't deny it but the so-called prudence was everywhere too. My wages rose far more under Thatcher and Major. There were many freezes subsequently. Then there was the part-privatization programme, half-baked admittedly. I see their greater economic failings as being that they had the wrong priorities on many occasions and particularly that there was some fairly basic economic mismanagement.

On Germany, reunification was good for national democracy. It was not necessarily the greatest news for democratic objectives in the EU. We are where we are. I think Angela Merkel is a principled, sensible, woman when considered according to her own reason. She is doing her best I feel. I couldn't incidentally speak highly of Sarkozy. He is clearly dodgy. So this isn't a stance against a perceived determined Uber Deutschland, although there are many EU bureaucrats who seem to be Uber Europeans, among them Germans. Rather I see semi-conscious impulses there based on history, recent change and efficiency traits.

If the Greens are doing well in Baden-Württemberg, great, but their cousins in Greece and Italy now have to go to the electorate saying "we believe in X but you realise we are not able to undertake paragraphs 7, 8 and 9 of our manifestos because the external penalties are too great". That isn't democracy. Perhaps though the Greens aren't the best example here given their stances on, say, growth. So how about last week's statement from the KKE in Greece. It doesn't look as if they feel the current interpretation of democracy is now likely to be fair when it comes to future elections - http://inter.kke.gr/News/news2011/20...-anakoinosi-pg