Book Review: 'Adults in the Room' by Yanis Varoufakis

Some critics of Varoufakis are clearly unreasonable. He did not create the Greek debt crisis of 2015; he inherited it.

A so-called bailout programme which actually reduces the national income of the debtor economy, rendering it even less able to pay than it was before, is demonstrably unsustainable. Kicking the can down the road, by what is called ‘extend and pretend’, protects badly-managed international banks at the expense of ill-advised Greek citizens and their livelihoods.

A Greek default would have led to the country’s ejection from the Eurozone and who knows how much damage to the EU project.

We need to remember that the single currency’s advantage over earlier programmes such as The Snake and The EMS was supposed to be its irrevocable nature. If Greece could be forced out, what would prevent the next victim of the single currency’s poor design being forced out too? Was it reasonable to expect Greece to take one for the team? I hardly think so.

The Lesson of ‘Adults in the Room’ is essentially an old and simple one: When you are in a hole, stop digging. But that advice is sadly oversimplified. You find that others in the same hole won’t, for a variety of reasons, stop digging. What’s worse, the owners of another, much bigger hole, see digging you further in as a wonderful means of digging themselves out.

Though his short career as Greek Finance Minister may have appeared Quixotic, the sad truth is that Varoufakis was tilting at real giants, not windmills. As is all too common with giants, many of these were not all that nice, and there were simply too many of them out there.

I recommend ‘Adults in the Room’ not just to critics of the EU, but to anyone tempted to overdose on a Public-Relations-based idealisation of a deeply-flawed organization.

*****

(5 Stars)

United States of Europe?

A United States of Europe has been advocated for centuries as a means of preventing European War. Even after the US Civil War demonstrated that war between federated states was by no means impossible, prominent European figures continued to argue for such a project.

The devastating wars of the twentieth century gave fresh impetus to the idea, and in the 1940’s the federalists effectively gained the upper hand over those who favoured looser associations such as the Council of Europe and EFTA. Recognising however that their ideas were well ahead of European pubic opinion, they agreed to a step by step approach towards “ever closer union”. The most recent step was the Lisbon Treaty of 2007, which effectively reintroduced the previously down-voted European Constitution under another name. It is under Article 50 of this constitution that the UK is currently negotiating withdrawal from the EU. A number of notable politicians have endorsed a United States of Europe in recent years.

However recent years have also seen a significant push back against the centralising tendencies of the European Commission in particular. Heavily indebted members of the Eurozone have been forced to accept major deflationary measures despite consequent heavy unemployment and popular discontent. Migratory waves have placed the open borders Schengen system under intolerably heavy political strain. Nationalist political forces have grown stronger in various member states.

To all of this the Brussels answer is more Europe, not less. For example the single currency won’t work properly without a common fiscal policy and to save the single currency from the pressures it has come under we must therefore remove the individual fiscal freedom of member states. The absence of a popular will for this is not considered an obstacle.

To some, European federalism is yesterday’s answer to yesterday’s problems. Aloof, remote government is no longer acceptable to populations who, in the information age, are far more in touch with alternative thinking on how their needs may be met.

This is not to say that the ideal of fraternity is not a fine one. However, if fraternity is to be realised, ways need to be found of making it compatible with liberty and democracy.

Listen to Ben

"We are all born ignorant, but one must work hard to remain stupid."  -  Benjamin Franklin

Since the introduction of the Euro in 1999, of  the main Eurozone economies Germany and France have grown by less than a quarter, while the economy of Italy has barely grown at all. Meanwhile the economy of the UK, outside the Eurozone, has grown by more than one third.

As a consequence of the Eurozone's sluggish performance, its unemployment rate remains almost 10% and youth unemployment is very much higher.

Since the EU's common currency has caused this economic meltdown, it is ironic to hear the continuing chorus from the Brussels elite that the solution is more Europe, not less.

It is doubly ironic that UK Remoaners are engaged in a last ditch battle to overturn the result of the Referendum so that our country can continue to be shackled to a moribund system.

Utterly failing to understand the popular vote, they continue to claim the majority were ill-informed and worse-advised. Leave voters didn't know what they were doing, poor things, and really need to be protected from their own folly by right-thinking people who truly understand these matters.

The best course now, they claim, is to hang on to an inferior version of EU membership rather than boldly turning our eyes towards the great opportunities outside Europe.

To that end every effort must be made to sabotage the government's negotiating position by placing it all before parliament first. It's only fair, after all, to put your cards face up on the table, otherwise how would your opponent know whether to raise or fold?

One more time please, Ben.

The EU Referendum - A Neglected Issue

It seems to me that a fundamental issue of the EU referendum has been barely touched upon in all the sound and fury of debate.

I consider the economic arguments pretty finely balanced and the immigration problem harder to settle, even after Brexit, than is generally supposed.

But during the so-called renegotiation conducted by the Prime Minister an issue far more important than any of the trifles gained was conceded: this was the UK's veto on further integration of the Eurozone.

If we remain in the EU we shall no longer have the power to block measures that favour the Eurozone, even if they are not in our interest. We may simply draw attention to the problem, following which the in-built majority of the Eurozone can press ahead regardless.

I have explained in previous posts why the political project of a single currency was always a pipe-dream in the absence of fiscal consolidation and the sort of mechanism for transfers to poorer regions that cannot long survive outside the borders of one country.

The inhabitants of the Eurozone may or may not want it to become a single country. No-one has asked them and the Brussels elite will try to avoid doing so.

However history shows us that whenever a measure of further EU integration has been rejected by referendum the country concerned has been required to vote again and this time get the answer right.

To the disastrous unemployment and indebtedness across the southern member states, Brussels knows only one answer – More Europe. Never mind that the single currency caused most of the problems; the single currency is by definition good and all steps necessary to make it work are therefore also good.

To the calls for Britain to lead rather than leave the EU, I say - How can we lead from the fringes? The single currency is at the core of the project and we have vowed to have nothing to do with it. The Schengen Agreement is the second biggest undertaking and we have vowed to have nothing to do with that.

There is no choice available between having the EU consider or not consider UK interests. To me a vote to Remain is a vote to be permanently outvoted and our interests ignored anyway. However, unlike after Brexit, we should not be allowed to remedy the situation by negotiating freely on our own account with the rest of the world.

Meanwhile we shall be allowed to continue paying the bills.

And if you think the only bills are financial, you might just ask our fishermen what the EU has done for them.