Not a question of if, a question of when

The Euro is as responsible for the sovereign debt crisis as each of the individual state actors. Sure they borrowed vast sums of money that they could likely never pay back, but the Euro system gave them the ability to do that, and it did so at a time when falling interest rates were reducing the return on their bonds. We're only human after all.

The crisis would not have happened, at least to the degree at which it did without the Euro. Without the Euro, Greece for one would never have been able to borrow the sums of money that they did, and countries like Ireland and Spain would not have seen a housing bubble on the scale that they did. Drachma were not worth the paper they were written on, and when faced with rampant inflation a country that cannot set it's own interest rates to control said inflation can do little to improve their situation. As we saw, low interest rates which were set to help the stagnating economies of France and Germany did little to calm the housing markets in Spain and Ireland, with drastic consequences.

Furthermore when hit by a crisis, a country does have the option of devaluing their currency, which although drastic, can be used to increase export receipts, and particularly with reference to a country which is heavily reliant on tourism, the number of tourists visiting the country. Neither Greece nor Spain have this option, and as anyone will tell you, both are no longer cheap holiday destinations in the vein that they were in the 80s and 90s. Both are also suffering from unprecedented unemployment, especially among young people.

The Euro as a concept is fundamentally flawed, you cannot have a customs union where countries have not only entirely different tax regimes but also lack effective labour mobility (like it or not, language is a barrier that the EU can do little about, it has tried, and failed). Why can the United States dollar function regardless of the differences between the 50 member states? One de facto language and a large federal body which receives the majority of tax receipts. If the economy in one region begins to fail as happened with the manufacturing sectors of the Mid West, then people move to find work elsewhere. Hence the current trend of migration from states such Michigan and Ohio to Texas and Georgia. This does not happen in Europe, at least on any scale which would be of any economic benefit. Furthermore since the federal body is in receipt of the majority of tax receipts, they can make fiscal transfers to poorer states. Again the EU is not able to do this on any realistic scale.

What Merkozy wants to do, by having states submit their budgets to the EU for approval, is the first step to taking control over national budgets. The problem with that is the inherent lack of democracy in the European system, and furthermore I do not believe either, that the European Union would exercise any more fiscal responsibility than any national state actor. It would not solve the problem of labour mobility either. So the question is, how much growth we will continue to steal from future generations in order to shore up this failed project? It's not a question of if it will collapse, merely a question of when.

Reply to "Bye, bye England? SNP plans closer Scandinavian ties after independence"

The full article as published in the Independent 5th December. (Despite the name the paper has nothing to do with the Scottish independent movement, with Independent referring to an independence from the media establishment). The full text can be found here.

The history of Scotland and the Scandinavian countries is very interesting. Scottish mercenaries fought in huge numbers in Scandinavia, particularly in the service of Sweden. Indeed some commentators have referred to Swedish-Scottish relations of that time as an unofficial alliance. There also existed a thriving trade between Scotland and Scandinavia with the port of Aberdeen having exported wool and fish for timber and iron ore. This trade far exceeded trade with England right up until 1707. Although the other Royal Burghs were geographically closer to England, Berwick of course saddling the border, this Scandinavian trade was still significant. However after the Act of Union was signed, due to economic protectionism these industries dried up.

It also worth noting that the Northern Isles themselves were once a part of Denmark-Norway, and the assistance given to Norway during the Second World War in the form of the Shetland Bus has not been forgotten by the people of Norway. Now we have the potential for huge investment from Scandinavian companies who are world leaders in renewable energy, with Statkraft and Vestas already active in building both offshore and onshore wind farms in Scotland. Is it really so preposterous to consider that Scotland could have a more active relationship with Sweden, Norway and Denmark? As far as I can see it is something that has been neglected by the Act of Union and not an eniterly new and fanciful idea.