Thursday, December 09, 2010

The one eyed seer of o'Kirkcaldy

What has the great expert to say, what is he telling us? He is of course very wise, and has been away in the North ruminating in his wisdom,
"I sense that in the first few months of 2011, we have got a major crisis in the euro area."
Well blow me down I wouldn't have guessed. I would have thought that even pregnant teenagers on a Bolton estate would have worked that out by now.

But there is more,
Failure to solve the euro's problems in "one fell swoop" would condemn the continent to "a decade of high unemployment and low growth", he warned.
The crisis would affect the UK, even though it is not in the single currency, because 60% of its trade is with eurozone countries.
Eh? Run that past me again you Scottish greymalkin. You are claiming that 60% of our trade is with the Eurozone! Given that the figures in the pink book, compiled while you were in office tell is that only 44.1% is with the Eurozone.
Written answers and statements, 2 December 2010
Lord Pearson of Rannoch (UKIP)
To ask Her Majesty's Government, further to the remarks by Lord Sassoon on 8 November (Official Report, col. 1-4), what is their definition of trade in the statement that "40 per cent of the United Kingdom's trade goes to Europe".

Lord Sassoon (Commercial Secretary, HM Treasury; Conservative)
The definition of trade used on 8 November was total UK trade (exports and imports) with the 16 members of the European Economic and Monetary Union (EMU) that have adopted the Euro currency. According to the latest Office for National Statistics 2010 Pink Book publication, in 2009, 44.1 per cent of total UK trade was with EMU countries.
Only 15.9% out. Easy mistake really. I mean given that the figures for trade are about 400 billion per annum, losing 16% down the back of the manse's sofa is pretty worrying stuff.

This might explain why we are in such an economic madhouse.

He also seems to take the position that for the Euro to work there must be a single EU country, and seems to suggest that this would be a good thing,
"We have also got this impediment to growth: the euro area is inflexible because you cannot adjust your currency. It is a one-size-fits-all interest rate that doesn't necessarily suit all countries, and the structural reforms that are therefore necessary to make a single currency area work haven't been completed - and in some cases haven't been agreed."


Mike Spilligan said...

Excellent post. I hope that your not thinking of buying his book - borrow it from a library, and then only if you really have to.

Edward Spalton said...

Actually the EU portion of total trade is much, much smaller. The figure does not take account of purely domestic economic activity - which is the largest part. When I looked at it some years ago, the figures rounded out very roughly to
10% Exports to EU (however defined)
10% Exports elsewhere
80% Domestic economy.

So 90% of our economy has nothing to do with the EU yet carries all the cost of EU regulations for the sake of the very important proportion of export activity to the Single Market.

Gillibrand said...

Wait for the sales to buy the book- it will be discounted by January 2. They may even pay you to take it away.

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