A FAILURE THAT OBAMA PURSUES

Submitted by: Donald Hank

Europe cannot save the euro, nor save itself from the euro

The deflated apparatchiks of the EU watch powerlessly as a tragedy unfolds.

Commission President Barroso and Council President Van Rompuy at a summit in Brussels, December 2011  Photo: Isopix/Rex Features

By Christopher Booker

7:00PM GMT 31 Dec 2011

It is customary at this time to act like two-faced Janus, looking back at the year that has passed while predicting what may happen in the one ahead. However, from what we have seen of the two great political fantasies of our age, it is now much easier to say what is likely not to happen. Each of these acts of make-believe has got so out of hand that a violent collision with reality is inevitable. But those who are in their grip are so locked in denial that it is only safe to predict that nothing will bring them back to earth until that nemesis intervenes. 

 

A first prediction is that it is no longer conceivable that the sad little nonentities who preside over the affairs of the EU will be able to find any rational way out of the hole they have dug for themselves over the euro. Nothing they did in 2011 went anywhere towards saving them and us from the consequences of this folly. There was perhaps a time when they might have rescued their currency by allowing those countries that should never have been allowed to join in the first place to leave – those countries that have exploited its low interest rates to run up debts they can never repay. 

But this could not be allowed because the single currency was never designed as an economic venture. It was a wholly hubristic political gesture, the supreme symbol of the real agenda of the “European project” from its foundation: the desire to lock all the nations of Europe indissolubly together in ever closer political union. For any country to leave the euro would be a defeat too great to be countenanced. 

 

As a result they are all now completely boxed in. Even in practical terms, it is too late for such a remedy. A country leaving the euro would find itself in a worse mess than ever. Its regained national currency would be instantly devalued, leaving it even less able to repay debts contracted in euros than it is now. Defaulting banks and defaulting countries would send shockwaves through the entire European economy and spread chaos in every direction. 

So all that is left to those in charge of the “project” is to prattle on about the need for “more Europe”, as they belatedly attempt to set up some kind of “fiscal union”: that all-powerful economic government of the eurozone which wiser counsels warned, as much as 30 years ago, was a necessary precondition of launching a single currency – not a half-baked measure to be cobbled together after the damage was done. 

 

The only recourse now is to inflict such deflationary pressures on the debtor countries of southern Europe that their economies are driven to collapse, inflicting social misery on a scale unknown since the Second World War. We can see this already in riot-torn Greece, where hapless families are driven to dump their children on a bankrupt state because they can no longer afford to feed them. 

Just how the catastrophe will unfold from here, and what the consequences will be for the future shape of the EU, no one can predict. Even the Commission President, Jose Manuel Barroso, has suggested that a collapse of the euro would inevitably call into question the survival of “the Union” itself. 

One faint consolation in recent months has been the sight (as broadcast on YouTube) of Nigel Farage, leader of Ukip and of the Freedom and Democracy group in the European Parliament, repeatedly standing up in its front row to rub in the inescapable realities of this disaster only a few feet from those currently responsible for it – Barroso, President Van Rompuy and the leaders of the other political groupings in the parliament. These deflated apparatchiks simply stare ahead, dead-eyed and stony-faced, knowing just how powerless they are in the face of the unfolding tragedy. 

We must not forget, however, that, when it comes to nations running up a debt out of control, our own Government is still having to borrow an additional £2.5 billion every week, just to fund its own overspending – which, despite all talk of “cuts”, still races upwards. Any moment now, our own national debt will top the £1 trillion mark, having more than doubled in six years. However damaging a disintegration of the euro may be to our economy in 2012, we also face a crisis we have brought upon ourselves – one for which our Government has no more of a real answer than do the impotent rulers of the eurozone.
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We are left in an equally insoluble mess by the ebbing away of what we can now see was the greatest and most damaging scare-story in history: the belief that the world was threatened with catastrophic warming by human emissions of carbon dioxide. 

In the 20 years since the scare was launched, global man-made CO2 emissions have risen by 50 per cent. But at the end of 2011, global temperatures measured by Nasa satellites stood barely a tenth of a degree Celsius higher than their average throughout the 32 years since satellite measurements began – far lower than the projected warming. The computer models on which the scare relied have proved so wrong that it is incomprehensible how they were ever taken seriously. 

Hardly surprisingly, in 2011 any attempt to get global agreement on drastic meaures to meet this supposed threat finally expired, as the third mammoth UN conference in as many years fizzled out in Durban. There is no chance that China, India, Brazil, Russia or even the US will agree to a replacement for the failed Kyoto Protocol – not when China alone, with its coal-fired power stations, is increasing its CO2 emissions each year by an amount greater than the UK’s entire annual output. 

On all sides, mad schemes dreamed up to meet this imaginary crisis are falling apart. The EU’s carbon trading scheme is collapsing, the dream of solar power is disintegrating, as country after country slashes its subsidies, and firms set up to cash in on the bonanza close in droves (5,000 in Germany alone). Evaporating likewise is the fantasy of “carbon capture and storage” – CO2 from power stations being piped away, at vast expense, and buried in holes in the ground. 

More and more, this leaves Britain isolated in a mad little bubble of its own, the only country in the world committed by law to the completely unrealisable goal of cutting CO2 emissions by 80 per cent within 40 years. 

On this very day, January 1, the EU is imposing a tax on airline flights which, on top of the Air Passenger Duty, when George Osborne raises it yet again in April, will bring the tax for a British family of four flying to Florida to £344. 

Next year, Mr Osborne is to impose a “carbon floor price” of £16 on every ton of CO2 emitted by British industry, when the price of “carbon” under the EU’s emissions trading scheme has collapsed to just £5.40. Not only will Osborne’s tax do serious damage to the competitiveness of British industry, it will add £3 billion a year to the cost of our electricity. This will rise within eight years to £5 billion, which alone will add 25 per cent to all our bills. 

Meanwhile, utterly lost in his own green dreamworld, the man supposedly in charge of energy policy, Chris Huhne (below), babbles about chequering thousands of square miles of our countryside and our coastal waters with a further 32,000 crazily expensive and useless windmills. It is a vision so insane that one cannot imagine why men in white coats have not already hauled him off – rather more expeditiously than the Essex police who, we are told, wish to see him prosecuted for perverting the course of justice over an alleged traffic offence. 

Even if Huhne’s pipedream could be achieved (it is technically out of the question), he still has not grasped that it would be necessary to pay billions of pounds more to build dozens of grown-up gas-fired power stations, as essential back-up for those still days that render the energy contributions of windmills all too frequently derisory. Something that we can predict with certainty is not going to happen in 2012 is any trace of sanity on these matters entering this absurdly dangerous man’s charmless head.