How can Greece expect to avoid default when the initial loan matrues on 20th March? With the bail out fund essentially halved by the downgrade, just where is the money other than subsumed within an imploding black hole that threatens to consume the entire European economy if leaders continue to simply cut cut cut and use thimbles to bail out a stricken cruise vessel?
It is apparent now that the crisis cannot be resolved and as I have argued for a long time, a more sweeping, schismatic approach needs to be taken if Europe is to rectify its ills.
With it in mind that the red letter day fast approaches and the bailiffs are poised in the wings, I have addressed George Osborne imploring him to tell of what sort of reinforcements are in place to present British interests in the wake of a catastrophic downfall and break up of the single currency. I will also write a letter to Welsh Government Minister for Business Edwina Hart asking her what her department is doing to prepare welsh businesses for a possible fall out in trade. I was alarmed to read a statement from the First Minister's Office suggesting Wales seeks to broaden trade ties with the Union, when financial experts from Ernst and Young are imploring the UK to trade further afield to prevent a return to recession.
Anyway, below is the letter I will send to 11 Downing Street today.
With any luck we will get a prompt reply and have insight into whether the government really are protecting British interests.
Letter to George Osborne
In response to the recent downgrades of both France and eight other EU member states and most recently the European Financial Stability Facility I am deeply concerned that the UK and its constituent countries have made preparations for what is now looking like inevitable fiscal disaster across Europe.
It is a growing probability that Greece will default on debt repayment when the current loan matures on March 20th. This of course would likely lead potential investors to lose confidence in the Eurozone and alongside the near halving of the bail out fund as a result to the EFSF downgrade, would lead to a spiralling downfall that could occur extremely swiftly.
The escalating urgency of the situation is without doubt apparent yet I adhere strongly to the sentiment that it is not the UK’s responsibility to bail out stricken single currency nations, as I hope you would agree.
However it is imperative that all of the United Kingdom’s constituent territories prepare for a break up of the single currency and mitigate the impact of fall out from ongoing crises within the Eurozone which may cast reverberations across global markets. It is with regards to this matter that I contact you today.
I would like reassurance that Britain is prepared for the worst when it comes to the future of the single currency and ask that you outline the preparations that have been made to ensure UK industries and markets are protected from ongoing problems on the continent. There has been suggestion that the UK Foreign Office has drawn up preparations for executing evacuations of British nationals if the single currency break-up leads to social uprising. However I have heard little of how British businesses, banks and investments would be safeguarded and whether public finances would be summoned to prop up the private sector in the event of a catastrophic fall.
I would also wish to question how Britain would react to potential future Irish default given the implications it would have on the UK after underwriting a significant tranche of Ireland’s debt.
Please would you also reaffirm commitment to resolutely standing against the notion of the British taxpayer bailing out single currency members, either directly or as a contributor to the International Monetary Fund.
It is a deep concern of mine that devolved governments have been consulted and advised on how to deal with the ongoing crisis in the Eurozone. I am writing to the Minister for Business, Enterprise, Technology and Science in the Welsh Government Edwina Hart to determine what measures she has taken to ensure her department prepares for the worst. Have the relevant devolved administrations been consulted on the matter and are you reassured as UK Chancellor that businesses and investments across the UK are sufficiently protected?
I was alarmed to hear a statement from the First Minister’s Office suggesting Welsh businesses should seek to expand trade with the EU at a time when many experts have advised that the UK slough trade with Eurozone countries in favour of trading with the wider world.
Please could you outline any strategic implementation that the UK Treasury has thus far coordinated with regards to safeguarding British interests in the event of the break up of the single currency and also clarify future intentions of the British Government to protect British business and investment against a financial crash in Europe?