Knifonomics (part 21): the Eurozone problem in a nutshell

Last week The Knife met a young Portugese surgeon – highly educated, fluent English. As it happens, we were in Germany, the hub of the Eurozone crisis. He’d already taken a 20% pay cut, and his only prospect at the end of training was not the cushy, secure NHS job that people here in the UK expect, it was a fixed term salaried job with a private hospital – the Portugese NHS collapsing, as ours has (yet) to do – with no obvious prospect of career advancement, no title such as “consultant” or anything like that. In short, a very ordinary employee, and he felt lucky.

“Do you not want to leave the Euro and regain economic independence?” I asked, given that as one of the PIGS, Portugal is an economic basket case, locked into Germany’s domestic economic cycle. No was the answer. A resounding no, hang on to nurse (Germany) for fear of something worse.

So all those rubbishy southern nations are desperate to cling on to Germany, to the detriment of their national identity, their pride, their social stability,  their economies, and of course, the poor old German taxpayer. You only have to walk round Berlin to realise how utterly alien Greece is to the successful German superstate, and how it will NEVER reach a true economic harmony, which is the essence of the Eurozone project.

All this is harming Britain, badly, so we do have a dog in the fight.

And now Spain.  Here is the pithy and brilliantly informed Ambrose Evans-Pritchard:

Just to be clear to new readers, I am not “calling for” a German bail-out of Spain or any such thing. My view has always been that EMU is a dysfunctional and destructive misadventure – for reasons that have been well-rehearsed for 20 years on these pages.

My point is that if THEY want to save THEIR project and avoid a very nasty denouement, such drastic action is what THEY must do.

If Germany cannot accept the implications of this – and I entirely sympathise with German citizens who balk at these demands, since such an outcome alienates the tax and spending powers of the Bundestag to an EU body and means the evisceration of their democracy – then Germany must leave EMU. It is the least traumatic way to break up the currency bloc (though still traumatic, of course).

My criticism of Germany is the refusal to face up to either of these choices, clinging instead to a ruinous status quo.

These Euro-obsessed politicians need to get out more, the inevitable failure of the project is obvious wherever you go in the zone. But, if you never leave your limo/hotel/chancellory, you might still think otherwise.

How’s that European economic harmonisation thing working out for y’all?
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