On August bank holiday Monday the European Parliaments Econ committee has been recalled from recess for an “emergency” debate on the state of the Eurozone. MEPs have put Brussels on hold August period and as one of my colleagues described it the problems have been allowed to “summernate”.
It will be interesting to hear what colleagues have to say after their five weeks back in their own parts of Europe. What are the stories from Greece and Portugal, Italy and Spain. What are the Germans thinking - do they side with those who believe the bailouts are illegal and are bringing a challenge to the constitutional court? or do they see the only way to defend a “strong euro” as more fiscal consolidation? What are the views of the other AAA countries, like the Dutch and the Finns.
Every summer for many, many years I have spent a fortnight in the calm of the West of Ireland. It is like having a window into another country. When I used to go there as I child I remember the total poverty with dire roads and working donkeys, then overtaken by ancient tractors. I remember the complaints about inflation when Ireland first joined the Euro and then the boom years, with new roads opening and building bonanza. Every year when returned the property prices had hiked again. The last year when the crisis had started to hit I was told of the exodus of young people; a generation leaving the country because of the lack of jobs at home.
This year I was almost dreading going back, expecting to feel deep depression and boarded up shops. However instead I came away with an impression of stoicism and realism. When ever we asked how things were we were told that yes it was difficult, takings were down - but this was usually blamed as much on the very wet summer weather as the general economy. However, property prices are back down to the levels of probably 6 or 7 years ago, but with a holiday cottage still costing the best part of €300,000 they are still well out of my league. Those who took out mortgages in the boom years are stuck.
Returning home this week I was taken by Ben Gummer MP to see the impact of the Irish banking crisis in Ipswich. The waterfront is buzzing with new restaurants, bars and a hotel. The marina has had its busiest year. But it is towered over by a 17 story high skeleton of a building now frozen by the wind down of the bank that had lent tens of millions to the buildings developers. Ben has been told by the administrators that they can not sell the building at current market prices without approval from the European Commission. If the building continues to be left the concrete shell will start to rot and will need to be demolished. Just one of the problems that I will be taking back to Brussels next week.
Later I went into Newmarket. I’ve been told before that there are over 6,000 working in horse related businesses around Newmarket. I went to see the Thoroughbred Breeders Association and the National Stud. Its been a difficult year. The Stud stables mares en route to meet up with the various Stallions across the area. They reckon they have seen 100 fewer mares this year. The direct affect of fewer (mostly Irish) buyers.
These are just two visible examples of how our local east Anglian economy is related to that of Ireland. But the relationship with other economies is often less visible. If the Eurozone crisis deepens into another bank crisis it will affect the UK too. I will be listening hard to the thoughts from colleagues across the continent on Monday.