Jason OMahony - Irish political blogger, Irish politics, EU politics
 

10 things Eurosceptics should know.

Posted by Jason O on Nov 28, 2011 in European Union |

Some uncomfortable Euro Truths.

Some uncomfortable Euro Truths.

1. Germany does not want to rule Europe. They don’t need to. Germany is such a major economic force that we want access to their markets, and so pander to them. Want to ignore the Germans? Fine. Don’t sell them stuff, buy their stuff, or ask for their money. They don’t do invasions anymore, other than with beachtowels.

2. The EU did not “depose” Berlusconi or Papandreou. The Italian and Greek parliaments have the absolute right to vote for whomever they wish, in the same way the bond markets have a right to refuse to give people they think are dodgy billions in pensioners savings as an unsecured loan. Would you lend Silvio money? 

3. Your country is not the only country in Europe that holds free elections where leaders have to answer to the people. Just because people in your country want something, that does not mean that people in another country want the same thing. Nor does it mean that they are evil or wearing pointy hats or unusual facial hair. 

4. If you don’t want money from the IMF, EU or ECB, they can’t do much to you.

5. There was a time when there was no EU, and national sovereignty did not assure control over your daily life. Just ask the Poles, Czechs, Dutch, Danes, Norwegians, Belgians and French.  

6. Blaming the EU for austerity caused by reckless domestic policies is like blaming the Mountain Rescue Service for gravity.

7. All the really big decisions in the EU are not made by Eurocrats, but national politicians, elected in national elections or by national parliaments according to national rules. In other words, by you. 

8. Don’t want to be in the EU? That’s fine. It’s your national political system that is keeping you in. Do something about that. It’s not like the EU has a massive military machine to stop you. We had to ask the Americans for help bombing a country whose navy was made up primarily of camels.  

9. If you honestly can’t see the difference between the EU and the Soviet Union, don’t forget to ask a grown up to help you turn off this big fancy machine when you’re finished. And put your crayons away, too.

10. The one thing that seems to irritate Eurosceptics even more than the Democratic Disconnect in the EU is any attempt to fix it.

9 Comments

Nick Nolan
Nov 28, 2011 at 5:02 pm

“6. Blaming the EU for austerity caused by reckless domestic policies is like blaming the Mountain Rescue Service for gravity.”

I would like to remind that while the problems in Greece were caused by domestic policies. Problems in Spain and Italy were not. Before 2008, Spain had it’s fiscal policy in oder and even Italy was winding down it’s massive debt. Easy money from Germany that flooded Spain and increased wages and prices caused the fiscal crisis when money flowing to Spain stopped. Problems in Spain are caused by the fact that euroarea is suboptimal currency region.

So please.


 
Jason O
Nov 28, 2011 at 10:26 pm

We could have controlled the inflow of cheap money with tougher banking regulations. We chose not to.


 
Nick Nolan
Nov 29, 2011 at 9:55 am

>We could have controlled the inflow of cheap money with tougher banking regulations. We chose not to.

The Spanish banking system has been credited as one of the most solid and best equipped among all Western economies to cope with the worldwide liquidity crisis. This is because country’s conservative banking rules and practices. Banks are required to have high capital provisions and demand various proofs and securities from intending borrowers. (see for example http://www.economist.com/node/11325484?story_id=11325484 )

The whole idea of euroarea is the free movement of money. Spain was unable to prevent inflow because Spain can’t control interest rates. Economic cycles in different EU countries are not in sync. ECB sets rates according to the average (mostly determined by Germany). When Spain needed cooling down but Germany did not. There was not labor or industry movement from Germany to Spain to balance the system because EU is not really same country.

Currency region requires many other things in addition to capital mobility: wage and price flexibility, labor mobility across the region, automatic fiscal transfer mechanism (Europe has a no-bailout clause in the Stability and Growth Pact, meaning that fiscal transfers are not allowed) and participant countries have similar business cycles. Only thing that EU can change is fiscal transfer mechanism (but that’s out of the question in practice, because EU citizens don’t see EU as single country)

Euro was created for political reasons. Economists said early in the 90′s that from economic principles it’s not sound. Those economists who were for euro assumed that EU would really unite and massive labour movements etc. would happen (they did not).


 
M. Miller
Nov 29, 2011 at 2:41 pm

(in response to Nick) Ah, yes, those floods of “easy money from Germany”… the kind of flood that there simply is no defense against. Other than, perhaps, not taking it.

Sarcasm aside, I’m not saying Germany is without fault in this whole mess, and they have to pay their share, but they’re doing so already. Perhaps they’ll have to pay even more, but in either case, cheap shots and simplistic explanations just don’t cut it.

@Jason: excellent article. didn’t know your website until now, I’m going to circulate this post as much as I can.


 
Anne
Nov 29, 2011 at 10:19 pm

We are committed europhiles in my house. So I was a bit surprised to hear my six year old son ask, “Do you know why everyone hates the Germans?” No idea where this came from, too much exposure to the Beano, to RTE news? “Why?” I asked. “Because when they get the ball they never pass it other players on their team.” Cryptic. Possibly a response inspired by the fact that he was nursing a grievance following his return from GAA training. Which is about as good a reason to be a eurosceptic as some others espoused by people who should know better.


 
Jason O
Nov 30, 2011 at 7:09 am

Nick: You are assuming that interest rates are the only way to control money supply. In Ireland’s case, lending regulations and increased liquidity ratios could have done the same thing if political leaders had the courage to do so. Don’t forget, not all the money which fuelled the property bubble was borrowed in Ireland, or even in the eurozone.

Mr. Miller: Thanks very much. The eurosceptic piece has gotten a huge reaction. Welcome onboard!


 
Jason O
Nov 30, 2011 at 7:10 am

Certainly, watching Jurgen Stark on RTE News, if I were the ECB I’d never let him near another camera again.


 

[...] We haven’t really worked our EU policy out. Instead, we spend a huge amount of time in Ireland asking, “Well what’s in it for us?” and then get really surprised when the cheque we get comes with political consequences like sharing political power. This approach then leads to some highly simplified, stock beliefs we have about Europe which need to be seriously questioned, as the fantastically bearded Jason O’Mahony has done very succinctly here. [...]


 
Ramon Pebenito
Oct 20, 2012 at 5:01 pm

“Blaming the EU for austerity caused by reckless domestic policies is like blaming the Mountain Rescue Service for gravity.”

The Greeks are a special case of domestic policy failure, but I would agree with Nick Nolan, that the Spanish, Irish, and Italians were not “reckless” in that both Spain and Ireland had budget surpluses prior to the crisis, while Italy’s deficit-to-gdp ratio was relatively small.

Spain, in surplus until 2008:
http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2005&ey=2011&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=14&pr1.y=15&c=184&s=GGXCNL_NGDP&grp=0&a=

Ireland,in surplus until 2008:
http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?pr.x=90&pr.y=7&sy=2000&ey=2011&scsm=1&ssd=1&sort=country&ds=.&br=1&c=178&s=GGXCNL_NGDP&grp=0&a=

Italy, budget deficit of -3.3% of GDP (2006) and only -1.4% of GDP (2007)
http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2005&ey=2011&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=14&pr1.y=15&c=184&s=GGXCNL_NGDP&grp=0&a=

Portugal, budget deficit of -3.9% of GDP(2006) and only -2.6% (2007).


 

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