Differential Growth – the unsolvable problem of the EU

The problem with a state, is that you need to have a lot in common: common economics, culture, history, education, religion even climate and the more differences there are, the harder it is to keep the “state” together. So, usually large states fail unless they become authoritarian dogmatic and enforce those things that they can: culture, language, law, even religion to compensate for those they cannot (e.g. climate).

One of the few instances in world history where a large state has worked in a semi-democratic way is the US. But this is one of those rare examples which prove the rule. Because here there were lots of “countries” with being formed at the same time from very much the same basic peoples, had very much the same culture, history, laws etc., so came into being with enough in common to merit a union. In other words, there was not a lot of difference … but even so, it still took a bloody civil war to bring them all together.

That is the lesson Europeans seem to ignore! They take the modern US – formed from what in historical terms was almost identical countries and nations – they point to its present success – but ignore what it needed to get there: CIVIL WAR!

In contrast, Europe has a very very long history and the nation states like the UK have had their own way of doing things for millennia. Likewise Germany and likewise France/Gaul. All these nations have existed for over 2000 years and they have entrenched cultural attitudes that no EUrocrat can change. There is no way on earth you can bring all these very distinct countries into one political union without an almighty fight occurring.

The Romans tried it – and failed. Napoleon tried and failed. Hitler tried it and failed. Byt the Eurotic madmen in Brussels ignore all that history and think that somehow they will succeed?

The problem is that a single currency will inevitably force those that stay to be closer and closer and closer politically and economically. A single currency cannot have divergence economies all growing at different rates – or at least any disparity quickly creates enormous stresses that just build and build the more divergent the economies.

The great advantage of a nation having its own currency, is that the currency provides a “slip zone” by which the economy of two countries can diverge. But if two such countries are forced into economic union, then if one group of workers are less productive – rather than dropping wages as is needed to bring in work, they tend to try to maintain “wage parity” with the result that work tends to go to the more economically efficient country.

So, the less economically efficient country gets less work, less work means less income, the tax income to government drops and in turn the government have less money to invest in improving the economic infrastructure. That then tends to create a vicious cycle – the investment in roads, rails, schools etc. goes down, the attractiveness of that country/region goes down and more work goes to the better country/region. That region then has more to spend on infrastructure, schools, roads, etc. and so is even more attractive. And very soon, like Greece and Germany, one country is an economic basket case and the other is booming.

The only ways out are:

  1. To throttle the booming economy
  2. To tax the booming economy heavily and pour huge amounts of public money at the less efficient country in the hope of developing it economically
  3. For the two countries to have their own currencies.

The advantage of the last, is that it allows countries that are falling behind to drop the value of their currency. That means they become more competitive as wages in the country fall. That in turn encourages people both inside and outside the country to buy produce from the country, which then gives a boost to the economy. So, whilst there is a small adjustment – the overall economic impact is much less than if they remain in the same currency.

It’s hard enough for England and Scotland where there are large-scale transfers from London to Scotland (Barnet formula)  – but as everyone knows that relationship is hardly rosy at the moment. But to attempt such an exercise with Greece and Germany is just plain stupid. One of them has to leave the EURO sooner or later, otherwise the only way to align their economies economically is for Greeks have to start working like Germans (LOL), for Germans to start working like Greeks (a basket case economy) or for hard working German tax payers to fund the Greeks with their long holidays, pensions etc. And it won’t just be Greece. Very soon German (& UK) workers will be having their income cut down to that of the Greeks by taking money away in “EU taxes” and handing it over to Greeks, Portuguese etc.

It will be like playing Monopoly – except at the end of each round, everyone hands their money to the EU and then the EU (under Mafia guidance and cream off) then hand the same amount back to everyone no matter how hard they worked. That is the only way to get the whole EU growing at the same speed.

Only a complete madman with no idea of the Euocracy will believe that the “common” economic growth will be closer to Germany’s than Greeks. In other words, the economies will largely grow a the lowest common denominator.

And there is no way on earth that the German public will tolerate it. Nor will the Greeks tolerate living in a Eurozone that massively benefits the Germans and wrecks their economy.

The EU is already a failed state!  Total European union is a physical impossibility which will never happen and it is just nuts to think it will. So, sooner or later Greece will exit the Euro, followed by the next worst economy – then the next, then the next. In other words, when enough time has passed to allow the differential rates of growth to create enough strain, the EURO will start being one continuous stream of exit – bail outs – re-entrants – calm – stress, strain, exit, bail-out.

We in the UK can’t stop that happening – the EU nations appears set on this suicidal course. But we need not be part of the madness.

Frequently asked questions on leaving EU

Gerard Batten MEP, sent me his FAQ on leaving the EU. (EU Referendum FAQs PDF)

Here are the top 5:

1. Would leaving the European Union (‘EU’) endanger jobs and trade, and could the EU put up trade barriers against the UK?
When we leave the EU, it cannot put up discriminatory trade barriers against the UK, since to do so would be in breach of World Trade Organisation (WTO) rules which govern world trade. All EU countries have agreed to follow them. And even if they could do so (which they cannot) why would they want to? We have a massive trade deficit with the EU – they sell us far more than we sell them. Britain’s accumulated trade deficit with the EU since 1972 is over £683 billion.

Figures for 2014 showed that Britain exported goods and services to the EU to the value of £228.9 billion, whereas their exports to us amounted to £290.6 billion: therefore we had a trade deficit with the EU of £61.7 billion. Germany, Spain, France, Italy, etc. will still want to sell us their cars, wine, holidays, etc. Trade will continue as normal.

Britain’s is the fifth largest economy in the world. We are a world-class trading nation, while we have a trade deficit with the EU, we have a trade surplus with the rest of the world. Our trading success stems from hundreds of years of experience, from English being the international language of business and science, and from the trust that foreign companies put in the English legal system and contract law.

2. What about the EU’s Common External Tariffs?
The EU was formed as a Customs Union, not a Free Trade Area; it erected certain trade barriers against non-EU countries, and these are known as the Common External Tariffs. However, the World Trade Organisation has been negotiating down trade barriers internationally for many years, and as a result these are now generally low. The pro-EU organisation British Influence states: “UK exporters would still have to pay 15% on average for food and 10% on cars to trade with the EU” 4, but this is pure scaremongering. Since the EU sells far more to Britain than we sell to it, it would not be in its interests to impose the Common External Tariffs even if it could, since if it did so we could impose similar tariffs on what the EU sells us. This would be in no-one’s interests.

Business for Britain issued a report stating that if the Common External Tariffs were levied on British exports to the EU, these would be at an average rate of only 4.3%.5 Business for Britain calculates that this cost would be lower than the UK net contribution to the EU budget. Using 2013 figures they calculated that tariff costs would be about £7.4 billion. The estimated net cost of EU membership for 2016-2017 is over £10 billion.6 When we are outside the EU, it would be cheaper for the British government to pay exporters’ tariffs for them rather than paying into the EU budget – should it choose to do such a thing.
3. Would leaving the EU exclude Britain from the Single Market?
The EU and the Single Market are not the same thing. Norway, Iceland and Liechtenstein are members of the Single Market but not the EU. The EU has 28 member states, the Single Market has 31. We do not need to be in either the EU or the Single Market in order to trade with member states. Some in the Remain campaign argue that we cannot trade with the 5 Single Market without open borders and the free movement of EU citizens. That is simply not true. Many countries trade with the EU without finding it necessary to join the EU or the Single Market.

The top ten exporters to the EU are: China, Russia, USA, Switzerland, Norway, Japan, Turkey, India, South Korea, and Brazil. None of these countries are members of the Single Market and six of them do not even have free-trade deals with the EU (China, Russia, USA, Japan, India and Brazil). The fact that they are not members of the EU does not restrict their trade; in fact it empowers them to trade on their own terms. Outside the EU, Britain could negotiate a trade deal with the EU from a position of strength.

4. What about international trade deals that the EU has negotiated with the rest of the world – would we be excluded?
Britain’s is the fifth largest economy in the world. We are a major trading nation. Outside the EU, those countries who have signed trade deals with the EU would certainly want to continue mutually beneficial trading arrangements with the UK. They would have a great incentive to agree quickly to a continuation of trade on the same, or very similar, terms. When Britain regains its seat on the WTO and control of its own international trade policy, we could also no doubt negotiate better trade deals for ourselves – as we did for hundreds of years before we joined the EU.
5. Isn’t about 50% of our trade with the EU?
No. This figure is highly exaggerated and misleading. ‘Trade’ in this context refers only to the international export of goods and services; and of international trade, in 2014 44.8% of our total exports in goods and services were to EU countries, according to the Office for National Statistics. That figure is reduced when we take into account the so-called ‘Rotterdam effect’. Exports first landing in Rotterdam are counted as exports to Europe, even when they are destined to pass on to other countries beyond the EU. The ONS say that the exact scale of the Rotterdam effect is unknown, but that it could reduce exports to the EU to 42.1%.7 So it is fair to say that less than 43% of our international trade is with the EU.

Britain’s trade with the EU has been declining over the last twenty-five years. ONS figures show that in 1999, 54.7% of our international trade was with the EU, by 2014 that had fallen to about 43%. Approximately 30% of our economy is concerned with international trade, and less than half of that with trade with the EU. The other 70% of the economy is purely domestic, i.e. within the UK. Figures published by the ONS show that only 5% of UK companies trade with the EU – and yet 100% of our businesses have to comply with EU regulations. While EU trade is important to Britain, it would not be endangered when we leave the EU – but 95% of our businesses would be freed from EU jurisdiction.8

Day 2

I’ve been trying to keep out of politics since I left UKIP and have been focussing on other issues. But yesterday I say this video:

And it just made me have to act because as I suggested in some comments “It’s like the Nazi’s never lost the war – they were just put into cryogenic freezers and are now rising like vampires to suck the blood of democracy dry out of Europe”.

But not having any previous contact with the Leave/Exit campaigns, I had to start from scratch. The obvious thing I wanted to find was the “Scottish HQ” of the leave campaign – because from my short experience in UKIP, it’s pointless joining a campaign based in London unless you have the money to go back and forth between London and Scotland. I don’t so, I really wanted to find a Scottish or better “Glasgow” campaign.

Eventually I found a list of local campaign groups on Leave..something..something…something.something (what an appalling name!). However, there was literally no group in or around Glasgow. Still not sure of the reason – obviously the Scottish elections are focussing everyone elsewhere. Rashly I tried to set up a group so that anyone else like me had some means of getting in touch – but they want an already functioning group – so a bit catch 22 – no group – no one to contact to form a group…

Finally, I decided to put everything I had found on a new blog and then I could email anyone and everyone I could think of asking whether they had more information. That way they would know what I knew, and if I/when I found out more, I could update it and they could go back and find the latest info.

Day 2 – dawned with a few good responses to my emails. At the moment the biggest event plans seems to be the meeting in Stirling. But many people are setting up street stalls and leafleting is being arranged. I’ve still to locate the “heart” of the organisation (if any) in Scotland, but I am starting to hear the heartbeat.

List of Scottish EU Exit web sites

List of Scottish internet sites dedicated to leave/exit EU

Just had to show this!

Scottish campaign(s)

There appear to be two main campaigns in Scotland: Voteleave and leave.eu. There was a third “GO” which is now part of leave.eu.

The organisation in Scotland is focused on local areas which from what I can see all belong to both campaigns.

So the best place to start is to look at what local groups exist and try to contact them direct (see e.g. https://leave.eu/en/get-involved#local-groups)

Scottish Websites

UK Websites

  • Vote Leave (designated “official”)
    Scottish Head: Braden Davy braden.davy@voteleave.uk
  • Leave.eu
  • GrassrootsOut (Now part of leave.eu)
    Scottish Head     Dr Tom Walker      tomwalker0472@gmail.com

Local Scottish Groups

Scottish Politicians

  • Jim Sillars: @NaeFear
  • Tom Harris (The former MP for Castlemilk): @MrTCHarris
  • Michael Forsyth (former Secretary of State for Scotland and Stirling MP)
  • Margaret Mitchell (Scottish conservative spokeswoman on Justice)
  • David Coburn MEP (@DavidCoburnUKip)


  • 6 May Dundee, 7pm. University Debate, D’Arcy Thompson Lecture Theatre (link)
  • 7 May, Greenock. Stall Oak Mall shopping centre,
    Contact: daveodo@hotmail.com)
  • 7 May, Stirling 10am – 2pm. Street Stall City Centre (FK8 2BX)
  • 7 May, Aberdeen 11am to 2pm. street stall outside M&S on Union Street
  • 8 May Stirling, 2pm. Leafleting – Stirling Train Station
  • 9 May Edinburgh 6pm – 7.30pm. What Does the EU Mean? National Library of Scotland. Neuropolitics Research Lab, University of Edinburgh event
  • 11 May Stirling 7pm. Social Event / Regular Monthly meeting – The Crossed Peels  (Lower Level)
  • 11 May Aberdeen, 7.30pm. get-together for activists in The Archibald Simpson (corner of Union Street/King Street)
  • 11 May Glasgow, 7pm “rainbow of different people and parties showing solidarity” hope pub , old Christian book shop (opposite central station)
  • 12 May Stirling, 7pm – 9pm. The case for Brexit, Speakers: Michael Forsyth, Margaret Mitchell. Albert Halls, Dumbarton Road, Stirling, FK8 2QL,
    Contact: Alastair Majury · majury1981@gmail.com
  • 19 May Royal Highland Showground. NFU debate: “In or Out? – the implications for Scottish food and farming
  • 20 June, 6pm: Berwick-upon-Tweed Public Debate, The Swan Centre
    Northumberland Road, Tweedmouth (Contact: steve.turner@voteleave.uk)
  • 31 May Inverness. The UK in Europe. In or Out?, University of the Highlands and Islands, Inverness. Royal Society of Edinburgh event.




In the years 2007 to 2013 Scotland contributed £7.7 Billion to the EU via the UK and received back in total £6 Billion, so we would appear to also be net contributors to the EU via our membership of the United Kingdom.