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The Forum > Article Comments > Why France and The Netherlands said “No” > Comments

Why France and The Netherlands said “No” : Comments

By James Cumes, published 15/6/2005

James Cumes argues for the economic reasons behind the French and Dutch “No”.

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Could cheap Chinese imports be part of the unemployment problem in Europe?

In Australia we are being virtually snowed under with not only bargain-based clothing, but also tools and and general hardware, as well as kitchen and table items - also electric and powered saws, drills, and even lawn-mowers, etc. These were formerly made locally in Australia, but in Australia, unlike Europe possibly, we have a serious shortage of skilled tradespeople, the cause also coming from China by the fact of the Chinese demand for our iron-ore, copper, nickel, the raw processing before export even now creating a shortage of labour, especially skilled labour.

Of course, the above cannot last long term, and a point to conclude concerning cheap Chinese imports, is that if a nation becomes reliant on such over-cheap imports, or its budgets rely on them, like with an oil shortage a kind of stagflation could set in, leaving the country in an inextricable economic mess for a few years.

Regards, Bushbred, Western Australia
Posted by bushbred, Thursday, 16 June 2005 5:26:14 PM
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We only have about 14% of our manufacturing left.If we become a monoculture of service industries,this makes us very vunerable to changes in the global economic and political structures.

What if the US like us becomes totally dependant upon Chinese manufacturing for all their needs?If the US has problems at home such as terrorists attacks and economic meltdown due to their balance of payments blowout,will they have the resources or the will to help us again in our hour of need?

What if China decides that instead of buying resources from us that it would be cheaper to simply take it?We have 40% of the world's uranium on an enormous continent with a minute population.With their over population and energy problems we look like an easy target.

Why does China have more spys in Australia than any other country?
If I was the leader of a totalitarian state,I would put the US in a servile position enslaving them in debt with the appeal of cheap goods,and then they would be become introverted ,consumed by their own indebitedness.

Next ,test the water by taking Taiwan,then take a large continent with massive energy and natural resources.Who would stop 1,200 million people.For every one of our soldiers they could provide sixty.

It would be so easy if America could be distracted for a while and China would need to do it before we developed our own nuclear weapons.

Perhaps we are lucky that we have so much uranium,since the US will want it too.

Very hypothetical,but Japan went to war for fear of energy and resource starvation.

China will continue to test the waters.Can we trust them as we do the US?
Posted by Arjay, Thursday, 16 June 2005 9:27:58 PM
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To the previous post, what is so value added about manufacturing? Many goods carry designed in, say, Finland, but are manufactured in China labels ... are you really prepared to pay more for getting locally manufactured stuff?

The Dutch gained independence with the 1648 treaty of Westphalia after resisting (Inquisitional) Spain for 80 years. Subsequently the country had to deal with British, French and German attempts of domination, and some would say the American/ Soviet ones since WW2, so there was more to the EU than just economic, or EEC as in the precursor to the EU, in my opinion.

One comment heard in nursing homes in the NL when the Guilder was given up for the Euro, was along the lines that the Germans with "their ECB" had finally won WW2. In citizens' perception the conversion to the Euro reduced salaries by 2.20371 (the conversion rate), but the cost of living went up dramatically.

Add a no charisma PM, BalkenELLENDE (Balkenende ironically combined with the Dutch word for misery, ELLENDE) aka the Harry Potter look a like without any magic, growing unemployment, a murder of a popular politician like Fortuyn, islam Turkey wanting to join, and it is not surprising the politican elite did not get to realise their plans for a federation. Unlike Switzerland with binding referenda, the NL referendum was arrogantly labelled consultative, rather than binding by politicians, so this really got citizens fired up ...

Moreover, why should the Brits be allowed a rebate, while the Dutch pay most per head of population? As the Economist put it, a yes vote would have been a vote for a journey into the unknown, while a no vote would be considered conservative ...

Personally, I really do not see how more 'crats at the EU level, adding to the Dutch national, provincial and local levels are going to improve the world ... in fact they just cost more tax dollars/ Euros
Posted by MX, Saturday, 18 June 2005 10:46:36 PM
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MX,my point is that if we let China manufacture everything,who do we buy our weapons from if they decide to expand their boarders?

With our balance of payments continuing to blow out,I wonder about our future auntonomy and security.Surely an successful economy has some diversity to cope with change?We are importing so much and yet are not paying our own way with enough exports.If we need to pay our own way through new inventions and discoveries,how can we or anyone else collect royalities when China just steals ideas and markets them as their own?

China is a long way from a fully democratic system and the Govt of China knows how impotent democracy can make a country just by observing our ills.They won't relinquish this sort of power easily since it gives them many advantages over us.

Yes we can trade with China but we should not get too cosy about the relationship since they don't have all the constraints of democracy and are hungry to prove themselves as a world power.We could become to eager to sell our principles and alliances for a few pieces of silver.

They won't be as benevolent as the US has been since WW2 in letting countries be autonomous and prosperous.
Posted by Arjay, Sunday, 19 June 2005 3:26:40 PM
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Let's start by explaining the Spanish "yes" vote: to them, the EU represents the end of the Franco dictatorship, so they feel grateful and want more of it. The same enthusiasm doesn't hold for the founders, however.

For the French, the EU has long meant being paid to be inefficient, but with the 2004 expansion to the east, they will find it much harder to justify the injustices of the Common Agricultural Policy. Their "no" probably has more to do with wanting to preserve their privileges and oppose further expansion than anything else.

The Dutch had the Euro forced on them without consultation and have suffered for it. I rather suspect that a lot of them voted "no" because this was their first chance to say "stop this crazy rush towards a European Superstate". The EU project has been moved along far too quickly and far too undemocratically for most people's liking, and they are now voting to try and get it back under some sort of democratic control.

It is a pity that the UK will now not get the chance to give their own resounding "no".
Posted by Ian, Tuesday, 21 June 2005 6:49:46 AM
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James Cumes writes "This must be seen in the context that, in the last 3 decades of the 20th century, manipulation of interest rates has become overwhelmingly the main instrument of macroeconomic management whether in the US, Japan, Germany, France, Australia, New Zealand or elsewhere. Hikes or cuts in interest rates have become the principal and the most visible, powerful and immediately effective instrument of macroeconomic management."

Yes indeed. Prior to 1971 most of Europe had a common "unit of account" care of the Brenton Woods Gold Standard. In fact this was true of most of the world. Each nation within Europe may have had its own currency but they were all just different names for gold. Converting between one national measure of value and another was fixed just like the conversion between yards and metres is fixed.

The move from 'managing the value' of currency relative to commodities (ie the gold standard) to 'managing the value' of currency relavive to consumer goods via interest rate manipulation was a case of three steps backward and one step forward. This aspect of modern macroeconomic policy needs to change. We need to get back to the monetary traditions of Adam Smith and Karl Marx and leave the monetary games inspired by Keynes to the dustbin of history.
Posted by Terje, Wednesday, 22 June 2005 6:20:52 AM
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