Whether Greece holds a referendum, and whether or not its people vote yes or no, is irrelevant: the country is bust.
The Eurozone countries are pledging €1 trillion, €2 trillion... It doesn't matter: none of them have the money in the bank—or, indeed, the credit line—to pony up on their fantasy. No, not even Germany—which will soon struggle to service its own colossal debts.
The last hope of Merkel and Sarkozy was the Chinese—and they, sensibly, declined. The governments of the EU must attempt to recapitalise the European banks when they themselves have no capital.
Only the other week, several governments had to bail out three European banks who have almost all, as yet, failed to write down their EU state debts.
I have said it before and I will say it again: the social democratic model is bust—it is time for this country to cut its losses and look forwards—to prevent bankruptcy in the short term, and to promote prosperity and freedom in the long to medium term.
So, how do we do that?
The first step that this government needs to take is to announce immediate withdrawal from the EU—with the first step the immediate cessation of any payments to the EU (including MEPs salaries, etc.). This is a process that will take some time in any case—so better sooner than later.
There are three main drivers for this course of action:
- to ensure that we are not on the hook for any more Euro bailouts—we are going to need every single penny that we can possibly save for the next steps;
- to enable this government to take immediate and radical steps to reduce regulations on business—those that trade with Europe will need to continue abiding by the EU's rules, of course. However, since only 10% of our trade is done with the EU, that will considerably lighten burdens on businesses—especially the SMEs that create the most jobs and growth in the economy.
- to be able to open dialogue with every other country in the world in order to gain advantage in uni- and multi-lateral trade agreements—something that we cannot do whilst part of the EU (which has total control over trade policy). Britain already has an advantage in being part of the loose network of countries known as the Commonwealth—a band of national states that roughly share the Common Law legal system and, in many cases, the same language.
The aim should be to promote totally free trade throughout the world. Even if other countries will not acquiesce, then we should immediately declare the free movement of goods and capital through this country.
All of these measures will take time—so the best time to start is now.
Our erstwhile partners in the EU will not take too many steps against us—with the balance of trade in our favour (as far as negotiation is concerned), we can ensure that the 10% of trade that we do with them is not adversely affected. However, the medium term aim is to reduce that proportion.
The simple fact is this: we have placed far too many of our export eggs in one basket: now the bottom is falling out of that basket and we are about to loose an awful lot of cash. In negotiating uni-lateral deals with the other 150-odd countries around the world, we can minimise any future disruption.
The next step will be to reduce any foreign aid—unless used as a bargaining chip with solid economic gains attached.
Our money must be made to work for the monetary interests of the British taxpayers—not for the vanity projects of MPs. And nor can we afford to hand over colossal amounts of cash in order to insulate other people from the disastrous decisions of their own governments. That may sounds harsh, but we simply cannot.
The only way in which these various tyrannical governments around the world will be brought to heel—and brought to heel they must be—is if we make it extraordinarily clear that we will help their citizens to trade with us, and that's all.
I think that we will find that this will bring about property rights and free trade in some of the more backwards parts of the world far more swiftly than any "humanitarian" or "debt-foregiveness" interventions will.
We should also withdraw from or severely renegotiate our relationship with the IMF. As with many other supranational organisations of which we are part, our presence at the "top table" seems merely to mean that we hand over huge chunks of money with absolutely no return (other than enabling our puffed-up peacocks of politicians to strut about like they own the fucking world).
Further, since the appeal to the Chinese has failed, it is now inevitable that the Eurozone will now appeal for funds from the IMF: this will mean, despite Osborne's blandishments, that we will suddenly be indirectly bailing out the Euro.
If we are to help out other countries, it will be on our terms and for our own advantage—neither for theirs nor that of the corrupt technocrats and bureaucrats of the IMF, UNESCO and all those other unaccountable world government structures.
On the home front
So, we need to boost business—especially SMEs—in this country. The simplest way to do this is to drop taxes on business, and on capital investment.
So, as I stated earlier, we are going to need some cash and a very sound business plan. Because we are almost certainly going to have to borrow some money ourselves. And we'll have to tread very carefully.
The first step will be the immediate sacking of the top three grades of civil servants (at least), and the voluntary retirement of anyone who would like to get out before the real cuts happen.
The next step is to cut National Insurance by 1% for employees and 8% for employers. Why this difference? Simple—there are far fewer employers creating jobs than there are employees looking to fill vacancies.
VAT (or its post-EU equivalent) can stay where it is—we need some income and, as I have said before, I believe consumption taxes (with the exemptions for "necessities") are the closest to voluntary that you can get.
Capital Gains taxes—for returns on money invested in businesses within the next three years—should be cut to 15%, with the expectation that they will rise thereafter. This should stimulate capital investment now, when we most need it.
Corporation Tax for businesses turning over less than £5 million should be reduced to 15% also. R&D tax relief at the current level will continue to apply.
Plans to introduce a universal Flat Tax, with high Personal Tax Allowance, will be set in motion with a legislation to be moved at the end of three years.
The National Minimum Wage will be reduced to £2.50 per hour, with Local Authorities empowered to set a suitable top-up precent for their own area. In other words, Westminster Council might decide to bring that up to £8 per hour, whilst East Yorkshire might maintain it at the national rate. This will start to prepare Local Authorities for more autonomy over the next few years.
As far as energy policy goes, government backing for fracking for the production of gas will be immediately granted, ensuring Britain's supply of cheap, low(ish)-carbon energy. Planning permission for gas-fired power stations will be fast-tracked through the process, to ensure that we can take advantage of this wonderful new energy source.
Finally, the NHS will be reserved for essential medical work only, with all funding for non-essential treatments and "preventative" advertising campaigns, etc. slashed to nothing. The government will also start renegotiation of PFI contracts, with the backers involved quite openly threatened with default if concessions are not made.
The above measures are designed to provide a quick kick up the arse to the economy, and to help businesses in the short term. In the medium to long term, a number of other radical steps will be taken (which I shall expand on in a following post)—the above, however, should buy us some breathing space.
Much of it requires the state to act in a ruthless, devious and occasionally downright dishonest manner—however, I believe that both the short-term crisis and the medium-term gains merit it. And reparations—in the form of higher growth and productivity—will be made apparent, eventually.
I'm sure that I've not covered everything, but it's a start—and I commend the measures outlined above to the House.