It has been noted widely, but deserves repeating again, and again. Margaret Thatcher predicted not only that a single currency in a European Union would become unworkable, but the means by which this would occur.
She argued that it was ludicrous to expect vastly different economies at completely different levels of development to be able to function under a single currency. Specifically, she foresaw that under such a scheme, the weaker economies of Europe would not be able to use inflationary measures to help deal with inevitable increasing levels of debt, which would lead to default and devastation of their economies.
In one of her autobiographies, The Downing Street Years, (1993) she articulates this:
“We had arguments which might persuade both the Germans — who would be worried about the weakening of anti-inflation policies — and the poorer countries — who must be told that they would not be bailed out of the consequences of a single currency, which would therefore devastate their inefficient economies.”
It has been said over the years that one of the reasons the left hated Margaret Thatcher is because she was so often right (no pun intended). Another insight which has been revealed recently is that the problem with the inevitable is that it always seems to happen.
Her concerns regarding the democratic deficit and loss of sovereignty to European central banks and unrepresentative bodies in Brussels have also been confirmed. She pointed out the danger that “80% of Britain’s economic decisions will be made in Brussels.”
While Great Britain has been able to avoid this, the Greeks have not. We must not pretend that this is anything but their own fault, as much as some will try to argue that it is the fault of the lenders– effectively, making the argument that it is their fault because they should have known Greece would never play by the rules. But what is effectively happening, regardless of the astuteness of the Germans and the idiocy of the Greeks, is that economic policy in Greece is now being dictated by Germany.
In articulating a simple patriotism and the universal virtues of the free market, Margaret Thatcher was able to protect Great Britain from the worst. Not only is Margaret Thatcher one of the greatest human beings to have lived in the 20th Century – it was her, along with Ronald Reagan, who ultimately defeated Communism – she also identified and predicted the folly of the great socialist experiment that is the EU.
One can draw a parallel between the collapse of the Soviet Union and the imminent collapse of the Euro- there is only so long that the productive areas of an economy, or productive regions of a union, can subsidise the unproductive, before something has got to give.