Britain is tied to the Eurozone – so why keep it at arms length?

Europe does affect British economic fortunes, which is why it is so counterproductive to pretend "so

Another quarter, another set of negative GDP figures, another drop back in recession for the British economy. The much talked about, yet elusive, recovery seems to be slipping from our grasp once again.

Many, especially Keynesian economists and those on the left of the political spectrum, will tell you this was inevitable. No surprise. Nor is it surprising that the government has been quick to blame everyone else for the state of the British economy. That’s what politicians do best.

According to the government’s script what is really to blame for the economic predicament we are in is the sovereign debt crisis in the Eurozone and the economic crisis it has generated. With our main trading partners in economic contraction our chances for recovery are significantly reduced, the story goes. Not to mention that the rising cost of raw materials like petrol is pushing our inflation rates up, while the global banking crisis is forcing the Bank of England to inject billions in the British banking system. At the same time, the printing of money is reducing the value of our currency, making imports of German cars, Japanese DVDs and American smartphones we love so much more expensive. And all the above combined is making the Bank keep interest rates at levels so low that they are starting to become unsustainable.

So much for the cherished economic, monetary and fiscal independence of Britain. The fact of the matter is that the government is, to a large extent, right. Most of what a very open but small and peripheral economy does is affected (and often dictated) by events that take place elsewhere.

The value of our GDP, the level of our inflation and interest rates, the very health of our economy are, by the government’s own admission, dependant on outside, European as well as global, factors. All we can do is tighten our belts and hope people will keep lending us money in affordable terms (their words, not mine).

As a result it is a bit disingenuous for the government to go on exclaiming their holy duty to maintain our economic and monetary sovereignty one moment while the next admitting that the very notion of "sovereignty" is void of meaning in the context of the internationally integrated economy Britain is plugged in to.

We are not just affected by the state the European economy is in. We are the European economy. Our trade inflows and outflows, our financial services sector, our supply chains and the source (as well as destination) of investment are one with those of the EU. And for good reason. This is the biggest market in the world and one of the most mature and sophisticated economies. Britain prospers when the EU economy does well and it suffers when it stagnates.

The plot really thickens when one keeps in mind that the EU has engaged in a process of monetary integration, soon to be coupled with fiscal and political union. No matter what the immediate and short term problems of the Eurozone (and its institutional architecture) are, the Eurozone and its single currency are so systemically important for the EU (and global) economy that it is a matter of when rather than whether the Eurozone will sort itself out and continue its path towards becoming a global reserve currency.

Before the sovereign debt crisis in Greece and the burst of asset bubbles in Ireland and Spain the euro had become the most held currency and the de facto second reserve currency. It has maintained that status throughout the financial and debt crisis of 2008 and 2010 and it has also kept its value, while global powers like the US and China have verbally and practically shown their confidence in the euro.

As a result we will soon find ourselves in a world where the global economy will be dominated by two, maybe three, currencies: the US Dollar, the Euro and the Chinese Renminbi. A situation that according to academic research (pdf) will contribute to the re-balancing of the global economy, away from the uni-polar and destabilising current system and towards a more sustainable multi-polar system.

The question is what happens to small and peripheral economies like Britain’s, with a freely floating currency like Sterling, when they get caught up in the headwinds of those three global reserve currencies and the enormous economies that underpin them.

Some people are forecasting that Judgement Day is approaching for the Eurozone. But the Armageddon they are predicting (or hoping for) is not going to take place. It is actually Britain that will have to make some important judgement calls in the not so distant future about how it wishes to welcome this brave new world. On the side-lines, affected by the elements of economic weather but unable to have an effect on them. Or as part of a strong and global currency. The sooner we start discussing the merits of that question the more prepared we will be for when the time comes to make this decision.

European Central Bank President Mario Draghi. Photograph: Getty Images

Petros Fassoulas is the chairman of European Movement UK

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Young people want big ideas – that's why I refuse to dumb down Radio 4

My week, from finding a way through the fog to getting the quarterly audience figures.

I walk to work through Regent’s Park, when possible accompanied by my dogs, which my husband then collects on his bike ride and takes home. If there is time we have coffee together in the small hut just before the inner circle. This is a good way to listen to the Today programme, I find, as I can keep one ear in, achieve a rational, critical detachment and still enjoy the birds, and then add the other ear if a strong interview demands immersion, or take both out altogether when despair creeps up. On the subject of Today, I hope to have some fun with Sarah Sands, whom we have just appointed as the programme’s new editor; it’s good to see an experienced woman brought in at a senior level to the BBC.

 

A winter’s tale

The park through the seasons has become something of an addiction, measured out by inspired planting of appropriate annuals, the names of which I note and discuss with the gardeners when I dare interrupt them.

Memorable events occur quite frequently during this walk: I once stumbled upon a proposal of marriage involving a beautiful young woman who once had worked for me; an elderly Chinese gentleman practises t’ai chi regularly at a certain spot and I imagine talking to him about the changes he has seen in his lifetime back home. I have seen a rare green woodpecker on the grass pecking boldly in plain sight, and hopeless ducks, silent, puffed up, marooned in the fountains, unable to find their way back to the ponds, so close by.

At the start of winter, while walking home one day, I got stuck in the park, with a group of other stragglers, as the gates locked with the onset of darkness. Rather than retreating the way I had come, I accepted the offer (from a rather good-looking stranger) of a lift down from the top of the gate. The atmosphere then was alive, exhilarating, with crowds heading for the Frieze Masters marquee. How different it all is now, in 2017. There’s a new mood, a new American president, a new era.

 

Musical interlude

Recently, Roger Vignoles – the glorious pianist and a close friend – was playing, as he often does, in a lunchtime concert recorded for Radio 3 around the corner from Broadcasting House at the Wigmore Hall, with the baritone Roddy Williams. French songs: Fauré, Poulenc, Honegger, with a handful from Caplet (the latter quite new to me). All thoughts of politics fled, giving way to “L’adieu en barque”, set late one summer’s day on the river, a moment to clear the fog, both within and enveloping us that day in London.

I left an hour later in clear sunshine, feeling smug because we have commissioned Roddy’s Choral ­History of Britain for Radio 4 later this year.

 

Power trip

Waiting for coffee to brew, I was discussing Book of the Week with Gill Carter, commissioning assistant on this slot, when my drama commissioner, Jeremy Howe, put his head round the door. “Clarke Peters (yes, the one from The Wire) is here reading The Underground Railroad for Book at Bedtime.” Assured, deep tones rang out from a tiny studio on the third floor. “I have to keep stopping,” he said, as I thanked him.

Who could not be overcome by this story of slavery and bravery at this moment in American history? I am so glad to bring it to listeners this month. “Can you help?” the producer pleaded as we left. “We’re about to be thrown out of the studio.” That’s real power, I thought, as ten minutes later Jeremy had conjured up the extra time.

Clarke Peters will be back in the autumn with a series about the real history of black music in the UK which, he says, is little understood.

 

Culture and anarchy

This is the time of year when we launch the commissioning round calling for big ideas for next year. It’s a humbling thing to stand in our beloved art-deco Radio Theatre in front of hundreds of programme-makers, hoping that they will be inspired to bring “the best which has been thought and said in the world” (my guiding principle from Matthew Arnold).

I try on these occasions to lay out a little of how I see the shape of the world in the commissioning period ahead. This year the Loneliness of the Long-Distance Runner overcame me. Better perhaps simply to outline the way we commissioned the first week of 2017 to catch the mood. T S Eliot, more or less all New Year’s Day, read by the formidable Jeremy Irons, raised an echo of the Thirties, then a factual series of considerable documentaries across the week described The New World, followed by writers around the globe Imagining the New Truth.

Finally, inspired by Twelfth Night and the spirit of misrule, the comedy writer John Finnemore, one of our favourites, took over as the Lord of Misrule himself.

The imaginative world and writers have never been more needed. Whether it is truth or post-truth, I suspect that dramatic, imagined and creative truth when properly achieved is probably the nearest we can ever get to truth itself.

 

Tuning in

It’s the week of Rajar. These are quarterly audience figures for radio. In the past few months, they tell us, over 11 million people have listened each week to BBC Radio 4, setting new records. Just under half are below our average age of 56 and 1.5 million are under 35. At the moment we seem to have over two million weekly visitors to the website and roughly 20 million monthly global downloads.

Who says young people don’t want intelligent content? Who says that dumbing down is the only way to attract big audiences? We at Radio 4 try to be all about smartening up. We mark Rajar Day (whether the numbers are up or down) with cake, so I make my way to Paul for two tarts, pear and blueberry this time.

Gwyneth Williams is the controller of BBC Radio 4

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times