Euro disaster zone

Published on Sunday 4 January 2009 21:04

Alex Orr's enthusiasm for the Euro knows no bounds (Letters, 3 January). He must be wearing Euro-blinkers, however, if he has failed to notice the dire straits of countries such as Spain, Portugal, Italy and Greece, all stalwart Eurozone members, now struggling to survive the disastrous straitjacket membership imposes. All of these countries have spiralling debts but cannot react by devaluing heir currency the way Britain has done.

With their respective economies in deep recession and unemployment rising to frightening levels, what these countries need is a sharp cut in interest rates, similar to that agreed by the Bank of England. But interest rates in the Eurozone are controlled by the European Central Bank. The ECB fuelled the inflationary boom by keeping rates too low for too long and now seems determined to maintain them at too high a level to benefit countries like Spain, Portugal, Italy and Greece.

The recent riots in Greece are a warning that the economic collapse of these countries is now a distinct possibility.

The British economy is in a bad enough state, but at least we are in a position to use the traditional tools of economic management to sort things out.

STRUAN STEVENSON, MEP

The European Parliament

Rue Wiertz, Brussels