Is the EU Falling Apart?

Investors, banks, financial institutions, hedge funds and rating agencies, are all warning governments that austerity packages without a growth plan are self defeating. Something I have been advocating or some time. Unfortunately the UK Conservative led coalition, are too stubborn to do anything about it, preferring to model its tactics on 30 year old ideas.


They are now talking about doing a ‘U’ turn on child benefit, which was totally unfair and very heavily waited in favour of the rich, they have already done a ‘U’ turn on pensions, a ‘U’ turn on the fuel duty they had planned for January of this year, and are planning to force businesses to close with a 5.6% rise in business rates this summer. Their handling of the university fees was amateurish and ill conceived. The N.H.S. reforms were designed to push the N.H.S. into privatisation, although they are now doing another ‘U’ turn.


The coalition is expected to leave the country in more debt when they have finished bankrupting it, leaving a projected £1.3 trillion deficit according to the Office of fair trading.


It is widely assumed that most of Europe as well as the UK are now slipping
back into recession, and possibly a world wide depression.

France and Austria have had their AAA rating downgraded due to their banks lending to countries which may default, and because both France and Austria have high deficits, with no plan for growth or effective austerity packages. France and Austria were two of the six countries with AAA rating, who were expected to be able to borrow at low rates in order to help other struggling EU countries.


China was expected to help the EU, but with falling exports and increasing
inflation, this now seems unlikely. Chinas reserves have fallen, but they do hold a lot of foreign currency. There is a great deal of optimism that the City of London will join Hong Kong as an offshore centre where the Chinese currency, the Renminbi, can be traded. Talks between the Treasury and the Chinese have been making good progress. If this does happen it will be good for jobs in the City and will give a lot more prestige to London.
Read More

If you like this article, hit the “Like” button.



Vic Farron RFT Express. .


Follow us on Twitter ::[ over 77,000 already do] ::Be a fan on Facebook :: and Blogspot [comment on Blogspot and our Hosted Blog, and BT Tradespace, all high Google Page Ranks ] ::Bookmark this page using the ‘Share’ button

Tags: Will the Euro collapse : EU in Crisis : EU Problems : Will EU Fail? : Austerity for Years : Austerity - The Answer : UK
Isolated : EU and UK Econony:

Austerity: The Answer

Austerity for Years: The Answer

The current UK Coalition government still has no idea how to get growth into the economy. The Conservative solution to this type of crisis is as always, reduce jobs, reduce earnings, and increase taxation.

Their latest hair-brained scheme is to increase Business rates by 5.6% in the spring, as more and more businesses go bankrupt the coalition is of the opinion that any growth is good .Growth in bankruptcies is not good for business, for jobs or the economy.This self defeating increase in Business Rates will put more
business into receivership, more people out of work, will reduce the overall tax take, and increase the welfare bill. Good planning and fore-sight if your intention is to bring the country to it's knees, not so good for the country though. The coalition had to do a 'U Turn' this month and reverse the planned increase in fuel tax by 4p a litre. Both these tax increases would have pushed inflation back up again in the 2nd quarter, now that the VAT rise is no longer factored into the inflation equation.

How to Create Jobs

The first thing the coalition should do is to stop the practice of putting people out of work. IT COSTS MORE MONEY TO KEEP A PERSON OUT OF WORK, THAN IT DOES TO KEEP THEM IN WORK.The coalition have set up 'enterprise zones' to encourage companies to move into these zones and regenerate them. A tentative step in the right direction, and had they backed it with more money, it would have created jobs short term.
The 'zones ' are areas of high unemployment, and a lack of investment. Short term this is good for the 'zone' but long term does very little. The 'enterprise zone' attracts people, and companies from outside the area who are prepared to travel, or move home to work. Not all the jobs created come from the enterprise zones. After the money runs out a lot of companies will close or relocate, and the area invariable degenerates again. So apart from moving people about, the long term prospects are improved very little. For the enterprise zones to work, the investment has to be long term.There needs to be a co-ordinated policy to regenerate areas, and create meaningful employment and training. There needs to be town centre regeneration, and an
incentive for small businesses to start up, with the aid of a mentor.

 Virtually every town centre has a high proportion of empty shops and offices, which are slowly falling into dis-repair. These could be let rent free to start up businesses, and rate free for the first 2 years. This doesn't
cost anybody any money, because nobody currently or in the fore-seeable future is going to take then on. It gives new start up businesses a chance to show what they can do. In addition the government could subsidise new start ups, by giving newcompanies a grant for every person they take on who is currently unemployed.

The grant could be paid weekly and be the equivalent to what the government now pay an unemployed person. No extra cost to the government, and gains to the government would be the tax and national insurance that ex-unemployed person pays. This scheme could also be extended to the self employed one man start ups as well. So far the ideas put forward are pretty straight forward, and in the main don't actually cost the tax payer or the government anything. The scheme could also be used for industrial premises, and manufacturing busineses.

Two further measures should be put in place to complete the packages. Firstly finance, the coalition
recently announced that they would guarantee business loans. This could be modified slightly to include a low rate of interest, and the banks could waive their prohibitive arrangement fees, which are added to the loan and are currently taken out after the interest has been paid, and before the capital is repaid. The coalition could take the lead in this by encouraging the banks the tax payer bailed out to take part.Secondly training should be made available, free of charge to prospective start ups, and a mentor should be on hand to advise when needed. The mentor could be supplied by the lending bank, or by the local Chamber of Commerce.

If you like this article, hit the “Like” button.


Vic Farron RFT Express. .
Follow us on Twitter ::[ over 80,000 already do] ::Be a fan on Facebook :: and Blogspot [comment on Blogspot and our Hosted Blog, and BT Tradespace, all high Google Page Ranks ] ::Bookmark this page using the ‘Share’ button

Tags: Will the Euro collapse? : What is a Coalition Government? : Correct Me