LONDON – United Kingdom’s Business secretary Vince Cable made comments earlier this week in which he warned of an outbreak of war in Europe if the Euro was to collapse. The comments were said during the Cheltenham Literary Festival in which Cable stated that the consequences of the collapse of the currency was “incalculable” and would have “massive implications” on Britain, a country which is only 2% of the world economy. The warning comes just days after the EU was awarded the Nobel Peace Prize for the achievement of peace and reconciliation in Europe post World War II.
The debt crisis that has hit several European counties has seen deep tensions re-emerge between the North and South of Europe. Scenes of the public pouring out on to the streets in protest of the severe austerity measures have become routine. The escalating crisis has fueled a rise of extremist political movements such as Greece’s Golden Dawn, an anti-immigration party that won 18 seats in Greece’s recent election.
The mood towards Britain’s role in the E.U continues to harden among Cable’s coalition partners. Prime Minster David Cameron, who backs a continued membership in the E.U, is under sustained pressure to re-negotiate Britain relationship with Brussels. It now looks increasingly likely that an in/out referendum will go the public vote, but not before the next general election. Education secretary Michael Gove has also aired his views on the issue. Gove supposedly told friends he would vote to leave the EU if a referendum was to take place and that Brussels should “Give us back our sovereignty or we will walk out.” This follows Defence Secretary Philip Hammond telling Andrew Marr on his BBC1 show “It makes sense for Britain to be in a single market but to reset the relationship so we have a balance of competences which works for Britain and the British people.”
The EU’s GDP shrank to 0.2 % this quarter compared to the previous one. A wide variety of indicators are pointing to a further slump in the third quarter. Spain and Greece have rates as high as 25 per cent unemployment. In Spain, every other person under 25 is unemployed. Despite a foreseeable collapse, Cable also commented at the Cheltenham festival that the Euro should be supported as it is “ very valuable” to Britain.
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