Friday, May 25, 2012

UK Home Secretary: "We'll stop migrants if euro collapses"

From UK's Telegraph (5/25/2012):

Theresa May: we'll stop migrants if euro collapses

The Government is drawing up plans for emergency immigration controls to curb an influx of Greeks and other European Union residents if the euro collapses, the Home Secretary discloses today.

In an interview in The Daily Telegraph, Theresa May says “work is ongoing” to restrict European immigration in the event of a financial collapse.

People from throughout the EU, with the exception of new member countries such as Romania and Bulgaria, are able to work anywhere in the single market.

However, there are growing concerns that if Greece was forced to leave the euro, it would effectively go bankrupt and millions could lose their jobs and consider looking for work abroad.

The crisis could spread quickly to other vulnerable countries such as Spain, Ireland and Portugal, although Britain is regarded as a safe haven because it is outside the single currency.

Details of the contingency plan emerged as the euro crisis deepened further yesterday.

Catalonia was forced to turn to the Spanish government for a bail-out and speculation mounted that Bankia, the troubled Spanish bank, would need £15  billion in state support. European markets fell again as the euro dropped in value against other major currencies.

The Home Secretary says that the Government is already “looking at the trends” to determine whether immigration from beleaguered European countries is increasing. While there is no evidence of increased migration at present, she adds that it is “difficult to say how it is going to develop in coming weeks”.

On the subject of whether emergency immigration controls are under consideration, Mrs May says: “It is right that we do some contingency planning on this [and] that is work that is ongoing.”

The introduction of immigration controls within the EU would undermine a key part of the single market. However, it is allowed in “exceptional” circumstances under European law.

Controls are most likely to include restrictions on people seeking to work in Britain, who could be made to apply for visas.

Several European governments introduced temporary immigration controls when countries such as Poland and the Czech Republic joined the EU, to stop an influx of workers. France also threatened to reintroduce passport controls at the Italian border following an influx of Libyan and Tunisian refugees during the Arab Spring.

David Cameron has already said that Britain has made contingency plans to deal with the break-up of the single currency.

They involve preparations to evacuate Britons from Greece if civil disobedience spirals out of control, and for banks to take steps to protect

The last paragraph looks incomplete, but that's what is there at The Telegraph.


Maju said...

Technically there's no way a Eurozone member can leave or be expelled. It can quit the EU as a whole or it can be suspended as member but, with a handful of "provisional" exceptions if you are in EU you use the euro (or have your currency otherwise pegged to it). Obviously this does not apply to the UK again but one even wonders if the UK is in EU at all...

Also notice that the UK itself, in spite of its extreme competitive currency devaluation, is itself in crisis with a yearly growth of exactly 0%, barely above that of Spain. Other formerly well-off states like the Netherlands have also collapsed apparently. Only Germany, Finland and a few Eastern European states (many of them outside the Eurozone) are doing ok (but in some cases, as Latvia, after a massive slump - while others like Hungary or Czechia are as bad as Italy or Portugal).

But will the Eurozone collapse, I doubt it. What can happen is that Merkel is cornered and a new policy established for the ECB. There is a Latin bloc coalescing, or so it says the same old ultra-conservative Telegraph in another entry.

I don't know what will happen with Greece but it seems to me that the one more and more isolated in EU is Germany. Personally I'd be happy if Germany (not Greece) left the Eurozone and restored their stupid Deutsche Mark, allowing the rest of us to devalue the euro within reasonable parameters so we can compete with China again.

arevamirpal::laprimavera said...

Odd one out is certainly Germany. But among the rest of euro zone, I don't think Greece and France, for example, can be governed by the same monetary policy.

TechDud said...

It sounds like the sequel to the Berlin wall, the Isreali walls, the USA-Mexico border wall also known as the Greco-Turkish wall hasn't been entirely successful. Maybe they will build another one "to help keep the Turks out"!

"Tear down that wall!"

Maju said...

The European Monetary System has been working for decades already: it precedes the euro by some 20 years in fact, forcing member state currencies to be pegged to a virtual unit called the ECU (European Currency Unit but also a historical Carolingian coin).

However back in the day the EMS could be suspended temporarily for a member state in exceptional circumstances as is the case of Greece now but was of Britain and Italy in 1992, for example. That's not anymore possible within the Eurozone.

But my criticism goes to the fact that the too strong euro is not conceived nor governed (because a currency must have one government and one policy) for the interest of the general Eurozone, not for Greece but not for Italy, nor Spain, nor Portugal nor even France or almost every country whose name does not begin with Ger- and ends with -many.

France is not as bad as other states but it's bad. The Netherlands, the most sturdy member of the German camp after Germany itself, is already realizing their error. Of course Italian, Spanish or Portuguese manufacturers have been closing one after another and yielding positions inside Europe to Germany (and others like Poland or the Scandinavian states) and outside EU to imports and cheaper salaries competition from developing countries like China, etc.

Germany does ok: they buy (oil and raw materials) cheap and sell (top end products with limited competence) expensive thanks to the strong euro. But that model does not work for most of Europe, not even France. The "normal" small companies that manufactured clothing or furniture or other middle-end products can't compete in the international markets, including inside EU itself, where imports are cheaper than their products.

The result is a massive collapse of the Latin European economies, among others. Greece is just the tip of the iceberg: all Europe is collapsing economically - and the main reason is the German monetary model. This model was already quite dubious in an expansive context of the recent past but it's totally suicidal in the recession context that has been the new normal since 2007 or 2008.

As for Greece and France not being able to share economic policy, I'd compare with Alabama and New York, for example. The USA does not forge its economic policies looking to New York and disdaining Alabama, mostly not, but tries to do a balance. Instead in EU the policy is designed by and for Germany and it's hurting all the rest. Greece is of course weaker than France but all weak with this super-euro weighting us down.

Anonymous said...

They can plan as much as they want to "control" but freedom to reside anywhere within the EU is a EU citizen right. If they stop people, it is illegal (if anyone ares).

UK a safe haven… doubt it, but their social benefit system is easy to abuse because so behind in terms of management, so that is what makes it attractive as a "safe haven".

Anonymous said...

Another Dunkirk lol!

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