My view on the Tory eurosceptics’ reaction to the Irish bail-out, published today on LabourList http://bit.ly/gke9le

Tory eurosceptics & Ireland

By Peter Skinner MEP

We all know that, for some people, opposition to Britain’s membership of the EU is an issue that obscures all else.

But it has been incredible this week to watch a series of Tory politicians and right-wing commentators come out to say that we should let Europe’s economy go to pot because of their obsession.

News that the UK will provide financial assistance to Ireland has resulted in a cacophony of ill-informed and dangerously wrong responses.

Calls by europhobic Conservatives for the UK not to participate in support for the Irish economy are reckless, risk undermining British economic and political interests, and amount to a form of isolationism when the UK should be showing solidarity with one of its closest partners.

We do more trade with Ireland than any emerging market and our banks have billions invested there. We share a land-border with the country and have historic and cultural ties that go back centuries. Ireland is our closest partner and yet euro-obsessed Tories want to risk that all for their own ideological reasons. They are dangerously wrong.

They seek to lay the blame for the crisis facing Ireland solely down to its membership of the eurozone, but the problems facing the country are far more complex.

Here is Tory MEP Daniel Hannan blogging on Monday: “Ireland is in this mess because of the Single Currency”. No mention of the mad lending binge of Irish banks. No mention that non-euro Iceland (which in 2004 he hailed as undergoing an “economic miracle” thanks to pursuing a “Thatcherite agenda”) faces an even greater bank-led crisis. No observation that the crisis in Greece – to which he refers – is totally different, caused by structural problems, uncompetitive business practices and a legacy of poor government decision-making. No, it’s all the fault of the euro.

Here is Tory MP Douglas Carswell, writing in Tuesday’s Guardian:

“It was euro membership, with ruinously low interest rates for more than a decade, that plunged Ireland into the economic abyss.”

Again, no mention that uncontrolled lending by Irish banks resulted in an unsustainable property boom. No contrast with the likes of Finland, Austria and Belgium, which shared the same interest rates as Ireland but sensibly managed to avoid its property crisis. No observation that the UK and US only narrowly avoided a financial meltdown caused by their banks, while eurozone stalwarts France and Germany sailed through relatively unscathed? No, it’s all the fault of the euro.

Clearly membership of the eurozone imposes burdens as well as benefits on members. But to conclude that Ireland’s woes are solely due to the euro, and therefore advocate UK non-involvement in a bail-out, is economically illiterate.

Adopting such a simplistic approach risks a failure to learn from mistakes and prevent a similar crisis in the future. And calls to stop any assistance to Ireland would potentially put the UK’s own economy at risk.

The Treasury is right to ignore such calls. The responsible action for the British government is to provide as much support as sensible to Ireland, either bi-laterally or through formal EU mechanisms.

Britain has relied on international support in times of need, from the end of World War II with US Marshall Aid through to IMF support in the 1970s – we should provide the same support to the Irish in their time of need, and ignore the talk of those on the Tory right who put ideology before partnership.

The President of the European Commission Jose Barroso (below, right) today addressed MEPs in Strasbourg in his inaugural ‘State of the Union’ address on the Commission’s vision for the future of the European Union.

While no Obama in terms of oratory skills, I have heard worse speeches than the one he delivered today. A high point was the re-statement of the Commission’s commitment to continuing work on developing the Single Market, including the creation of a single EU patent and reducing red-tape for SMEs looking to conduct business cross-border in the EU. This is critical. The Single Market is surely the EU’s greatest tangible achievement, and the Commission is right to target it as a crucial area where the EU can really add value to the lives of European citizens.

I also liked the proposal of a ‘European Vacancy Monitor’ to show EU citizens where job opportunities exist for them beyond their home market. Lack of job mobility has been a key hindrance in developing the Single Market. This could be a good step in helping to address that.

I did not like however the President’s words on the sustainability or otherwise of national budgets. Mr Barroso has clearly come along way from his early leftish political leanings. He now claims that “debt and deficit lead to boom and bust”. My fear is that in following the mantra of rightwing governments across Europe the President is now committing the Commission to a similar mindset. This is despite the very strong arguments – which I support – that the recovery is not yet secure and that cuts, if they are necessary, should be well targeted and gradually introduced, rather than ‘slash and burn’. The previous Labour Chancellor of the Exchequer believed that the UK could only afford to cut its deficit by half over four years without damaging economic prospects.

The Commission does not have direct power over national budgets, but it will still influence how European finance ministers adopt the various proposals around economic governance under consideration. It is of concern that Mr Barroso has joined the apostles of austerity – Osborne, Merkel et al – just when the Commission should be devising strategies for growth in Europe.

Among the many injustices of George Osborne’s first budget, a particular concern of mine is a proposal that will damage the competitiveness of employers in the South East, just as the region begins to recover from recession. Under the Tory chancellor’s plans, companies in the South East would not be exempt from £5,000 national insurance savings that competitors throughout the rest of the UK will benefit from.

Osborne is wrong to apply a one-size fits all approach to the entire South East region of Britain, which is vast and diverse. The South East is not London, it contains some poorer areas in need of further investment; Thanet for example has unemployment levels of around 9%. Osborne’s plans will damage the South East economy and make its companies less competitive.

The coalition has already begun to impose heavy burdens upon the South East. The suspension of £23m funding to the Kent Thameside Strategic Transport Programme will take away vital funding to the Thames Gateway and the national economy as a whole. The government has turned its back on jobs and growth in the economy and is already cutting vital services, as the Kent police force, which will have to make £20million worth of savings, has found out to the cost of the local community.

Budget not fair and not forward-looking!

More generally the Con-Dem Coalition’s Budget is unfair and relies on non-progressive means to get Britain out of recession. We all know that the debt needs to be cut, but the Chancellor’s plans will impose burdens on those least able to bear them. An increase in VAT will hit pensioners and the unemployed hardest. The huge cuts in public services as welfare will mean that we will soon feel the pinch of the coalition’s cuts.

Another Lib Dem let-down

What else is poignant in all of this is that Lib Dems have been willing participants, not just cheerleaders, to the Tory axeman. Clegg and Cable told us that under the Lib Dems there would be no return to Tory cuts; instead they’ve let down all those people who put their faith in them to deliver a fairer Britain.

Government showing no faith in young people

Depressingly the real losers from the budget will be children and young people; the sad fact is many of them have already lost, witness the swathes of school children now denied free school meals. As well as this the Future Jobs Fund, created with the aim of getting 150,000 young people into work, has been ditched along with child trust funds. For those of us who supported a government intent on eradicating child poverty this budget is depressing reading. The Chancellor has shown that this Government will wield the axe and hope for the best without regard for the future of our young people.