Indeed. Here was I under the impression that the UK economy is in an utter mess, yet so many from the UK seem to be pointing at the Eurozone and laughing. From my point of view it seems that, for one reason or another, certain people in the UK need to make a point of the situation in the Eurozone so as to deflect attention from the UK’s own problems.
It looks like you’re saying that being outside the Euro-zone has forced Denmark to be more fiscally disciplined. And, that being outside the Euro-zone has allowed the UK to be less fiscally disciplined. I guess I don’t understand how you can come to these conflicting conclusions from the same premise.
Also, it sounds like you think the financial markets are too distracted to punish the UK for fiscal excess. That seems unlikely to me – I have no doubt that at every major bank, there are traders dedicated to Euro-zone countries, and different traders dedicated to UK debt. If financial markets are concerned about UK solvency, it would already be reflected in its borrowing costs.
You’re also saying that, since the UK is not backed by Germany (since it’s not in the Euro), once the market gets around to worrying about the UK, it will be in trouble. How do you explain Italy’s high borrowing costs, since, in your opinion, it’s backed by Germany by being part of the Euro?
It just looks like you see everything through a certain austerity point of view and base your conclusions on that, rather than looking at the facts.
My (untutored) view is that the UK has low borrowing costs because the markets think that its economy will be poor for some time (due to the austerity measures), so the UK central bank will stay accommodative. They are not worried about the UK’s credit, since it has its own currency and could not be forced into default – if things got really bad, it could inflate its way out of problems. However, the market is concerned about Italy’s solvency, since it doesn’t have control over its currency, and you’re seeing that reflected in its borrowing costs.
I have no opinion on Denmark, other than it seems to have very happy people and an extremely high-tax economy. And, I think Lego is very well made.
The UK deficit is about the same as that of Greece (I’m not sure it’s actually higher), but UK public debt is far lower. It’s something like 80% of GDP, which is not great but is similar to Germany and France. Greece, meanwhile, is at about %140, IIRC.
That is not how it is at all.
I don’t detect any deflecting of the focus away to Europe. The big talking point here is, and has been for the last 18 months, “how do we sort out our economy?”
The arguments are all about how far and how fast we cut and which areas bear the brunt. Thought the fate of the eurozone comes a close second because it still affects us deeply.
The general upswing of the prior decade masked a lot of financial mis-management around the world. When the slump came the UK was woefully unprepared and we are paying for it now. Other countries fared better, but the eurozone was always going to be judged on its capability to withstand its first real test since inception…it isn’t faring too well.
There is a collective sigh of relief that we aren’t in the euro as it would’ve limited our options and tied us more deeply into the bailouts being discussed.
No-one is pointing and laughing though the majority of people are thinking “we told you so”
I think the British were right to stay out. This because London is a big center for world finance…and the UK exerts economic power out of proportion to its size. Having its own currency is an advantage.
On a slightly different note, is the hge expansion of the EC government worth it? I have been to Brussels, and the amont of bureaucrats employed by the EP is astounding. Do they really need another layer of government?
If Greece leaves the euro (and makes a recovery with the drachma), a lot of the ECU memebers will be wondering why they should stay.
I respectfully disagree, but now we’re just down to opinion and that will always be clouded by our own personal biases.
Which bit do you disagree with? Are you in the UK? because if not then the only discussions you are likely to see are those that affect Europe more widely.
The news is carrying the euro crisis prominently but it hasn’t been used as a political distraction. Indeed, the major parties are all trying to ensure that it doesn’t become one and that our own internal problems are the ones that really matter.
Here’s theblog for today’s PMQ’s, Europe is not being heavily talked about. The main points are generally internal UK issues.
I disagree that there’s been no attempt to deflect. A single PMQ isn’t going to show any particular general feeling. Even then, did I say I was talking about politicians? The media and the usual pundits seem quite happy to point fingers and laugh.
For the record, I am no longer in the UK but am British. In the modern world it isn’t hard to subject myself to the British media. “You aren’t here so won’t understand” will just get a snort of derision from me.
Well, I’m with Novelty Bobble. I’m not sure who these people are who you say are trying to deflect attention from the UK’s problems. It would have to be government ministers, because who else would have reason to do that? But if some government figure has been going around saying “Never mind us, have you seen how screwed they are in Europe?”, I’m not aware of it. It would never work - the public care primarily about their own problems, not those in far away lands such as France ;).
As for “pointing and laughing”, I suppose I have seen some eurosceptic commentators saying “we told you so”, but no real gloating. Unless you mean people in the comments sections of articles or on message boards, but they don’t count. Bunch of loonies. The main sentiment is trepidation about what happens if/when the euro crisis comes to a head.
who? where? I’m not saying it isn’t happening at all, merely that I’m just not seeing it to any great extent. It is being discussed but in a serious and controlled manner. If you have links to the “pointing and laughing” then feel free to send them my way, I’m willing to be proved wrong.
I didn’t say that, I’m just pointing out that you probably aren’t getting the full range of what is being discussed here.
No - the sensible thing would be for the tories to start building their next election narrative to explain why everything is still shit.
‘It’s because the dastardly europeans scuppered our fine plans by not putting their euro-house in order’.
The UKs biggest problem has been the bail out of various insitutions, through nationalisation of certaiin banks, writing off toxic debts and underwriting other bailout packages.
This amounts to well over £1300bi££ion.
Now its true that we got some assets which should be realisable in the future but it means huge costs in servicing, and that sale of assets will not happen anytime soon, just a very bad time to put lots of stuff on to the markets for the forseeable future.
This bailout represents over 50% of UK national debt, so in truth, our structural debts are much lower than has been mentioned in previous posts.
UK has a far larger manufacturing sector that all those other highly indebted nations, its probably third in the EU table and so has a genuine prospect of coping with this debt, although it will be painful.
Previous posts compare the ratio of UK debt to that of other EU leading nations, but its not like that at all.
On a much more micro level, Greece up to the 1980 and 1990s was largely a service economy, and was doing quite well, helped hugely by their ability to devalue, in fact its not too much of a stretch to say that devaluation was part of a cycle, a strategy for reducing debts through inflation. Greece was a cheap place for holidays. Thats not the case now, Greece is now considered rather expensive, and UK tourists have been going to Turkey in droves.
Its not just that some of these indebted smaller nations have lots of debt, they just don’t have the means to generate the means to pay it off, or even service it.
Its not the size of debt in itself that matters.
A strong Euro is in Britains interests.
It would make the U.K. a less attractive prospect to the millions of unskilled economic migrants who are undercutting the local work force on pay.
(with its attendant problems of unemployment, and increased welfare payments nationally)
It would also reduce the amount of money being remitted to E.Europe instead of recirculating in the British economy preserving existing jobs and creating new jobs.
While money is being “exported” consistantly, the economy isn’t going to expand no matter how many new initiatives we implement.
Economically speaking its like trying to run up a "Down "escalator.