Countries in Southern Europe can only save their economies by readopting their own currencies and allowing devaluations to boost exports, Andrew Brons MEP has said.
Speaking during a debate in the Committee on Constitutional Affairs (AFCO) and Economic and Monetary Affairs Committee (ECON) in the European parliament, Mr Brons said that only through the adoption of their own currencies and consequent devaluation could those nations take their economies out of recession.
“I have already, in the AFCO meeting, raised constitutional objections and pointed out that the Draft Agreement did not have the status of an official EU Treaty but was just a private agreement,” Mr Brons told the committee.
“Therefore, it would be improper and possibly illegal, to use EU institutions to enforce it. I do not intend to repeat these points here.
“However, the Agreement is also economically flawed,” Mr Brons continued.
“I and others have argued that a single currency value for seventeen very different economies is bound to be inappropriate for many of those countries.
“The same criticism applies to the same interest rate for seventeen different economies.
“However, it is argued by many that moves towards fiscal and perhaps political union between the seventeen or seventeen plus countries will somehow render the economic criticisms invalid,” he said,
“The fact that very different economies are in a single state or fiscal union, rather than several states or fiscal entities, will not solve the problem.
“In previous recessions, in the same political states, there have been regions in recession whilst other regions were enjoying economic expansion and full employment. That was true in the 1930s world wide. It was true in the UK in the early 1980s and in the early 1990s.
“It might be said that single political states often feel that they have an obligation to give assistance to depressed area. However, sometimes states do not feel that obligation and even if they do, their actions might not be successful,” Mr Brons continued.
“Countries in Southern Europe in the Eurozone need to readopt their own currencies and allow their values to fall providing export led booms to lead their economies out of recession.
“They do not need an economic and budgetary straightjacket locking them into recession and poverty,” he concluded.
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As usual, Andrew Brons talks sound sense. Running fairly weak currencies was essentially good for the economies of the so-called PIGS (leaving the Irish Republic out of the equation for the time being, though foolish indeed were the Irish politicians who gave up the peg to the Pound Sterling to try and keep up to a tougher mark).
My tuppence worth on this subject would be that devaluation will obviously help tourism as much as manufacturing industry in southern Europe, as the de facto devaluation on the badly misnamed “Black Wednesday” helped us, when the Pound fell out of the Exchange Rate Mechanism in 1993, and more recently helped Argentina after the end of the Peso/Dollar peg in 2001.
While devaluation is not a cure all (no doubt reforms of inflexible labour markets will be necessary too), it is a prerogative of sovereign governments to set their own priorities. It is therefore alarming to see the sovereign governments of Greece and Italy effectively deposed, and replaced with what amount to civilian juntas of unelected technocrats, acting principally in the interests of the cosmopolitan financial interests that have recklessly lent to the improvident, and should now be left to take an appropriate hit on their own balance sheets. Perhaps that will teach their shareholders to keep an eye on the board in future!
Come to think of it, I can think of an organisation closer to home than the PIGS’ bankers in which the “stakeholders” ought to have kept a closer eye on the one eyed, one man board, but that is another story!
Sovereign currencies would be preferred, especially if those countries coined their own currencies rather than borrowed it from their private central bank like we do in the uk.
The Bank of England is not the Bank of England, it’s a private company, just like the Not so Federal Reserve.
You are wrong about the Bank of England. It was nationalised in 1946. Until then it was indeed a private bank, but it isn’t nowadays, and hasn’t been for 65 years, which is a long time.
It’s unfortunate that nationalists repeat this canard so often. It simply isn’t true.
The Bank of England was indeed nationalised in 1946, but is public in name only, the court of directors still come from the world of private financial interests and act on their behalf. There is also The Bank of England Nominees a privately-owned subsidiary of The Bank of England which holds securities for heads of state such as the Queen and their families, government departments and others.
The devaluation remedy is being put to the test. Britain’s free, independent, sovereign currency has lost 30% of its value in the last three years. How long can we go on before the pound is worthless? It might help our exports but it pushes up the price of gas and oil. The problem is not the euro it is debt – in any currency. The US and Japan are not in the eurozone but they have got unsustaibable levels of debt. The answer is to abandon the Rothschild model and promote self-sufficiency.
Self sufficiency might be attainable at European level, but certainly not within these islands, even if our rulers ahd not been so insane as to swell the population with millions of foreigners. You might favour European union, but it has no popular support in England, so is not at present a sensible policy, least of all for a nationalist party, many of whose voters are viscerally Eurosceptic. I might not personally agree with such sentiments, but if politics is the art of the possible, Europe a nation is not politics.
seconded .. .. .. btw .. You need a spokes person, Mr. Brons ?? i may not be completely fluent in English, but, i’m quite certain ii could conbey ANY of those messages 🙂
Pete-0