Should the UK bail out the Euro?
Europeans today spoke against PM David Cameron, who vetoed a Franco-German treaty to resolve the pressure on the Euro and downgrading of European government bonds. I ask: why use it to rule over all 27 EU countries rather than just the 17 Euro-zone countries?
The treaty is intended to enforce what member countries already agreed to do when they signed up to the Euro: keep national deficits in order etc. So country A would not suffer in a Euro quake due to country B spending masses to win the popular vote or massively miscalculating their tax revenues.
The stinger, a country that signs up can have its annual budget reviewed for change by the European Commission. Now that is power: to ask an elected government to change its spending policies and tax strategy. Plus as Boris Johnson says: they want to tax London's finance centre.
A major sticking point to Cameron was the planned new "financial transactions" tax pointed mostly at London and Frankfurt. That could help the ECB back up countries whose borrowing costs skyrocketed due to doubts over repayment, already discussed widely for Greece. Compare paying back Eur100billlion bond at 7% (what the Italian Govt needs to pay to sell bonds) instead of 3.25% (Germany and UK): => an extra EUR3.75 billion interest cost every year.
Solution: use more French muscle with a "Wine Bottle" tax ... after all we need to reduce our wine consumption and it seems it is all the southern European countries who both produce wine and the out-of-control deficits. Maybe Cameron should have stayed more onside with European neighbours... but then I do not ask my neighbour to pay back my overdraft.