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2015, A Year of Lamentation?

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I am looking forward to the coming year with some dread, as there is the prospect of so many banana skins for our government, our people, the EU, the Eurozone and the world in general that someone is bound to come a cropper. The problem is that we are all so interdependent that one major mistake could bring disaster falling down around all our ears. No, let me be honest, around my ears (and my wife's). I work on the principle that what's good for me is good for the country.

We are already seeing (and hearing) the opening shots in the battle for this year's general election. Words without end on the NHS, power bills and what the prospective governments are going to do for us and to us. Even at this early stage I am ready to weep at the endless replaying of old arguments and even older assertions about what will happen to the nation if I cast my vote one way or the other. Actually both my wife and I have two votes each, at the forthcoming election, as friends away from the country have already decided that they trust us sufficiently to cast their votes on their behalf.

I cannot not tell you how to vote, that is your responsibility. Traditionally, the Right has been good (ish) with the country's money and the Left has been good at spending it. I make no more point than that, except can we get our nation's finances in some sort of order so that we live within our means?

The election in Greece thrusting the far left party, Syriza into power has sent shock waves around the Eurozone not to mention the whole world. The new government has threatened from opposition to rewrite the rescue package put together by the Eurozone and the IMF, together with the ECB and now they have the means to do so. There are already shock waves taking the Euro lower and causing worrying fluctuations in the world currency markets. Whilst I will confess some delight in the embarrassment this might cause the EU and the Eurozone the consequences are serious. Will Greece have the courage (or is it foolishness?) to leave the Eurozone? We are already seeing the Euro diving against Sterling and the current deflation threatening the Eurozone does not bode well for the future.

After years of indecisiveness the ECB has decided to use Quantitative Easing, throwing vast amounts of money, created by hoovering up bonds, in an effort to offset the effects of deflation, apparently the major danger to the Eurozone and indeed the world. There are those who say that the ECB has dithered far too long as both the UK and the USA used the same technique five years or more ago. But there are other conditions, including excluding Greek bonds from the scheme until July and perhaps permanently that may render the efforts totally futile.

The recent referendum on Scottish independence just will not go away, with our (English) political parties seemingly incapable of coming to any agreement about the status of future Scottish MPs in votes on purely English matters. The nightmare scenario of us being effectively ruled by a coalition depending heavily on the support of the SNP is a realistic proposition, possibly leading us into unforeseen territories. Perhaps we English will be offered the opportunity to have a referendum on our own independence.

Many are glancing unbelievingly at the prices being currently posted at the petrol pumps and see the pressure being reduced on their pockets. The prospect of reductions in home heating bills is also being relished and we are all grateful for the relief being offered. But do we realise that we are seeing a war being waged about the control of the price of oil? The Middle East has seen the rise of the frackers in the USA and other newer producers who, despite the higher costs of oil production, are able to eat into the marketplace, previously thought to be their preserve. This is an economic battle to try to drive those higher cost producers out of the market so that the Western World continues its dependence on the Middle East and there are scaremongers who now forecast an increase in to oil price to $200 a barrel, four times the current level.

But there is another unforeseen consequence, a reduction in tax raised by the government and prospects of further cuts as producers find there isn't enough left at current prices. So there will be another argument about the shortfall in government revenues, undoubtedly referred to as a "black hole", an exercise in political futility, instead of doing what every sensible household does when the income drops, cut your expenditure.

And finally I turn to what I shall only refer to as the "Je suis Charlie" issue. The horrors of those few days in and around Paris are an illustration of man (and woman) kinds' determination to destroy each other. Wiser heads than mine have sought to bring peace and understanding but currently to no avail.

Surely a year of lamentation in prospect, and yet? I cannot constantly see the glass as being half empty. The problems have their positive side. The reduction in petrol and fuel prices will have a positive effect on living costs for households. The problems of the Eurozone may be brought to a head by the Greek general election and QE, but perhaps those in charge of policy will finally realise that action is required now to address the worries of their 200 million plus citizens, which seems to have been the least of concerns to the European Commission. The shock of those terrible events in Paris may finally bring people to a realisation that this is a problem on our own doorstep that has to be tackled.

There are so many alternatives in our own political situation that perhaps the electorate will out think the major parties and cast their votes in a discerning way. So a year that is currently promising total calamity, we have to take the positive view and hope and pray there is a chance of it being one of celebration to be toasted in half full glasses.

David Ingall

Past President

UK200 Group

 

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