Back in the Sixties, I was working for Procter & Gamble in Gosforth, Newcastle-on-Tyne. I remember walking down a corridor one warm summer’s day, when an annoying housefly came buzzing around my head. Impulsively I grabbed at it, and to my astonishment I actually caught it in my hand. Instantly I realised my predicament — what to do next? I didn’t want to let it go. I didn’t want to squish it between my fingers. I certainly didn’t want to apply to the RSPCA for advice on the humane disposal of houseflies. In a sudden gesture of revulsion, I threw it away, and it flew off apparently none the worse, still buzzing.
The experience taught me a lesson in life that I shall always remember. Never set out to achieve anything, great or small, unless you have a clear idea of what you will do with it if successful. Or to put it more simply, be careful what you ask for.
I heard on the news today that Peter Mandelson, or Lord Mandelson as we now know him, had said that Eurosceptics should be careful what they ask for with regard to the €uro. Before sceptics get all triumphalist about the €uro crisis, said Mandelson, we should bear in mind that a eurozone melt-down would be catastrophic (his word) for Britain.
He has a point. With (probably) over 40% of our international trade going to the EU, any serious recession across the Channel will certainly hit the UK economy. But of course Mandelson’s warning rather suggests that sceptics make a €uro melt-down more likely, merely by wanting it. I’m afraid he overestimates the power of our wishes. Our wanting it won’t make it happen. And his not wanting it won’t stop it.
We predicted it more than a decade ago. Many of us described, with uncanny accuracy, the consequences of this hugely dangerous, reckless and foolhardy political and monetary adventure. We criticised the true believers, who seemed to think that the very power of their faith in the concept of monetary union was enough, that they could ignore the warnings of economists, and indeed of the EU-commissioned McDougall Report of 1977, which warned that huge fiscal transfers, 6 to 8% of EU GDP, would be necessary to sustain monetary union.
But once the EU had committed itself to the €uro, the outcome had all the inevitability of a Greek tragedy. Failure was baked into the pie. No amount of wishing it, or not wishing it, could affect the outcome. Heroic bail-outs from the EU, the EFSF, the ECB and the IMF may delay the dénouement, but nemesis is surely coming, as night follows day. We sceptics are surely justified in taking some satisfaction from the fact that we have been shown to be hugely, overwhelmingly right. But we shall have to take collateral economic damage from the €uro débâcle anyway.
There is, however, a key question we should ask. Why are we in Britain so especially vulnerable to the €uro crisis? Why is 40%+ of our trade with the EU, when the EU’s share of global trade is only half that? If our trade with the whole world were more balanced, we should be only half as vulnerable to the €uro crisis. It’s because we’re in the EU, because we’re too focused on Europe, because we’re lost our global perspective in this failing Brussels club, that we’re so vulnerable. The EU, as usual, is the problem, not the solution. Britain for centuries has been a great global trading nation, but we’ve allowed ourselves to be distracted from that role by our membership of an inward-looking, centralised, protectionist, corporatist club.
It’s time to take off the €uro-blinkers and re-engage with the rest of world, where the economic growth is happening. Roll on Independence Day.