'Troika out!': how Cyprus' rallying cry could inspire euro revolt

Impressive and moving commentary. How easy it is to be brought down by EU's 'vanity. the Euro is only surviving in order to save face for EU. It won't work, but how many countries will fail before they admit it.

We MUST leave this corrupt EU.

Excellent and clear analysis.

Best article I've read on Citywire for a long time and answered many of the questions I've had over the past week

Brussels is nothing but an haven for parasites and hangers on. Take a look at the salaries and pension they receive, this is the only reason politicians and bankers support it

LOL

The usual crap from UK based newspapers:

Completely skewed reporting, telling the misinformed exactly what they expect to hear!

Cyprus is in this mess precisely because the previous communist government buried its head in the sand.

There was time to act, more than a year ago.

The EU wanted to act, more than a year ago - a stitch in time and all that.

But the former Cypriot government refused to act.

Now there is a new government there is almost no time left.

But somehow, it's all the EU's fault! Of course! Everything always is!!

Two words: bull ... sh1t.

And only the negative view from Cyprus is reported. Have a look at the throngs of Cypriots ... in their ... tens .... holding placards that suggest Merkel will take their money.

Merkel won't get a penny. If the tax goes ahead (and it has always been a long-shot) the money will go to the Inland Revenue Dept of the Republic of Cyprus.

People on the streets that I have actually seen vox-poped disagreed about the method of finding the money, but they agreed that Cypriots *should* and ultimately *would* pay - some say yes to the deposit tax, some say some other way.

The former communist government has almost succeeded in killing off Cyprus. The EU (and the IMF, that gets no mention of course) has thrown the Cypriots a life line, but at this stage it will take more money than Cyprus can reasonably hope to repay, so the rest of the money must come from somewhere else.

If the Cypriots play this like fools (i.e. if they listen to UK expats) then they could end up both outside the Euro and STILL have a massive bank run. If that happens, they may just look back on the chance to pay 10% and think - feck, should have taken that offer while we had the chance!

As for contagion: no.

The time for that has passed. For one simple reason:

Ireland has shown that there is light at the end of the tunnel. They're well and truly on the mend - not there yet, perhaps, but so far progressed that there is a temp[late or road map for others to follow to get their economies back on track.

If all you can see is hardship without hope, people riot. But if they can see that it IS possible, and it CAN be done - see evidence with their own eyes - it removes one of the prime motivators: they no longer believe that the path is pointless and hopeless.

Will Cyprus remain in the Euro? Hard to say. Will Cyprus bring about collapse of the Euro?

No.

The demise of the Euro is inevitable - it is just a question of when.

Excellent and well written analysis.

It seems to me that, as with several other states that should never have joined the Euro, and need to return to their original currencies, Cyprus should return to the £, but in an orderly way with full public disclosure. To prevent a run on the good, as well as bad banks, during the interim period, the banks should not be allowed to repay to any depositor more than £1,000 (sterling) per month. The exception to this would have to be for the provable completion of contracts entered into 30 days before the crisis and priority should be given to local projects.

Alternatively the option of Germany, Holland, Finland etc leaving the Euro and returning to the Mark and Guilder should become a priority, but again in an orderly way. If this happened then the remaining 'soft' economies of S.Europe could devalue the currency by 40% or more and restore their competitiveness.

Many have predicted the eventual collapse of this horribly ill-conceived and poorly managed project. Its major flaw was not difficult to pin point. A currency with no safety valve operating across many countries just cannot work. The project did not even have a common prospectus; the French (understandably) hoped it would address the lessons of their recent history. Being invaded twice in 25 years left a tremendous scar. The UK was told by its political elite the project was primarily a matter of trade and presented by Ted Heath as one with no federal pretensions. No doubt a well meant project, but one that has suffered from dreadful leadership and wishful thinking on an industrial scale. Will Cyprus prove the beginning of the end? It's not impossible. There will be a breaking point.

A big thank you to Robert Kyprianou and Rufus Dogg. These matters are complex. People are frequently doing the wrong thing because of this human weakness to simplify and blame. Right now the EU, the Euro and Brussels are the handy targets. The Daily Mail readers are told that the Eurocrats are stealing the money from innocent savers. A convenient and plausible description that generates more hate, (and circulation). If you asked the 'experts' at the DM for their solution they would hide behind the familiar British right wing line that there should never have been a common currency. I think I would then say, "So you prefer stealing by devaluing?"

There is not a problem in the world that a politician cannot make twice as bad than it already is!

And with that you've hit the nail on the head. Meddling by politicians and economists caused the Great Depression to last 3 times as long as it should have, but this has only encouraged them since!

ICD - too true!

Devaluation is NOT a solution. It is a symptom of fiscal incompetence, and it F*CKS a country for years.

The countries with the worst histories of devaluation are:

Greece.

Spain.

Ireland

.... can you guess where this is going? The usual suspects.

They have - pre-euro - been caught in endless cycles of boom and bust, ending in devaluation.

Devaluation means

Rampant inflation (6% off your savings? How about 16% off everything you own. Per year. For the next 3 years.)

Crippling interest rates - people spend so much servicing debt that the economy goes backwards.

Credit squeeze - banks won't lend because

a) no one can afford the repayments and

b) The cannot raise money on money markets

Devaluation is the start of a hangover that can last for a decade.

Given the choice (and having lived through one or two devaluations in my time) I can honestly say that I'd gladly take the road less traveled. It may be the harder option now, but it offers the prospect of a long term fix to the cyclical problem.

People point to the Euro and say "the Euro is preventing devaluation" - as if that's a bad thing!

It isn't!!

We're in a new paradigm. Time for some new, and hopefully, more permanent solutions.

Thank you Robert for sharing your insight. I found it very helpful.

It makes me wonder why the Euro zone is still persevering with this painful currency project.

The rallying cry has to be 'set me free of the currency stranglehold'.

How long must this currency madness continue? How much more pain can the citizens take?

The average Cypriot will not be thinking about the long term political ambitions of Cyprus and the EU, but about their life savings, as would we all (not just Daily Mail readers) if we were in their place. The confidence in Cyprus' banks has disappeared. When the bank doors open, their vaults will empty!

As Rufus Dogg has argued, it's all the fault of the previous Communist Government and the EU are 'white knights' charging to the rescue. In which case, it's the fault of the Cypriots who elected that Government ergo it's the public's fault!

Whereas, Robert Kyprianou (who, as his name suggests, probably has a closer awareness of Cyprus' troubles compared to Rufus Dogg) has written the best summary of the problems this week.

There is no getting away from the fact that this act was irresponsible, and regardless of whether it goes ahead (unlikely) the damage to Cyprus' banking system is done and won't be mended for such a long time.

Others have rightly pointed out that countries like Cyprus should never have been allowed in to this great Euro project; true. So, who was it who accepted flawed numbers (as with Greece) to boost the size and ego of the Eurozone? If Cyprus was doing OK before the Euro, why shouldn't they do so without it? Oh, I forgot, their banks are now ****ed!

Perhaps Angela Merkel wants to see the Euro collapse ...it would please many German voters, and many others across the net contributing EU states fed up with Brussel's stupidity, arrogance, self interest and unaccountable profligacy with others' money.

Thank you, Rob, an excellent article. Rufus - your points are well made and noted, but we are where we are. Triggering a run on banks was not a good idea.

Excellent article, thanks. I did wonder if, rather than seize a slice of deposits it might have been less damaging to make these 'withdrawals' as loans to the government to be paid back, with interest. This might have given Cyprus a bit of time to plan a better-managed exit from the Euro. Maybe some support from Russia etc would have the same effect?

Excellent article.

Just one point - wasn't it a condition before Cyprus was eligible to join the EU, that Northern & Southern Cyprus unite?

LouisV-W4

" ... Merkel wants to see the Euro collapse ...it would please many German voters and many others across the net contributing EU state"

Not too many, TBH.

I am sorry to say that what passes for information (re: The EU) here in the UK is very highly skewed to the anti-EU side. Reading sources of information from other countries gives a very very different picture.

Cautious Investor:

As you rightly say, we are where we are. I am a great believer in the golf phrase

"Play it where it lies"

But I feel compelled to comment

"Triggering a run on banks was not a good idea."

That depends entirely on what you were trying to achieve .... !

It certainly will focus the minds of all involved in Cyprus (including potentially Dobby & Co) into coming up with a rapid, workable, alternative.

I have an Economist dated Mar 16th to 22nd but published before the Cyprus news became headlines that pretty much foresaw the difficulties. Their solution was, I quote: "Europe's policymakers should think more boldly. Cyprus's bank bail-out should not go through its government at all. Instead rescue funds should flow directly into restructured Cypriot banks.......Each bank should be dealt with on its merits but as a condition for capital injection shareholders and junior bondholders should be wiped out (and negligent bosses removed)."

That sounds sensible to me. Do others agree? Banks, like airlines are very international, these days. No one gets excited if airlines operate to internationally agreed standards of responsibility and safety. The same approach to banks seems reasonable.

Undoubtably, the situation is an absolute desaster for all parties involved.

A tax or levy on deposits should only be in the cards, when equity and bond investors have made their respective contributions, as would normally be the case...

However, no one, including Mr. Kyprianou and the well respected Cypriot people, has the right to claim solidarity in this way. Solidarity is not a one way street. A levy on deposits, as unjustified as it may be at this stage, will hurt the Cypriot economy and people for a certain time, but not wipe them out. There are simply no painless ways out of such a mess. Even more importantly, one should definitely read the contracts, upon which the European Monetary Union was introduced ("no bailout clause"). What happened to the general principle of "Pacta sunt servanda"? This kind of Europe has become a totally unreliable banana republic led by incapable politicians, in which every single country is trying to get the most out of it and nobody asks anymore, in how far one can contribute. Existing contracts are simply disregarded. The old "no bail out" principle paired with mutual national respect and a politically independent central bank was great and would have provided the basis for a well functioning United Europe. Since these principles have been thrown over board already with the first problems in Greece, the whole project may need a fresh re-start - or simply an end. The way things are handled now, the Euro has become a dramatically disintegrating element even seeding the grounds for nationalist conflicts.

Albeit painful, a bank and even state bankruptcy is not the end of the world. At times a painful end is preferable to endless pain...

ICD

" Instead rescue funds should flow directly into restructured Cypriot banks.......Each bank should be dealt with on its merits but as a condition for capital injection shareholders and junior bondholders should be wiped out (and negligent bosses removed)."

On a purely logical basis it sounds OK.

However, on a legal, political and even moral level it sounds very dodgy.

First of all it would mean the EU bypassing the elected government of a member state. And that's not good.

Secondly, it would mean the EU effectively taking control of several private businesses. Broon was on uncertain ground when he nationalised Northern Rock, but this would be much bigger and much more legally-suspect.

All this jiggory pokery with finance (a means of trading exchange); it makes no profit, except for a few skimming off the percentages; more endeavour should be applied to making stuff for trade and thus providing profitable work for the populace.

Just a thought, if Germany wants to keep the Euro, why do they not give the likes of Cyprus and Greece some investment of industry.

Excellent analysis. It gives european leaders a good lesson about their responsibilities.

EXCELLENT.IT GIVES EUROPEAN LEADERS A GOOD LESSON.

Rufus Dogg. I'm interested in your view, but sometimes it is helpful to argue! Surely, if you have run out of money, ie you need hep then you lose your (moral) rights. The helper has the right to say, "We will help you but these are our terms." The bank retains the right to decline the help, of course. I understand the electorate of Cyprus being highly annoyed, but shouldn't they blame their government for allowing it to happen? Perhaps they would say that they could not have foreseen the Greek disaster.

Just trying to put matters in context.

How far can communists be blamed for the recession and matters arising, like Cyprus?

and

Which is better

Devaluations on the basis of home currency OR

Bailouts with deposit raids in the EU?

An elder one. I agree. If you take an idealistic view of the EU (why not) I would expect the Greeks to say we need more employment opportunities in our country. Let's make it easy for those irritating hard working Germans to set up a car factory here. I would expect BMW to say to themselves we make good cars, why don't we set up a factory in Greece? We should be able to get factory workers very cheaply, and we can send our supervisory staff to work in the sunshine for a couple of years. Sounds like a win win situation to me

ICD - re: German manufacturing in Greece

One of the big problems is that labour costs in Greece are (I believe I read somewhere, but did not verify) higher than labour costs in Germany.

So, why spend money relocating to Greece?

Prof Eman

"How far can communists be blamed for the recession and matters arising, like Cyprus?"

Cyprus? About 100%

But it is worth noting that (nominally) socialist gvts were also present - either solo or as part of coalition - when the damage was done (pre 2008 in most cases) in many other states that suffered crashes and are now feeling their way back from the brink.

Spain, Ireland, Greece - even the UK.

However, and it's a huge however, German politics is very much left of where we would consider center. So blaming socialism or leftism by itself is too blunt a tool for pinpointing the problem.

"Devaluations on the basis of home currency OR Bailouts with deposit raids in the EU?"

TBH, I don't think either will happen in Cyprus. But if I had to pick one, as previously indicated, I'd take a 10% cut off the top in a deposit tax, rather than a similar 10% off the top, followed by double digit inflation for years to come, compounding the misery and the cost.

Rufus Dogg - Since when has the EU worried about bypassing the elected Governments of member states. They do it all the time by forcing through legislation in Brussels which cuts across what our Government and voters want (yes, a UK-skewed view, because that's what affects me!). Of course, if you are a member state on the receiving end of shed loads of EU cash, then why would want to sink that particular boat!

Anon 2 - you are right. In the very early stages of Cyprus' membership talks there was an EU condition that only a united island could enter the EU. However, this was quickly dropped as they came to understand the intractable nature of Turkey's occupation and it was felt that it would be wrong to punish a country for the aggression of another.

Trevor Davis - I believe you understate the reality. As Rufus Gogg points out, the previous President Christofias was a top decile performer in this respect for 5 years in a row. if he had been an asset manager he would be a Citywire AAA rated manager for excellent, long term outperformance and he would undoubtedly be in Citywire's Select programme. But as Cautious Investor points out, this does not justify the deliberate act of crippling a country's banking system and ruining its economy.

ICD - the process you describe from the Economist is exactly how it would have worked if Europe's politicians had done their jobs properly and delivered on the promise to create a European banking system and European Monetary Fund. If you recall last summer's European summit, Spain and Italy left believing that this was exactly what had been agreed in the setting up of these institutions. It was Germany's (and others) decision to renege on this decision and put bank bailout money on government balance sheets that has hardened Spain's resistance to seeking a bank bailout. It is why we cannot get agreement on setting up these institutions .Perhaps this was the precedent for Anastiades to renege on their negotiaiton agreement in Brussels?

An elderone - I think you make an excellent point. If Germany and the Eurogroup thinks that the deposit levy is such a great idea, why don't they exchange thier bailout funds for shares in Cyprus' banks? Anastasiades should put this on his list of "third way" options. Maybe this would dampen Troika enthusiasm.

ICD

"Surely, if you have run out of money, ie you need hep then you lose your (moral) rights."

Some. Probably even some money too. But ALL?! I'm not sure about that.

"The helper has the right to say, "We will help you but these are our terms." The bank retains the right to decline the help, of course."

But the "bank" is owned by the shareholders. How can bank employees unilaterally decide that the rightful owners of the bank - the shareholders - lose their rights (and their money)?

"I understand the electorate of Cyprus being highly annoyed, but shouldn't they blame their government for allowing it to happen?"

Absolutely. And I am sure that many of the good people of Cyprus do blame the former government. But there is little point in demonstrating against a party that is no longer in power.

LouisV-W4

"Since when has the EU worried about bypassing the elected Governments of member states. They do it all the time by forcing through legislation in Brussels ..."

That's not an accurate picture.

Our glorious media keep us out of the loop. In the dark. Blind.

Other countries get told what the Commission are discussing; what legislation is on the cards; which way it's all leaning, etc. People feel better connected and informed about the realities of being part of the EU.

What do we get? Nonsense and lies about barmaids having to cover their chests, etc. and then we find out the important stuff (that is real) after the event and once all the decisions have been made.

Dave & Co do have some excuse in that some of the stuff will have been proposed under the last government, but they should be up to speed by now.

The Council, which is made up of all the national gvts, tell the Commission what legislation they want and most of it spends several years being debated and discussed. It shouldn't be a surprise to anyone when they deliver it.

Rufus Dogg

Your point about socialist governments and the recession.

I was under the impression that the main problem was in the USA and the recession started there. USA was not socialist as far as I understood it.

Had it not started there would the world recession come about anyway? And is not communist China helping the world out of the recession?

I tend to agree with you that blaming socialism or leftism is too blunt a tool for pinpointing the problem.

As for the second point, devaluation of home currency v bailouts and deposit raids in EU. In my opinion the first is better and it can be arranged more quickly and more easily and in a more timely manner, without affecting the stability of other nations to the same degree, as under the Euro.

Having said that I am not particularly happy about the effective devaluation of our pound GBP that we have experienced, many other GB people agree with me so I understand.

Prof Eman

In an effort to defend the Euro from some of the more extreme criticisms I have often pointed out that devaluation is far from being an ideal solution. If Yanni has been saving up his Drachma to go and visit his son who works in the kitchen of a Greek restaurant in London, then he is going to be pretty displeased if the Greek government halves the value of the Drachma v the GBP. I don't think it would be too farfetched to accuse the hypothetical Greek government of stealing Yanni's savings to sort out their debts. On the other hand I do recognise that exchange rates can be an easy way for a government to sort out imbalances. Economists never discuss this but it seems to me, a mere amateur, that if you have a rich country and a poor country using the same currency then the poor country has to run its finances on an appropriately 'poorer' basis. So for example the pay level of the Greek finance minister should be a lot less than that of the German finance minister. I know this is a bit simplistic and you could argue that the Greek minister has a harder job!!! But there is a principle here and governments in a single currency should look out for these factors.

PS the above was written before some of the other comments and is mainly aimed at those who think that if there was no Euro then everything would be wonderful. My personal view is that the Euro has drawn attention to some existing unfair situations.

Rufus Dogg

Interested in your comment that Greek labour costs more than German labour. That surely directs attention to where the difficulties lie with a common currency. As they can't devalue the pressure should be on Greek workers to face up to being out of work or accept wages from BMW at BMW's rate. I suppose what I am saying is that these things should find a level. I suppose it may take a while.

Very interesting article.

But can someone explain the mechanism whereby Cyprus' two largest banks got in a mess in the first place. Did they have excessive deposits with Greek banks and when EuroBank Cyprus did not, if so why ? If this is the case this would just be bad commercial judgement. Is there Bank Supervision in Cyprus ?

Stop and think. The problem is the Euro. So many countries in the Euro zone are financially stuck in a straight jacket. Surely they must be able to see that.

With so many countries in the Euro zone already in receipt of bail out funds, it seems highly probable that there will be more to follow. Who will be next? Free the EZ countries to follow their dreams.

Prof Eman

Socialism/ Communism - as I said and you acknowledge, too blunt a tool.

The USA draws it into sharper focus. Profligate spending. Both private and public. Perhaps a lack of financial realism.

China is in an expansion phase. That won't last forever.

"In my opinion the first is better and it can be arranged more quickly and more easily and in a more timely manner, without affecting the stability of other nations to the same degree, as under the Euro."

The effects of a raid are over instantly. It might leave you with hard feelings, but the next day it is done. Devaluations take years for the effects to wear off, and when you add in the inflation they induce the total price is very high.

ICD

Not to go on about socialist gvts again, but the Greeks did enjoy a series of wage rises that were absolutely crazy.

Of course people vote for that because they're voting for what they want: more money!

Allegedly notionally high Cypriot labour costs; Rufus, call it the price for Germany (and others!) keeping the Euro intact.

In a domain of disparate sovereign states.

An elder one

I never mentioned Cypriot labour costs.

"call it the price for Germany (and others!) keeping the Euro intact."

?

Even if I add the "In a domain of disparate sovereign states." that you added later it makes no sense.

What is "the price"? Cypriot labour costs? The deposit tax?

Prof Eman, I can't help feeling that greedy competition in the realm of finance generally is the source of our present woes; that behaviour is as if wealth is money and is grown on trees; as a consequence, the brightest and best brains are put to the task of finding the cleverest way of garnering the best of the crop; methods that are often beyond their directors comprehension or concerns.

A Cyprus exit from the EU would help to open the way for eventual Turkish entry. The Greeks, themselves considerably in hock, would be in a less strong position to prevent that.

I bet the Turkish Cypriots are thanking their lucky stars that the Greek Cypriots voted against reunification in 2004.

As for Russia helping, one should remember that "He who sups with the devil should have a long spoon"

Rufus Dogg/an elder on

There are people who feel that they could easily argue that communism has nothing to do with the recession, and that is is the failed free market system based on greed is good for you that is the root of the recessionary problems.

Rufus, going back over, I see it was Greece and not Cyprus of whom you referred; I suggest it was a mistake easily made since there is little real difference between their respective conditions in relation to Germany, whilst sharing the Euro.

Labour costs, of course! which I implied could come under some degree of management if the Euro area ceased to be a conglomeration of sovereign states

Turkey would a fool to join the Euro zone!

Looking like a loan from Dobby the House Elf, plus maybe a few other contributors, some time next week. Secured against various assets.

If that happens, no deposit tax; Cyprus stays in, and joins the countries that will comprise the test-cases for EZ reform.

Ah! Rufus, the muggles are in a muddle and no mistake; what about Gringotts? or do I transgress intellectual property rights.

13 Feb 2013:

"Turkey's chief negotiator on EU accession Egemen Bağış said it was time the EU made up its mind on whether Turkey can join the 27-member bloc, and said it should be allowed in even if some countries object.

Talks on Turkish integration into Europe originally began in 1963, but the intractable dispute over the divided island of Cyprus...have blocked talks on several policy issues candidate states must conclude before entry.

Enthusiasm among the Turkish public for EU membership is waning given the bloc's economic woes, particularly the sovereign debt crisis hitting some members of the currency union, but Bağış was confident any referendum would pass.

"If there was a vote today I could easily get a yes vote ... on membership of the EU, but I'm not so sure about joining the euro zone," Bağış said."

Ireland does not have a history of significant devaluation. The Irish pound floated for a number of years between being linked to Sterling and subsequently joining the euro. For most of that relatively short period it was 10-20% weaker than Sterling, recently as part of the euro, stronger v Sterling than when joining the euro.

Excellent analysis !!!!

re possible Turkey membership of EC isn't it the case that new members must:-

Accept jurisdiction of ECHR (since the Lisbon Treaty)

Sign up to the Schengen agreement.

Make EURO membership an active goal.

Quite some hurdles for Turkey there, or even an independent Scotland.

Micawber

""Turkey's chief negotiator on EU accession Egemen Bağış said it was time the EU made up its mind on whether Turkey can join the 27-member bloc, and said it should be allowed in even if some countries object."

With negotiation skills like this, it is a wonder it has taken the EU so long!

Vincent McDermott

"Ireland does not have a history of significant devaluation. The Irish pound floated for a number of years between being linked to Sterling and subsequently joining the euro. For most of that relatively short period it was 10-20% weaker than Sterling, recently as part of the euro, stronger v Sterling than when joining the euro."

Your recollection may have become clouded by the passage of time. Or perhaps mine has.

The Punt was not devalued in large chunks, but it was devalued repeatedly. I am pretty sure there was a 2 year period (~) in the late 70's or early 80s when it was devalued three times, by about 10% each time.

The primary reason being in order to maintain the 10-20% weaker than Sterling rate that suited Ireland. The chief exports at the time being agricultural, and the chief export market being the UK.

I seem to recall the gap between the last two devaluations of 1986 and 1993, I believe, as being much longer than usual. But both those were only about 8%, I think.

Ireland may not have been knocking off 30% in one go, but devaluation was a tool that was used, pretty frequently, to maintain the exchange rates in a narrow band.

An excellent article. Interestingly it raises the issue of the EU attempts to 'help' bail out euro countries such as Greece actually 'pushing' other countries' banks into financial deficits. The chain reaction or house of cards can take effect when very large 'haircuts' are imposed.

The Cypriot reaction is predictable for the very obvious reason that this money grab on their savings was so transparent and blatant. I believe I read that certain EU ministers claimed this was the decision of the Cypriot Parliament but it appears it was a condition of any EU bailout. Ironic if the EU's previous help to Greece forced two of the largest banks in Cyprus into this position.

People's savings in Britain have long been under attack by the Government. All interest is taxed as income even if it is less than the rate of inflation...so the tax is actually on the capital or savings of investors. QE has similarly slashed the capital and income of pensioners and savers. The big difference between these taxes in Britain & the now seemingly defunct tax in Cyprus is that British Governments are more adroit in destroying the savings of people.

About £350 billion has so far been printed to help reduce the Government interest on loans. Over the last six years something of this order will have been lost perhaps in people's savings, bank deposits and pension/annuity returns. The state will claim all manner of reasons for doing these things but David Cameron is happy to hand over 0.7% of Britain's GDP to 'poorer' countries in overseas aid. He says Britain is rich, notwithstanding that our national debt is increasing exponentially - and children with cerebral palsy are not given NHS funding for the necessary operations they need...we are not so rich as Mr Cameron suggests, are we?

Cyprus played with Greek bonds and called it wrong. The Euro will survive this and we will have moved on to the next disaster by next week.

Kent County Council & many other local authorities in Britain invested to get high returns in Iceland. We all know what happened and Iceland reneging on its debts. Bad decisions have been made by many countries and Joe Stalin may well be right with the euro surviving this crisis - yet he does not sound at all confident about avoiding the next. What does this suggest about people's perception of the euro in the long-term?

And isn't it the 'long term' that ultimately matters?

Paul Eden

Relatively, we are rich. I don't deny that there is an unpleasant disparity between the richest and poorest, but we are rich in world terms and rich relative to 50 years ago, (and fatter!) If you are saying that what goes on in this country is not ideal I would agree, but please don't think that there is much to gain by running down the Euro. It is only a currency that forces governments to run their affairs more carefully and honestly. I suppose if Cyprus had its own currency they would have melted away much of their debt by massive devaluation. There would still have been unfair results and big losers. The actual procedure of leaving the Euro would be very difficult and would still leave lots of difficulties. It is a British media solution, not a realistic one, in my view

£50m a day to Brussels is keeping us poor

john brace

There are costs and benefits. What are the benefits?

Having a huge 'home market' is keeping us rich. Being part of a powerful and influential organisation encourages big manufacturers to set up factories here that provide thousands of jobs. It is good news at world politics level. It is good news at individual freedom level. There is far more calm political debate in the better parts of Europe than here. We just talk about personalities and strategies. I could go on. But who am I? If you try to choose between the for's and against's the for's come across to me as far better informed, less inclined to insults, more able to produce rational arguments in support of their views.

re ICD

" the for's come across to me as far better informed, less inclined to insults, more able to produce rational arguments in support of their views."

So do you find someone like Bill Cash MP ill informed ???

Interesting, I normally find that when I try and have a rational debate with someone that is pro-Europe then they usually resort to calling me a Daily Mail reading little Englander.

MoneyObserver

"So do you find someone like Bill Cash MP ill informed ???"

There are plenty of well informed and erudite people that will tell you, in absolute earnest, that there is an almighty overlord with a long flowing white beard, that sits on a cloud, loving us all endlessly, yet at the same time judging us all harshly enough to punish us all horrifically for an infinite amount of time should we transgress during our brief lives on earth.

The American investor, Charlie Munger, is a very wise man. I have been attempting to get some of his words of wisdom to stick in my head recently, so this is a good opportunity to regurgitate some of them - hopefully helping them to adhere to my hominid operating system.

Here are some interesting observations about cognitive bias, where people either dislike or hate something:

"How does this tendency manifest itself? There are three primary ways:

- We ignore the positive virtues in the things, or people we dislike.

- We dislike people and things that are even associated with the object of our dislike.

- We distort the truth, bending reality to conform to our dislikes and hatred."

Additionally, widely-held beliefs make them more believable:

Social "Proof" - politicians say that the EU is out to get us; newspapers say that the EU is out to get us (and our barmaids' cleveages), and in their day to day lives, when people talk about the EU they use the filter of social proof. Your average man in the street has no incentive to go and check for themselves, they have a life to live.

Before I go off on a "War and Peace" like treatise on this whole area of cognitive bias and the EU, I'll skip to the all important conclusion. Again, Munger said it pretty well:

"I'm not entitled to have an opinion unless I can state the arguments against my position better than the people who are in opposition."

John Brace

Norway and Switzerland are outside the EU. They pay to access the EU market.

If we did leave the EU there would be a protracted negotiation for us to have access to the massive market place we had just left.

Norway, for example, pays more per-capita than we pay, net, to the EU. And Norway has vast amounts of oil - so much so that it exports almost all of its gas, of which it also has gob-fulls. So they have a great bargaining chip to offer the EU, yet they still pay more, per capita.

The thing that we can offer the EU, by way of a bargaining chip, is consumers. Yet ANY nation can offer consumers as a bargaining chip.

So what is there to stop the EU from granting us the dubious freedom of being outside the largest trading bloc in the world, but charging us even more than we currently send them, net, on a daily basis?

Nothing.

PS - while you're pondering that, keep in mind that Norway et al still have to implement a lot of EU legislation in order to trade with the EU, AND they voluntarily adopt other EU laws and standards just because it is easier and cheaper to work with one set of standards and regulations than it is to have your own.

But of course, countries that do so, do so without any say in how those laws are drafted. No voice. No veto. Not even a vote.

This all makes me wonder how we ever managed when we only traded happily with the whole world!

I call ou rpresent situation ' blackmail'

Rufus

once politicians think citizens have no choice but to accept the status quo, the clock is very definitely ticking...with civil unrest getting ever closer.

John Brace

"Blackmail"?

Indeed, what poor poor victims we are.

We traded happily with the whole world when we, effectively, held a gun to their head. If an emerging market had resources we wanted, we invaded; established British companies, and then traded with those.

In many ways, it was a simpler time ...

Clive B

Civil unrest is already here. Remember the riots.

They were for a more pressing "reason" - chief of which is that kids like a good riot.

Rufus

I don't belive the riots had anything to do with shortage of jobs or the economy. Funny how so many of the rioters decided what they really needed was to steal a TV, or a pair of trainers, or ....

Thank you to Rufus for dealing so well with some of these controversies.

To Neil K I feel I should respond because I could slip into such accusations. Through family connections I am able to read the Daily Mail, which interestingly has some very good writers. They are good with skilful use of words, not solving political, financial and social problems. I get my information from many different sources. I run my own SIPP successfully and do not regard myself as particularly clever. But I can recognise propaganda. We all can but if it is good enough and there are no dissenting voices we can be unaware. Just pick up any DM and look for the tricks. "In parliament pressure is mounting for XXX's resignation". That means the DM is stoking up pressure for XXX's resignation. The reader is interested. What has XXX done that he should resign? The reader reads the DM's highly coloured version, and probably cannot see XXX's version. Sometimes the DM is more sophisticated. Sometimes XXX's version or a more balanced aspect of an anti-EU comment DOES appear, but it will be at the end of the article (cont on page 5), a place that busy readers may never reach. When a politician is reported as 'claiming' something the implication is that he is probably lying, without actually saying so. Another technique is to say, "insiders are increasingly calling for the prime minister's resignation". Maybe they are and maybe they are not, but I will ignore it unless a named MP is reported as saying this and gives his reasons. Because the journalist, possibly under orders is writing an anti PM piece. The BBC is pretty bad as well. They have no track record of running the economy but they interview each other and basically try to tell me what to think.

BTW I missed the barmaids cleavage item. Where's that Daily Mail?

ICD: The points you make, large market, creation for additional inward investment, improved world politics, freedom - especially freedom - calm debate - all this was achievable, surely, by what was the original 'common market'. An expanded free trade area. Labour was, for whatever reason, dead against it at the time. Conservatives were, in the main, pro. However, despite promises to the contrary, its political/federal dimension was revealed only after the country accepted the pro argument.

We gradually came to realize the pro politicians caused great damage by being economical with the truth at a moment when straight talking was essential. Federalism was the aim all along.

The ERM was another lesson; politicians of all persuasions and businessmen genuinely believed it would be advantageous to sign up. In practise it proved a disaster, showing exactly where the dangers lay in a one-rate -fits-all currency across diverging economies. With the best will in the world these facts cannot be shrugged off, and by the looks of it nor will they be.

Here is a recap of what one prominent member of our glorious media told us to think about the EU and the completely fabricated story about barmaids clevages.

http://www thesun co uk/sol/homepage/news/110539/Save-our-barmaids-boobs.html

Please fill in the dots yourself, many comment sections prevent posting of links.

Anyway, back to the boobs - at the time that it happened it was the most recent in a long line of hilarious Anti-EU propaganda. I found it unspeakably funny how wildly misinformed my countrymen were. Over the last few years though the joke has well and truly worn off. Just like "everyone likes a good racist joke" any claim to humour flies out the window once you start to see that people actually think that this crap is true.

And we have reached the point where people genuinely believe the endless "The EU is bad" narrative.

On a lighter note, I cannot help but feel that some of the more sinister overtones of being told what to think by Rupert Murdoch is mitigated, in some small way, by the pictures alongside his propaganda.

That's probably one of the secrets of his success.

Mike Knight

The problem with Free Trade - for anyone not old enough to recall, or too old to remember, is that you need a level playing field. Otherwise it is not actually Free Trade at all.

If the nations that you have Free Trade with operate factories that run 24/7 paying a pittance in highly dangerous conditions, then your factories cannot compete.

What you end up needing is standards that you all work to, across the Free Trade area - otherwise some elements have an unfair advantage, and they steal away jobs from other nations. As soon as any nation starts to lose jobs due to unfair practices, everyone starts clamouring about "level playing fields."

I.e. there will always be a tendency for nations involved in free trade to harmonise laws, regulations and standards which will have to be debated and discussed by representatives from member states. They'll also need a venue to air grievances, etc. Probably somewhere reasonably central.

Something like the EU is not only inevitable, it is (if you are serous about free trade) absolutely necessary in the end.

Members of the EFTA, as I said, still have to adhere to EU laws and standards - to keep that playing field skewed towards level - but they don't get to influence the standards agreed by the members of the EU.

Re: political union - it too is an inevitable tendency (note: Not conclusion!) where more and more legislation and standards are harmonised.

E.g. France will always be France. No matter how integrated things get. An example from the other side is that, despite 100s of years of Union, Scotland is still very much Scotland.

Pre EEC - There may have been some mixed messages, pre EEC entry, but to say that we were 'deceived' into joining - no. People tend to hear what they want to hear. So when Heath said things that they wanted to hear, they listened. When he said things they didn't want to hear, they didn't.

On BBC TV's Question Time, 1.11.91, Heath was directly asked "...the single currency, the United States of Europe: was that in your mind when you took Britain in?" He replied "Of course, yes..."

Back in the 70s he said

"In saying that we wish to join the EEC, we mean that we desire to become full, whole-hearted and active members of the European Community in its widest sense and to go forward with you in the building of a new Europe."

Before that, in the 60s, when we failed to get in, he said

"The end of the negotiations is a blow to the cause of the wider European unity for which we have been striving."

Re: The ERM

Speaking as someone that was working in Germany in finance at the time, the thing that was gob-smacking was the response of the UK establishment.

Neither the government nor the BoE appeared to be taking the very apparent problems seriously. Until it was too late. Then, the BoE overreacted, which completely killed off any remaining positive sentiment.

The ERM itself was something as simple as this: hold your currency within these exchange bands. How complicated is that?

It's hard to know precisely how team GB managed to screw that up so royally, but screw it up we did.

But rather than blame our politicians and the BoE - those tasked with the krypton-factoresque challenge of holding the currency that we had full control of in well defined bands - rather than blame the people steering the car recklessly, we blame the road? Somehow, the ERM gets the blame? Well, I suppose someone or something has to get the blame, and it cannot be "our" fault, right ...

Rufus Dogg - shall we take that as a 'don't know' then.

MoneyObserver

"shall we take that as a 'don't know' then."

Forgive my pedantry, if that was meant as a joke, but with so many points covered you'll have to be a tad more specific if you'd like some further comment on one of the points raised.

Or, as my American friends would say (loudly)

"Um ... what?"

Rufus, to pick up a couple of points from your arrogant penultimate rant:

1. how do you define a level playing field for trade; I suggest it depends on ones point of view; I think our problem in the UK in particular is that it is constantly undergoing development by a bureaucracy that has little knowledge or real concern of its needful constitution, who like all such organisations have the compulsion to grow and look busy. The problem is that much/most of their energy goes into the unprofitable output of rules and regulations that in many ways stultify actually profitable endeavour by business.

2. On the matter of Norway costs of trade with EU, I suggest that if indeed they do pay more than EU members to trade - I don't know; much is conjecture anyway; depends where you read - then they get a better value for their money by being free of Brussels bureaucracy and its so-called level playing fields.

The so-called level playing field endeavours, I suggest, merge into all those other things required of their notions for government of a federal stae.

May I also suggest that the history of EU, except insofar as it is enshrined in the treaties, is irrelevant; what we have to deal with is our condition now, real and foreseen to the best of our judgement.

Mike Knight: I had to go out but now I note that Rufus has given a very well-informed and erudite answer.

From my point of view I started out open minded, but what caught my interest first was that when I went abroad I found that foreigners, some of them at least, were far smarter and more innovative than I had been led to believe. Having been brought up to have a low opinion of foreigners I started to question what fellow Brits said. I remember the 'Cod Wars' where the Icelanders were the bad guys. Then somehow an Icelandic opinion made it into a British paper (no internet then of course) and it was very persuasive. I think I became the only Brit on the Icelandic side.

In more recent times I have read the most extreme and scathing criticism of the EU. I am retired and the internet is here to help. Every time I take the trouble to research the criticism of the EU I have found a reasonable answer. Here is a trivial but illustrative example from recent times. In an earlier discussion I had invited the antis to give some examples. Someone, very politely said that his neighbour was an electrician and cursed the fact that our clear and simple green red and black wire colour coding system had been changed by the EU. Having done lots of wiring in my time I also wondered about that. So I searched and searched on the internet. Lots of abusive comments about the stupid EU making pointless regulations, but eventually I found it. It is to do with colour blindness. And it makes sense. Might even save a few lives. There is a reason!! They are not all sitting around in Brussels saying, "What stupid regulation can we dream up today". Of course that is the sort of thing the media should have found out and explained to the public, but the lazy and convenient response is to use anything to discredit the EU. Even the criticism about the EU never getting its accounts audited successfully has an explanation that puts a different slant on the criticism. Go to the EU website and search for 'Myths'.

The EU is far from perfect, but nor are we. I invite any polite and rational Europhobe to throw out a criticism and I believe I can give at least a half reasonable response. With luck you will get a much fuller and better response from Rufus Dogg

come come, an elder one. That was not a rant. It was a calm lucid explanation of the history and the situation. If you dispute something please explain and we can all try to investigate. What is difficult about a level playing field? When new trains were needed Siemens got the job, instead of Bombardier, causing great annoyance. I do not remember any media person explaining the obvious point that if Germany wanted some trains built and Bombardier had put in the best quote they would have got the job. Perhaps some Brits want a sloping playing field...

ICD, I disagree, but will try to answer tomorrow; but you seem to have missed my point altogether.

ICD re"Level Playing Field"

Do you think that other EC countries, in particular France, play the 'level playing field game' fairly.

ICD, the problem I have with the so-called LPF is that it is not so much a field of play as that of battle; it is in constant change with no definitive constitution and to employ the game analogy, one in which the goal posts are constantly shifted to suit the big boys (or cheats; whoever they are!); add to that, what is fair, in poor little Cyprus/Greece being expected to play one man against a German team of 80-100 men - or women for that matter - on a field that has been put under a German roller.

No, I think the concept of the LPF is a sentimental contrivance being exploited by the big boys to serve their selfish wants; anyway, how can the analogous field ever be levelled with the UK able to manipulate exchange rate and all the other financial jiggory pokery going on - no wonder the German/French axis are doing their best to screw the City of Londres.

To pick up on your point regarding the procurement of new trains by UK, the award of such contracts has nothing to do with LPFs since such decisions are surely based on a judgement of, Timing, Function and Cost; ie, will one get it when one wants, will it serve the purpose demanded and does it best meet the costing.

Such matters as electrical wiring that you allude to are matters of industry standards, entirely separate from LPFs and have been for ever with us - incidentally the notion of colour blindness in that context is new to me; on the face of it, it seems something of a joke; I learnt years ago by the then established method judgement, that I was to a degree, red/green colour blind, though I'd no difficulty distinguishing between red and green wires; no, the matter I suggest, was the concern of industry standards; though the fact is that here in UK we use a 3 pin plug whereas on the continent it is something else; and just to throw in another example, we in the UK drive our vehicles on the left.

Just as an afterthought, if Germany truly want to keep the Euro since they have gained so much profit by it, it would only cost them a bob or two to buy the two biggest Cyprus banks when they could also go through the Russian laundry with their Teutonic efficiency and set things straight; though I confess - if not obvious - finance is not my strong point.

Finally, I admire the German industry, being an engineer and working with them in a large multi-national concern, and thus understand what they are up to; but if they want to keep the Euro federal ship afloat then they are going to have to make some sacrifice of their own; not just just poor little Cyprus; they look at it as a premium to pay for sunny holidays there.

erratum! they COULD look at it as a premium

An Elder One

re: my "arrogant penultimate rant" ;-)

"1. how do you define a level playing field for trade; I suggest it depends on ones point of view;"

NB: there cannot truly ever be a *completely* level playing field. Major disparities can be addressed, but that is all the EU tries to do.

Again, the Scottish example illustrates the point - a factory in Kent and a factory in Ayr may abide by a similar set of laws, but each will have its own set of advantages and drawback based on geographic and even cultural concerns.

But the elements that govern things like health and safety is the same for each factory.

"I think our problem in the UK in particular is that it is constantly undergoing development by a bureaucracy that has little knowledge or real concern of its needful constitution, who like all such organisations have the compulsion to grow and look busy. The problem is that much/most of their energy goes into the unprofitable output of rules and regulations that in many ways stultify actually profitable endeavour by business."

That is the exact sort of comment that ignorant people make - and I mean that in the true sense of ignorance, not as a simple insult.

The EU commenced a program of cutting red tape in the mid 2000s - not only committing to *only* produce legislation where absolutely necessary, they embarked on a program of culling off existing red tape.

Have a look at these - copy/ paste and fill in the dots.

Farming:

http://www europarl europa eu/news/en/pressroom/content/20111024IPR30156/html/Farm-policy-reform-cut-bureaucracy-and-rethink-greening-measures-MEPs-say

Funding:

http://emmamcclarkin com/?p=1127

Fruit:

http://news bbc co uk/1/hi/world/europe/8127461.stm

Fish:

http://www bbc co uk/news/science-environment-18420618

Etc.

Here is a reference to the drive to cut red tape.

http://www cjam co uk/2011/07/new-plans-to-cut-bureaucracy-in-brussels/

The idea that the EU exists solely to make headaches, obstacles, red tape and, ultimately, unnecessary costs for the member states is one of the fondest fallacies.

But the facts do not fit.

"2. On the matter of Norway costs of trade with EU, I suggest that if indeed they do pay more than EU members to trade - I don't know; much is conjecture anyway; depends where you read -"

This sounds like the usual kind of sophistry.

What I said was that Norway pay more per capita than the UK.

Maths is not a matter of conjecture. Maths has no agenda.

Norway's contribution (2011)

€340mn

Population

4,952,000

Per capita contribution €68.66 per person

UK's Net contribution

€3,500mn

Population

63,200,000 (2011 census)

Per capita contribution €55.38 per person

If you have different numbers, or some other method of calculating something as simple as the cost per head, I'd like to see it.

?

"then they get a better value for their money by being free of Brussels bureaucracy "

You have missed a VERY important point:

Norway are NOT "free of Brussels bureaucracy". Norway have to adopt EU compliant legislation and standards in order to trade with the EU.

That is a fact.

Those people that say that they want to leave the EU in order to accomplish these aims:

- Stop paying Brussels

- Stop Brussels from implementing EU legislation in the UK

Do not have aims that are realistic or achievable.

I.e. even if we left tomorrow, those things would continue.

Rufus, I'll not argue further with you - we will ever find disagreement - except to remark that - to take the Norway case - complex equations are not resolved by simple arithmetic; one might ask, if the cost is onerous why do they bother and/or maintain their own currency.

Your remark concerning ignorant people is yet another example of your arrogance: quote "That is the exact sort of comment that ignorant people make - and I mean that in the true sense of ignorance, not as a simple insult", is an insult nontheless and thus intended; the arrogance lies in the form of its (the argument) presentation; ergo, that you are the only one - or those on your side; being magnanimous - that has a grasp of such matters. Y'know, it's not necessary to emphasise a point by being rude.

Incidentally, legislation is something we have to obey; standards are something different and provide some choice; they have an international nature, the concern of all nations that make things to trade across borders. For example if we wish to sell motor vehicles worldwide then we in UK have to build LHD despite the fact we use RHD ourselves; furthermore, the demands of homologation make it good sense to observe standardisation, wherever possible, to minimise oncost to manufacture.

The level playing field for the EU, is a myth, I suggest, and is a matter of finance applied in trade; the joke (in the worst possible taste) is that the UK has its own currency; unfortunately Cyprus and Greece, to name just two, do not.

All of this is occuring in a conglomeration of disparate sovereign (say, still tribal) states; ones point of view is much affected by which tribe one feels one belongs to; or would like to be a member thereof; I guess you don't care much for the UK.

an elder one

I feel a level playing field is an ideal that in my opinion cannot be reached.

Having said that, I feel that the EU has made a contribution to it.

If you disagree please let me have your evidence.

Referring to your post, an elder one: Surely the EU is in the business of trying to stop the goal posts being moved? You talk about Cyprus/Greece v Germany. The whole point again of the EU is to get away from that. Theoretically a medium sized business in Cyprus or Greece should be mostly subject to the same rules as one in Germany. Suppose I wanted to buy a bicycle and it said on it, "made in Cyprus". I would be more likely to buy it because Cyprus was (for the moment) in the EU. I would think that the EU would surely not let them sell dangerous bikes, so it should be ok.

Because of your engineering background I often agree with you an elder one, but let's consider this level playing field business again. With a big contract like the trains there would have rightly been a huge fuss if it had been awarded during a game of golf rather than put out to contract. Once a contract is tendered I am sure that the EU has strict rules. If we had said, "Yes the Siemens offer was much better and cheaper but we want the trains built by British workers, so we will award the contract to Bombardier anyway", I am sure there would have been trouble. Despite often having poor management skills and a reluctance to make long term investments we do have good engineering skills so there should be times when we gain from the level playing field concept. Of course there will be cheating but if there are rules there should be less cheating. Not being in the Euro does give us the chance to cheat/manipulate by achieving an ever lower value of the GBP. Wouldn't it be better to compete by quality rather than an artificially low Pound?

Once again a very helpful contribution from Rufus.

Interesting the links supplied by Rufus about reducing red tape. Would it not be absolutely the moral duty of our newspapers to tell us about that? Perhaps it was at the bottom of page 5.

Prof, that's a very broad challenge,. but to answer it simply, I'll not deny that great effort, has been, and is still being, put into it, but it's a forlorn hope it will be resolved in my lifetime, observing as an octagenerian, or ever will be, for that matter, since finance and currencies and tribal differences (in every regard - size, climate, history, etc, etc)), lie at its roots.

re Prof -" I feel a level playing field is an ideal that in my opinion cannot be reached. Having said that, I feel that the EU has made a contribution to it.

If you disagree please let me have your evidence."

Prof- You've made the assertion so you give your evidence.

ICD, your arguments are simplistic; just to take one point of yours, if I was looking to buy a bike - which I ain't - where it was made, would be of little concern to me; I judge the things I purchase by their evident quality, for instance I buy German made kitchen kit made by Bosch for that reason, not particularly because it's in the EU or markets its stuff in Euros. In saying that, I take with some resentment your implication that only an E label can/might be deemed trustworthy.

As far as the Railway Trains procurement is concerned, I frankly have not studied it, but would imagine that if the people in that line of business were perceived making purchases that were not cost effective, there would be a row - apart from any possible transgressions on the so-called LPF - but face it, I suspect that neither you nor I spend much time analysing such matters in any depth - and things there go very deep at times.

You are also rude about UK management without justification, which I'll submit is a judgement derived from ill judged newspaper opinion.

MoneyObserver, it can be argued that the evidence you seek from Prof Eman, stares you in the face; to try and put the matter into figures and loose notions about the conditions pertaining to, notionally fair trade - not only within the EU but also with the rest of the world; ask Australia and New Zealand about it - simply trivialises the issue; with all the people the EU employs to work out the sums and establish the essential parameters, a solution continues to elude them long term. The European project arose out of sentiment - gut feeling one might say, from a premise that arguably no longer obtains - and continues its existence as such, whilst its technocrats continue to seek the figures and controls to make it work; and to hell with democracy!

MoneyObserver

Level Playing Field, I do not have time to fully justify what I have said, hence such a short statement. However I am happy to keep to it until some-one proves me wrong.

But as nothing in this world is perfect, I do firmly believe that LPF on the EU scene is perfect.

As regards my views on the EU, I am all for a common market, but have great reservations about the Euro. In fact a break up in my opinion could be advantageous to not just Europe but also the World, i.e. by removing another variable in the world economy which has been causing so much bother.

MoneyObserver

Second paragraph

Meant to say LPF on the EU scene is NOT perfect.

Apologies

an elder one. probably both you and I would have the know how to judge the qualities of a bike from observation. My example was to show that the 'originating in the EU and therefore conforming to certain basic standards' aspect was a plus. I need to argue quite strongly with you, not out of any personal animosity but because many share your views, and I believe them to be totally wrong. We had our day as top dogs, almost entirely I would suggest because of the industrial revolution and then our rather cavalier attitude to setting up an empire. We are small and ordinary now, and we get stronger the moment we admit that. The EU basically represents our way of life, which faces significant threats from culturally different fanatics. We could have been very influential in the EU if we had not behaved like a spoilt sulking child. As for Farage, who is undoubtedly a skilful operator, his speeches in the EU make me quite ashamed to be British.

My judgement about management is nothing to do with newspaper comment. As an engineer you will remember that we used to have a car industry and a plane making industry, both very large for the size of the country. We have neither now. We used to blame cheap foreign labour but that doesn't stand up. As you know, Germany supplies cars all over the world. Telegraph readers hate to admit it but that is due to quality not financial chicanery. We could have retained a car industry. There is nothing wrong with British manufacturing skills; after all we still make lots of cars under foreign management. When I was young I used to blame the unions and perhaps they should take some blame but now I realise how arrogant, irritating and sanctimonious the management obviously were in those days, I have changed my view somewhat. Let's turn to aviation. Rolls Royce is a shining beacon by being a successful world-class company. (I have invested in them!) In my opinion British Aerospace, or at least their board are a disgrace. A few years back they owned 20% of Airbus. They hadn't got to that position by any smartness, but at least they were there. Then they sold out. I was aghast. "Why?" I asked anyone who would listen. Officially it was because they reckoned they could make more money making and selling arms to the Americans. So it was arms v commercial jets. Where would you put your company future? More recently there was a chance of BAe getting back into EADS, the parent company of Airbus. This was because USA had grown weary of endless wars and was cutting back on arms expenditure. What a surprise! Who could have foreseen that? The right wing, moustache twitching Telegraph reading establishment said we couldn't possibly have our weapons maker having anything to do with those nasty Europeans. They might not allow us to fire our rockets. They were all ready to sabotage the deal, but Merkel beat them to it and said, certainly not, and that was that. I have not read that view on BAe anywhere but I was obviously right at the time, not with hindsight. BAe, with lots of expertise in wing making will, ever so gradually get eased out, and if we are not in the EU it will be a lot quicker. How will those skilled workers feel when they lose their jobs, knowing they are as skilled as anyone in the world?

Apologies to anyone who has read through all of this, but this thread has seemed to include most of the issues about which I feel strongly, thus encouraging in me a tendency to rant. But I am ok now! I shall look forward to the GP tomorrow.

ICD, just another observation on your last post; the value of a nation's currency and the quality of its products are not interchangeable alternatives, and your seeming implication that they are, or are likely to be, in the case of UK products, is insulting. You know perfectly well that the UK is not alone in manipulating down its currency as a means of increasing demand for its products - the latest practitioner being Japan as you will be aware - and has nothing to do with the quality of their product, per se; quality is a judgement for buyers to make and I cannot see really poor quality products selling at any price.

The UK, fortunately, did not adopt the Euro and despite all the criticism it attracts are able to manage, by some measure, a suitable exchange rate for the pound by which to survive in some sort of hopeful state during the present chaos. Alas for poor Cyprus, they cannot.

e ICD " As you know, Germany supplies cars all over the world. Telegraph readers hate to admit it but that is due to quality not financial chicanery. "

Come now ICD, there you go again. I read the Telegraph, own a German car cos I think their the best, and haven't got a moustache to twitch.

But I agree the BAe board are a complete disgrace. But you do misrepresent the

BAe recent situation compared to the former situation.

BAe were an independent partner and part owner of Airbus, as was EADS when the sold their stake several years back - very bad move, but they were still an independent UK defence capability resource for our country.

The latest proposition entailed them being taking over by EADS in which they would become just a part and controlled by majority non-UK Directors - end of UK independent defence capability..

.

"Rufus, I'll not argue further with you - we will ever find disagreement"

I'll translate:

You cannot find anything in what I have said that is in anyway inaccurate, but you still feel the need to object on some level, so you kept your objection as broad as possible so that you could still register one.

"complex equations are not resolved by simple arithmetic;"

No, but simple arithmetic does prove that any given Norwegian pays more for access to the EU market than any given British person.

" - except to remark that - to take the Norway case ... one might ask, if the cost is onerous why do they bother and/or maintain their own currency."

I never said that the cost was onerous and don't consider it to be. That was not the point. Re: remaining outside the EU/ Euro: Why shouldn't they?

"Your remark concerning ignorant people is yet another example of your arrogance: quote "That is the exact sort of comment that ignorant people make - and I mean that in the true sense of ignorance, not as a simple insult", is an insult nontheless and thus intended; the arrogance lies in the form of its (the argument) presentation; ergo, that you are the only one - or those on your side; being magnanimous - that has a grasp of such matters."

That was not a question of "grasp" - which is to know, with or without understanding - it was a question of ignorance. Which is to not know in the first place.

I was aware that it was possible that you could take offence, so I did try to pull that particular punch, but nevertheless I hope that you feel that in future, whatever you say about the EU you cannot accuse them of only ever producing more and more rules and regulations and existing to serve no one but themselves.

"Y'know, it's not necessary to emphasise a point by being rude."

I apologise.

"Incidentally, legislation is something we have to obey; standards are something different and provide some choice; they have an international nature, the concern of all nations that make things to trade across borders. For example if we wish to sell motor vehicles worldwide then we in UK have to build LHD despite the fact we use RHD ourselves"

And a ridiculous and expensive thing that is for us too. Standardising to LHD would save us a fortune.

But we would never dream of changing the way we do it to fit with everyone else - let everyone else change to fit with us! Yeah, those French and Germans can be really stubborn at times - lol.

" furthermore, the demands of homologation make it good sense to observe standardisation, wherever possible, to minimise oncost to manufacture."

Absolutely!

"The level playing field for the EU, is a myth"

You are old enough to know better. At least old enough to recall the days of "dumping" of products, such as shoes, on the UK market?

Was it Italy that dumped a ton of shoes on the UK? Made in factories where health and safety was a joke? The UK couldn't compete and it drove a lot of UK shoemakers to the wall.

That's the kind of thing - quite common place in pre-EU days - that doesn't happen any more, inside the EU.

The way of dealing with it in the past was: trade barriers, embargoes and super-levies.

ALL of which is bad for business.

As noted with my Scottish example, a "level playing field" does not mean outright equality. Another example might be football teams - the fact that you can field 11 players against Manchester United does not mean that you have an equal chance of beating them. If you think that is what a LPF is, it is not. But you do all play to the same set of rules.

"I suggest, and is a matter of finance applied in trade; the joke (in the worst possible taste) is that the UK has its own currency; unfortunately Cyprus and Greece, to name just two, do not."

You'll note that having our own currency has not prevented us from getting in the sh1t ourselves? Recessions (probably even triple-dip); high unemployment; massive and growing deficits; property bubble; bank runs and collapses; credit rating downgrades ....?

The method we chose to get out of trouble (QE) was not open to Greece and Cyprus. The Euro is a very young currency and this is the first crisis it has faced. As such there was no blueprint for what to do. Some people (willfully or otherwise) misinterpret this as there is nothing that can or will be done.

"All of this is occuring in a conglomeration of disparate sovereign (say, still tribal) states; ones point of view is much affected by which tribe one feels one belongs to; or would like to be a member thereof; I guess you don't care much for the UK."

On what basis?

On the basis that I should pick a side, and that side should be the UK?

I was born here. I live here - by choice too, not just by default. I have lived and worked all around the EU and have property in other EU states. That's how I have been lucky enough to see the other sides of the EU story - one not poisoned by the UK media.

It is not, as far as I am concerned, a matter of "us" and "them."

I am on the UK's side. The EU is a massive boon to us, and people that tell you otherwise are not telling you the full story.

I am sure, in fact I know that the Telegraph has some reasonable readers, and you sound like one of them, so my apologies for generalising too much. With BAe I think you are agreeing with my first point; the second point I am simplifying and perhaps exaggerating a little. I seem to remember that they were trying to get some contractual deal that would keep everyone happy, but anyway that is history. You must admit that the Telegraph does have some of the angriest readers, who seem to think that any political discussion is just a competition of insults.

I have been thinking about the independent defence capability you mention. it is a point worth considering, I agree, But we get our nuclear weapons from America, don't we, and I can't imagine EADS denying us what we wanted, even if they disagreed with British intentions. If a weapons supplier starts playing politics he will lose his customers. Anyway we have a factory or so in the UK

Rufus Dogg:

It has annoyed and disappointed me to observe the lack of any integrity shown by most of our press concerning the EU. You are by far the most articulate and well informed spokesman for the benefits of membership that I have encountered. If the Conservatives win the election I hope you will be active before the promised referendum. Such is the power of the media that, in my opinion most professional politicians are scared to speak in favour of the EU. The internet does give an opportunity for open discussion and debate. Using a different name I have 'disagreed' with contributors on the Telegraph website. What I notice is that contributors just have their say, mostly to slag off foreigners, or the EU or the 'looney left', but don't respond to any differing views. I exclude MoneyObserver from this generalisation! The Mail on the other hand just doesn't print me, despite me using the most perfectly polite language.

# ICD

ICD, as regards me being reasonable, I think you are confusing me with someone else

Why do I get the feeling that the troika, aided and abetted by a member of the Frankfurt group, who should be entirely neutral, are attacking/destroying any financial centre which is not in Frankfurt? Just look at their attempts on the City.

As for the competence of the politicians, expert, at setting up and destroying any threat to their preferred govts, using the functionaries in Brussels to take the flack/blame for which they have created a situation/pretext. for Greece Spain/Ireland/Portugal, well they were unworthy in the first instance.

Cyprus is clearly an experiment to see how far they can push the envelope and set up an Eldorado of new revenue, bank deposits.

It sets a dangerous new precedent, they saw how destructive the pensions raid was, so they need a new avenue, maybe an additional source, knowing that the civil service element would be protected, pensions and deposits.

Rufus, WRONG, she destroys the Cyprus financial centre, hoping more will flow to Frankfurt, resulting in a lot more tax, It is called deep thinking.

However, this now sets up the rest of Europe for a bank tax, obviating the need for a transaction tax, and all on a pretext. Soon the EU bank guarantee will be breached by a tax on anyone who has assets, in whatever form.

Mike K, erm, the French have their own leftie agenda, always had, and Germany looking to supremacy, knowing that the French have a history of devaluation, so it was only (always) a matter of time before they fell off the wagon of rectitude, being the double dealers the are.

LouisV-W4, you shouldn't smoke your own product. Great project, doomed to failure from the outset because of the lax controls, to sucker suckers in to demonstrate the exercise of raw naked power and supemacy, which they have time and again in the past. As for "Since when has the EU worried about bypassing the elected Governments of member states", aided and abetted, yeas aided and abetted (criminal context), by your country.

I think that the EU has been too clever by half, and a lot of fuds will now flee Europe because of this jiggery pokery, with perhaps several banks failing as they experience runs!

MoneyObserver: Things are always more tolerable when humour creeps in. I remember a particularly bad-tempered discussion in the Telegraph when one contributor said of another, "To call him a moron would be insulting to morons." Not very original probably but it made me laugh!

Snoekie: Have you tried plain English? I don't even know if I agree with you. But as I believe in tolerance and thinking the best of people, probably not!

Europe is inefficient, as is any large organisation. I am working on the World's most expensive energy project and the waste is phenonimal!!

We are currently hounded by the application of European Standards, clearly written with good intention, but put into practice on a large scale causes waste and inefficiency. We are better off without.

We need local management by local people with commercial exposure, not foreign people dictating to other foreign people/

Here the problem is compounded by Polititians, none of whom work in the real commercial world. And now the innocent are expected to pay for the mistakes of the polititians.

How, in any way shape or form is this fair? Break up and return to local management. It is happeneing in our food chain, let it pass to our national Leaders

Rightcharlie1: I rather agree with your comment about large organisations, but such an organisation needs to be aware of the risks and have an appropriately light touch. For instance there might be agreement that regulation on something would be helpful. Rather than having 27 regulations why not have one? Country X might say at the discussion stage "We have unusual circumstances and the regulation would be unworkable in our country." If this comment is seen as genuine rather than an attempt to get an unfair advantage then the regulation is created with X being permitted to opt out.

Although you are commenting with practical experience, and that gives your comment much more relevance are you sure that if the well-intentioned regulations were written in London, say, would they be any better?

The idea that Germany is attacking Cyprus to advance Frankfurt as a financial centre doesn't stack up.

Franfurt - Cyprus - financial centre rivals.

That's like saying J.P. Morgan and Al Capone were business rivals.

snoekie

"Why do I get the feeling that the troika, aided and abetted by a member of the Frankfurt group, who should be entirely neutral, are attacking/destroying any financial centre which is not in Frankfurt? Just look at their attempts on the City."

Well, speaking as someone that worked in Finance around Frankfurt, I am probably uniquely qualified to comment on that:

You get the feeling that Frankfurt is "out to get you" precisely because that's what you're being told by some elements, including BoJo. BoJo and DC and George all have lots of old muckers working in the City of London. Where the logic falls down is that: if anything EU wide is an attack on London, it is also an attack on Frankfurt.

AH! You may say, but London is bigger! So we stand to lose more from any negative impacts!

And? So how does that help Frankfurt gain?! It doesn't. It is a logical nonsense.

Frankfurt has no agenda against London. Quite the opposite - the deepest respect (as in all things German) for the "Meisters."

Germans are absolutely terrible at hiding their true intentions - they always speak their mind, even if what they have to say is highly contentious. It is one of the reasons why we can find them brusque, or even downright rude.

You think I am WRONG?

Ok, please illustrate why I am wrong and how you came about your particular brand of insight?

Oh - PS - this is the start of raids on all EU banks?

Nope.

Rufus D, though I had intended to have no further discourse with you, I confess that I was irritated enough by your commentary of March 24th 2013 at 13.30, to respond:

Your translation of me, is presumption;

Your comments re. Norway's arithmetic has little or no relevance to the case for or against EU, and nor did I say 'the cost is onerous' - you neglected the conditional;

'Grasp' is to hold with understanding - to 'know' without understanding is dogma;

Tried to 'pull you punch' how magnanimous; I maintain that EU continue to create rules and regs to suit their aim of a federal state; I detect a desire of your's for such an outcome, whereas the UK majority seemingly ( to be proven) do not;

Your apology, is just that, an easy, meaningless, word, not endorsed, judged in context;

Your comment re. LHD is fatuous, unsubstantiated and dogmatic;

Industry standards are global to be observed, or not, by managements from a local viewpoint;

My age has nothing to do with my understanding or recollections - except an opportunity for you to excercise impertinence;

What has those shoes to do with the argument - admittedly I'm ignorant on that issue - arguably it was simply an incompetence on someones part; with or with a LPF; we are I think getting well off the beaten track wth such;

No, I agree, we in UK are well able to get into the shit ourselves, what with our preoccupation with finance and excessive unprofitable government spending; incidentally the French are in a bit of a pickle in that domain too;

What on earth has the UK media done to deserve your opprobrium; I'll admit they are generally a provocative lot of scribes, but they are but part of a another global industry, and to imply the UK populace can read nought else is nonsense (no, I know you did not say that); I get the impression you're NOT a ukip supporter; nor am I, incidentally;

The irony of this spat (may I call it such?) between us - including ICD - is that I sense that there is much that we can agree on; mayhap, I would suggest, there is common ground between us in that manufacturing industry is much neglected in UK and over indulged - relatively - in finance; the Cyprus imbroglio exemplifies that concern. Manufacturing is ill served in UK by education and training facility - there is some evidence this has at last been picked up by the politicos. It is for this that we suffer from a relatively poor comparison with Germany on quality and quantity of product trade, especially in consumer durables - and probably much of our creative ability, as regards management, has probably gone into finance and moved to other climes.

I have a great respect for the quality of German manufacture, derived from its excellent training tradition; that has nothing, incidentally, to do with the the EU, the Euro, or the so-called LPD; though it has derived a considerable advantage from Euro exchange rate, I think. I submit that the European peripherals will never match-up to them; without the federal state; if Germany feels so inclined to pay for it; and if they don't, the Euro wil become bust.

sorry, not LPD, LPF; fingers!

and, with, or withOUT, somewhere!

"Your translation of me, is presumption;"

Of course. Accurate, though. This one too.

"Your comments re. Norway's arithmetic has little or no relevance to the case for or against EU,

I never said they were, and they were not meant as such. It should have been clear from the context that the whole point was the ridiculous notion that leaving the EU will mean that we no longer send taxpayer money to Brussels.

The fact that it will continue to cost us is not up for debate. Norway pay more, but get less. Is that the model you wish to follow?

"and nor did I say 'the cost is onerous' - you neglected the conditional;"

Yes, but you did say "If the cost is onerous ..." which is a lead on from my point. And I wanted to assure you that I said no such thing, least you had missed the thrust on that score too.

"'Grasp' is to hold with understanding - to 'know' without understanding is dogma;"

Yes, and to not know at all is 'ignorance.'

You didn't know that the EU has been on a drive to cut bureaucracy, did you?

"I maintain that EU continue to create rules and regs to suit their aim of a federal state;"

As already noted by me, that is a completely inevitable tendency, but not an inevitable conclusion.

"I detect a desire of your's for such an outcome,"

If a Federal EU happens, it wouldn't bother me. If it never happens, I wouldn't care that it didn't.

" whereas the UK majority seemingly ( to be proven) do not;"

Ah yes, but ignorance abounds on our fair isle. Garbage in => garbage out.

"Your apology, is just that, an easy, meaningless, word, not endorsed, judged in context;"

Oh dear. I am sorry.

"Your comment re. LHD is fatuous, unsubstantiated and dogmatic;"

What, that operating a different standard costs us a fortune?! Of course it does. Standardisation cuts costs. Retooling and making a smaller batch to a different specification is always more expensive.

The simplest example being resale value: You can go to Germany and pick up a 2nd hand BMW five series for a song. But you cannot comfortably drive it here, because it is LHD.

The lack of continental competition keeps our car prices high.

Why else do you think our cars cost 15%-35% more, retail, than they do in Belgium?

If we were all to the same standard, competition would enable us all to upgrade our car purchases.

"My age has nothing to do with my understanding or recollections - except an opportunity for you to excercise impertinence;"

Is that so? Has it occurred to you that I might be "getting on" myself?

"What has those shoes to do with the argument"

What they have to do with the argument is that absent the EU and its ilk and you have a truly UNLEVEL playing field. And without the EU's mass, or Norway's oil, with which to cut deals, we'll end up having to adopt a protectionist stance in international trade. Just like we used to do, post war and pre-EU.

Tariffs, levies and embargoes. And all the ill-will and bad trade that goes with them.

"What on earth has the UK media done to deserve your opprobrium;"

What? lied, lied and lied again. So much so that the average misinformed British person automatically thinks that the EU is bad. They're even able to present some flimsy evidence that the EU actually IS bad, but their brains are so warped by the constant Anti-EU propaganda that they cannot bring themselves to admit when the evidence they have presented is dragged out into the light and examined until it is apparent that they clearly cannot, and never did hold water.

"and to imply the UK populace can read nought else is nonsense"

Perhaps, but "can" and "do" are very different things.

"I get the impression you're NOT a ukip supporter"

UKIPPERs are grotesque hypocrites, complaining about the EU gravy train, but then taking all the gravy they can get! So much so that two MEP, so far, have gone to jail for fraud. So, no, you could say that they disgust me.

If people examined what they say vs what they do, I think they would disgust a lot more people too.

"The irony ... is that I sense that there is much that we can agree on ..."

Indeed.

"I have a great respect for the quality of German manufacture, derived from its excellent training tradition; that has nothing, incidentally, to do with the the EU, the Euro, or the so-called LP[F] ..."

What of, for example, the Czech Republic, or places like that then?

Until the 1990s they were communist nations with woeful manufacturing and soviet era production. By the end of the 1990s, thanks to investment from companies like Seat, they were power-houses of production. Inside a decade.

How do you explain the rampant growth from an almost standing start in places like that?

"..and if they don't, the Euro wil become bust."

Always, with you (and others in the UK) the resolution that you return to is "the Euro will go bust if they don't do X, or the Euro will go bust if they do do Y."

This pointless fantasy-fixation on the demise of the Euro is not helpful to your understanding of either the problems or the solutions.

I can tell you that the chances of the Euro going bust are about as high as the chances of the GBP going bust. Neither impossible, nor particularly likely.

Even if, and this is a real leap of the imagination here, if the Euro did falter, by far the most logical follow-up is a new single currency, where some of the more obvious problems are addressed in the formation phase.

People, especially in the UK, have been shouting DOOOM DOOOOOOOOOM for a long time now, and yet the Euro has weathered ever single storm so far.

Reform and change are in order. Demise is simply not on the cards.

My word, you do get excited Rufus; all that spittle!

Just one point; the Czech Republic issue could have occured through the normal channels of foreign investment, without the EU and its Euro following the fall of 'the Wall'. What does the rising fortunes of India and China owe to Europe and the Euro, apart from trade, the usual tariffs and trade rules and managed exchange rates.

On all the other issues, do the sums, if that's your way, but be sure to include all the parameters if you can or are able to identify them, not just those you choose to employ; personally, I neither have the time - and to be honest, nor the inclination - but intuitively, from experience the circumstance seems to stare one in the face; the UK majority have not, that I am aware, shouted DOOOOOOOOOOOOM, but argued simply and indefatigably, that the Euro will work only with a fully integrated state and all that that entails, in financial cover by the haves to the have-nots, an irritation for some, but nonetheless a responsible point of view based on observation; if you disagree what's your solution.

An Elder

India and China have a critical mass, an internal market engine that drives their growth. The Czech republic does not.

You complain that an LPF effect from the EU is a myth, yet deny clear examples of it at work.

Rather than pick fairly irrelevant comparisons, like India and China, why not examine other states that were also former Warsaw Pact areas that did not join the EU?

Serbia

Croatia

Montenegro

Belarus

Maldova

Ukraine

They form a reasonable cohort of "control" cases.

All got out from under the Soviet umbrella at the same time as the Czech Republic. And yet none of the nations that stayed out of the EU did nearly as well as any of the nations that joined.

"On all the other issues, do the sums, if that's your way, but be sure to include all the parameters if you can or are able to identify them, not just those you choose to employ; personally, I neither have the time - and to be honest, nor the inclination - but intuitively, from experience the circumstance seems to stare one in the face;"

Things are either a fact, or they are not a fact.

Opinion is not the same as fact.

"the UK majority have not, that I am aware, shouted DOOOOOOOOOOOOM, but argued simply and indefatigably, that the Euro will work only with a fully integrated state and all that that entails, in financial cover by the haves to the have-nots, an irritation for some, but nonetheless a responsible point of view based on observation; if you disagree what's your solution."

Since the blindingly obvious needs stating, the Euro has been able to get by without that so far for 14 years or so. The Euro itself has not actually faced any problems - nations using the Euro have, but not the Euro itself.

As I said, reform - serious and deep - is on the cards. Banking union will be here at some point. But the Euro functions perfectly well without these reforms. They will only serve to make it function better; more stable.

No "solution" is required for the Euro itself, it is the operations of the members that need changing. But, not by as much as many would have you believe.

Rufus, Your picking of other ex Warsaw Pact countries outside of the EU is no more relevant than mine relating to India and China; the Czech Republic applied and were deemed a satisfactory candidate for EU admission; I don't know about the others; the only obvious common property is their previous sojourn under Russia; Countries do well, or not, for all manner of causes; the Czechs found benefits in the EU bloc daresay, but how goes it with them with the Euro and ongoing developments.

You know full well it's not the Euro per se that gets the critical attention of the UK media, but the malign effect it is having on some members in the southern states, who lack the Northern's industrial assets and/or possess a different culture. The Euro can be enabled to continue its existence within an appropriate political structure, no doubt.

Opinions are based on facts, therefore are not the same things, but what are the facts to be considered and how are they weighted in any solution of the EU equation (are we in or are we out) is the question. From experience I've found it depends much on what one wishes to conclude; sentiment plays a significant role.

I claim the LPF is a myth in regard to trade in the EU because for me it clearly implies a working towards a federal conclusion, not simply a trading bloc; I submit the UK don't need directions on human rights by a European court as part of a notional LPF, for an instance. Tax and finance are the main things that govern the field of trade, surely?

Your last para is the German solution; I submit it won't work on any distinct horizon.

Your statement of the blindingly obvious is a joke, surely; still there's none so blind that won't see; the Euro may not have a problem - it is after all simply a currency - but it causes constant problems: like a flame is not a problem itself, but when applied to a pile it can produce a conflagration.

The Euro is becoming the symbol of the totally failed EU. It does not matter which way you look at the EU it is not a place that Britain can thrive in. Clearly the main protagonist ,Germany , is now calling the shots to primarily suite Germany. The value of the Euro is closely controlled , and all other economies other than Germany can be sacrificed. How can Cyprus ever regain its off shore business? Never, it is condemned to returning to a small meditterenean Island on the Holiday map and nothing else. Its Banks will steadily now lose its Russian depositors and they will shrivell on the vine. The EU is corrupt, Undemocratic, Dictatorial , inept , and totally unfit for purpose. It is counterproductive for any country in the long run to be a member. UKIP has been born on the back of EU hopelessness, and grown large on EU inepptitude. Britain must get out fast before it finishes Britain. Vote UKIP if the Tories will do nothing under Cameron and Clegg.

re Rufus - "I can tell you that the chances of the Euro going bust are about as high as the chances of the GBP going bust. Neither impossible, nor particularly likely."

As we can see it will be possible by periodic ad hoc temporary fixes to keep the Euro alive for a very long time - but all that time it will be to the detriment of the economies of the majority of countries in the Euro Group - that's the dilemma.

You say that the EURO has had no problems for 14 years. Well no Country had problems until the subprime Mortgage market blew up. Then every currency was examined in detail, and no real support mechanism existed until the frantic efforts to create a federal currency group. The trouble with that is only about 3 countries are fully solvent. the rest like Greece Cyprus Portugal Spain Italy etc are grossly overborrowed. Austerity will not lead to economic recovery in these jurisdictions. The best way forward would be to break out of the Euro, and leave Germany to see their Euro currency rise in value to the proper level, where the others can do business and make money to recover.

A further comment re. the LPF: the mark of a nation state is its currency, thus the Euro is as a pretender seeking to rule a federal state of Europe, the ultimate objective of the European project; much of those rules and regulations, the legal and political paraphernalia being developed, are to that end, not necessarily as a basis for fair trade, the so-called LPF.

In that context, the Cypriot financial business is being wound up (destroyed) as a distraction for the project, by its ruling power for the notional greater good of the project; who, to put it bluntly, will screw London as well, in any way it can.

It seems that in all this the economically weaker states within EU are being governed by technocrats - through a pseudo democratic representation - appointed by the directors of the project; without any consideration for the otherwise UNFAIR treatment of their peoples.

".... I've found it depends much on what one wishes to conclude; sentiment plays a significant role."

Certainly in your case. It is evermore apparent, reading what you say, particularly seeing how you deal with data that does not necessarily fit your conclusions. And spurious examples you choose to make a point, on your own side.

The Euro causes constant problems, does it?

And these problems caused by the Euro, would they be:

- Bank runs and collapses

- Deep recessions (even triple-dip)

- High unemployment, particularly among the youth

- Massive and growing deficits

- Property bubbles

- Credit rating downgrades on gvt debt

For those smart enough to follow what is going on, I am repeating myself here.

Because we managed to conjure up all these problems ourselves WITHOUT being in the Euro.

To any thinking human being capable of rational thought, the obvious conclusion is that since we (and other non-Euro nations) experienced the exact *same* problems without the Euro, those problems have not been caused by the Euro.

The corollary proof is also there: Nations inside the Euro that did not experience these problems.

The thing that is different is the solutions, NOT the problems.

So, this all being new for the EuroZone means that templates are absent. Not that solutions cannot be found. And certainly not that solutions will not be found.

The problems have been made by national governments, but the nature of the EuroZone means that the problems are now regional, not just national, and so the solutions must be regional as well as national too.

I'd also be repeating myself to note that federalism is a tendency, not necessarily a conclusion.

ECHR? The ECHR have even, within the last year, overruled our courts where PM Dave said that he was "Delighted with the outcome" and "Glad that common sense prevailed" - where the UK lost!

Do you recall that episode? Probably not - see my Charlie Munger comments above.

The ECHR adds nothing in terms of LPF. So long as you ignore large areas of employment law, particularly workers rights, etc.;

Petty stuff, like workers' right to a fair hearing; freedom of association and right to assembly; right to privacy and private correspondence; the right to equal treatment; etc.

None so blind as them that cannot see?

How very, very true.

To claim that India and China are just as good a control group as the other former Warsaw Pact nations is extraordinary.

The nations I chose for comparison all

- Do *not* have a massive internal market

- Shared a common history. But that's not all. They also had

- Common level of development

- Started at the same starting gun

Yours? Hah!

The German solution? A more accurate description would be "the obvious solution."

You can submit all you want, but being detached from reality, as you are, by several degrees, it matters not.

# Elder One

"governed ..... without any consideration for the otherwise UNFAIR treatment of their peoples"

You are right to highlight this.

The well being of the current generation of various peoples of Europe is not a consideration for the Directors of The Project.

Their "Vision" may necessitate some current sacrifice for the greater good of future generations - as with Stalin industrialising Russia.

Furthermore, the EU free trade area idea and its LPF argument, is being - has been? - subsumed by the project for the federal objective, hence presents us in UK with a straight choice of in or out, there seems to be no middle course, to seek a selection of bits and pieces out of that tangled mess would be an insurmountable challenge, both technically and politically, I think. Though not a Ukip supporter, I'm sympathetic to much of their viewpoint in that regard; what to do about it, a Tory's dilemma!

LOL

"UNFAIR"

So, "fairness" in this context would be what, exactly?!

Actually, don't bother to answer, an elder. You have decided your conclusion (one that, surprise-surprise, fits with the narrative you have been fed).

When discussing points with a reasonable person, repetition should not be frequent. You have given me the strong impression that ongoing "discussions" would just involve me repeating myself. Again and again.

Rufus, and finally you resort to insults, entirely; take a holiday in Cyprus and get over it.

# Rufus

"You have decided your conclusion (one that, surprise-surprise, fits with the narrative you have been fed)."

Hey Rufus - I don't suppose this could apply to you, eh ??

Graham Barlow

"Well no Country had problems until the subprime Mortgage market blew up."

The pedant in me would note that they did have problems, just like China has massive problems right now, but in an expansion-phase those problems are hidden. They are, technically, already there.

Please note, that a program of austerity has already been going on longest in Ireland. And the noises, both inside Ireland and outside Ireland is that it is finally - thanks to its early and hard austerity choices - on the mend.

" The best way forward would be to break out of the Euro, and leave Germany to see their Euro currency rise in value to the proper level, where the others can do business and make money to recover."

The "best" way?

Given that no one wants to leave the Eurozone, and no one wants to force anyone else to leave the Eurozone, how does your statement represent the "best" anything?

That's like suggesting divorce for a family that wants to stay together when the bread winner loses their job. I.e. you may be able to make some kind of logical sense out of it for social security, benefits and whatnot, depending on the circumstances, but the very suggestion - particularly as the "best" way forwards - illustrates how little you understand of the family itself.

The true worth of the Euro is unfolding before our eyes. Watch the news, then vote to get out - at any cost

MoneyObserver

"You have decided your conclusion (one that, surprise-surprise, fits with the narrative you have been fed)."

Hey Rufus - I don't suppose this could apply to you, eh ??"

I do examine my logic constantly. In all things. One of the most frequent mistakes people make is thinking that the fact that they were convinced of something yesterday means that there is no requirement to examine it today.

To, boringly, quote Munger again:

"Any year that you have not challenged and destroyed one of your most fondly held beliefs is a year that you have wasted."

It *could* apply to me, if I was fed a narrative. And perhaps I have been, subconsciously. Let's assume that I have, for the purpose of exploration.

So, the people that would have fed me this narrative would now, also be the people responsible for finding new solutions, yes?

The attitude, and narrative being "can do." With a strong leaning to 'negotiation and compromise'.

Does that make it more likely, or less likely that solutions will be found?

john brace

It never ceases to amaze me how sour the Euro grapes are for the UK.

Tell me, which of these is the actual reason why we're not in the Euro:

1. The UK opting out of the Euro in the Maastrict treaty.

2. The UK vetoing automatic entry to the Euro.

3. The UK opting to leave in the early stages because it didn't suit our economic goals at the time

4. The UK voting against joining.

5. A little bit of *all* the above

Rufus Dogg - don't include in 'We' the vast majority of UK subjects who never wanted any integration with Europe other than trade [which we were promised], Ted Heath was the big liar who dealt behind our backs, - he badly wanted us in the euro.

How many EU countries are now wishing they had never taken the bribe to join. I repeat watch and wait

MoneyObserver, beware, you dealing there with one of the gen(i)us, Greater Spotted Pompous T(w)it

john brace

I include "we" on the basis that it was our government, and our nation.

Ted Heath did not lie. He was plain enough, for anyone that actually listened to what he said.

Do you have an answer that you want to give on our decision to not join the Euro?

A pity that this discussion is degenerating into unpleasantness.

In a democracy we are all allowed to hold views and express them.

I think many people agree about the benefits of a common market, the main problem is how it has developed, and the Euro.

These are issues that need addressing, but leaving the EU is not in my opinion the best option. Even the USA does not want us to leave believing we would have about zero clout in the EU if we do.

Before, committing ourselves to such drastic action, as leaving the EU, I feel one should consider the alternative courses of action, and work their long term effects.

I do agree that the Euro has not been providing the best solutions to regional crises, and that the resulting austerity can add to problems rather than solve them. The latest example is Cyprus. But this is just one aspect of the EU which needs addressing.

These discussions are useful because they do what the media has conspicuously failed to do by giving exposure to the rational arguments that should be considered by everyone.

Unpleasantness may be creeping in because one side only has gut instinct to guide them. It would obviously be better if Protestants and Catholics got on with each other. The same goes for Sunnis and Shiites, but they often don't, not because of history but because of the them and us factor; the tribal instinct. Also there is peer pressure. People tend to share the views of those around them. And believe what the media tell them, because they want to.

Graham Barlow

Your post at 10:37 is just the sort of diatribe you can read in the Daily Mail. It is a series of statements based on nothing. Taking the sentences in sequence:

1. The EU is not totally failed and the Euro is a currency not a symbol. Is the Dinar the symbol of anything?

2. The British solution to bad financial management is to print more money to get out of trouble. We would not be able to do that if we had the Euro. What's wrong with the country running its affairs properly in the first place?

3. The value of the Euro is closely controlled...I would have thought that the opposite is the case.

4. How can Cyprus ever regain its off-shore business? By running it wisely, I suggest. Something they have conspicuously failed to do up to now by investing depositors money in risky areas.

5. The EU is corrupt etc Sure there has been some wrong doing in high places, I agree, but do you seriously think it is any worse than the UK for instance?

6. Then you get onto UKIP. It is difficult to remain polite about such a shameful scam.

ICD, all concepts, designs, theories, start from the gut - call it intuition; a strong motivator - based on the reading of the knowledge discovered from past experiment and theory. With that stimulus one endeavours to assemble a model from what one regards as the essential parameters that describe its nature. Those parameters are given values and the form of the model, to be computed and tested in comparison with realities. Such experimentation is fine in the realm of inanimate matter, but applied to the realm of sentient beings can produce unwanted trauma. The problem being the adequacy of the model chosen, by way of its parameters and their weighting.

Some experimenters are easily convinced - or driven to conclude - they have assembled the true model from what they regard as the only relevant solid data and become convinced from its virtual performance that they have it to rights and will see no other point of view; others try to assemble a model including parameters that were neglected, including say the variables of human nature and other influences and find it impossible to assemble a model that can be seen as stable at all.

The consequence; the latter group wait to see how the former get on with their experiment, to the point when its success or failure begins to be revealed, in their judgement.

aeo, the most talented of people have the ability to make a complicated problem seem simple. You appear able to do the opposite.

Would you like to be in court, accused of something, and have the judge take a look at you and say, "My gut tells me you are guilty. Five years. Next case please"?

ICD, a fatuous comment; you're out of your depth!

Look at Kepner-Tregeo for starters

AEO

I am someone who believes in polite constructive argument, but I find that that is sometimes impossible with my countrymen. Some feel that to hold a different opinion even if you are prepared to back it up with explanation is annoying, so they get angry. Others will hold forth using fine sounding words and making statements of what they describe as facts, not opinions, so that to disagree is made to seem rude. This style which is a mixture of arrogance, amateurism, gut feeling, (e. g. don't bother me with facts I don't want to be mingling with foreigners except on my terms) is fortunately dying out. In my view it is partly dying out because of the EU and the right sort of immigration.

I could write what you have written on Mar 26 at 20:43 in about a third as many words, using normal commonly used words and it would seem like what it is: a mixture of the blindingly obvious and some clearly wrong stuff.

Take your first sentence; it is just plain wrong. Not a good start, I suggest. For example, many concepts, designs theories start from a perceived need, not your gut. Petrol is expensive so let's attempt to re-design the car engine so that it is running as efficiently as possible throughout it's cycle. Not easy but let's get in touch with the electronic world who can design circuits to carry out the most complicated functions. And if enough units are made the price becomes low. etc etc. It needs a knowledge of engineering principles, other markets, willingness to consider new ways of doing things etc.

So please don't try to intimidate me with grandiose language. If you want to disagree with Rufus or anyone else I recommend facts. These days it is easy enough to look things up on the internet. Also please don't take my comments personally. There are many Brits who are much more deserving of my comments...

Have now just looked up Kepner-Tregoe (on Wikipedia) and I see nothing to support your comments. They are to be praised for saying," let's examine the process and see if we can find ways of improving it". I use the anthropological approach myself when I read the Daily Mail!

ICD, if you want polite discourse then please employ the same practice and don't insult me with specious exemplifications.

The issues of European unity is not a simple matter, and just throwing numbers alone at the problem - as financial analysts tend to do - does not necessarily yield satisfactory answers; both Hitler and Stalin tried but failed; the former nearly succeeded I agree.

Yes I do want polite discourse, as you put it, but it is your 'side', perhaps not you, but your side that uses very strong insulting language, factual claims etc and that is what needs rebutting. If the Europhobes said something along the lines of, "I'm sure they are doing good work in Brussels and have good intentions, but I for one feel uncomfortable allowing at least some of our regulations be created in a foreign country" then I would still not agree but I would accept that as a reasonable point of view. What is not acceptable is this ridiculous and dishonest vilification from the media, which obviously is convincing some of us.

#ICD

ICD do you accept that there is a Federalist agenda behind the EC project, and that those who drive it are prepared to set aside democracy to achieve their Federalist aims ?

They would say, and I would agree that their objectives and procedures are democratic. To forestall what you might say remember that there are appointees in the British government as well as in Brussels. If your feeling is that they are pushing too hard for 'union' then I might gently agree with you, but I think there is some acceptance in other countries of that view as well. But I don't feel too bothered because in my observation decisions being made democratically in Brussels are often wiser than those in London.

If the EU consisted of say Pakistan, Saudi Arabia, Iran and UK then I would want to leave immediately. No offence intended to some citizens of those countries; they have their problems but culturally they are totally different from the life I consider desirable. The objectives of the EU meet with my approval and having such a powerful world force for my way of life seems highly desirable.

#ICD

And the EC bosses will keep disregarding the outcome of numerous referenda and fkeep asking the same questions again until the People 'answer the question correctly'.

The mindset of the Federalist does not regard itself as a Servant to the People, but a SuperParent doing what it regards as best for itself and then the children.

This is Europe ! - your comments on Pakistan etc are irrelevant

ICD; to pick up on a judgement I made of you earlier, let me observe that we are all out of our depth here in EU; its directors and entourage, not the least. The problems are not to be resolved by financial bureaucrats simply moving cash about on balance sheets; whether or not their aim is towards a federal model, it has all the hallmarks for such.

The purpose of a currency is to facilitate trade - nothing else - a natural human endeavour for the benefit and well-being of mankind, using its collective intelligence and skills in harvesting the fruits of the earth.

In that endeavour, the manifold tribes on earth have settled in various environments and have developed their various peculiar solutions for survival and enhancement. In the UK in particular the solution has developed through turbulence over hundreds of years, absorbing and integrating various invasions of different tribes, then most recently nurtured by mercantilism and an industrial revolution; consequently they have considerable experience in the matter of survival to create their peculiar comfort zone - part of which is incidentally a facility to adjust at need, the relative value of their currency.

The nation states of Europe, all differ, in various degree, and are arguably comfortable in their various skins; or were, in some cases, by now. In the European project, these are the differences that have to be reconciled in order to achieve unity - assuming that to have been the desirable aim of the founding fathers.

It's amazing what a singular thing, such as currency can do to corrupt such desire; what should have come first is a serious effort in working towards amalgamation or unification of the various tribes in Europe, by establishing a 'design' based on institutions and expectations of behaviour on which all could and must adhere; arguably a long and tedious road. Our misfortune is that the directors were so impatient to see the conclusion of their desires, that they thought to accelerate the process by putting the emphasis on a common currency.; hence the current miseries and uproar in some places and evident selfishness of others, at which, some of us in UK look upon with horror; many in UK of course look upon the 'design' as something unnecessary and undesirable in our experience and say vive la difference.

I guess that some truly think the 'design' project will be made to work, without too many deaths; I haven't a clue, but my guts say it won't.

However, we in the UK should look upon the trial of Cyprus as a source of enlightenment regarding the over-dependence on Finance as a means of survival in a global marketplace; industry in invention and manufacture is relatively ill-served by educational endeavour and culture here.

"let me observe that we are all out of our depth here in EU"

Speak for yourself mate.

MoneyObserver

"The mindset of the Federalist does not regard itself as a Servant to the People, but a SuperParent doing what it regards as best for itself and then the children."

Do you know how the EU operates?

Most UK residents do not have a balls notion.

The Council, made up of elected State Governments, tell the Commission (one commissioner appointed to look after each state's interests) what sort of legislation they want.

The Commission then go off and discuss, debate, negotiate and compromise on this before proposing draft legislation.

At any and all points, state governments can throw in their 2 pence worth.

The EU is not in the habit of pulling legislation out of its backside for which there has been no call, and which has not been in the works for a long time.

If you really think that the EU just makes up directives as it sees fit, with no impetus or even input from members states, then you don't really know what's going on in Brussels at all.

#Rufus

Did we not all witness, yourself included, Merkel and Sarkosky actually prevent the Referendum Papandraeou had already announced, which asked the Greek people if they accepted the EC Terms on offer.

EC are entitled to define bailout terms to ‘busted’ countries, but those countries' people are entitled to be asked if they accept or reject them.

The Greek people looked like they would have rejected the terms which would have led to Greece leaving the Euro.

THAT MUST NOT BE ALLOWED INSISTED MERKEL/SARKOSKY – GREEK REFERENDUM CANCELLED

This is not Brussels Rufus Dogg, this is Germany and France

So much for democracy in the EU.

As regards the domestic state of democracy in the UK - not relevant - you're veering off the subject matter under discussion

#Rufus - "The Council, made up of elected State Governments, tell the Commission (one commissioner appointed to look after each state's interests) what sort of legislation they want.

The Commission then go off and discuss, debate, negotiate and compromise on this before proposing draft legislation.

At any and all points, state governments can throw in their 2 pence worth."

Widely understood Rufus, don't fret - but what is surprising that you think this process would stop the die-hard federalists that are well-embedded in the system that operates the process.

obviously, 'we' , the majority - it seems - in UK; mate, mucker!

an elder one

Your comment - over dependence on Finance in UK

This is one I argument I cannot argue against.

Most of our problems do stem from it.

Let's hope we never get into a Cyprus situation as a result of it.

MO

"Did we not all witness, yourself included, Merkel and Sarkosky actually prevent the Referendum Papandraeou had already announced, which asked the Greek people if they accepted the EC Terms on offer"

I didn't just witness it, I stood and applauded .

The idea that a head of state would go into a negotiation; come out with a solution to their problems that required large sacrifices from everyone, INCLUDING all the other parties that would basically be picking up the tab until such time as Greece could pay them back (if at all), and that head of state would then turn around and say AFTER the deal was made -

I think I might put it to a referendum.

It would be the equivalent of James Bond saying, once the girl is in his arms:

"I'll just go and ask me mum if it's OK that I sleep over - she does worry."

I.e. beyond a joke. If he had raised it BEFORE the negotiations, that would be one thing. Raising it AFTER a deal has been reached is completely unacceptable. Completely.

Not least because it would take, perhaps, two weeks to organise a referendum, and the costs for holding it would be €100mn or more that Greece did not have.

I.e. They'd have to BORROW the money that they needed for the referendum to see if they accepted the borrowing terms.

Warped, to the point of being ridiculous. Symptomatic of the levels of denial in Greece too - we don't have enough money for this, let's go on a state picnic and discuss how we might fail to acknowledge this problem in the best manner.

Words cannot express how livid I was when I heard that Papandraeou had announced a referendum, post agreement (and out of the blue) and delighted when it was shot down.

It was the right conclusion to a unilateral decision taken by one idiot. If he wished to abdicate he should have done so before sitting down to talk.

A deal was negotiated in good faith. Papandraeou, in essence, almost negated everything that had been done up to that point. He nearly rendered it pointless.

If you can understand nothing else of this point, I hope you can at least understand this: who would pay for the referendum? Not the Greeks, they couldn't.

As expressed by me elsewhere, the Greeks were polled last year and were showing support for the Euro in the 70s and even high 80%s, so the chances are that the referendum, expensive waste of time and all as it would have been, would probably have been a Yes. But regardless of whether it was a Yes or a No, Greece would have run out of money before any result.

So they'd have already been in default - an unstructured one at that - regardless of the outcome.

"The tide will be in at 6pm this evening, drowning us all - OK, let's schedule a vote for 7:45pm this evening to decide whether or not we get in the life raft that I have called here"

It was like something from Monty Python's "Judean People's Front."

MO

"Widely understood Rufus, don't fret - but what is surprising that you think this process would stop the die-hard federalists that are well-embedded in the system that operates the process."

Well if our own gvts can't be ar$ed to ensure that they get what they want out of the Commission, and our own Commissioners cannot be ar$ed to protect our interests, there is also the Parliament, where (as long as your MEP isn't an ever-absent UKIPPER) MEPs can vote and modify the legislation.

Do you realise that a lot of countries feel like they really get a lot out of the EU - that it does the kinds of thing that they want, that it draft legislation that they feel appropriate, etc.?

Why do you think it would be that they're so engaged and happy, when we're so detached (frequently to the point of ignorance) and despondent?

Perhaps something to do with the level of engagement?

AEO: "The purpose of a currency is to facilitate trade - nothing else". I was going to argue with you but in a way you are right. But, (you will like this), think about the history. The roofer says to the carpenter, "You make me a table and I'll mend your roof". "Ok but mending my roof will take you half an hour making the table will take me 2 hours, says the carpenter. So eventually they invented money. Money is supposed to represent something, either property or work. So if I sell something and get paid in a strange currency I don't want some financial person adjusting it downwards before I have a chance to change it into 'my' currency. I know; lets use a common currency. Good idea!

MoneyObserver, let me suggest, the objective for the European project is clearly of a federal nature using a common currency, that is, a singular nation state, with all that that involves, despite the pretence that it can be some sort of confederation of individual, autonomous sovereign states; it should be borne in mind that various managers of the project have already told the UK, in so many words, that it cannot expect to be allowed to cherry pick from the project's model, what they like; thus, nor will any other current member state - they'll just have to put up with the consequencies as best they can; or revolt.

That seems like a clear message to the UK that it should leave the project (asap) and negotiate trade measures with the EU independently. beyond the existing rules on tariffs and trade; there, should advantages to be found, for both sides; the EU probably sells more to UK than vice versa, I read, though that of course comes via the evil (it's been labelled by some) UK media. Let's hope the UK will continue to be able to exercise facility for free speech.

The present financial efforts going on with the Euro, looks like a juggler trying to see how many clubs he can keep up at the same time; it would be entertaining, if it did not cost so much to watch.

So do you think that Germans and French will become just like each other?

Getting back to the Greek referendum matter, Rufus has dealt with that in his factual no nonsense way, but I would like to query the extraordinary attitude that some are taking. If you have spent all your money in foolish ways your bargaining position when begging for money is weak!!

#ICD " If you have spent all your money in foolish ways your bargaining position when begging for money is weak!! "

Absolutely correct - if you decide to take the help !

ICD, prices of things for trade depend on a complexity of factors, supply and demand, costs of production and distribution, which themselves depend on a number of factors including desireability of a product through quality and performance, and the degree of efficiency with which it is made, and availability of the means of production - is there sufficient factory capacity.

The example that you give as an example is ok where the two artisans work for the same tribe, but where the trade is across tribal frontiers, it is a different matter; often and usually the tribes will have been conducting their separate economies with different emphases and they get out of phase, thus they will each endeavour to change the relative valuations of their respective currencies in order to satisfactorily rebalance their revenues from trade.

Some such notion of yours - across tribal frontiers - was tried once I believe, called the gold standard - I confess a bit beyond my ken.

AEO

Yes of course, and the person engaging in business has to take all this into account, but it is a bit unreasonable if he has to cope with the exchange rate changing as well. If you are selling your product all over the UK there will be variations of course and you have to use your expertise to cope. Now suppose you decide your product is competitive in France and the exchange rate is 10 francs to the GBP. You decide your product will sell at £10, that is 100 Francs. Now France decides it wants to give its economy a boost so it arranges that there are now 15 Francs to the GBP So that means your product sells for 150 Fr. Your French competition are still selling for 100Fr so you are out. Not exactly a level playing field surely. So lets all be like North Korea and not trade with anyone else.

ICD, disregarding your arithmetic and your syllogistic reasoning quotng North Korea, you make exactly the point I've made earlier regarding the LPF; that kind of thing happens periodically in global business, especially as now with all our backs to the wall endeavouring to trade down our currencies in which Japan is the latest practitioner..

Add to that ICD, regarding the UK position - as an engineer - it could logically be made to fit into a northern european union with a currency shared in common, once it had achieved a better balanced economy; which still has to be addressed properly - more manufacture relative to finance - which won't happen any time soon though.

Would the UK want to share the toils of resolving the problems of the Med periphery I wonder

One could argue the Euro project started out based on the wrong criteria - entirely financial - there should have been a proper study of each country's business model to discover if it would make a close enough fit, as it stood, and discover in the process who was simply in it for the money.

It was a pig's ear of finance from outset.

MoneyObserver: So The bargaining positions of Greece & Cyprus were weak so cries of "Where's democracy?" are inappropriate surely?

AEO: Journalists and economists have repeatedly told us that you can't mix the economies of the north & south because of the differences without explaining why. It seems to me that there are difficulties but that it should be possible. In fact it should be a win for rich & poor because of greater trading opportunities on that famous level playing field! It just requires the poorer countries to handle their economies properly. If you were to tell me that human nature is such that it won't work and bail outs will be needed again, then I choose to be optimistic.

ICD - "MoneyObserver: So The bargaining positions of Greece & Cyprus were weak so cries of "Where's democracy?" are inappropriate surely?"

Our opinions on "Greek democracy suspension" are irrelevant/impertinent.

Its a matter for the Greek people whether they're prepared to accept the terms of a bailout- that's democracy.

#ICD

ICD - is this not a reasonable sequence of events.: -

Greece asks for help not knowing the price

EC name the price (as they are entitled)

Greeks decide to pay the price or not.

Referendum Question

Should Greece accept EC terms and remain in Euro ?

or

Should Greece reject EC terms and leave Euro ?

It would have made it a bit harder for the Greeks to blame Germany for their plight

Coming back to the UK.

Some people on the continent view Brits as benefit tourist, they want to visit the parts that give maximum benefits and at least effort/costs.

The main contribution offered is financial services which no-one really wants.

Another aspect, as someone once wrote recently - Why don't you Brits make something rather than trying to rely on construction to come out of recession?

ICD, currency exchange rate adjustments are a fact of life, saying they are disagreeable for a level playing field, achieves nothing; what does happen of course is that competing parties can and do react, when necessessary, in the same way, as has been happening recently and still is. Of course if France, Italy, Spain, Ireland, Greece, Cyprus, and so on and so on, wanted to, they could have done so with their old currencies, but now they're stuck with the Euro and have shot themselves in the foot, as the saying goes. Germany, who have the greatest say so in such Euro concerns seems not to have suffered from the Euro's valuations.

Ask yourself, how can a tribe with say little more than olives and sunshine to trade - a little simplistic I'll agree; but for the purpose of illustration - compete with the likes of a Germany, without either their own currency or some beneficence from the crowd they're stuck with; they could put up the price of olives and sunshine, one could suppose, but none would buy.

Having said that, the tribes - of which the UK is one - continue to make a boggins of their economies, and get out of kilter with others; it's not my field, but it seems to me that finance who manage such things and arrange the credit to advance the business of trade and create growth for the benefit of humankind in every regard, are too self-centred in their privileged position and mainly look to maximise cash flow from which to skim off the percentages. Politicians will oft go along with that arrangement if it serves their purpose; until the merde hits the fan; which it has. Money has been poured into economies, but to be used for unprofitable purposes, not a sensible growth rate.

Prof, I positively agree that UK should make more things for trade than she does, and be less reliant on finance. As I've already put it - say I'm right or wrong - finance does not make anything to trade, in essence it is simply an enabling industry to serve trade between peoples and manage the means for new industry to emerge and grow, for the benefit of everyone; it is unfortunately a seductive enterprise for making easy profit, that is, to the degree that government and its legislation permits or encourages it.

Certainly UK must engender a more active manufacturing industry, to be stimulated by a better emphasis in education and training facility, to that end. Those things have suffered losses since I was young, I think; the very bright of the tribe will ever succeed, but Mr and Ms average need better preparation for their livelihoods in an increasingly competitive world.

There are signs that this is begining, with the encouragement for businesses to establish apprenticeships for example, though it's no close study of mine; our recent past preoccupation with getting more to university seems to me, misguided; lowering standards to enable it, as seems to have occured, amongst other things.

AEO:

Back in Mar 20, 2013 at 14:36 I posted the following:

An elder one. I agree. If you take an idealistic view of the EU (why not) I would expect the Greeks to say we need more employment opportunities in our country. Let's make it easy for those irritating hard working Germans to set up a car factory here. I would expect BMW to say to themselves we make good cars, why don't we set up a factory in Greece? We should be able to get factory workers very cheaply, and we can send our supervisory staff to work in the sunshine for a couple of years. Sounds like a win win situation to me

and Rufus Dogg replied on Mar 20, 2013 at 14:41 as follows:

ICD - re: German manufacturing in Greece

One of the big problems is that labour costs in Greece are (I believe I read somewhere, but did not verify) higher than labour costs in Germany. So, why spend money relocating to Greece?

So I say that the Greeks will have to decide what they want. The skilled and hard working ones will have to decide to sell their labour for the market price, which right now will be very low, because the alternative is no work and very little money. The electorate hopefully will figure out that they need a government that sets up an infrastructure where honest businesses can flourish.

MoneyObserver

With reference to the Greek bailout situation first of all Rufus dealt with the nuts and bolts of the situation in his forthright manner. Also if I remember rightly Greece was within weeks of being unable to pay its public workers. Its all very well encouraging the electorate to vote to say boo to the Germans but when the politicians and others have let the country get to such a situation it would have been totally dishonest to have pretended that getting out of the Euro would solve everything. It was clear according to all informed writers, Greek people and even my own observation when working, that Greece was in fantasy land. Now you can say that that was their choice and nothing to do with anyone else. Or if you are an idealist you can say that the EU concept is forcing the countries with a wealthy ruling elite to run their countries in a fairer and more honest way. As we all know there are countries around the world with corrupt systems and rulers. Often ordinary people can do nothing about their situation except perhaps by revolution or protest marches etc.

If Greece had stayed out of the EU and still had the Drachma investors would have known to be very cautious about investing and some debt problems would have been solved by devaluation and inflation, and Greece would have stayed the way it was: nobody paying tax, top people OK and their buddies of course, no development, no progress, no growth, everything running at a loss, just sunshine and olives. What I assume actually happened was that investors assumed that, being in the EU their money was safe and they could get high returns from Greece. They will know better next time hopefully. You will probably comment that now it is worse, but, I think that what has happened will bring about better times. We will see.

ICD, Indeed, we shall see; regarding the possibility of investment in Greece by the German motor industry, I'm not aware Greece has been offered the option; yet; but as they say, set between a rock and a hard place, focuses the mind wonderfully.

My comment at the time was out of simple logic, with little regard for the practicalities; those are for the directors of the Euro project to choose to resolve; such developments - if they should occur - will no doubt come as a bit of a shock to an unaccustomed culture; but that is what such a culture is faced with in the Euro project. I make no judgement.

And I think we have just about exhausted this topic - have a good Easter!

If I were Angela Merkel, then I would leave the Euro, and let the rest get on with it. It is Germany's credit rating that the EZ relies on, and all the Germans get is abuse. I would manage my currency's value like the Swiss, the Japanese, the USA, the UK etc..and would follow the competitive devaluation of my currency as practiced by these countries. This way I can still export well and be prosperous.

What is the point of belonging to a club where people come to get something and complain when they have to contribute to the club.

AEO

You are right, we have given it good coverage. I have not forgotten that there are many things we do agree about! Enjoy Easter yourself

Best wishes to all

Best wishes to all from me.

Just cannot help thinking that some might not be as happy as some others. What with bedroom tax, universal credit, and other cuts biting as from April.

I hope that least least some of them find ways to cope in the new situation. Even the weather seems to be against them.

Anonymous 1 "If I were Angela Merkel, then I would leave the Euro, and let the rest get on with it. It is Germany's credit rating that the EZ relies on, and all the Germans get is abuse. I would manage my currency's value like the Swiss, the Japanese, the USA, the UK etc.."

Agree - some argue that a reconstituted Deutschmark would rise to uncompetitive levels, but that could be managed downwards by lower taxes and extra government spending on pensions, benefits, infrastructure development,etc.

Germany will never get all the rest of the EZ counties to behave like Germany and is doomed to disillusionment, unless they change their outlook and are prepared to ultimately underwrite much of the EZ.