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thomas davison

Britain is shackled to the corpse of Europe
By Daniel Hannan
PUBLISHED: 22:39, 6 May 2012 | UPDATED: 22:39, 6 May 2012

Europe's economic problems are about to get a whole lot worse. For the past three years, governments have tried, however ineffectually, to tackle the debt crisis. Now, though, in country after country, voters are demanding precisely the high-tax and high-spend policies which caused the recession in the first place.

Yesterday�s elections in France and Greece were the first of what will surely be many advances by the populist Left. In both places, candidates were elbowing each other aside during the campaign to demand more intervention and an end to cuts.

The new French President is an unapologetic Socialist of the kind we haven�t known in this country since Michael Foot. Fran�ois Hollande wants wealth taxes, stimulus spending and a massive expansion of the state payroll.

Au revoir austerity: France's new president Francois Hollande will boost state spending
He understands that this might lead to dismay in the international markets, but he has an answer to that: he will create a French credit ratings agency which, unlike the American ones, will tell him what he wants to hear.

Hollande summarises his programme as �growth, not austerity�. Gosh. Who knew it was so easy? Why has no one thought of that before?
More...RICHARD WAGHORNE: France's electorate has voted for years of decline under a Socialist leader
Au revoir President Bling Bling! Sarkozy concedes defeat as Hollande becomes new leader of France

The truth, of course, is that France has already pushed tax-and-spend to its limits. The government accounts for an extraordinary 56 per cent of the economy, and the French budget was last in balance in 1974. If state expenditure really had a stimulus effect, France would be the wealthiest country in Europe.

Yet every one of the ten presidential candidates there demanded even greater state intervention. Nicolas Sarkozy promised to make France �stronger than the markets�. Three of the other contenders were Trotskyists and one was a Green.

Economically to the left: Marine Le Pen
More intervention: Nicolas Sarkozy
The National Front�s Marine Le Pen, while retaining her father�s anti-immigration platform, offered an economic programme well to the Left of Sarko�s and Hollande�s.

Not a single candidate argued for smaller government, freer competition or greater international trade. All ten offered more of the medicine that had sickened the patient.

It was the same story in Greece, where voters abandoned the two traditional parties, PASOK and New Democracy, for a swathe of anti-austerity movements. Three of the new parties are hardline communists. Even the two traditional parties refused to speak openly of the austerity measures they had privately accepted.

Polarised: Greek voters have rejected mainstream parties
That, in a nutshell, is Europe�s problem. In the current climate, a politician who says �Make the rich pay!� has the advantage over one who says (truthfully), �The rich don�t have anything like enough to pay for all the things that the government is doing, so we need to make savings�.

The root cause of Europe�s crisis is very simply stated: there is too much debt. In order to fund their growth, governments squeezed the private sector for all it was worth. When they exhausted its capacity, they started to tax future generations through borrowing. Sooner or later, of course, the money was bound to run out.

That moment arrived four years ago with the banking collapse. Yet, since then, governments have responded by accelerating all the policies which brought them to their present pass: more regulation, more debt, more Brussels intervention. As the economy deteriorates, voters feel angry and betrayed. They listen sympathetically to demagogues who say: �The bankers caused this mess: make them pay!�

Sadly, few European voters are presently minded to make such a distinction. Nor are they prepared to accept the cuts in spending which, bank crisis or no bank crisis, their leaders would need to make.

Last month alone, both the Dutch and Romanian governments fell over attempts to impose austerity measures. We can expect more of the same across Europe. The EU institutions, for their part, are no longer demanding austerity: they understand that they can hardly talk this way while continuing to expect large increases in their own budgets.

Until yesterday, only four per cent of EU citizens lived under Left-wing governments: those in Austria, Denmark, Cyprus and Slovenia. Yet the notionally Centre-Right governments elsewhere presided over budgets whose size would have been inconceivable a generation ago.

The fact is that fewer and fewer private sector workers are paying higher and higher taxes to sustain larger and larger governments. This is unsustainable. But no one wants to hear it.

All over Europe, state employees demand to be exempted from the austerity measures that the private sector must make. Beneath all the slogans about fairness and compassion lurks a remarkably selfish sentiment: �Make future generations pay my pension!�

Without any alternative narrative to explain their present discontents, Europeans blame the downturn on �cuts�, �bankers� and �deregulation�. The politician who tries to point out that spending is massively higher than it was three years ago, that we could expropriate every banker entirely and still make barely a dent in the national debt, and that financial services are perhaps the most regulated sector of the economy, is liable to have dead animals lobbed in his direction.

Europe is in a downward spiral. The worse things get, the more its people vote for all the things that brought it to its present unhappy condition: wastrel spending, unsustainable borrowing, punitive taxation, deeper integration.

Not since we joined the EEC 40 years ago have the Continent�s prospects looked so dark. Nor, by contrast, has the rest of the English-speaking world looked so bright: as Europe dwindles, the Old Commonwealth is flourishing. We thought we were joining a growing and prosperous market all those years ago when we signed up to Europe. In fact, we were shackling ourselves to a corpse.

Daniel Hannan is a Conservative MEP for South East England

Badly regulated banking practices allowed financial institutions to flourish way beyond their practical worth and when they looked like failing were bailed out with taxpayers money. They then turned to speculative trading to make more profits thus forcing up the prices of commodities. These traders then became so powerful they could influence Governments through donations and lobbying and went on to speculate on currencies aided by the power of the ratings agencies forecasts thus making more money out of the misery of the working and middle classes. The banking system is in dire need of reform with central banks controlling money creation and high taxes put on speculative trading. Hopefully when the EU falls apart governments will be able to this without the constraints placed on them by EU bureaucrats and self serving career politicians.

Better still put those responsible in jail, including Blair and Brown and throw away the key, this WILL concentrate Bankers and others, minds on doing their job properly, if you carry the buck YOU do the time.

thomas davison · Posted: Fri May 18, 2012 7:44 am Post subject:

This new president wants it all ways, what have we gained from the EU apart from giving our jobs, housing and wealth away to foreigners?

As you can see, this man's main criteria is to destroy briatin, Notice how he wants Britain to Pay financial tax, he wants britain to lose the rebate and yet at the same time he wants to "Ringfence" the subsidy to FRENCH farmers. time to go now before we get fleeced of what money we have left. Britain has paid BILLIONS into Europe and we have got no returns NO RETURNS. We are Europer Mother along with Germany, This new French leader just wants France to ride off the back of handouts. We need to get out and let him carry on. We need to re-build and our government cannot expect the british taxpayer to carry on funding Europe. Britain has not been this poor for hundreds of years. Although we had little cash during the wars, we did have Manufacturing and output. Now we have no cash, no industry and they now want to destroy our financial system Well, if we do not leave now we are completely dead in the water.

Whilst I certainly wouldn't back Hollande the idea of the financial transaction tax is aimed at currency speculators (greedy banks). That could be a good thing and bring more stability to exchange rates.

After all it was the banks who got the world into this mess and its the people who are paying for it, WHY SHOULD WE PAY WHILE THEY STILL CAN LIVE HIGH ON THE HOG WHILE WE ARE UPTO OUR NECKS IN DEBT.