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What IS independence exactly?

I notice that the SNP via Nicola Sturgeon has raised the issue of currency once again in the independence debate. She states confidently in this article that following a yes vote, Scotland would continue to use Sterling as the country’s currency.

This is in fact a can of worms on several levels. How will this square with the EU? The UK’s opt out will remain with the successor state, which has already been acknowledged by the EU President and the European Commission as being the ‘Remaining UK’ i.e. England Wales and Northern Ireland.

Given that the EU have said that Scotland will be treated as a new state, then the UK opt out on the Euro will not apply. Any new state coming into the EU is obliged to join the Euro once criteria are met so I wonder where this leaves Scotland should we vote for independence?

Quite apart from all that, even if this problem could be overcome and Scotland was allowed to keep Sterling by the EU, wouldn’t monetary policy still be decided in London? And given that the acknowledged main problem of the Euro has been differing fiscal policies within a single currency, and given that Sterling already has particular problems, how would this play out on a small island with a small currency but within it separate fiscal policy?

There is some comfort for the Yes campaign from economist Professor John Kay who states that the EU “would probably settle for some vague and indefinitely postponed aspiration” that Scotland would adopt the euro.

However Kay also believes that “The currency issue is crucial – Scotland would be right to seek agreement on monetary union with the remaining United Kingdom, but it would be difficult to negotiate an agreement that would be consistent with the fiscal freedom sought through independence.

“Scotland should be ready to adopt an independent currency.”

So the SNP want to keep the pound and the Queen. They say that Scotland will be free of Trident and yet even if the vote is yes, there is no guarantee that a future Scottish government would follow that through. I’ve always wondered that even if that government were SNP, if they wouldn’t come to some arrangement with the Remaining UK on the issue.

As someone who has voted SNP in recent years, when it became clear that there was to be a referendum, I looked forward to being convinced that independence made sense.

At the moment I remain to be convinced.

And the clock is ticking….

And the least surprising news of the day is…….

cyprus

Eu’re Not a Euro Any More

When is a Euro not a Euro?

When it’s in Cyprus.

From the Financial Times:

The most important characteristic of a monetary union is the ability to move money – without any restrictions – from one bank to another in the currency area. With capital restrictions, the value of a euro in Cyprus is no longer worth the same as a euro held by any other bank in the eurozone. A euro in Nicosia cannot be used to buy goods in Frankfurt without limits. Effectively, it means that a Cypriot euro is not a euro any more.

Jeroen Dijsselbloem, the head of the region’s finance ministers, seemed to suggest to Reuters on Monday that the island country’s rescue ( a hybrid between a dog’s dinner and a pigs’ breakfast) could serve as a template for future deals, by taxing depositors.

Here’s how that news was received in Italy:

UCG-chart

“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.”
Albert Einstein

The markets have rallied

How often do we hear that phrase now?

The ‘markets’ are like a bouncing ball.

A country reaches crisis point and markets dive.

The European Central Bank, the IMF and the EU broker a bailout and markets rally.

The effect is only temporary and the country again reaches crisis point.

Markets dive again.

Really it is time for all sane and rational people to realise that the vanity project that is the Euro is on its death bed.

Nick Cohen put it very well in the Observer yesterday “Eurozone leaders cling to the single currency as if it were a tribal fetish. Not even the descent of southern Europe into ruin can shake their faith.”

Cyprus and Europe and all that….

No one can predict what will happen.

However by the Cypriot parliament’s rejection of the bail out package it would seem that they are on course for an exit from the Euro – unless they change that decision.

If they printed their own cash they could re-capitalise their economy, set their own interest rates and get their country back on its feet.

The same applies to Greece.

Iceland have done it and their economy is now well into recovery phase.

They couldn’t have done had they been in the Eurozone.

There is a real danger that if Cyprus is held prisoner by the Eurozone that banks and ATMs all over the continent could be closed as panic and contagion take hold.

And although the UK isn’t ‘in the zone’ (sic), it is so exposed to Eurozone debt that it could be drawn in.

However the fact that the UK has its own currency may turn out to be its saving grace.

There are options open to the UK which aren’t available to the ‘bloc’.

I take no pleasure in saying this, but the loons of UKIP may very soon become an electable party of government.

Head for the hills!

 

Who’s Next?

After Cyprus?

Italy?

Head for the Hills!

Number Crunching

67% – Proportion of UK electorate who voted to remain in the European Economic Community in 1975 in a referendum.

22% – Proportion of UK electorate who would definitely vote to remain in the EU were a similar referendum held now.

40% – Proportion of UK electorate who would probably vote to stay in EU were a similar referendum held now.

51% – Proportion of UK electorate who would probably vote to leave EU were a similar referendum held now.

Source: ICM poll commissioned by The Mail Telegraph The Guardian

Actually, I take no pleasure in this at all. Those at the vanguard of the Euro- sceptic lobby are the self same type of eejits who want the return of fox hunting and the death penalty. I would actually quite like to be pro EU, as such a concept of international cooperation and fraternity suits my liberal view of the world.

However many years ago I noticed that the EU seemed to be based on a whole series of summits where no one could agree on anything.

After each one there would be briefings and statements from the various leaders which made one wonder if they had indeed been party to the same discussions. The impression given in photo calls was a unanimous one. A unanimous smile through collective gritted teeth.

I’m quite old fashioned in that I think that effective government is probably better situated quite near the location of the population affected by its legislation and decisions

That’s not to say that national governments should not cooperate and agree – of course they should, but what is the most likely route to that agreement?

In the housing estate where I live there is a Residents Association. At meetings, residents come along and discuss the various matters which concern them and in the main, can usually (indeed always) settle on the way to go by debate and discussion.

I sometimes wonder what the spirit of cooperation between residents would be like if there were connecting corridors built between each house, members of each household were free to come and go as they pleased and that everyone’s pay was credited to a single bank account.? If one household got into financial problems largely through not sticking to agreed rules and regulations, the others would rally round and bail them out.

It wouldn’t work.

Neither I’m afraid does the EU or the single currency.

The UK electorate it seems has woken up to that fact.

The mainstream parties have to get a handle on this soon, otherwise that jolly old jackass Nigel Farage and his UKIP cronies will continue in their untroubled ascendency.