Leaving the EU

Whilst we await the next chapter in the farce cum tragedy in the Eurozone story from Spain, I was musing on how totally lacking in judgement and untrustworthy our political class is on the subject of EU membership.

These thoughts were triggered by two things. The first was David Cameron’s bizarrely stupid statement that he would go to Brussels to negotiate a better deal for the UK with the EU but that he would ‘never campaign to take us out of the EU’. Oh well, that will leave him with a strong negotiating position then won’t it? What is he going to use instead of the threat of leaving I wonder? Maybe harsh language?

The second was that we continue to hear from the Euro apologists that it would be a disaster if Britain left the EU. This is arrant nonsense. But the total lack of any evidence for their position was bought home to me by a former colleague and fund manager who was telling me about a visit to Turkey which had produced glowing reports about the condition of its economy. What’s interesting about this is that Turkey has tried to join the EU and failed, having opened accession talks in 2005. Turkey has strong economic growth with no significant budget deficit and low public debt. Just to recap its performance for the past decade:

* Inflation has fallen from 55% in 2000 to 6.5% in 2011
* Real GDP has increased by +58% since 2002, versus +12% in the EuroZone
* Real per capita GDP has risen by +41% since 2002
* Public debt has fallen from 71% of GDP in 2002 to 33% today.

EuroZone debt, by contrast, has risen from 53% to 68% over the same period (and the ratios for individual countries are far worse of course).

Compare and contrast that with Turkey’s neighbour Greece which “succeeded” in joining not only the EU but also the Eurozone.

If ever there was a case of the man left on the quayside as the Titanic sailed it is Turkey. Our politicians should stop scaremongering about life outside the EU.  And those who campaigned for us to join should take a vow of silence on the subject.

Comments

[Nev]

i am a long time follower of your very sensible views on Europe and the UK financial / banking matters.

i cant help but ask, in a time that the world banks are unwinding themselves of years of folly then how can this be a positive situation for the company that you are CEO of - Tullett Prebon? If the world goes to the position that you paint then presumably Tullett Prebon has some short term tough times ahead?

Nev

[Grumpy Oldman]

Turks probably have much younger population than W Europe+probably much lower average wage

[Tanner]

Can't argue with that! Well said Terry, when will our politicians wake up to the fact that they should be representing us honestly, and doing what's right for us. As opposed to flogging political idealism. The facts speak for themselves.

[Terry Smith]

Grumpy Oldman: True. But I would guess they also dodged a bullet by avoiding EU/Eurozone membership.

Nev: I don’t think I should really comment on Tullett Prebon’s prospects on my blog. I think there are tough times ahead for many businesses.

[prohyp]

It is regrettable that along with a number of other important issues, our politicians, led by Messrs Cameron and Osborne have allowed their arrogance and penchant for putting self interest, above national interest, seem to be keener than ever to herd us deeper into Europe.

Since their collective arguments regarding how much better off we are in the EU, have been exposed for the lies that they are, one can only assume that the majority of our MPs who appear to be overt, or closet Europhiles, are eager to get aboard the gravy train the EU affords its inner circle.

The only solution I can see to prevent us from drowning in the stinking corruption of the EU, is a mass defection to UKIP. The problem then is that would also require those MPs who are, or claim to be Euro sceptics to defect as well! That raises the question of whether or not they have the balls to do so?

[Yoldas]

As a Turkish national, I am glad you showed a country who is not seeing EZ crisis as an excuse and sits on his a***e without doing anything when it comes to growth ... Even though they have fundamental issues.. Mr. Cameron keeps telling us EU is the biggest trader partner so he wastes his time and taxpayers money on uncountable numbers of EU submits . Turkey's export to EU, their biggest market, has dropped for the last few years but overall exports increased. Why,? because some part of the world is booming, this is where they focuse rather than waiting the EU to solve their problems.

One more thing Terry, Turkish people is not bothering about EZ crisis at all unlike British people do here.. If Mr. Cameron had spent his time with rest of the world, British people would talk more about growth and less EU crisis which would increase confidence to spend more, to invest more, to growth more....

P.S sorry for the grammer errors..