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The Rt Hon Theresa May MP
10 Downing Street
London SW1A 2AA
7th Oct 2018
We will remember them.
50 million people died as a result of the first and Second World Wars both of which were started by Germany. Germany was defeated in both of them. In about 1950, Germany & France secretly planned to create the United States of Europe in about 2025. If the UK does not have a clean break from the EU from March 2019 it will lose its independence for the first time in 1,000 years, it will also lose its voice in the world and it is likely that its independence will be lost forever.
No Prime Minister should ever contemplate such a path for the future.
The paragraphs below justify the above and proposes an alternative route.
Germany was defeated at huge cost by the UK and was supported during the war by the USA and the Commonwealth countries.
In the late 1940’s Germany held secret meetings with France to develop plans to creating the United States of Europe at some time in the future.
These plans initially resulted in the formation of the Iron, Coal and Steel Community in 1951 which was followed in 1957 by the European Economic Community. The UK and others were invited by Germany and France to join the EEC the in 1973. The UK accepted the invitation, which was confirmed by a referendum in 1975. The EEC became the EU in due course and it created the Euro.
However, by 1973 the Napoleonic code had been adopted as the legal structure for the ECC and its successors. The institutions of the ECC were largely designed and developed by Germany. Senior positions, in most of the institutions were held by Germans. Germany still holds those or similar positions today.
Since the UK joined the EEC/EU it has influenced some policies, but Germany has dominated the EU and its institutions. In particular it has managed the Euro to its advantage.
The Euro which was introduced in 2002 was an immediate disaster for Greece and it also became a total disaster for about a third of other member countries from 2007.
For the sake of brevity only details of Italy’s financial situation will be shown below.
Italy has had zero or near zero GDP growth for the last 10 years. Its adult unemployment rate has been 10% and its youth’s unemployment rate has been about 30% throughout that period. The government’s total debt is now €2.3 trillion which is 130% of its GDP (It has increased every year for the last 10 years), the deficit is expected to continue to rise in the future. If interest rates rise, then the debt will increase at a faster rate. Its commercial banks have 15% non-performing debts. Most movable assets have been moved or are currently being moved out of Italy.
The only way that Italy has survived to date, is because of the ECB’s Target2 system which has supported the Italian currency. (It should be noted that the ECB is currently breaching the EU rules because the current payments exceed the maximum monthly limits.) It is thought that this is being allowed by Germany because Germany wants to secure the UK’s continuing commitment to the EU, before it tackles the Italian financial difficulties
The UK has already supported Italy (together with Ireland, Portugal, Spain Greece and others) with over €150 billion (Yes, that is correct) which has been lent to the European Central Bank which in turn has been transferred to Italy and other EU countries which are in financial distress.
Italy’s financial debts are now out of control and are too large for the EU to resolve. There are two options. Either the EU can allow the current situation to continue in which case the debts and damage will increase. Alternatively, Italy could declare bankruptcy and revert to the Lira, but at substantially reduced exchange rates. The difficulty of the second option is that it could trigger a world recession which would be much larger than the 2007 recession.
In its negotiation with the EU, this matter must be raised and an agreement reached for the target2 ECB loans to be repaid together with capital paid to European research projects (in which the UK will no longer participate). They must be returned by the end of March 2019 or at some other date which has been mutually agreed.
There is no doubt, that the political situation in Europe is changing there is a high possibility that some new political parties will be returned in future elections. Most of the new political parties have plans to leave the EU. It is quite possible that Germany will return to the Deutsche Mark.
The Napoleonic code and the structure of the institutions will bring about the collapse or partial collapse of the European Union in the relatively near future.
Our referendum result instructed the UK politicians to negotiate for our country to leave the EU. Our democracy demands that that instruction is fulfilled by our politicians.
When the above recession hits the world there is a possibility the UK will survive the financial catastrophe although that will be difficult. However, if the UK is still attached to the EU or is a member of the EU it is highly unlikely to be able to pay its own liabilities as well as the ongoing liabilities from the EU.
It is impossible to fudge Brexit. The EU is close to collapse and many EU companies will also collapse. The World is wide open to the UK. But in the meanwhile, the recession will be long and hard.
WW1 & WW11 were long & hard further we must remember that 50 million died for us.
We will remember them.
David Mainwaring FCA