Two Mysteries which are No Mysteries At All
In recent days the British government has faced serious criticism on two apparently unrelated fronts. Cameroon is terrified to respond with any vigour – and here’s the reason why…
First, farmers are rightly complaining about the price paid by the dairies for their milk.
Secondly, small businessmen are unable to borrow from the banks despite government funds being made available.
In both cases, and as usual, the source of Cameroon’s embarrassment lies in Brussels, which is why he and his wimpish ministers can’t or won’t talk about them.
First, the farmers. Dairies complain that the open market price for dairy products – cream, butter, cheese – has collapsed. So they have to reduce the price they pay farmers for their milk.
What they don’t say is that the EU has been subsidising the production of dairy products in other EU countries for years, and they pay those subsidies to exporters of those diary products. In other words, EU-subsidised diary products are being dumped on the British market and destroying one of the UK’s best and oldest industries.
(A few years ago, Parmalat, the giant Italian diary products manufacturer, was caught diluting Italian butter before exporting it. They made millions from the EU’s ludicrous export subsidies scheme, even though the products were unfit for human consumption. No-one was ever successfully prosecuted. Nothing new there, then.)
So long as the EU’s export subsidies on diary products remain so will British farmers’ financial pain.
Now, small businesses. Certainly the Bank of England has recently pumped millions into the banking sector in what is euphemistically described as “quantitative easing” – code for inventing money out of thin air. But – and it’s a big but – the EU has instructed the banks to increase their capital ratios (the amount of cash in their balance sheets to support their lending portfolios) to nine percent – and do it now!
It used to be two percent.
So, yes, the banks have the money – but the EU says they can’t lend it until their balance sheets are billions stronger. Come back later – if you’re still in business!
Question – who’s going to tell the farmers and small businesses? Certainly not the British government, it seems.
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