Wednesday, 18 July 2012

Bryan Johnston: Don't give up on Europe



The Open starts this week at Royal Lytham and St Annes, the scene of the late lamented Severiano Ballesteros’ greatest victory. The Spaniard’s shot from a car park in 1979 is etched into the annals of golfing folklore.

Unfortunately, the economic prospects for his native land require just as a miraculous recovery but whether there is a caddy of sufficient standing across the European community to provide the necessary is a matter of continuing debate. Robert Peston and his coven, clearly not fans, certainly believe that the entire eurozone course will have to be redesigned or, instead, simply built over as a retirement home for failed bankers and politicians.

Nevertheless, one should not give up hope. A vital and energetic banking system is essential in any economy but not necessarily this banking system. One could argue that it would have been preferable to allow failing banks to do just that, fail, and simply start again.

Unfortunately, the domestic political implications of such an outcome makes this prospect extremely improbable. Indeed, when criticising the profligacy of Southern Continental sovereign states,it is often forgotten  that much of this recklessness was actually funded by Northern European banks.

I still believe the problems with the eurozone will be resolved, probably through the intervention of an outside third party agency funded by the vested interests of those better-heeled countries in the Middle and Far East and Latin America. This may rescue the eurozone but probably will not halt the progressive migration of political and industrial authority from West to East.

Bryan Johnston 
Divisional Director - Edinburgh

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