Britain and the EU

I don't know enough about British politics but I would say the coalition is just holding together, for now. 

 

Cable warns of war in Europe if euro collapses

The Business Secretary, Vince Cable, warned yesterday Europe could be plunged into war if the euro collapsed.

The Independent,

15 October, 2012

The senior Liberal Democrat said the consequences would be “incalculable” and added there was “no automatic guarantee” that Europe would not disintegrate into conflict.

“I think we need to take stock that if the eurozone were to unravel in a way that destroyed the European project – and there is a risk that could happen – the consequences would be absolutely incalculable. We tend to forget, until we were reminded last week of that Nobel Prize, the European project was constructed to rescue Europe from extreme nationalism and conflict. There is no guarantee that won’t return.”

Mr Cable spoke during an event at the Cheltenham Lit-erature Festival called “Austerity, the euro and us”.

The minister described the euro as “very valuable” and had to be maintained – otherwise Britain would suffer.

“We are not in the eurozone so we cannot directly influence it. We will be heard very loudly if it does unravel,” Mr Cable told the audience. “My sense is that the Germans in particular realise how much is at stake. A series of sensible measures have been taken in recent months.

“Deep down there is enough common sense and a sense of survival to prevent this getting out of control. If it does, I’m afraid the consequences for us will be awful.”

The Business Secretary said the challenge for the Government over the next year was how to balance the need to stimulate growth while at the same time maintaining confidence on the money markets.

Two senior Conservative cabinet ministers call for Britain to threaten to leave the European Union

Britain should threaten to leave the European Union altogether unless significant powers are returned to the UK, two senior Conservative cabinet ministers have suggested.

The Independent,

15 October, 2012

Today the Home Office is expected to announce it is "minded" to exercise a block opt-out from new European Union powers including the controversial European Arrest Warrant.

But several senior Tory Cabinet ministers have indicated that they want the Government to much further and threaten to pull of the EU entirely - unless significant existing powers are repatriated.

Philip Hammond, the Defence Secretary, said the "mood had changed" among senior ranks in the Government.

"The point…many of us feel is that we are not satisfied with the current relationship," he told the BBC.

"The mood has changed...because for the first time in a decade, those of us who are uncomfortable with the way that relationship has developed see an opportunity to renegotiate it.

"It makes sense for Britain to be in the single market but to reset the relationship so we have a balance of competences which works for Britain and the British people."

His comments came after Michael Gove, the Education Secretary told friends he would vote to quit the EU if there was an immediate in/out referendum.

"Michael thinks it is about time we spelled it out, in simple words that even Brussels bureaucrats can understand, that we won't tolerate this any longer," they were quoted as saying.

"We have to tell them if they don't return some of the important powers they have snaffled from us, we will leave."

William Hague is currently leading a cross Whitehall audit of EU powers which could be clawed back by the Government including areas such as immigration, working hours and human rights.

However the Tories are very unlikely to get agreement from the Liberal Democrats on a joint negotiating position with other EU leaders ahead of the next election.

Mr Cameron is opposed to an in/out referendum and backs continued membership but has hinted his party could go into the next election with a promise of a referendum on a new-look relationship.

Today's announcement by Theresa May will confirm Britain intends to take up its rights under the Lisbon Treaty to opt of new justice and home affairs powers by 2014.

The Government will then decide which specific powers to opt into which are feels are in the national interest.

A Liberal Democrat source said this had still to be agreed between the Coalition partners.

UK trade deficit was second-biggest ever

A further plunge in exports saw the UK rack up its second-biggest trade deficit on record, official figures show.

the Independent,

9 October, 2012

The deficit in goods and services, the gap between exports and imports, grew to £4.2 billion in August from £1.7 billion in July, the largest since April, the Office for National Statistics (ONS) said.

The deficit in goods alone widened to £9.8 billion from £7.3 billion the previous month as exports to EU countries and non-EU countries fell 0.5% and 7.2% respectively.

Coupled with downbeat manufacturing statistics, the figures cast further gloom over the economy's growth prospects in the third quarter and beyond as analysts warned that any recovery is unlikely to be sustained.

Victoria Clarke, economist at brokers Investec, said: "UK exporters continue to face challenging market conditions, particularly in exporting to EU destinations but globally too."

The figures are a further blow to Chancellor George Osborne who is relying on the economy shifting towards the private sector, particularly in manufacturing and exports, to withstand his far-reaching public sector spending cuts.

Imports of goods increased by £1.5 billion, or 4.5%, from £33 billion in July to £34.5 billion in August, the ONS said.

But the increase in the import of goods reflects higher imports of fuel which was up £1 billion, specifically of oil which rose by £900 million.

Alan Clarke, economist at Scotiabank, said: "With the UK's main trading partner, the eurozone, hardly hoovering up our exports, there is precious little reason why our exports should be flying out of ports.

"If the UK is going to recover in a meaningful way over the coming year, it is going to rely to some extent on firmer demand from abroad. We have our doubts."

The gloomy figures follow a downbeat assessment of the economic outlook from the International Monetary Fund, predicting that the economy would shrink 0.4% this year and only grow by a tepid 1.1% over next year.