Via Elsevier (NL) we learn a bit of news that should warm the festering rage of all who know the EUnion for what it is.
The Dutch government debt will see an increase following the mergency loans to Ireland. This is the consequence of a decision made by the European statistical bureau Eurostat.
Last year Ireland was promised up to 85 billion euro in emergency loans, 17.5 billion of which is provided by the EFSF, an investment mechanism to aid debt stricken euro countries.
The fund takes up loans in the financial markets, backed by guarantees of more affluent euro countries, and passes it on , in this case to Ireland.
Eurostat has now decided that euro countries should add the amount for which they have given off guarantees. Recently EFSF has entered the market for the first time and has taken on a loan of 5 billion euro. The Netherlands guaranteed 5.9 percent, which means that the Dutch deficit is increased by 300 million.
A spokesperson for the ministry of Finances pointed out that the whole amount guaranteed by the Dutch government is incorporated in the government budget. In the budget there is an entry for around 26 billion euro for the EFSF.
Back in May last year, our then and current minister of Finance, Kees-Jan de Jager, was adament: De Jager made a point of insisting the 440 billion are guarantees and will not be used, thus costing us taxpayers nothing.
Another promise broken, another vow forgotten. Only last week De Jager was crowned (NL) ‘most trustworthy politician’ in a poll of the Dutch population. Ironic, isn’t it?
This, by the way, is not a strictly Dutch issue. The decision by Eurostat will have its cosequence to all countries guaranteeing loans to Ireland, and Greece, and possible Spain and Portugal in the near future. Every time to EFSF goes onto the market to seek money to bail out a EUnion member state (and remember, this is supposed to be illegal under the Lisbon treaty) another slice of deficit is added to your nations budget. A deficit that will have to be held within the limits set by the EUnion, more likely then not with tax money. Our governments guarantee vast sums of money to keep the euro alive. And for us there is nothing to do but pay up.
In the Telegraph today there is yet another pundit declaring the euro dead. This time it is Jeff Randall, writing that as long as Greece remains locked in a currency that is Deutsch mark with only a hint of garlic, its economy cannot recover. A lethal combination of rising unemployment, falling wages and an exodus of talent will force it to confront reality. That will occur when either the voters decide they can no longer stand the hair shirt or the country’s creditors run of out patience. The same will apply to Portugal and, eventually, Spain. Thus the euro, as we know it, is finished.
But as Dr. North observes, the euro is a political, not an economic project. The “colleagues” will do everything in their power to keep their “baby” alive – and then some. So, where economics ends, politics takes over. They will ruin the economies of every nation in the EU rather than give up hope.
We must get out before it is too late. Unio Europaea delenda est!