Wednesday 1 March 2023

Super Sunak? Well, maybe not quite yet.

Prime Minister Sunak's new "deal" with the EU on our trading relationships with Northern Ireland, artfully called the "Windsor Framework," is receiving plaudits all round (well, almost). The “adults” are back in control, is the general opinion. It remains to be seen whether the hard line Democratic Unionist Party in Northern Ireland , and the hard-right so called European Research Group of Tories in the Westminster parliament, will be won over, and whether ex Prime Minister Johnson will feel he has enough support to lead opposition to it. This will take about a fortnight. If they all cave in Sunak’s image will be bathed in yet more sunshine and he may even begin to look more like a winner for the next election. Whether that happens or not, I hope the lasting legacy of his present triumph is that it has exposed the lies and deceit by which Johnson sold his far from “oven ready” Northern Ireland Protocol. One newspaper headline exposed the truth succinctly: “Brexit gets done – again (hopefully.) For the sake of all of us, and not just the people of Northern Ireland, I hope that the “Framework “ sticks, and indeed becomes the first step in “the long arduous process of undoing Brexit” as Rafael Behr puts in in today’s Guardian. What I hope will eventually emerge is that all Sunak has achieved is the undoing of a tatty bit of tawdry deception engineered by probably the least competent ever of his predecessors – and something which he himself supported and so, as a senior member of the cabinet which approved it, bears a large measure of responsibility for it. What has received very little attention amidst the carefully choreographed “suspense” surrounding the release of this “Framework” is that Monday 27 February, marked the seventieth anniversary of the London Debt Agreement, signed in 1953. This genuinely landmark accord cancelled, without any reservations, half of Germany’s external debts. The other half was "restructured." You can see the details here. The reason was that the Western Allies, effectively in charge of the instructions to regulate international finace (IMF, World Bank and the GATT) realised that Marshall Aid was not enough, and that Germany could not become a viable democracy, market for the products of the rest of the world, and a bulwark against military aggression, whilst burdened with crippling debt. The anniversary serves as a reminder that: 1) external debt can be cancelled; 2) this does not lead to “moral hazard;” 3) debt cancelation enables countries to provide a humane standard of living for their citizens . . . .) and contribute to world economic development; 5) condescending terms such as “forgiveness” and “charity” need not be used; 6) private firms and individuals (eg Donald Trump) can go bankrupt, have their debts cancelled, and then “bounce back;” 7) there are 52 countries in the world burdened with unpayable debt and whose citizens are living in extreme poverty (eg where often more is spent on debt servicing than on health and education put together); 8) much of the debt is no longer held by the original lenders, but by “Vultures” who have bought it at a discount and are determined to extract every penny of their “investment.” You can find further and better particulars here. When the World banking system was in jeopardy after the 2008/9 crisis Mr Sunak’s distinguished predecessor Gordon Brown successfully organised the rest of the world to save the banks from their folly and the rest of us from destitution. Now, debt is a “world problem” worthy of Mr Sunak’s attention, if he has the will and genuine “pragmatic” skills. Will he rise to the challenge?

1 comment:

  1. I am thankful to the author for continuously challenging convention and bringing new perspectives and ideas to the table.