'Oh, so that's who Richard Morris is..." Lord Hattersley on The Daily Politics

'An influential activist' - The Guardian

'Iain Dale, without the self loathing' - Matthew Fox in The New Statesman

You are a tinker...' - Tim Farron

Wednesday 22 June 2011

John Redwood was right this morning. Just for all the wrong reasons.

Well, there's a headline I wouldn't have thought I'd write (though I'll have to go some way to beat Charlotte Henry with this one...).

But John Redwood was on breakfast TV this morning advocating that the Eurozone countries should giving, not lending, the money they need to bail out their economy. Ostensibly he said that this was because, as there was no prospect of the Greeks ever being able to pay back the loans, the pain of the extreme severity cuts were an unnecessary evil. He then of course revealed his real reasoning. To paraphrase him, if the members of the Eurozone wanted a single country, then they should act like it - just as we would give money to poor areas in the UK when they are struggling ( you can argue wether we do enough of this but it is true we don't lend within our own economic area).

Now of course Redwood is just stirring the pot as he doesn't like the Eurozone and he's making the point about 'see how awful the Euro is'. No change there. But while I don't agree with that line of argument, I do think he's got a point about giving, not lending Greece the money. While this should still be tied to strict conditions of fiscal governance, there is little point in putting onerous payback conditions onto a population with little prospect of paying the whole lot back.

This is exactly the same principle as advocated for the Third World debt by the fabulous Jubilee 2000 (now the Jubilee Debt Camapign) ( and hats off to Gordon Brown who campaigned tirelessly to deliver many of this organisations aims). (Blimey I've agreed with John Redwood and Gordon brown in the same post - you can't say this blog hasn't got range, can you...)

And a good start would be ( Mr Redwood, if you're reading this, you'll be needing a lie down now): we should cancel our government debt from the bail out first.

Why? we're not in the Eurozone.

No. But we are in the EU, and the Greeks are neighbours and allies. This is clearly in Britain's interest. No, they're not our closest trading partner, but there's a principle here, and they are an important trading partner none the less.

What's more, the Greek government's debt to us from the bail out is not especially large - a little over a £billion from backing we gave through the IMF loan.

Which is of course a still a large sum in the age of austerity, but a fraction of what we are exposed to through our banks, should the Greek economy fail. It is also exactly the sort of sum we spend on gaining British influence with foreign governments. An example of which lies just across the Med.

For if the military campaign against Libya continues into the Autumn - as seems probable - then the cost to the UK taxpayer will be approximately the same as Greek debt to the UK government. In contrast to the tens of millions that George Osborne originally said.

I know how I'd rather be spending that money, which is anyway coming from 'our reserves'. Lets give it to the Greeks. And then just enforce the original UN resolution in Libya. I support the defending of civilians but not the extended remit we seem to be giving ourselves on a daily basis.

Seems common sense really. Doesn't it?

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