Collapse of the Eurozone Almost InevitableThe eurozone is doomed to failure and the British National Party has been the only party to continuously warn of its dangers and the high taxes necessary to pay for our membership of the EU, BNP economics spokesman Andrew Moffat.
“The recent Greek financial crisis demonstrated that investors were not prepared to purchase Greek Government debt (i.e. Greek bonds) excepting at a vast premium to offset the risk of default,” Mr Moffat said.
“In conjunction with the need to roll over debt at short intervals, in uncertain markets, Greek Government bonds have recently yielded double digit figures, despite nearly zero inflation.
“That compares with yields of between 1%-2% on the equivalent short term Sterling maturities, where the guarantees of the British Government are not doubted.
“It has only been the intrusion of the European Central Bank that has enabled the Greek Government to fund itself and the country's liabilities,” Mr Moffat continued.
“In effect, Greece had been shut out of the capital markets: no one was prepared to buy Greek Government bonds until the ECB provided funding and guarantees.
“Given the recession and the shortfall in governmental revenues, Greece will soon be paying nearly 20% of its GDP in interest charges, to service its growing debt mountain.
“Similar difficulties afflict the governments in Spain, Portugal and Ireland — the latter of which is suffering the effects of a property crash, financed by the banking sector.
“Clearly, the ECB cannot continue to finance the debts of the 'PIGS', the acronym employed to describe this group of countries.
“The EU has created a stability fund of Euro 750bn, raised from a levy on EU members, albeit the Slovakians have complained about their contribution, which
— like everyone else — they can ill-afford in straightened circumstances.
“The Euro currency cannot work. It cannot work because of the inappropriate nature of a 'one size fits all'.
“This means that individual nations lose the ability to devalue their currency (the UK thankfully devalued its currency when we left the ERM in 1992, which created economic expansion) to remain competitive and to reduce interest rates.
“The currency is the Euro and the Central Bank is the ECB, which determines interest rates throughout the Eurozone.
“In consequence, the only means for nations to regain competitiveness is to cut wages and government expenditure. That typically creates tension and riots in Mediterranean countries.
“All Western nations are reducing their budget deficits and implementing spending cuts. Where will the money originate to stimulate new growth and increased governmental revenues? In the absence of growth, governments must raise taxes, which further depresses incomes and spending ability.
“In the light of this backdrop, it is likely that the governmental deficits in the PIGS countries will deteriorate. That will make it more difficult for these countries to service their debts.
“Worse, there may enter a period of deflation, when real debts rise. That provided the backdrop in the 1930s and created political instability in nations such as Spain.
“The Eurozone will lack the financial resources to bail out Greece and the other debtor nations. Greece will be ejected from the Eurozone, followed by other countries.
“The result will be disastrous for those banks throughout the EU, which hold the unpayable debt of the ejected member nations.
“Meanwhile, the ejected nations will find they have to repay their Euro debts with their newly reintroduced and devalued currencies. There will follow defaults on governmental bonds, leading to more crises within the banking sector.
“The political imperative to create a European union, with its own anthem, heads of state, legislative body, armed services, central bank and supreme court, has not been matched by any competence to control economic forces.
“The British National Party has long warned of these difficulties. We repeat them here.
“Unemployment, homelessness, bankruptcies and default are the end result of inappropriate currency union. So, too, are the high taxes to pay for the increasingly expensive cement to bind together the cracks, necessitated by our membership of the EU and our obligations to this supranational club.
“The British electorate has been well and truly stitched up in this political ideal, which has never been identified or explained to them.
“There may be an alternative: Germany could be ejected from the eurozone, along with its French collaborator. That way, the Euro would fall and monetary restraint in the ECB could be relaxed. This solution, however, would be politically impossible,” Mr Moffat concluded.
Make a differance join the British National Party by clicking this Link below https://www.bnp.org.uk/membership.html