Thursday, April 7, 2011

How exciting (not!)

Portugal has admitted that it needs an EU bail-out and Britain's share of it may well come to £4.4 billion. (Covered everywhere but here is the Telegraph story.) Well, there's a surprise. We really believed that nonsense about them not needing a bail-out and the rot stopping with Greece and Ireland. Spain, anyone? The Boss has a short posting about it on EURef.

Every time I hear comments about the need to save the euro because it is in Britain's interests to have a stable eurozone I recall a conversation between Harold Nicolson and his wife Vita Sackville West at the time of the Sudetan crisis that led up to Munich. Nicolson had been one of the Foreign Office officials at the Versailles negotiations and felt that all of its outcome in Europe was his responsibility. The idea of anything collapsing filled him with pain.

When Vita asked him why it was such a problem for the Germans to have Sudetenland he almost wailed. If Germany takes a chunk then Poland will want a part, the Slovaks might announce that they want to be independent and Hungary will demand those areas that had been taken away from her at the Treaty of Trianon, one of a series of treaties signed in 1918 -1920. Czechoslovakia would simply cease to exist. Well, said Vita very rationally, if it is that easy for the country to fall apart what is the point of propping it up. (I am quoting from memory as my copy of the Nicolson Diaries is upstairs.) That is more or less how I feel about the euro. What is the point of propping up a currency that is quite so unstable and so badly structured? It would have been much better not to create it in the first place as a number of us said at the time and were shouted down. Now we are stuck with it. That does not mean that we, and I mean all of us across Europe, need to be stuck with it for ever.

Oh and by the way, I refuse to write about Jemima Khan's interview with Nick Clegg. (Here is Ruth Dudley Edwards's take on it. The two deserve each other but I don't see why the rest of us should suffer.


  1. £4.4 billion: the equivalent in toys would be 2 fleet carriers (or 3-4 small Invincible class ones), or maybe another 5-6 Type 45 destroyers, or up to 30 Type 23 frigates (which were very cheap). The difference being that the expenditure on toys would be spread over many years or even decades while the money for a bailout needs to be found quickly.

  2. At some stage Greece, Ireland and Portugal will have to default. They cannot possibly pay back this money and all the rest they owe. They will fall out of the Euro which may regroup around a core of Germany and the Netherlands with any of the other survivors, but not Italy and Spain.

    Do you have any news from Iceland?

  3. I must catch up on what is going on in Iceland and others who had the sense to stay out no matter what their political establishment tells them.