Business Spectator

To be clear, Britain is not Greece. Under enormous pressure, the Greeks actually had to cut public spending while the British so far are only talking about it. However, unlike the Greeks the British still have their own currency and central bank (and they pay some taxes, too). As long as the Bank of England continues to buy UK government bonds as if there was no tomorrow, they will be just fine.

The decision of the Norwegian Nobel Committee to award this year’s peace prize to the European Union was criticised by the usual British eurosceptic suspects. The leader of the UK Independence Party Nigel Farage said he was “baffled” and feared the Nobel prize had been brought “into total disrepute”.

In a world ruled by quantitatively easing, unorthodox central bankers, Germany’s hard money focus may appear anachronistic. But given Germany’s history, it is entirely understandable for them and should be a lesson for all.

Considering Sweden’s remarkable economic performance throughout the GFC in the absence of minerals cash, there can be little doubt about which of these two Scandinavian countries pursues the better economic policies. Thinking about Australia on the other hand, it is also clear that it rather resembles big-government Norway than smart-government Sweden.

The euro remains a zombie currency which condemns half of Europe to prolonged misery while locking the other half into a liability union it never signed up for. And with the ECB actively joining the currency debasement race, the euro also becomes more dangerous for global monetary stability.

No, Germany’s highest court did not provide its unqualified seal of approval to the ESM, the Fiscal Compact let alone the ECB’s monetary activism. What it actually did was create enough loopholes for a future German government to pull Germany out of the eurozone.

The ECB now occupies a bizarre position in the pseudo-democracy of the EU. On the one hand, it has the power to compel struggling countries to implement austerity policies, cut their welfare states, reform their labour markets and change their tax systems. On the other, it effectively forces the stronger economies of Europe into a de facto liability union as all the ECB’s risky bond purchases are ultimately underwritten by the taxpayers of countries such as Germany, Luxembourg and Finland.

As much as one can understand why liberal economists would like to use the euro as a catalyst for economic reforms, it may result in the precise opposite. But if there is one place where a little liberal daydreaming is allowed, it is the general meeting of the Mont Pelerin Society.