A German government spokesman has confirmed that European Union countries had decided “in principle” to financially help Greece meet its national deficit because a collapse will destroy the euro currency.
This means in effect that British taxpayers will have to pay close to £7 billion to help Athens — while the British government’s deficit stands at £830 billion.
The Wall Street Journal has reported that German Finance Minister Wolfgang Schäuble told officials in Berlin on Monday that there “was no alternative” to a rescue plan for Greece, while the front page of City AM reports that Germany and other European countries are working on a bailout plan to save Greece and “restore confidence in the euro.”
Mr Schäuble has asked officials to prepare a plan in time for the next EU summit to discuss what form the financial support should take. It appears that loan guarantees from Germany and “other countries” are the most likely scenarios.
The amounts of these loan guarantees are likely to be calculated according to other EU member state’s economy sizes, irrelevant of whether they are eurozone members or not. This means that Britain will in all likelihood be called upon to meet a £7 billion bill as its share to prevent a collapse in the euro currency.
The Greek crisis — which has already spread to Spain — underlines the core problem with the EU’s monetary union (to which the major parties are ultimately committed as it is a natural and inevitable consequence of continued membership of the EU.
A monetary union leads to a common budgetary policy as well as a single interest rate. If one country’s national economy runs into problems — as has happened in Greece — the taxpayers of other eurozone countries are also punished because their currency is interlinked.
The Conservative Party claims to be opposed to the euro, but they also claimed to be opposed to the Lisbon Treaty.
The Tory’s “iron clad promise” of a referendum on the Lisbon Treaty vanished when they realised that a no vote would mean that Britain would have to withdraw from the EU if such a decision were ever to be brought to practical implementation.
There is no reason to suspect that the Tories will use any other logic when it comes down to joining the euro currency.
The only party which has consistently opposed membership of the European Union — and consequently of the eurozone — is the British National Party.