Now for another enormous international scandal – the proposed IMF bailout of the Eurozone. Admittedly, this one involves nothing more precious than our hard-earned cash – but, as Simon Tilford of the Centre for European Reform argues, the demands made by the Eurozone governments are indefensible:
- “When it suits them, the euro is no longer the currency of a highly successful and integrated economy, but a currency shared by a collection of sovereign creditor and debtor countries, and the IMF thus has a responsibility to support the debtor members.”
In other words, the federalists of the Eurozone are suddenly very keen to emphasise the technically sovereign status of their individual members – and no wonder:
- “Imagine that the US federal government decided that it no longer wanted to support Mississippi and demanded support for that poor southern state from the IMF. The rest of the world – led by the eurozone governments – would rightly turn their backs.”
Tilford points out that the Eurozone is a net exporter of capital to the rest of world – a position it is determined to strengthen:
- “Moreover, the eurozone’s strategy for dealing with the crisis implicitly relies on a rising surplus: member states with current-account deficits are under pressure to close them, but creditor countries face no pressure to reduce their surpluses. So, a region that is essentially pursuing a mercantilist strategy now wants the rest of the world to finance it.”
The rest of the world, ideally led by Britain, should reply with a firm non – or should that be nein?