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Democrat - January-February 2009 (Number 112)

Report by Brian Denny

Single curreny crisis sparks violence

No euro

Lord Mandelson, Oliver Kamm and other New Labour neo-cons have joined forces to push for Britain's membership of the Euro despite growing unrest across the EU caused by monetary union.

A leaked confidential European Commission paper has admitted that the economies of member states in the eurozone are actually diverging, creating dangerous tensions in the currency union. As the only big economy in the eurozone, Germany has benefited, while Italy, Spain and others have suffered.

The paper admits that the Euro hasn't led to a coordinated economic policy, leading European Commissioner Joaquín Almunia to plead for "stronger coordination of economic policies".

Bulgaria, Latvia, Lithuania, Hungary and Greece have all faced social unrest and rioting as unemployment soars and as many European countries have been forced to impose severe cuts to government spending, the only tool left for member states inside the Euro. The March EU summit will examine the increasing unrest as unemployment rises across the EU and cuts to social programmes bite.

French President Nicolas Sarkozy first warned of protests spreading across Europe at a Brussels Council in December.

Lithuanian police fired tear gas recently to disperse demonstrators who pelted the country's parliament with stones in protest at government cuts in social spending.

Latvian diplomats have also expressed concern over protests against austerity cuts in Riga, demanded as the precondition for EU and IMF loans, descended into unprecedented violence.

Hundreds of Bulgarian protesters clashed with police in Sofia when a rally against corruption and the economic crisis turned into a riot.

High youth unemployment is also the main underlying cause of a wave of unrest across Greece last month, initially sparked by police shooting of a youth in Athens.

Greek unemployment is edging towards 10 per cent and, in Spain, it is expected to hit around 20 per cent over the year.

Spain recently became the third eurozone country in three days to be warned of a potential downgrading of its credit rating over the deterioration of its public finances. Ireland and Greece were also warned that their ratings could be downgraded as debt levels of Spain, Greece, Ireland and others has risen to levels not seen since the launch of the euro.

David McWilliams, a former official at the Irish central bank, has called on Dublin to threaten withdrawal from the Euro unless Europe's big powers do more to rescue Ireland's economy. "It is essential that we go to Europe and say we have a serious problem. We say, either we default or we pull out of Europe," he told RTE radio.

"If we have a single currency there are obligations and responsibilities on both sides. The idea that Germany and France can just hang us out to dry, as has been the talk in the last couple of days should not be taken lying down," he said.

Mr McWilliams said the EMU was preventing Irish economic recovery. "We are paying twice for the euro: once on the exchange rate and once more on the interest rate," he said.

This is the eurozone that eurofanatics in Britain want us to join. We are already in the penultimate stage of the economic and monetary union and subjected to the strict criteria.

Government ministers like Lord Mandelson have been pushing for euro membership despite the fact that a recent poll showed that over 70 per cent of British people do not want to join. Ken Clarke, who recently joined the Tory shadow cabinet, has also attacked Tory policies hostile to the single currency as 'silly'. Mr Clarke joined the shadow cabinet despite rebelling against his party 33 times, mainly over the Lisbon Treaty, since 2005.