By Andrew Lilico
I enjoyed Paul's article this morning – Losing billions on defaults is the price Ministers are willing to pay to avoid blame abroad - insightful, cutting and charming in equal measure, as ever. However, I think something here is worth pointing out that is largely ignored in the UK debate: not even every Eurozone member has agreed to participate in these bailouts! In particular, Slovakia – a euro member since 2008 – has refused to participate in previous bailouts. Even for the current bailout under negotiation (which, for technical reasons to with its proposed form, cannot proceed without the Slovaks), it says it will only participate if part of the bailout is a declaration of insolvency.
Setting aside (as we shouldn't) the point that participating in these bailouts is forbidden by the EU Treaty and thus a form of naked malfeasance (for which I shall be sorely tempted to sue, once it crystallizes into actual losses), if not even all Eurozone members have sufficient confidence in the efficacy of the bailouts to participate, why is the UK – a non-Eurozone member – participating in them to the tune of tens of billions of pounds? And if even a Eurozone member's refusing to participate has not, thus far, brought the whole thing down, then, if it is viable at all, why would a non-Eurozone member's refusing to participate bring it down? And if it is not viable at all, and it's only a matter of who calls time on the whole charade, why should we in Britain be sending tens of billions of good money after bad in a futile attempt to keep the show on the road for another few months?
I understand perfectly well why the Eurozone members might want to delay the inevitable (and delaying the inevitable is not, after all, nearly so silly a thing as is often supposed – as a wise man once pointed out, delaying the inevitable is called "life"). Indeed, it is even conceivable (if not plausible) that the Eurozone could decide to go the whole hog and establish a fiscal union involving tens of billions of transfers each year from Germany, France, and other wealthy parts to the less wealthy parts of the Eurozone, much as the Sterling area is underpinned by transfers from London to Liverpool and other less affluent regions – since the Eurozone is intended to be (indeed, on most natural and legal definitions already is) a state, that was always ultimately going to be what happened in the end anyway.
But what is much less clear is what conceivable interest Britain has in losing money in this way? Having supported the Autumn 2008 banking bailouts, didn't Osborne oppose the Spring 2009 bailouts, and hasn't he said he doesn't want any more bailouts – indeed, is now trying to privatise the banks? And didn't he allegedly oppose the Greek bailout and the broader Eurozone bailout mechanism? So if we aren't covertly bailing out our banks, and we aren't trying to save the Euro (which surely isn't our job, especially not given that not even all the Eurozone members are taking part!), then what on earth do we think we are doing sending yet more money to a transparently insolvent country, almost at the point of revolution, which is inevitably going to default within two years anyway??