HAVE YOU ever thought why the European Union are so unhappy about Britain wanting to leave the E.U?
It’s a little like being a member of an organisation that originally started up in Italy, and once you’re in, you’re in so they believe, if you want to leave you are taken around the corner and given a bit of ungentlemanly mistreatment, a bit of mudslinging, the odd kicking and the occasional slap this appears to be happening to us at the moment but to a slightly lesser extent.
Isn’t it rather curious this huge organisation with massive trading deals and resources are giving little old Britain such a hard job of leaving. In 1972, I voted for Britain to join the Eurozone, it seemed a good idea at the time, we were promised good trading deals and we were told it would improve our farming, industry and other exports.
Eventually as we are all well aware, we have lost control of our human rights laws, which were the best in the world, now our judges are overruled by either Brussels or Strasbourg, the immigration problem has driven several of the members to breaking point in the last decade orso.
I will ask the question again. Why is the E.U. so unhappy that Britain wants to leave? And why don’t they just let us walk away? If they believe that they are so strong and everything in the garden is coming up roses. For a little while now I have been questioning my vote at the referendum, I voted OUT, I have waivered occasionally like other supporters of OUT may have done.
I have spent the last few months looking and researching the many possibilities for the reason why the E.U is throwing up all the problems that are threatening our resolve to leave, getting over the hurdles that could take up to three years before we can leave.
Many so-called experts have told us it will be disastrous for Britain if we leave? while other so-called experts believe that Britain can forge ahead with great success. Alan Greenspan once the world’s most powerful former central banker agreed to an interview by Nick O’Connor from Southbank Investment research, Greenspan´s words predicts the demise of the European Union.
There’s one thing that bothers me, considerably, which nobody makes any mention of. There is in the European Central Bank (ECB) a mechanism as it exists out of necessity where the (ECB) is made up of European, Euro area, and then there’s Target 2, Target 2 at this particular stage is turning out to be an extraordinary large transfer from the Bundesbank essentially to Italy and Greece and more recently the (ECB), this means the Bundesbank is lending money in big numbers were talking 7,800 Billion Euros, this cannot go on indefinitely at some point somebody’s got to move Greece out, Greece is in the (ECB) by accident or fraud? They came in under false pretences, as the Greek numbers were all wrong if the true figures had been known Greece would not have been able to join, nonetheless they were allowed to stay, this was a terrible mistake.
The Greek savings rate is -20% you cannot run an economy on -20%savings rate. Something is going to happen, my view is that it is going to be Greece and conceivably Italy could go, the funny part of it that the second largest contributor to the net flow in lending to Spain and Italy is Luxembourg, with their steel and banking system.
While the total assets of the (ECB) continue to go straight up, but what would happen if there is a default in the Euro? In the US if there was a default on the Dollar the US treasury would step in and bail out the problem, so far there is not a comparable vehicle with the (ECB) if there was a default on the Euro would the (ECB) be able to step in?
Greenspan continues, I’m very worried. Mario Draghi is a very good guy is he just talking when he said we will do whatever is required, as his promise to flood the market with freshly printed Euros until everybody leaves him alone, at some point somebody is going to say I don’t want to accept Euros. He says there are two ways the Euro can disappear, the first is the internal demand within the Eurozone as the majority of people need to pay their taxes. Marine Le Pen has proposed a creation of a new basket of currencies a kind of shadow Euro, France could then reinstate the Franc and peg its currency to the basket.
Another mechanism would be the external demand falling, seeing the structural problems will never be resolved and ditching the Euro, if nobody wants The Euro, Draghi may as well print monopoly money at that point he would be out of ammo.
Greenspan continues by saying it is Italy and Greece as potential flash points in the next European crisis, and clearly the endgame is a crisis in which the (ECB) becomes powerless after some other countries outside the E.U will not accept Euros any longer.
So, what of these claims by Greenspan, you could say that he is a dinosaur, for some time no longer in the exalted position however hewas a banking whiz kid, being American he was probably not in favour of Europe joining together matching the strength of America. Recently the Deutsche bank were fined by the US Department of Justice for miss-selling mortgages before the last financial crisis, the fine was $14 billion however the bank has only $10 billion to cover its self.
In France, recently they had a banking stress test, BNP Paribas and Societe Generale two of the six biggest in Europe, were found to have capital shortfalls to survive a future crisis of 10 billion Euros and 13 billion respectively. In May Spain saw its Banco Popular share price drop 25% in one morning and needed to raise 2.5 billion Euros, after claiming that they had one of the best savings reserve in Europe.
In Britain at the moment borrowing has reached huge proportions and Mark Carney the head of the Bank of England, has warned British banks to keep a firm eye on lending as it is believed that there would be many defaulters especially if the bank rate is raised.
I would not accuse any of the banks, be it Germany, Spain, Italy or Greece of lying or misleading anybody, but does Greenspan’s voice of doom for the European Union have sought of resounding message?
In France people were taken to the guillotine in a hand cart, and the crowd would shout out “they are off to hell in a hand cart” IN or OUT of the Union I hope all us British see Heaven.
P.S. As I finished writing this column, Athanasios Vamvakidis of the Bank of America Merrill Lynch, says that the single currency block has been falling apart for 20 years. Mr Vamvakidis formally with the International Monetary fund for 13 years, says that Germany has failed to redistribute wealth on a permanent basis to the poorer countries in the Eurozone, i.e. Italy, Greece, Portugal and Spain and agrees with the former Governor of the Bank of England Lord Mervyn King that the one size fits all currency The Euro is doomed.