The euro now equals poverty and deflation says Daniel Hannan.
To grasp the sheer unfairness of the euro system, consider Slovakia. For a few days last October, this nation of five million defied the might of Brussels. Its MPs refused to approve the bail-out fund, arguing that it was wrong for prudent countries to be fined so as to reward profligate ones. The EU promptly turned its hideous strength against the plucky Carpathian republic. Within five days, the government had fallen and parliament had ratified the fund.
When we read of the latest euro-calamities – three Portuguese banks bailed out yesterday, Cyprus on the point of bankruptcy, retail sales across the eurozone far lower than expected – we feel sympathy rather than panic. Countries in the single currency have no such luxury.
“Since we joined the EU,” says Richard Sulik, leader of Slovakia’s liberal SaS party, “our net receipts from the Brussels budget have come to just over one billion euros. Under the European Stability Mechanism, we are liable for 13 billion. All to bail out countries with higher GDPs than ours.”
According to the polls, two thirds of those who use the euro believe it has made them worse off. They’re right. On Europe’s periphery, monetary union means deflation, poverty and emigration. In the core, it means unprecedented tax rises.
EU leaders no longer argue that the single currency boosts growth. Instead, they fall back on the cure-would-be-worse-than-the-disease shtick. Imagine the chaos of a break-up, they tell us, eyes wide with horror. The bank runs, the capital controls, the return to protectionism!