Will the collapse of the Eurozone save Brown?

Prime Minister Gordon Brown was not enthusiastic about joining the Euro when, back in June 2003 he declared we were not ready for the Euro. He gave us the famous five tests, which I am not going to repeat here, since they were so subject to interpretation and spin as to be meaningless. Nevertheless, Brown, at this point, was against it. There then came a hint, in December 2008 that Brown was wavering: "Desperate Gordon Brown eyes the Euro" screamed the Guardian. Typically, Brown has wavered over the issue, and perhaps it is his dithering that has saved us all in general, and him in particular.

Peter Obourne is in Grim Reaper mode over at the Observer with this article:

http://www.guardian.co.uk/commentisfree/2010/jan/03/peter-oborne-end-of-eurozone

Oborne writes:

Consider the facts. In Spain, unemployment has already reached a gut-wrenching 19.3%. But unemployment for those between 16-24 is a catastrophic 42%. In Greece, youth unemployment is 25%, in Ireland 28.4% and Italy 26.9%. Marginal eurozone countries such as Greece, Spain and Ireland are not just in recession. They are in depression – and so long as they remain inside the euro there is no exit.

These stats put our problems into another perspective, do they not? Perhaps not surprisingly Europeans are taking full advantage of the devaluation of the pound to buy up our products and services. Obourne believes that, "The European single currency amounts to an experiment in social and economic engineering on a scale only very rarely before encountered in world history."

istockAnalyst's story on Saturday was entitled: Will The Euro Become The Most Hated Currency For 2010?

The writer paraphrases Milton Friedman: A one-size fits all monetary policy doesn't give the member countries the flexibility needed to stimulate their economies.


If tthe Obourne quote is not an exaggeration, and you believe Friedman, it would appear there is a prima facie case for Brown to have an awful lot of leeway. It may only be the kind that allows him to dither a bit more, but he can sit and dither while Rome burns.