Monday, December 05, 2011

Come, Eurogeddon, Come

What do former UK prime minister Margaret Thatcher, disgraced Canadian sprinter Ben Johnson and singer-songwriter Morrissey have in common? The link is both tenuous and personal, the date Saturday, 24th September, 1988.

The previous evening, I had arrived in the Scottish border town of Jedburgh and crashed at a friend’s place en route to Durham in northeast England. The Summer Olympics were in full swing, albeit 5,500 miles away in Seoul, South Korea. The nine-hour time difference meant that the Men’s 100m Final – all ten seconds of it – would take place at about 3:30 a.m. British time. We stayed up all night and watched a steroid-fuelled Johnson outrun reigning champion Carl Lewis (and future champion Linford Christie), smashing the world record in the process (Figure 31.1). Ethics apart, it was an unforgettable spectacle.

Figure 31.1: The infamous race in Seoul

Copyright 2007 The New York Times Company

After breakfast, I trudged, red-eyed, to the bus terminal and boarded a National Express coach. Past the stage of wanting to sleep, I spent three hours listening to my Sony Walkman – there were no iPods back then – and reading the Times. The song that always reminds me of the journey is Morrissey’s Everyday Is Like Sunday (Figure 31.2), a soulful 80s classic complete with plaintive melody and evocative lyrics. Who else but Morrissey could have written the words ‘Come, Armageddon, Come’?

Figure 31.2: Morrissey's obra maestra reached number 9 in the UK singles chart

Copyright 1988 EMI Group Ltd

In that day’s newspaper was the fallout from Mrs Thatcher’s seminal speech given to the College of Europe in Bruges the previous Monday (Figure 31.3) (see link below). Her words, which I read on the coach, still resonate:

‘To try to suppress nationhood and concentrate power at the centre of a European conglomerate would be highly damaging and would jeopardize the objectives we seek to achieve. Europe will be stronger precisely because it has France as France, Spain as Spain, Britain as Britain, each with its own traditions and identity. It would be folly to try to fit them into some sort of identikit European personality... We have not rolled back the frontiers of the state in Britain to see them re-imposed at a European level, with a European superstate exercising a new dominance from Brussels.’

Figure 31.3: Thatcher in Bruges – the birth of modern Euroscepticism

Copyright 2008 Bruges Group

Since I read those excerpts, 23 years ago, I have never doubted the wisdom of her warning. As I write, the markets are becoming convinced that the Euro currency is a failure. Many – I among them – would argue that it was ever thus. A few days ago, I decided to throw a firework under the table – or, more precisely, into an English-speaking German newspaper (see link below).

‘The Euro will collapse, possibly even before the end of 2011. Its creation was political and flew in the face of economic fundamentals. The UK learned a bitter lesson in 1992 when it was ejected from the Exchange Rate Mechanism of the European Monetary System. Prior to its de facto expulsion, interest rates had been kept cripplingly (and inappropriately) high in order to maintain an untenable exchange rate. Only when the pound was allowed to find its natural level, by devaluation, did the UK's economic recovery begin. As it was then, so it will be for the stricken Eurozone economies. Then, once the short-term shock subsides, each of the affected nations will, by means of an independent currency and floating exchange rate, be able to determine its own future, free from the Euro straitjacket.’

Then I waited, all of half an hour, for the predictable response.

‘The Euro is not a straightjacket [sic], but rather a part of a political project that has fostered peace and prosperity on the continent - a "guarantee for peace" as Kohl recently put it.’

This is a tired, and quite ludicrous, argument. Peace in Europe does not depend upon the existence of a corrupt, anti-democratic supra-national authority with a one-size-fits-all currency. It never did. Indeed, cordiality between nations could go up in smoke if, for example, Germany succeeds in its attempt to determine fiscal policy in Greece and Italy (Figure 31.4). What right does it have? Besides, the fatal flaw inherent to the Euro was in removing the vital feedback mechanism of exchange rate fluctuation. Moreover, when it was introduced, there was no provision to allow any nation to leave. This was deliberate – and how very devious. It is a straitjacket, but its seams are about to give. ‘Eurogeddon’ is almost upon us, and it will certainly be painful in the short term. Nonetheless, I hope nothing stands in its way. A United States of Europe, the only alternative, would be anything but.

Figure 31.4: Not everyone views German chancellor Angela Merkel as an advocate of European harmony

Copyright 2011 Zeit Online

To paraphrase Morrissey: Come, Eurogeddon, come. I, for one, have waited long enough (Figure 31.5).

Figure 31.5: Crossing Durham's Elvet Bridge – a 22-year-old student with a head full of Margaret Thatcher, Ben Johnson and Morrissey

Acknowledgement: Malcolm Warne, Editor, Durham Times

Copyright 1988 Paul Spradbery

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