I know he didn’t mean it, and he really doesn’t understand it but Mr Cameron has finally done something that will not mess our economy up ( unlike his attempts with Gideon to help our economy by embarking on its destruction due to misguided policy).
What did he do you ask?
He didn’t join in with the stupidity pact dreamed up by Merkel and Sarkosy. The reasons that he gave for not joining were that it would be against our national interest.
Specifically “Cameron demanded that any transfer of power from national regulators to an EU regulator on financial services be subject to a veto; the UK be free to place higher capital requirements on banks; that the European Banking Authority remain in London; and the European Central Bank be rebuffed in its attempts to rule that euro-denominated transactions take place within the eurozone.He also argued that non-EU institutions operating in the City but not in the eurozone, such as American banks, should be exempt from EU regulation.”
Paradoxically not by joining in may the UK financial services industry may be more damaged by Mr Cameron’s blundering attempts at protection. In fact “there is a new inner grouping within the EU that can potentially agree new financial regulations without the UK even being present”, this could force the relocation of financial services companies to a eurozone country if they wish to trade in the currency (though I suspect that the World Trade Organisation may be the place that any such move is argued out).
One of the stated objectives of Germany and France was to introduce a transaction tax on financial operations but “The UK has long been resisting calls from other EU leaders for a Europe-wide bank transactions tax which it says would hit the City of London hardest.” actually as Mehdi Hassan points out “The International Monetary Fund, the European Commission and the Gates Foundation have all released studies showing that unilateral transaction taxes are feasible and raise funds for individual countries (the Robin Hood Tax campaign says a 0.05 per cent tax on transactions could raise £20bn for just the UK alone!).”
The real reason that Mr Cameron has done us a favour is that the Euro is unsustainable. As Michael Portillo pointed out on This Week (quoting Boris Johnstone) the European countries are trying to save the cancer not the patient. In other words they are trying to save the Euro and not the European Union. The reason that Germany is such an economic powerhouse is not just fiscal responsibility ( though that has definitely helped) in Germany’s case the Euro is significantly undervalued (making fiscal responsibility a breeze and not a reason for smugness). They enjoy a currency advantage against the UK of approximately twenty percent and by entering the Euro whilst the Deutchmark was undervalued they are destroying the economies of southern Europe who’s currencies were overvalued at the time of adoption. Any attempt to save the Euro is doomed, the fundamental problem is that the weaker countries of the Euro can’t devalue and there is no chance that Germany will redistribute the fruits of its ill gotten gains. (Incidentally that is the same reason that the North of England, Wales and Scotland are at a disadvantage when compared to London and the South East) Mr Cameron has inadvertently saved the UK by keeping us out of a doomed project but may still have damaged the financial sector that he was so keen to save.
So Mr Cameron did do something right, pity he hasn’t a clue why.
Quote of the week – Zac Goldsmith, Conservative MP discussing the press “if the only way a business can stay afloat is by engaging in immoral or unethical behaviour then that business should either change its model or go out of business. No one said that Auschwitz should have been kept open because it created jobs”
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