James Max - James Max is a broadcaster, columnist and business expert

Europe. The UK is a Celebrity. Get Us Out Of Here!

If you don’t like what’s on the menu, you tend not to visit the restaurant. Well, that’s what I would have thought; yet for years we have been dining at the European table thinking we have to be there in order to make a difference. Britain and its people want a very different EU from our neighbours, friends and allies.

David Cameron has demonstrated that he has a backbone some didn’t think he had. For those thinking this was some kind of appeasement to his Eurosceptic backbenchers, think again. For those who think Britain’s position has somehow been weakened, they are misguided. And for those who think we should be at the negotiating table, I’d ask what good that would do?

In order to understand this unholy mess, a step back is required. The global financial crisis was precipitated by a number of factors. There has been much conjecture and social engineering as a result of what occurred. Whilst the banks were at the centre of the storm, it’s wrong to say they alone caused it. It’s too complex for that simple (yet for some convenient) analysis. Over the past 30 years we have moved from an economy when people and governments saved and then paid for goods and services to one where debt was used to fund growth, development and investment. There is nothing wrong with debt per se. Think of it like this. When you are born you have little or no earning capacity. As you as an individual grow and develop as a person you increase your economic ability to earn. As you are earning so it’s sensible for you to borrow when you need to in order to be able to make the big decisions you’ll have to take. During the course of your life you will hopefully be able to pay off those debts. And so it is with governments too.

It all goes wrong when you borrow too much and good debt (that which is serviceable) turns into bad debt (which is unsustainable).

A wall of money was created when central banks reduced interest rates to combat the terrible fallout for the far eastern financial crash, the dot com bubble bursting and the response to 9/11. In turn, debt became freely available. Yes, banks lent to people who should never have been able to borrow. However so did governments. In so doing, balance sheets became increasingly burdened with debt that would only be paid off if growth persisted.

The first crunch was very much of the making of central governments operating with lax regulation and retail banks for buying market share. It was a private sector crash. This second crunch is more of the politicians’ making. Simply because their spending plans and investments were predicated on the private sector creating and generating a revenue stream that would make their expenditure acceptable. International markets have applied their judgements on those countries that borrowed too much whilst unable to pay off their debts.

The EU solution was to slap more taxation onto a system already overburdened. In addition they have some grand plan of integration and regulation to put even more money in the hands of European instutions. Increasingly they want more revenue too. The nations and major financial institutions in many European countries have not faced up to the massive holes in their balance sheets. As a result confidence has been

lost. The EU needed to demonstrate that it would either allow countries who should never have been in the Euro in the first place to drop out or for them to back up their currency with a massive bailout fund (or the application of Eurobonds, backed by every member state of the Euro). Instead their answer has been to achieve the political and financial union that was missed out when the Euro was first established. Whatta mistaka to maka! How on earth countries expected the Euro to work when you have different economic pace, rules, regulations, public spending plans and so on, I have no idea.

The UK is a net contributor to Europe. Along with Germany our economy is a success. Whilst we may not manufacture as much we do something far more important. Our institutions provide intellectual products that are the envy of the world. Our financial system, battered as it may be is the shining beacon in Europe. Our legal, accounting, advisory, professional, research and development firms are the envy of the world. It might not feel like it at the moment but when it comes to technology of the human mind, we are the celebrity in the pack. With a financial transactions tax there is a view that this would solve the problem. However all it would do is allow the UK to bankroll this financial mess. Whilst it is in our interest for the Eurozone countries to resolve their problems, it is none of our responsibility to provide the funds to do so. We already contribute quite enough to the EU and indeed to the IMF and do not need to provide any more.

To those unelected Eurocrats. In many countries people have screamed out that they want more democracy not less. How can we go along with a plan that would raise (even) more tax to fund projects and institutions that have little or no public accountability?

Labour says we are isolated. Yet Labour were the architects of many of our economic and social problems. Indeed their approach to Europe left us weaker. Handing back the rebate. Giving away voting rights via the Lisbon Treaty and parachuting one of the most useless of all politicians in history (in the form of Baroness Ashton) into power. Indeed in its last days, the signing of a virtual blank chequebook to appease our European friends to prop up a currency that is of little use to us was simply appalling. Back home they taxed us too much and spent too much. They implemented green taxation that nearly killed off some of our most successful businesses. They then spent that money on their social engineering projects. Sending thousands of students to study courses that had no practical use. Dumbed down our educational system to allow a significant minority to leave full time education with little or no hope. They complicated the tax system to such an extent that they made business more difficult and they applied a benefits system that was the envy of the world. But not for the right reasons. The envy of the world to come and gain free treatment on the NHS and the envy of the world for those wishing to come and work here in full knowledge that the jobs they took would not be competed for by the indigenous population who could sit in housing provided for by the state on benefits handed out like confetti.

Britain needs a long and considered discussion about what the EU should be. In my view it’s a single market. Nothing more and nothing less. Of course we should have cooperation and appreciation of our neighbours. There have been plenty of benefits to being part of the EU and we should be clearer about what they are. However as a net

contributor to this behemoth of an institution whilst we suffer austerity at home, so we should be pushing for better value for money abroad. It is not our job to sign up for and pay into a club that is really about developing and propping up countries that cannot and will not accept responsibility for their actions. Indeed it is not for us to sign up to an institution that wants more power for its own ends rather than for the good of the population they serve.

The Euro has been an unmitigated disaster. The EU institutions have remained wasteful, bureaucratic and expensive. Worse still they have become even more unaccountable. Many of our MEP’s are faceless yet the amounts of money they spend and the projects they support are ludicrous.

On the menu is a range of food akin to that offered by Ant and Dec in the jungle. On this occasion David Cameron was right to shout “I’m a Celebrity. Get me out of

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