Friday, 23 July 2010

Daniel Hannan

Daniel Hannan is a writer and journalist, and has been Conservative MEP for South East England since 1999. He speaks French and Spanish and loves Europe, but believes that the EU is making its constituent nations poorer, less democratic and less free. He is the winner of the Bastiat Award for online journalism.

For some, the EU is not ambitious enough:


the. ultimate goal is one world government

Reykjavik

Reykjavik

For 70 years, a quixotic organisation called Federal Union has been campaigning for a worldwide confederation. There is a whiff of benign 1930s dottiness about its campaign: of handbills and sandals, Esperanto and vegetarianism, decimalisation and naturism. You can’t help warming to people whose only real complaint against the EU is that it is insufficiently ambitious, and that regional blocs are a potential obstacle to global administration.

Anyway, Federal Union has taken issue with my contention that we should not have supported unwise banks with taxpayers’ money. Iceland, I pointed out, had been unable to bail out its financiers and, while paper fortunes there were wiped out in consequence, nothing in the real economy has changed very much. Crops are growing, wheels turn in factories, traffic lights change, shops open. Indeed, when you look at the government’s total liabilities, Iceland is in a far happier situation than the countries which assumed their banks’ debts. Which perhaps explains why Reykjavik looks and feels so counter-intuitively prosperous.

In a wide-ranging critique of my blog, Federal Union’s blog advances one incontestable argument:

One of the ways in which the Icelandic economy has bounced back is the collapse in its exchange rate. Imports become more expensive and exports cheaper: this is Nature’s way of rebalancing the economy. Iceland used to be an expensive tourist destination but has now become a cheap one.

Yup. The same phenomenon explains why, after twelve spendthrift, bloated, pork-barrel, wastrel Labour years, Britain is not in the same mess as Greece. It is, in short, a knock-down argument against the euro.