Migrant Rights’ Network: UKIP has an advantage that is not based on concrete policy proposals

by , under Enrique

By Awale Olad

The aftermath of the UKIP surge in the polls in the local elections has led to a lot of soul searching in mainstream politics. To the detriment of the Conservative Party whilst also hacking away at both the support of the Labour and Liberal Democrats parties, UKIP emerged as the third most popular party in Britain today.  

But a lot has to be said for the state parliament finds itself in 2013. In 2008, the UK entered its longest and harshest economic crisis in 60 years, mainly caused by an unhinged financial sector. Economic growth has been almost non-existent since then.

In 2009, parliamentarians were publicly crucified for living lavishly on expenses paid by the taxpayer and trust in politicians plummeted considerably. MPs are yet to be acquitted by the court of public opinion.

In 2010 the public decided that there was to be no overall winner at the General Election, which took the country into a new political direction – mainly consensus politics. And in 2011 the phone hacking scandal in the press erupted and shook the nation considerably.

With some in the public now openly engaged in warfare with mainstream politicians and further compounded by a politically apathetic majority, UKIP vacuuming up the votes in the space left unoccupied was inevitable.

The public managed to deliver a puncture to the political spectrum in revenge for what Andrew Rawnsley refers to a ‘resentment felt by many voters that Britain is run in their own interests and those of their friends by a lookalike metropolitan elite who are all implicated in the economic mess.’ However, there is a case to be argued for the need to modernise, and move with the changing demographics of the country, if the parties want to be seen to be fit for government.

YouGov’s analysis of the results for the Observor on Sunday shows that UKIP voters worry mostly about the economy (59%) and immigration (51%), very disproportionately to voters as a whole that worry about immigration (31%). They also tend to be Tory voters who live in the Midlands, who are older and predominantly working class men. But coming second in South Shields would have sent chills down the spine of Labour Party strategists as well.

UKIP doesn’t currently have a clear-cut policy on immigration. It’s ‘undergoing a review and update’ according to its website.  So rhetoric as opposed to actual policies drove its recent successes, which mobilised their supporters, who dislike today’s political class, to the ballot boxes.

David Cameron almost immediately came under pressure to change tack on a number of issues but mainly to bring forward the promised referendum on Europe. His Tory government and friendly backbench colleagues have toured the studios to pour cold water over the idea, and suggested the public needed to deliver a Tory majority in 2015 for the referendum, given that their Coalition partners and the Opposition would kill it off at the first reading in parliament. Good excuse, but will probably do little to win back support from their dissenting base.

Pollsters and political commentators will continue to dissect the results of last week’s local election results and will be conjuring up future predictions of how well UKIP will do at next year’s European and local elections. Cameron’s greatest difficulty is trying to effectively deliver his government’s programme of work without having to do a volte-face on a number of issues, in particular, immigration.

His record will show that he reduced immigration as promised and that’s how he should be judged – it’s also very likely that given the sluggish economy, senior minsters may have an allergic reaction to further draconian measures on immigration and a telling sign that senior Tories are happy with the current flow of immigration is the lack of primary legislation that has come forward to reduce immigration to the level of the early 90s.

The Coalition government continues to control immigration by tweaking Labour’s Points Based System (PBS). Not a single bit of primary legislation aimed at controlling immigration numbers has been introduced under a Tory Prime Minister since Edward Heath.

Nadine Dorries MP brainstormed the recent Eastleigh by-election results in which UKIP voters ‘lapped up’ the need for an Australian-style immigration system… much like the UK’s existing PBS, which is based on the Australian PBS. This is further confused by the fact that UKIP hasn’t got an immigration policy – so if the rhetoric is more draconian than its actual concrete proposals, then it can be argued that UKIP accepts the mainstream consensus on immigration policy, which gives them an illogical advantage that needs to be challenged.

The Tories are unlikely to change tack immediately in response to UKIP’s recent surge. They may (rightly) be banking on their tribe to return home and defend them against a Labour onslaught in 2015.

However, from now until the next General Election, the Conservatives are expected to experience a slump in their support at the ballot box. Now is the time to think of new ways to neutralise the UKIP appeal and attract Labour and Lib Dem supporters if they are to perform better in the 2015 election.

Read original story here.

This piece was reprinted by Migrant Tales with permission.

 

    • Enrique Tessieri

      –UKIP bases its politics on concrete measures and facts, thus the rise in fiigures.

      I disagree. It’s a bit like constant whining without any solutions. Could you give us some concrete examples where you think that the UKIP bases its politics on concrete measures and facts. Thank you.

  1. Marke

    UKIP wants out of the EU, some support of the British people-more than 50% was for exiting if I remember correctly.

    Austerity measures has stopped the growth of the EU, the only market after 2008-crisis that has not recovered yet. When launching the euro, we were promised stable conditions..

    Democrazy has been removed from member.states-no member state is happy with this. When people do not have a voice no longer-hell breakes loos as it has in Greece

    Schengen does not work, we know it all. It has brought major problems to the UK.

    Too high level of regulations…this is harmful for the economy.

    • Mark

      Marke

      Austerity measures has stopped the growth of the EU

      Rubbish – recession stopped the growth. Growth that slowed most was based on bank lending and investments. Even when the banks had capital, supplied through bailouts and other mechanisms, they were still reluctant to lend, even to each other. Austerity is about controlling out of control public sector spending. The austerity does not tackle the growth problem – that’s about winning back investor confidence. It was the loss of this confidence that drove the collapse of the bond markets in Greece and Ireland. That loss of confidence had a lot do with with high GDP to debt ratios. At some point, the bar man is going to stop the tab when he sees the drunkard at the bar is so drunk he’s unlikely to return to work so as to pay the bar tab off. Moreover, Greece cannot complain it has a hangover considering the scale of bingeing the night before. At some point, when debt to GDP is high, the tax base can no longer sustain spending. Cutting that spending further undermines the tax base, but it is the only solution that works in the long-term, to take a fall and next time avoid the cliff. Given the high number of public sector workers in Greece, slashing the currency (in a non-Euro economy) would help with growth in the commercial sector but also push up costs for public sector workers and government, because of the higher cost of imports that comes with a weak currency. That higher cost would not be offset by business growth, as profit tends to leach to the highest and the most mobile in money terms. Bottom line is that the middle class’s would still have a job, still carry the debt, but have higher costs. The only answer was some extent of debt write off, sell the government assets to pay for the painful transition and then change public policy so that such ridiculous spending doesn’t happen again.

    • JusticeDemon

      Marke

      UKIP wants out of the EU, some support of the British people-more than 50% was for exiting if I remember correctly.

      Austerity measures has stopped the growth of the EU, the only market after 2008-crisis that has not recovered yet. When launching the euro, we were promised stable conditions.

      When did the UK join the eurozone?

      Schengen does not work, we know it all. It has brought major problems to the UK.

      When did the UK join the Schengen Area?

      You are Allan and I claim my £5 🙂

  2. Marke

    EU told investors to fuck off from Europe.

    Now, Cyprus santioned its bank depositors..next package when it will be launched the money will sail off rather quickly and this might cause real real chaos

    • Mark

      Marke

      UKIP bases its politics on concrete measures and facts, thus the rise in fiigures

      First you write this. And then you write this:

      Now, Cyprus santioned its bank depositors..next package when it will be launched the money will sail off rather quickly and this might cause real real chaos

      I thought the second comment was closer to the truth – the UKIP is a party feeding on grievance and an ‘anti- society’ feeling and generally seeking to create a sense of despair and chaos, from which, they hope to capitalise. They are very little different to the classical fascist and nationalist parties of yesteryear! These are political parties seeking to feed and feed off of a political ‘underclass’ and a very small minority of people that think the UK will be better off financially for no particularly enlightened reason.

      Take Nigel Lawson’s recent comment – pull the UK out of Europe and focus on Asia, except that the reality is that UK trade exports are £120 billion to Europe, with many markets still growing, while trade to Asia is a mere £20 billion, with Asian companies showing advancing and developing competitiveness in their home markets. It’s an incredibly risky move to try to shift the focus of UK exports to the Far East. Indeed, that would be the quickest way to provide China with further bargaining chips, as it continues to maintain a weak Yen, thus making export to China artificially expensive.

      Indeed, the clear evidence is that such a move would benefit only a small percentage of ‘global players’ in the UK at the large expense of everyone else in the UK (higher import costs due to a weak pound).

  3. Marke

    Marke

    When did the UK join the eurozone?

    When did the UK join the Schengen Area?

    You are Allan and I claim my £5

    Claim a book about EU, EMU and Schengen.

    UK is not part of Schengen nor EMU but indeed of the Eu since -73 I think

    • JusticeDemon

      Allan

      Look back at what you wrote:

      UKIP wants out of the EU …
      When launching the euro, we were promised stable conditions.

      INCORRECT

      The UK is not a eurozone country, so any such “promise” was meaningless to its currency. The sterling ERI fell by about 20 per cent between October 2008 and January 2009.

      Schengen … has brought major problems to the UK.

      INCORRECT

      The UK is not and never has been a Schengen Area country.

      Only Allan the Troll was uniquely dumb enough to make such ill-informed comments on Migrant Tales and then persist in those views even after they had been definitively refuted.

  4. Marke

    Allan

    Look back at what you wrote:

    INCORRECT

    The UK is not a eurozone country, so any such “promise” was meaningless to its currency. The sterling ERI fell by about 20 per cent between October 2008 and January 2009.

    INCORRECT

    The UK is not and never has been a Schengen Area country.

    Only Allan the Troll was uniquely dumb enough to make such ill-informed comments on Migrant Tales and then persist in those views even after they had been definitively refuted.

    I suppose you are one of the guys who never remember a name, could be good to get a guide for that one as well.

    Another hint:

    google UK+Eu, UK+Schengen, UK+ EMU and all your questions will be answered. Provided that your understanding is better than before. Take a friend to help you out, that is what friends are for.

  5. Marke

    Justice demon, why do not you try to tell others how the brits have contributed to the bail-outs and what is the presumptive loss for them in your calculation. 500 per citizen, 5000 pounds perhaps per citizen and how much this is expected to grow in the future.

    Try also to tell us how the UK is applying Schengen agreement, appplying it without signing it.

    Try also to understand what you write yourself, before you try to understand others, if this is not too much asked.

    • Mark

      Marke

      500 per citizen, 5000 pounds perhaps per citizen and how much this is expected to grow in the future.

      Where do you get these figures? A dark and smelly place, no doubt. Anyhow, even £500 per citizen would only amount to £20 billion, which is only 17% of ONE YEAR’S revenue that the UK gets from the EU trading area. So, not a huge hit to take so as to keep the markets alive, is it! Or would you prefer to let the Eurozone collapse and impose a much more massive loss on the UK taxpayer?Moreover, the deregulation of the City of London had a MASSIVE impact on finanacial markets in the EU through its position as the finance capital of Europe. The UK reaped the benefit and must likewise shoulder some responsibility for fixing the bloody mess (somehow has to pay, after all). Further, UK policy growth was focused almost entirely on housing markets (notorious for bubbles) and the investment markets, where derivatives were ultimately a massive deception in taking risk off the balance sheets of the City banks.

      Also, the ‘cost’ to the UK taxpayer is not yet fully a payment made – it is a liability that they carry (loan guarantees). The actual debt write-off in the EU has so far been fairly small in relation to the size of the ‘bailout’ mechanism itself (€30 billion for Greece, carried by the banks – compared to the €350 billion of normal debt write off for businesses in the EU for the same year, it’s small change in economic terms).

      So, basically, rather than create or explore any of the real context of the EU bailout mechanisms (ESM and EFSF), you prefer to pull one figure out of your arse that is designed entirely to make people feel like they are ‘paying’ for other people. In other words, you deliberately seek to create a sense of grievance that can be leveraged for political power – a power that would be put in the hands of a talentless bunch of xenophobes and homophobes, i.e. the usual recruiting barrel of Far Right populists!

      The strategy of the UKIP is simple – a great many voters don’t think, so the best way to reach them is ‘simple sentences that resonate’. And what is the easiest thing for a politician to resonate with a complete stranger off the street? Immigration!!! I.e. latent racism and a feeling of having been ‘forgotten’. Many people in the UK have ‘kept themselves to themselves’ when it comes to multiculturalism, muttering under their breath about the invasion of ‘Pakis’ and ‘Poles’, and doing NOTHING to get to know these people or to understand how Britain has indulged in yet another GREAT immigration move, something that has happened many times in Britain’s history, and which has in the past driven its truly global standing. Nope, they stand outside of it – suffering in a recession that they also don’t understand, at the mercy of financial policy that has benefited mostly City traders and their families. Easy pickings!!!! Except that it’s a recipe for disaster – a Britain divided against itself. Class warfare replaced with ethnic and cultural warfare. The poor turning against each other. It always surprised me how the poor got suckered into voting for a party (Tories) that time and again undermined their core interests. Some say Thatcher turned the working class into the middle class, through house-owership, but it was really education that did that – graduates were the ones with the salaries to pay for the mortgages, while selling the housing stock to the poor was just another way of monetising a government asset to pay for reduced corporate taxes.

  6. JusticeDemon

    Allan

    You were banned from this site some time ago for precisely this kind of idiotic trolling.

    The UK is not part of the Eurozone. Anyone who has watched/suffered the vicissitudes of sterling over the last 5 years is aware of this.

    The UK is not part of the Schengen Area. Anyone who has entered the UK after travelling through the Schengen countries notices this immediately. When was the last time you entered the UK from a Schengen country without an identity check, Allan? How do you explain the border control lanes at the Eurotunnel and ferry terminals or the need for the UKBA-Eurotunnel agreement? This all seems like a lot of investment for facilities that are no more necessary in Folkestone than at the Strasbourg-Kehl frontier. Please explain what happens between 00:45 and 1:05 in this video, and tell us why the UK government has wasted so much taxpayers’ money employing people in Folkestone for a completely unnecessary purpose.

    • Mark

      I already stated that it is understood that Greece’s economy will shrink before it grows again. That’s the nature of the medicine.

  7. Marke

    EU wanted to be the most competitive market in the lisbon-strategy launched in 2000.

    Big competitors like US and Japan were in a lead that did not change until after the global financial crisis. Then we could see what happened, the gap widened and the initially laid strategy failed even more.

    I am one of those who would like to see Europe grow as a market, not the things happening now. Now market has had a developement as Europe has now, all the other has recovered, including EFTA-countries.

    If you choose misery and disaster, vote for the current EU. That is a fact.

    • Mark

      Allan

      EU wanted to be the most competitive market in the lisbon-strategy launched in 2000.

      You say that the EU wanted to be the most competitive market. What do you mean by that? This is an empty sentence.

      What do you mean US and Japan were ‘in the lead’? Why would it change after the financial crisis?

      What was the original strategy (and whose) that failed ‘even more’? This is an empty sentence.

      I am one of those who would like to see Europe grow as a market, not the things happening now. Now market has had a developement as Europe has now, all the other has recovered, including EFTA-countries.

      I guess this is just your poor English, because it’s nonsensical. Hands up those that would like to see Europe’s market shrink? No-one wants to see it shrink, but people want to see healthy economics, not governments piling more debt on old bad debt!

      What is ‘all the other’? And what do you mean they have recovered? If the crisis is over, what are you whining about?

      If you choose misery and disaster, vote for the current EU. That is a fact.

      Oh, doom and gloom, woe is me, slap me sensless with a Euro flag!!!

      You do realise, Allan, that EU countries generally rate themselves as quite happy people on the whole.

      Clearly the UKIP will do well in the European elections. Part of the reason for that is the Tory party and its lurch to the Right instead of actually taking on the xenophobes and extremists. Tories look out of touch and the UKIP meanwhile feed off a new populist wave of sympathy. Be careful what you wish for, it might just come true!

  8. Marke

    Greece cumulating debt for 30 years, trade balance too negative for more than 15 years.

    Will you give another 30 years to recover? 300 more realistic.

    -sadly, but it does not work that way.

    Year 2000 officials in Brussel wanted to make Europe (EU) the most competitive market. As we both know, we did not reach the top of the mountain but the bottom of the valley. US and Japan were to be caught up, instead they ran off, presumably for a very very long time.

    I predicted civil unrest on a larger scale, that guess deserved jackpot. Unfortunately poverty and violence is more to come but your chair Mark Twain seems too comfy for having sympathy for people in genuine shit.

    Janne Taavetti (justice demon) also struggles with a too comfy chair I suppose.

    Mark Twain, first goes the money, then goes the health (and happyness). That applies even for you in your comfy chair. If misery strikes on you..odds are high since massive disaster is on its way with the current policy.

    Once again: EU as the only market in the world has not yet recoverd from the 2008 crisis. All others have, think of that when you look at the flag and sing the anthem

    • Mark

      Marke

      I predicted civil unrest on a larger scale, that guess deserved jackpot. Unfortunately poverty and violence is more to come but your chair Mark Twain seems too comfy for having sympathy for people in genuine shit.

      The answer to being ‘in the shit’ is not civil unrest, Allan. It’s to knuckle down and find work or continue to work hard. That’s the ONLY WAY. I’m not rich, Allan – I work hard and I provide for my family – it’s not a comfy chair, by any means.

      If misery strikes on you..odds are high since massive disaster is on its way with the current policy.

      You are like a doomsdayer! Give it a rest Allan. Either you have something concrete to say or you are just whistling narratives of doom in the wind.

      Once again: EU as the only market in the world has not yet recoverd from the 2008 crisis.

      Europe’s problems were already entrenched before the crisis – the recession just made the inescapable. The EU didn’t create those problems, but it is probably the ONLY mechanism currently available that would fix those problems. Expect the EU to bounce back to growth next year!

  9. Marke

    the support is down to 45 % for the EU in the 8 biggest EU-nations, a fall of 15 % within the last 12 months. (PEW)

    -tells that things are not going that smoothly, doesn’t it?

    • Mark

      Yes, but public support isn’t exactly going to be rosy during a recession, is it. And of course, there are plenty of parties trying to exploit the uncertainty. That doesn’t make it the right or sensible way to go, though.

      Since when did life run smooth? Are you twelve?

  10. Marke

    Yes, but public support isn’t exactly going to be rosy during a recession, is it. And of course, there are plenty of parties trying to exploit the uncertainty. That doesn’t make it the right or sensible way to go, though.

    Since when did life run smooth? Are you twelve?

    It did not run smooth for the past 30 years.

    the support was the lowest in Greece, the country that receives all the money you pay. Very ODD!! Strange logic!!

    • Mark

      Allan

      Very ODD!!

      Not odd at all. Greece was in the deepest shit and had to implement the most difficult recovery plan – one would expect public support to be lowest in that country. God knows where Greece would be now without the EU aid. Their economic model was totally unsustainable.

  11. Marke

    Yes, but public support isn’t exactly going to be rosy during a recession, is it. And of course, there are plenty of parties trying to exploit the uncertainty. That doesn’t make it the right or sensible way to go, though.

    Since when did life run smooth? Are you twelve?

    I am eleven, do you have a minimum age requirement here?
    -I can see there are no other requirements

    • Mark

      Marke

      I am eleven, do you have a minimum age requirement here?

      Funny.

  12. Marke

    Allan

    Not odd at all. Greece was in the deepest shit and had to implement the most difficult recovery plan – one would expect public support to be lowest in that country. God knows where Greece would be now without the EU aid. Their economic model was totally unsustainable.

    Twain:

    In other words-if somebody helps you out when you are in deep shit, you should be bitter to him.

    Indeed without any aid at all, Greece would be in gigantic trouble. So why not take the help you get with open arms?

    • Mark

      Allan

      In other words-if somebody helps you out when you are in deep shit, you should be bitter to him.

      Indeed without any aid at all, Greece would be in gigantic trouble. So why not take the help you get with open arms?

      Unemployment in Greece is running at 27%. People are suffering. The politicians are telling them that austerity is the only way forward, but others are telling them that EU withrdawal, currency devaluation to stimulate growth and tight immigration controls are in fact the answer, that Greece can ‘grow’ its way out of the problem, without touching public pensions or any of the other albatrosses around the neck of the public authorities. On top of that, Greeks are being told that the only reason they are suffering is because the ‘weaker’ Euro that comes in part from their membership of the Euro actually benefits Germany, a massive exporter, who would otherwise have to contend with having a much much stronger national currency if it was based on their own economic fundamentals.

      In other words, Germans (and others like Ireland and Finland) directly reap the benefits of having these weaker economies in the block, because it helps their export and economic growth. That indeed is the rationale behind the need for these countries to ‘stump up’ the guarantees for the Greece (and other) bailouts. The bailouts don’t solve the problem though, they just stop the Greek government from going bankrupt, i.e. they can pay their public sector workers their salaries. To solve the problems, they have to pare public services down to the bone, which in effects means ‘less salary’ or ‘less salaries’.

      Greeks are therefore told that the Germans are ‘making them suffer’ so that they can benefit. In that scenario, people can easily become disillusioned even with the ‘help’ they are getting. In fact, the whole idea that Greece should just be ‘grateful’ for the ‘charity’ of the EU starts to sound insulting – Greeks suffer austerity just to make Germans and the French wealthier through cheaper exports built on the weak Euro? The problem is that Greece was the one to make a mess of their public finances, and no amount of blaming the Germans for exploiting their EU membership gets away from that. The reality is that Greece did create its own problems, but when people are suffering, they generally seek someone to blame, preferably not themselves.

  13. Marke

    if you join a monetary union or any other union, you are supposed to play by the rules Twain.

    If you can not do this, you have to seek for other options.

    If Greece never had joined the euro and started to devaluate around 2005-2006, their economy would be in flow condition now and things would look very differently.

    Independent experts nearly all say that Greece has no other option than to leave the euro.

    • Mark

      Allan

      if you join a monetary union or any other union, you are supposed to play by the rules Twain.

      See my other comment about France and Germany.

      If Greece never had joined the euro and started to devaluate around 2005-2006, their economy would be in flow condition now and things would look very differently.

      There was never any easy solution to Greece’s problems. Devaluing can bring benefits but also redistributed risks – it tends to benefit entrepreneurs and global players more than local or internal businesses (whose costs GO UP!). The only benefit with devaluing is that it brings jobs growth, which raises tax contributions, lessens welfare and thus eases the pressures on government. But this can also lead to more reckless public spending – governments in Greece have tended to use ANY slack in their finances to leverage more debt and spending, thus taking out the flexibility required to deal with downturns. Everyone plans for growth, but no strategy for recession. It’s the typical ‘boom and bust’ approach which economists have been trying to get out of. There is no easy answer to that – once the downward cycle starts, it’s very hard to control, and it’s self-perpetuating and incredibly self-destructive. It’s almost like economic cancer.

      The fundamental problem is the management of risk, not capital. ‘Bubbles’ are when risk is not being properly reported, or people are taking advantage of a high risk game trying to make hay while the sun shines with no thought to the mess that happens when the accumulated losses (or redistributed risks) start to eat away at the economic fundamentals. Profit in one direction, risk in the other. Except that when this game is allowed to play out, there is only one eventual outcome – the patient gets ill. It’s called ‘free market economics’, but the market cannot be trusted to maintain the health of the market as a whole. That is something that far too many economists on the Right have closed their eyes to for far too long.

      It’s not a question of regulation or deregulation, but having the right regulation. And for that, we need the smartest minds working in Government. Sadly that is rarely the case.

    • Mark

      Marke

      Independent experts nearly all say that Greece has no other option than to leave the euro.

      This is an accurate description by Greek economists writing in the Wall St Journal about what would happen if Greece left the EURO.

  14. Marke

    Twain, you know now this Slovenia bail-out risk..then comes presumably France and Italy and then we are gone.

    Janne Taavetti: even you in your comfy chair will start to shake

    • Mark

      Indeed, the financial markets are not yet stable – and this may not yet be the end.

      But there are no realistic alternatives at the moment. For Europe to succeed, it MUST create its own free trade area and harmonised monetary policy. The problem has been perhaps too much compromise – people talk of sovereignty issues, but with a project like this, the decision has to be, either we do it or we don’t, because the half measures have left the block completely vulnerable. Harmonisation was too rushed and not strict enough – France and Germany both broke their own rules on debt to GDP ratios as and when their economies were becoming sluggish, and this sent totally the wrong signals to the other block members.

  15. Marke

    See my other comment about France and Germany.

    There was never any easy solution to Greece’s problems.

    The fundamental problem is the management of risk, not capital.

    It’s not a question of regulation or deregulation, but having the right regulation. And for that, we need the smartest minds working in Government. Sadly that is rarely the case.

    You can not form a monetary union when some nations have this and that tax level. Countries with low tax level, get their countries trouble when countries with high tax levels pay for the low ones. This is funny, it could not get really worse. The markets change over time, so you can argue with this and that but if you are not competitive you are not competitive.

    If banks are in difficulties, it is lack of capital. You should not do business that gets you in too big debts. Lack of capital because negative balance of trade for more than 10-15 years, perhaps 30 years in Greece.

    Another thing which is out of hands. Very debted Finnish taxpayers/households pay to not so debted Greek taxpayers. This should never be the case.

    Greece has to be offered a solution to get hope, prospects and economic growth rather soon. The current path is not the right one.

    • Mark

      Marke

      Countries with low tax level, get their countries trouble when countries with high tax levels pay for the low ones.

      Not necessarily true. It depends a lot on the size of the public sector. In the Nordic countries, people are happier for some basic services to be provided by government, which means high taxes and ‘free’ services, as opposed to low taxes and bought services. The difficulty is when you try to run public services with low taxation, so that service quality suffers and a two-tier system opens up with private services preferred by the better off. The question really is just whether a government has enough money to pay its salaries and debt obligations. More salaries and/or debt means more tax revenues. The problems of a recession are often not in reduced taxes per se, but reduced velocity of economic activity, meaning that it takes longer for money spent or earned to return to the Government. Size of earnings is related to pace of spending.

      The key issue is bringing debt to GDP levels into parity, not about controlling tax spending uniformaly in the EU. So, yes, you can have a monetary union and have different tax levels. The argument is whether government services can give value for money.

      If banks are in difficulties, it is lack of capital.

      Again, not necessarily true. The first responses to the crisis was to make capital available to the banks, but the refused to use it, for fear of not knowing which bank might fail next.

      Lack of capital because negative balance of trade for more than 10-15 years, perhaps 30 years in Greece.

      Trade deficits can be misleading. First, they bring some significant positives. They help keep inflation low and prices competitive – as long as a deficit is serviceable, everyone is happy. Another matter commonly overlooked is that imports from domestic companies operating manufacturing or assembly abroad and then importing the goods shows up as a minus on the GDP, even though the economic benefit of that is actually domestic. This is one reason the US can effectively run such an enormous deficit and still function – it simply uses cheap labour around the world. The difficulties lie in where the profits are going, not in the trade balance, per se.

      Very debted Finnish taxpayers/households pay to not so debted Greek taxpayers. This should never be the case.

      That’s about as inaccurate as it gets. First, debt levels in Finnish households are not that high. Second, Finnish taxpayers are ‘paying’ very little towards Greece. There has been little debt write-off, but mostly loan guarantees via the various bailout mechanisms. I’ve already discussed the levels of debt involved, I’m not going over that ground again. Also, if you had followed my previous link, you would see that Finland directly benefits more than other EU countries from a weak Euro that comes from Greece’s problems. In other words, Finland profits from Greece’s problems. To the degree that Finland benefits exclusively from another member state’s difficulties, there should also be a degree of redistribution. That is what being part of a monetary union is supposed to be about, an absence of that kind of EXPLOITATION. All countries are facing problems, though, with shrinking economies and rising unemployment.

      The idea that Finns should just look after their own while ignoring how Finland benefits from the situation of difficulty is frankly immoral.

      The current path is not the right one.

      The current path is the right one but it’s a long one, and that is what is hurting. People want solutions now. It’s not going to happen. The cost of living in Greece would totally plummet if Greece was to put the Drachma back on the currency markets. You think it looks bad now! Nevertheless, it may come to that before the rest of the European countries accept that a level of economic responsibility is a prerequisite to a well-functioning EU. But in terms of European cohesion, it would be a disaster – the message is that if you get into difficulties, you would be totally cast adrift. That’s a bit like saying I’ll only be married to you as long as you don’t ever get sick! Sounds unrealistic in terms of a long-term or ‘healthy’ marriage.

      If Greece is to become a competitive and thriving economy, it is better off doing this in the context of EU membership. In fact, the failure of Greece already to arrive at this competitiveness in the last 40 years suggests that alone, they are not capable of doing it. Is Europe better off with Greece in the fold? Well, that’s debatable. But one thing is for sure – Greece has to come off the EU teat that it’s been feeding off the last 15 years and that means austerity!

  16. Marke

    You write text that I do not understand half of. Let’s keep it short.

    If there is not enough money, then there is not enough money.

    Bail-outs-tempoarary solution. They will not help Greece, its problems originates from years behind.

    I read a survey from two Americans sayoing that when the government debt is more than 90% of GDP, then the economy slow down and debt usually increases.

    If banks are in trouble and can not materialize capital quickly, then it is a problem. Same American say that the financial sector should not be too big.

    Total debt level and total tax level are important, because they determine the purchase power which of course is also directly linked to the banks.

    EMU nor Eu countries are homogenious, UK has more global trade than Germany, germany more Eu-trade than UK.

    One founder of the Euro, german minister said recently that the bail-outs have to be stopped, they destroy the economy of Greece, Spain etc. Portugal.

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