Clegg’s Clause Four – abandon the Euro
Posted on September 9, 2011In a desperate defence of his party’s continuing and increasingly absurd support for Britain joining the Euro, this morning Nick Clegg told the Today Programme that:
“I don’t think any of us could have predicted…that the rules on which the Euro was created should have been so spectacularly flouted”
His claim was that the concept of the Euro has always been and still is a good idea both in principle and in practice. The Lib Dems’ latest line of defence on the Euro is that it has never been implemented properly – that the failure of some countries to abide by the Stability and Growth Pact which regulates Member States’ budgets had undermined what was actually a really good idea.
This is getting increasingly ridiculous.
The inherent and fundamental flaw of the Euro is that it sought to bind together utterly disparate economies without any democratic or market accountability. It takes the bloated civil service of Greece, the housing market of Spain, the manufacturers of Germany and tries to force them all into the same straghtjacket. It tries to buck the market, the laws of economics and public opinion all in one go. It was always going to fail and wreak economic havoc, and the Commission’s attempt to pretend that wasn’t so was the introduction of the Convergence Criteria in the Maastricht Treaty, which later became the Stability and Growth Pact.
As many people pointed out at the time, and as history has shown us since, it was a fantasy to imagine that the Southern European countries in particular would be able or willing to keep their deficits below 3% and their Government Debt to GDP ratio below 60%. As a politically-motivated project, it was always likely that the Commission would fail to enforce these rules in order to keep the Eurodream of “ever closer union” on track no matter how great the risks. (You can see the woeful track record of adherence to the Pact here)
To say it was never predicted that this would happen is simply untrue – it has always been a mainstay of the Eurosceptic case that many EU states flout regulations and rules while others like Britain try to abide by them at great cost. It has also always been part of our critique that the Commission will bend and break as many rules as it feels necessary to keep forging ahead blindly with their obsession for EU integration.
Nick Clegg is experienced enough to know that when you have sunk to defending an ideology by claiming that “it’s never been implemented properly” – an argument normally used by student Trots defending communism from the claim that it has always resulted in tyranny and slaughter – then reality has disproved your idea and the day is lost. In fact, I think you can hear a slightly depressed realisation of this in his voice a couple of times in the Today Programme interview.
Euro-enthusiasm is a totem for the Lib Dems. It’s been one of the few things that has kept Liberals and SDPers bound together despite their many private disagreements on other topics. But given the judgement of history on the Euro, and the clear judgement of the opinion polls on the EU as a whole, isn’t it time they abandoned it?
Now that would be a proper Clause 4 moment – facing up to reality, ditching what has become an albatross around their necks, moving closer to overwhelming public opinion and finally being able to move on from an issue that, as Nick Clegg found out this morning, will otherwise keep rearing its head to bite them.
Tags: Clause Four, Coalition, Economics, EU, EU Commission, Euro, Euroscepticism, Eurosceptics, Liberal Democrats, Maastricht, Nick Clegg, opinion, Parliament, Party Conferences, Politics, public spending, Socialism, Stability and Growth Pact
Categories: Economics, Opinion, Politics, Westminster
Actually, I agree with Nick on this one, for the first time in a while. If you look to see the guidelines that eurozone members are supposed to follow, aside from Finland all members had completely ignored them, even Germany. Greece, in particular, was nowhere near the guidelines set out by the ECB, even before the false accounting by their previous government became apparent.
Given that the Greek crisis is really what’s driving this Eurozone crisis (Greece is what started it and, quite frankly, without Greece’s problem the crisis would be far more low key or even non-existent by now) I think that considering it a failure to properly implement the terms and conditions attached to euro membership is completely valid and in fact the most thought out policy.
Certainly the fact that there are other international currencies aside from the euro which, although not as vastly successful as reserve currencies, have survived for extensive periods of time. The East Caribbean Dollar and the Central African Franc, off the top of my head, have been around for a while.
So, to put it bluntly, Clegg is completely right. This is a matter of implementation and enforcement, there is nothing inherently flawed in the idea of currency union and to say otherwise just seems like wishful thinking on your part.
And, as an aside, if you still think that talking in terms of members of the Liberal party and the SDP is even remotely relevant in the Lib Dems in 2011 then quite frankly, I don’t think you know enough about the party to make any comment on it at all. I don’t mean to be rude but it is basically the litmus test of knowing whether someone talking about the Lib Dems has any idea what they’re talking about. The SDP is a big part of Lib Dem history but the kind of people who can be lazily labelled “an SDP wing” existed prior to the merger in the Liberal party and don’t identify as social democrats or SDP.
Also thank you for using the term euro-enthusiasm, it’s much more balanced than the term europhile, but again, you are also wrong about the Lib Dems here. They are the most enthusiastic of the EU of the main political parties but there are eurosceptics among their party ranks, aside from personal liberty, you can find a Lib Dem somewhere that would disagree with any typically Lib Dem position.
PS “it has always been a mainstay of the Eurosceptic case that many EU states flout regulations and rules while others like Britain try to abide by them at great cost” is misleading.
First of all, almost every economy in the eurozone flouted the rules, as I said, Finland is the only exception. Similarly the UK flouts its own share of EU rules. This is a problem of implementation, as so much of the problems with the EU genuinely are, and the UK has its hand in the cookie jar as much as any other country.
Secondly, as with a lot of what eurosceptics tend to say, the complaints are more than a bit light on specific examples and reliable data. Complaining that other countries don’t abide by EU regulations is all very well and good but I’ve never heard this complaint in the context of the ECB guidelines for the eurozone so, really, people moaning about Spanish fishermen has absolutely nothing to do with the issue at hand.
PPS “Nick Clegg is experienced enough to know that when you have sunk to defending an ideology by claiming that “it’s never been implemented properly” – an argument normally used by student Trots defending communism from the claim that it has always resulted in tyranny and slaughter – then reality has disproved your idea and the day is lost.”
Scraping the bottom of the barrel much? There is such a thing as a problem of implementation, the problem with communism is fairly obvious and was recognised by the libertarian movement within the communism movement at the time. “A problem of implementation” is not valid in the context of communism because of the specific mile-wide holes in the Marxist theory of communism, namely why a totalitarian state would just evaporate into a worker’s collective.
It does not say anything about the general concept of implementation being a problem with other ideas. Quite frankly, any idea can be good in principle but have difficulties in implementation, to claim that any idea where there are admissions of failures of implementation is fundamentally flawed is, quite frankly, ridiculous and a case of sheer intellectual laziness.
Also, I’m a relatively recent student, communism isn’t really a very common political position so “student Trots” just sounds bizarre to me. Maybe they were significant in the 80s, but student politics tends to be based around the main political parties, with strong support for the Greens and a minority of right-libertarians who tend to either support the Conservatives or Lib Dems.
20.09.2011 14:04
Chris Huhne to Lib Dem Conference earlier today: “Being part of Europe is not a political choice. It is a geographical reality. It always was and until the tectonic plates break up, it always will be.”
This clown is now arguing that we should be part of the EUSSR because of the theory of plate tectonics. So is he now against Turkey joining the EU or not??????
20.09.2011 14:39
I think you are taking Huhne’s comments out of context. Being part of Europe, one way or another, is NOT a political choice. It’s a necessity as Britain will become irrelevant without it.
And the problem Europe is facing IS (partly) a problem of implementation. If those at the centre of the EU project weren’t so keen on expanding the EU to smaller basket case economies like the Greek economy and the regulation concerning government spending was enforced better I think the case for joining the Euro would be very strong.
23.09.2011 10:16