EU: Recent Developments

Lord Dobbs Excerpts

Thursday 16th February 2012 Lords Chamber

[Lord Dobbs]

My Lords, it has been a true pleasure to listen to this debate. It has been insightful, it has filled me with fascination, and I have heard arguments—intellectual, hypothetical and institutional—that go way beyond my pay grade. I want to follow up on some of the remarks that the noble Baroness, Lady Wheatcroft, made in her very insightful speech about what the noble Lord, Lord Howell, called in his opening remarks the “noble country” of Greece.

Greece is much beloved by me. I have many friends there. One of them was telling me recently about what a dire state it is in. She said, “It is so dire that the Government have even increased the taxation on swimming pools”. I said, “Surely that has helped”, and she said, “Not very much because there are in the whole of Greece only 137 swimming pools known to the tax authorities”. I said, “Surely there must be some industry that is growing in Greece”, and she said, “Only one: camouflage netting”.

I refer to this silly story to illustrate a very serious point. Greek accounting practices have always been colourful and creative, offering more optimism than insight. It is the way they do things; it is the way they have always done things. What we are witnessing in Greece today is not just a tragedy but a travesty. It was folly to invite Greece to join the eurozone. The Greeks should never have been let in—and that is not with hindsight; that was said at the time. But common sense at that time was buried to obliteration by the imperial dream. I think it was President Mitterand who said that it was inconceivable that we could have Europe without the birthplace of democracy, Greece, as a member.

So Greece was let in and now that birthplace of democracy has been reduced to what? We do not know for sure at the moment. We all harbour fears for that once great and proud nation, but we can be sure that it is reduced—humbled—by those it took to be its friends. When the crisis broke, these friends said it was impossible for Greece to leave the eurozone; it could not be done. A little later they said it was inconceivable that Greece could leave the eurozone; it could not be thought. Then they said it was wholly unlikely, but now we know that in every corner they are preparing for precisely that possibility.

The reduction of that great country of Greece has been a very degrading spectacle. The wise men who run these things came up with a stunning plan. Greece needed to be leaner, to run faster, so they decided to cut off a leg. When that did not work, they said they must continue with the same policy, and cut off another leg. It is Pythonesque in its stupidity, and so the tragedy goes on.

There is no prospect of Greece achieving what is demanded of it. It may have been the glorious birthplace of democracy but today even its democracy is in doubt. Its Prime Minister is unelected and its previous Prime Minister was cast aside for his temerity in suggesting that he should ask the people for their views. The forces of the extreme left and extreme right are gathering pace. Now every party in Greece is expected to sign a binding undertaking that, no matter what the result of any future election, it will do and will continue to do what it is being forced to do by others. The noble Lord, Lord Flight, talked about the situation being horribly like the folly of repatriation imposed upon Germany after the peace treaty of 1919. Once more, almost 100 years later, Europe is a continent of lions led by donkeys. Those leaders who object to what is going, like our own Prime Minister, are told that they have no right to object.

The noble Lord, Lord Lamont, talked about the recession in Greece, which has been going on for five years. Its GDP was down 6 per cent last year and 7 per cent in the past quarter. It is getting worse, not better. Unemployment in Greece is 21 per cent and rising rapidly. Yet still the wise men who run these things want to hack and to cut deeper. Greece is a limbless body lying on the ground. It can no longer get to its feet, let alone run.

Will Greece default? It has already defaulted. We are simply arguing about the details. Will the eurozone break up? In my view, it will almost certainly—if not completely, partially at least. Greece will become adrift, like ballast from a plummeting balloon. We are witnessing a catastrophic failure of leadership in Europe. We sit here in our comfortable Chamber discussing plans and possibilities, and doing our best. But it would be better if we were on the streets of Athens, Patras and Thessaloniki, so that we could see what damage is being done by such plans when they go wrong.

In his opening remarks, my noble friend Lord Howell asked that we should look forward and how we should go forward. We have had many different suggestions. My noble friend Lord Dykes has been trying to offer me champagne over the past few days. I fear that instead of the champagne I am likely to get nothing but the ice bucket, because I listened to him and he talked of the temporary problems of the eurozone. There is nothing temporary about these problems. I much prefer—strangely for me and I hope that I will not embarrass him by saying so—the analysis given by the noble Lord, Lord Mandelson. He talked about the need for a fundamental review of the way in which the eurozone is conducted. I agree with many of his analyses, if not all his conclusions. Above all, we must remember to re-establish the democratic legitimacy which must lie at the heart of any Europe in the future.

In his opening remarks, my noble friend Lord Howell said that we are members of the EU “by choice”. I think that I can see the noble Lord, Lord Pearson, almost fulminating at that idea. But let us cherish the words “by choice”. We must continue to ensure that we remain in Europe by choice—the new and, we hope, fundamentally reformed Europe, which we have heard about and perhaps will be capable of building. We must not be part of a European enterprise simply because we are told, like the Greeks are being told, that there is no alternative and that we have no choice.

I fear for the future. I am not complacent. I fear that Greece will leave the eurozone with all the calamity that that will entail, but I fear even more that Greece will not leave the eurozone and that we will be stuck with a far greater calamity. But whatever that future will be, it must be driven not by egos or imperial arrogance but by popular consent. For that, at some point sooner rather than later, whether we succeed in refashioning Europe or not, we must seek the views of the British people in a referendum.