Blog 2023 Malcolm Blair-Robinson

The language used by Cameron in his TV interview in the US was no doubt designed for the local audience but it makes little sense. It is not possible to destroy IS any more than it is possible to destroy Christianity. What can be done is to contain it so that gradually it withers into a more amenable structure, concerned with its own survival and less focussed on threatening the world beyond its borders. It has redrawn the Sykes Picot map and and much of that may be beyond recall, but the regional mayhem needs to reduce. Armed force can help containment to give space for a political solution, but it cannot produce a solution on its own. We have learned that lesson and have had to do so several times. Now that we are working more closely with Shia Iran the prospects look more favourable.

There is absolutely no point in extending some random bombing campaign without it being backed by a full strategic overview, a clear set of objectives and an exemplary tactical plan, finished off with a clear exit mission. None of this exists in the minds of any of the politicians and in very few of the military. The assertion by the former head of the Army on TV that we should go onto a ‘war footing’ is just silly. We have had enough of these wars that go nowhere. Before the military gives advice to the government it will have to get real.

There are signs emerging that the new Liberal leader, Tim Farron, is something of a religious fundamentalist. Some of his evasive answers have failed to dispel this impression. You can be a fundamentalist and still be a conservative or you can still be a socialist, but you cannot be a liberal. That is just not possible. Either Mr Farron makes it very clear and beyond doubt that he does not regard being gay as a sin or else his leadership of the Liberal party is for all practical purposes over.

An idea to stimulate economic growth without further government borrowing. Written in plain English and very easy to follow, this is the only really fresh approach out there to the intractable problems of the UK economy, and it is just beginning to be noticed in important places. Buy! Download only .99p Paperback £2.99

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Since virtually everybody is agreed that the current bailout plan cannot work for Greece, let us review the practical options in a realistic way.

1 Staying in the euro  This will require a 75% write down of all Greek debt (for creditors a grade one haircut) and printing enough Euros to re-boot the Greek economy, about e20 billion should be enough to ignite recovery and growth. Germany will never agree to any of this. So it is a non runner. The Germans are themselves thrifty and careful with money and debt write offs are anathema. They have an irrational fear of printing money which inhibits the proper functioning of the euro currency. Britain printed £375 billion to get its economy moving again after the crash and the US printed about $2 trillion. Both the $ and the £ devalued but have now recovered and the two economies are now growing well.

2 Semi-detaching from the euro A common sense alternative to crashing out altogether would be to allow the Greek Euro to float downwards within a wide enough margin to kick-start a devaluation led recovery. This would be achieved by allowing the Greek Central Bank to print about Ge50 billion, but with the ECB standing backstop to intervene if the floated Greek currency dropped below 60% of the value of the German controlled main euro. There would still be a grade one haircut of existing debt, but there would be no more borrowing. At a point somewhere  in the future it might rejoin. On the face of it Germany would say no, but if you listen carefully to the whispers now circulating in the German political and financial establishment, the position could be about to change.

3 Leaving the euro for good  This would involve a total write-off of all Greek debt, the reintroduction of the drachma and the intervention of the IMF. Greece would need a loan of about $50 billion to buy gold to back the new currency to give it a worth of about 50% of the current euro. The losses to Euroland would be substantial and it would be seen as a humiliation of Germany and a euro car crash generally. On the other hand it might be the best for Greece which could remain in the outer circle of the EU which Britain is presently marking out for itself. Greeks and Germans are good at mixing on holiday, but as economic partners they are a fiasco.

It is unlikely that wise enough councils will prevail to adopt any solutions in the shape of the above. Whatever happens next will therefore not be good.