12TH JUNE 2020 THE REALITY BEHIND EUROPE MONTHLY £3.50 A lesson in food security Edward Spalton i n g a p o r e ’s experience of the In the last few days I heard of a success. Land covered by factories COVID-19 crisis shows us phone call from a distressed lady in does not grow crops. One Sexactly why the UK government Singapore, complaining of food commentator remarked as long ago as needs to safeguard our food security as shortages and empty shelves in the 2012 that, in the Sixties, the state had a matter of post-Brexit policy. We supermarkets. I had one of those “I some 20,000 farms occupying 14,000 must not become overly-dependent on told you so” moments. So I thought I hectares of land (more like what we imports for our food supply, or a crisis had better dig a little deeper. would call market gardens than farms), like the current pandemic could leave The interruption in food supplies but most of them had been obliterated us suffering from crippling shortages. was due to the fact that Malaysia had by development. Sometimes it takes a long time to closed its borders to prevent a further The Singapore government is not discern coincidence — and sometimes spread of coronavirus. W h i l s t just responding to the emergency of it bounces back to hit you in the face. I Malaysia and Singapore separated in the moment. It has been facing up to wrote an article on Singapore’s food 1965, they have close economic ties the realities of its situation for many s e c u r i t y, which appeared on the and some 300,000 people a day years, developing its regulatory system Campaign For an Independent Britain normally cross the border between the to maximum advantage. Last year the (CIB) website on the 9th March. two. If Malaysian labour is no longer Ministry of the Environment and It acknowledged the tremendous available, some Singapore businesses Water Resources combined the Agri achievement of the Singapore will have to relocate to Malaysia. Food and Veterinary A u t h o r i t y, the economy, pointing out that it was the The government has assured result of vigorous, active government citizens that it has persuaded firms to National Environment Agency and the leadership and tight regulation — build up stocks of food for the last two Health Sciences Authority into one rather than of Thatcherite laissez faire months and that there are ample new body, the Singapore Food Agency free trade. In particular, I pointed out supplies, provided people do not start — which gives some idea of the that Singapore’s reliance on imports panic buying — although there may be p r i o r i t y. Singapore is a food for 90% of its food supply was not less choice. Sounds a bit familiar, manufacturing and processing something to which any would-be doesn’t it? economy as well as an e n t re p ô t independent state should actively As a densely populated city state, it (transshipment) port. aspire — although an influential is unlikely that Singapore would ever British government adviser appeared have been entirely self-sufficient in Edward Spalton is the chairman of the to think it was highly desirable for the food, but the present huge imbalance is CIB (www.campaignforanindependent UK post-Brexit . l a rgely a result of its industrial britain.org.uk) Loss of freedom of expression hile the UK is looking at China’s country punishable by up to 3 years in theme. Wlegislation attacking freedom jail, classing it as a hate crime. The move followed Social for people in Hong Kong it appears The vote in the Bundestag (German Democrat (SDP) complaints about that similar action, not quite as parliament) on Thursday 14th May protesters burning of the Israeli flag in extreme but still worrying is makes defiling foreign flags to the Berlin in 2017. happening in Germany. crime of defiling the German flag. It should be expected that the EU, Germany has made public burning The same applies for the EU under the German influence will soon of the EU flag or that of any other anthem, Beethoven’s ‘Ode to Joy’ follow. INSIDE: Eurozone crisis p 2 – Book Review “Escape From Brussels” p 3 - UK expats at risk p 3 – The Huawei problem resurfaces p 3 - EU economic bailout under question p 3 – Euro at any price p 3 - Governments draft fisheries negotiating position p 4 – Letters p 6 - Obituary to Tom Hay p 6 VOL 25 NO 10 Eurozone crisis Ben Habib he inherent flaw in the euro, (ECB). There was a total refusal by the problems of the countries in crisis at about which all protagonists in ECB and Germany to countenance the cost of the more fiscally prudent Tthe debate have always been debt forgiveness. Greece’s debts were countries of Northern Europe – for aware, is that a single currency cannot somewhat restructured but Greece was which read Germany and the represent a number of countries if forced to undertake extreme austerity Netherlands. Such a solution is either: from which it has yet to fully recover. abhorrent to both these countries which Those countries’ economies are not Since 2009 the economic situation would, in effect, be bailing out the in similar shape and do not move in of a number of other euro member eurozone. And with perfect timing, lockstep; or there is not political and states has also markedly deteriorated. G e r m a n y ’s Constitutional Court has fiscal union. I t a l y, which has an economy 10 just stepped into the fray. The 19 EU member states that times the size of Greece, had in March It announced the result of a case joined the euro were never in similar of this year a government debt to GDP which has bubbling along since 2015. shape and there is not (at least at the ratio of 135%; Spain had a similar It decided that both the ECB and the moment) political and fiscal union in ratio; and France which is bigger than Court of Justice of the EU (CJEU), the zone. both Italy and Spain had a ratio of which had approved ECB actions, had For the French that mattered not 100%. acted ultra vires in the massive extent because they saw the euro as a political To put these into context, the of their QE activities. The timing of the tool to force member states into union. European Stability and Growth Pact ruling is no accident. Germany was For the Germans that mattered not requires that no EU member state compelled to act before its peoples because they knew the euro would should have a ratio exceeding 60%. were forced to bear the full brunt of the inevitably be weaker than the (Even Germany breached this limit in ‘profligacy’ of these other countries. Deutschmark and that would favour its March with a ratio of 63%.) For France, Italy, Spain, Portugal and export dominated economy. Indeed the ECB had undertaken Greece amongst others, the ruling is a The German view was, of course, some €5 trillion of money d i s a s t e r. In short, Germany has absolutely right. Since the creation of printing/bond purchases during the slammed the door on any prospect of a the euro in 1999 it has essentially been course of the credit crunch to try to eurozone bailout. a weak currency much to the benefit of stabilise these economies. T h i s No one could over-estimate the Germany. quantitative easing (QE), as it is importance of this ruling. It means that It is no accident that there is a direct known, is the biggest such programme some of the largest economies in the correlation between the growing trade undertaken by any central bank in the World will be in a funding crisis any surpluses of Germany and the growing World, including the Federal Reserve moment now. When this happens, the trade deficits of the weaker euro of the United States of America. shockwave felt across the Globe will economies, most notably Portugal, In short the eurozone entered the dwarf that caused by Lehman Brothers Spain, Italy and Greece – to name a Covid-19 crisis with many of its going bust. few. member states’ economies already in The ruling will also have major These trade deficits were financed ICU and the ECB’s firepower stretched implications for the EU and, by by growing government debt levels to its limit. The stimulus measures now extension, Brexit. It informs us that which in turn were financed by banks being instituted by these countries to Germany’s court which is, by treaty, in the eurozone, many of which were counteract the effects of lockdown will junior to the CJEU has repudiated the German. In a sense, trade within the increase these debts to unsustainable CJEU’s authority. It is the equivalent of eurozone became one big Ponzi levels. Some of the biggest economies a rebellion by a vassal state in an scheme. And like all Ponzi schemes in the World will be in danger of empire. Other countries in the EU are this worked well while trade flows collapse. The financial fallout would bound to follow Germany’s lead. were growing but the wheels first came be devastating for the World and would Poland and Hungary have for some o ff the wagon in the 2008 credit certainly break the euro.