Communist Party Shits in Woods

Shocking news, comrades. The Revolutionary Communist Party has declared that national control of economies should be a thing of the past.

“I do not believe in the sustainability of a small floating currency. Look at the pound, it’s being attacked,” he said in interview with the Daily Telegraph.

“The euro is a good move. People have to abide by the Maastricht criteria, so it imposes discipline. Other options are less palatable if you really want to become a big strong economic union.”

…

Mr Tsang, as always wearing his signature bow tie, said it will be impossible for the Far East to launch its own currency union until China makes the renminbi convertible. This is not yet remotely on the agenda.

But it will be. Then of course, the currencies could all combine. There’d need to be a government to control it of course. Sort of a world government. One economy, one government, for the future of all.

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Two stories about EMU

Story 1 is a call from Will Hutton for Britain to join the Euro. Now, Will Hutton’s wife happens to own a lot of property (or her business does), so Will has something of an interest, to say the least! Although this means he’s not objective about the issue, an article in the Times (I can’t find the link right now) suggests that Brown may be thinking about the Euro as an option for Britain.

Is this likely? Not in my view. The crisis at hand needs short-term solutions. After it has passed, Brown will be enormously unpopular, because a good result for us now is still going to be very bad. This means he will not have the support of the public for any radical moves. He also probably won’t have time before the next election for that. In the extremely unlikely event he wins the next election, I suppose it might be possible. However, it is extremely unlikely he will win. Even if he won and wanted to join the Euro, he would have to include it in a manifesto, and I’m not sure even the financial crisis would make it a popular policy. Let’s not forget that it was Blair who wanted to join the Euro, and Brown who didn’t. Is Brown the kind of man who admits he was wrong in the past? Exactly. Another reason is the difficulties described in story 2 …

Story 2 is an article by Ambrose Evans-Pritchard in the Telegraph on the risks of EMU splitting up. AEP has been predicting this crisis for a while. He has written a few articles saying that a recession would come, and saying that the Euro might not survive it. I never really believed him; I thought it was likely that he, as a eurosceptic, wanted the Euro to fail, and he was seeing what he wanted to see. However, he was right about the financial crisis and the recession, and he does describe some very real tensions in the euro-zone. I hitherto believed that the Euro was so important to national leaders that they would protect it at all costs. Right now, who knows? We don’t know how bad this crisis is going to get yet; certainly no country is going to let its economy be destroyed to save the Euro, as the Irish decision to guarantee bank deposits shows. Do I think it’s likely? I have absolutely no idea! I don’t understand enough about economics to know how bad the crisis is going to get, and I don’t think that many experts know either. It will be very interesting to see what the EU heads of state decide when they meet this weekend.

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