The IMF Is Not Helping

Berlusconi is reported as saying yesterday that "I don't think the hypothesis of leaving the euro and using competitive devaluation is blasphemy." He went on to say that the best solution would be for the ECB to be allowed to act as lender of last resort but that if that doesn't happen either Germany could leave the euro or other countries could do so. This though seems unlikely as it has the Spanish premier has been reported as saying that at a meeting in Rome today between Germany, France, Italy and Spain that they were united in their desire for political, banking and fiscal union. The four countries are also untied in their desire for a financial transaction tax. The IMF though is of the view that measures that were considered at the meeting of the leaders of those four countries were not enough to deal with the crisis. Jeremy Warner warns though in the Telegraph today that the IMF is in process of encouraging the setting up of a monster on our doorstep and that this is a danger that neither Cameron nor Osborne have taken on board. Warner maintains, and I agree with him, that Cameron and Osborne should not be encouraging political, banking and fiscal union on our doorstep as it will be to our disadvantage to have a huge autocratic institution on the continent and that we should be doing everything in our power to stop it including telling the eurozone countries that the euro is flawed and must be abandoned. You can read Warner's article here. We desperately need to start looking after our own interests. Hannan has a good proposal for what should happen next. Yes, you guessed it - a referendum. Not just on the In/Out question but on something more sophisticated which involves re-negitating our terms of partnership with the other EU countries. Read his idea here.