Bill Carmichael: Another year, another eurozone crisis

THE new year is only hours old and the eurozone is plunged into yet another existential crisis.

Ignore the soothing voices coming from Brussels and Berlin trying to reassure the international community – and in particular the money markets – that all is well and the financial emergency which threatened to rip asunder the EU only a few years ago is well and truly over. It isn’t – and I expect that before spring is upon us we will find out exactly why.

The trouble is that the fundamental structural problems that undermine the whole idea of a currency union encompassing widely differing economies have not gone away.

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The latest calamity comes courtesy of further political ructions in Greece, probably the weakest of the EU basket-case economies, although there is plenty of competition.

Earlier this week the pro-austerity ruling parties in Greece failed to gain enough support in parliament to elect a new head of state, thereby triggering a snap general election to take place later this month.

Ahead in the opinion polls, and most likely at this point to form a new government, is the far Left Syriza party that wants to tear up the agreements with the EU, the European Central Bank and the International Monetary Fund.

Syriza rejects the austerity measures imposed as a condition of Greece’s 240bn euro worth of bailouts and also wants the country’s 320bn euro worth of debt simply wiped out.

Given the terrible damage the EU has inflicted on ordinary people, not just in Greece but right across the eurozone, it is hard not to sympathise.

Because of the grandiose ambitions of the Euro-fanatics, lives have been ruined, businesses destroyed and the life chances of a whole generation of young people sacrificed to the mad idea of a United States of Europe.

But whether the antediluvian dogma of 1970s Marxism is the answer for Greece is another matter.

As Margaret Thatcher wisely observed, the problem with socialism is that you eventually run out of other people’s money to spend.

And given that Greece has no money left of its own, and the Germans and Dutch will eventually tire of trying to fill up the bottomless begging bowl, Greece is heading for an even bigger crisis sooner rather than later.

Given the misery inflicted on working people it seems strange that Syriza supports both the EU and the Eurozone.

A far better solution – in fact the only way Greece will ever recover – is for it to ditch the euro, devalue its currency and try to rebuild a more competitive economy from the bottom up.

That is unlikely to happen voluntarily, but the Greeks may not have a choice – the money markets may make the decision for them. News of the election this week saw the Athens stock market slump by 10 per cent and interest rates on three-year debts soar. So the choice for Greece is stark – either capitulate to the Brussels bullies and carry on with austerity, or quit (or be kicked out of) the euro.

If the latter happens the crisis could quickly escalate. Brussels is hoping that there is now enough resilience in the other vulnerable economies – Spain, Portugal, Ireland, Italy and France – that the dominoes will not begin to topple.

Let’s hope they are right because further chaos in Europe will damage everyone – the UK included.

Food for thought

I was admiring the centrepiece on our festive table – a combination of flowers, foliage a couple of candles and a bit of glitter – when I noticed a warning attached to the basket: “Not for human consumption – Do Not Eat!”

Thanks for the advice, but to be honest I’d have to be pretty far gone on the old cooking sherry before I started scoffing houseplants and candles.

But in recent years we have become used to notices warning “May contain nuts” on a bag of peanuts and “may contain hot liquid” on a cup of takeaway coffee. Whatever next? “This is a bicycle – not for human consumption” or “This is a garden spade – do not try to eat it”.

How did previous generations ever manage to stay alive without such advice from health and safety bureaucrats?

Oh and in the spirit of the times, if you are tempted to eat The Yorkshire Post – after you have finished reading it of course – my advice is don’t.