Euro bonds
Sir: In your leading article, ‘A new deal with Europe’ (17 September), you argue that as Brussels will not agree to radical reform and massive deregulation, the only remaining options are to renegotiate our membership of the European Union or ‘pull out entirely’. However, we must be clear that unilateral withdrawal is out of the question. Over half the UK’s manufactured exports to the EU would face zero tariffs whether we were in or out of the EU. But if the UK left the EU without any new preferential trade agreement the remainder would face an average EU tariff of over 5 per cent, a decisive handicap in many price-sensitive markets. In particular, the vital UK car manufacturing sector would face EU tariffs of 10 per cent. This would place Honda, Nissan, Toyota (UK), BMW (UK) and Jaguar Land Rover at an unacceptable competitive disadvantage in the deeply integrated European car market compared with their present position.
Negotiated withdrawal from the EU should be seen as a fallback option for the UK if all else fails. As the one leading member state which had the sense not to join the euro, the UK could credibly argue for a less integrated Europe based on trade and co-operation. Failing that, we would be in a strong position to negotiate withdrawal based on a new intergovernmental customs-union-based trade agreement which would enable free movement of goods between the UK and the EU to continue.
Ronald Stewart-Brown
Trade Policy Research Centre
Charlbury, Oxon
Japan’s example
Sir: Allister Heath’s warning about the ‘bubble’ in government bonds (‘This is going to hurt’, 17 September) doesn’t once mention the market for Japanese sovereign debt, yet it’s this very market that should be his main source of evidence. Here in the developed world’s premier ‘bankrupt’ country, the market’s persistently low yields have taught people what fixed-income traders have known all along: a monetarily sovereign government that issues a non-convertible currency and has zero liabilities in any other currency will never go broke unless it chooses to. Its ability to pay its obligations is unquestionable (it cannot run out of the funds that it alone can create), even if its willingness to pay shouldn’t be taken for granted. Inflation, of course, could erode the value of bondholders’ investments, but Japan’s deficit spending hasn’t created any inflation. Somebody other than Mr Heath should tell George Osborne that the UK’s own declining bond yields have nothing to do with government austerity. Your editorials before the turn of the century had it right: don’t give up monetary sovereignty and the UK will inevitably be a safer bet than its eurozone neighbours.
Steven Wall
Shimonoseki, Yamaguchi, Japan
Exciting Moscow
Sir: Ian Buruma (Russian Notebook, 17 September) is mistaken. The British Council in central Moscow and the American Centre in the same building have up-to-date foreign newspapers as well as three separate English language libraries. There is a particularly fine theological library primarily in English on the top floor.
Moscow is an exciting place: if you find it ‘gloomy’ you have never arrived.
Christopher Nicholas Morgan
Leipzig, Germany
What’s the difference?
Sir: I greatly enjoyed Peregrine Worsthorne’s recollections of his homosexual youth (‘Are explicit sex scenes OK?’, 17 September). But I was puzzled by his reference to ‘orgies between strangers where the anatomical contortions are such as to make mere buggery and sodomy seem like good clean fun’. In my innocence I have always assumed that ‘mere buggery’ is one and the same thing as ‘mere sodomy’. Does Mr Worsthorne understand a distinction between these activities, or was he just using two words instead of one, because he loves the noise they make?
Benedict King
Oxford
The wrong remedy
Sir: Like all Eurofanatics, Lord Ashdown has learnt nothing and forgotten nothing (‘Paddy pulls no punches’, 17 September). He is quite sure that the euro cannot survive, and that this ‘will threaten us in all sorts of ways’. His remedy is deeper co-operation with the incompetent Eurocrats who built the fundamentally flawed eurozone in the first place.
John Stott
Devizes, Wiltshire
Compulsory chapel
Sir: Ralph Townsend makes a very weak argument for compulsory chapel (Independent Schools Guide, 3 September). He says that pupils are taught ‘sitting still, listening, and switching off politely’. Surely his pupils do not need a stint in chapel to learn these things: what are lessons for? He claims that pupils spend a ‘short period of time in a beautiful building … and they hear music of sublime beauty’. But what of the many Roman Catholics at Winchester? They hear mass in a rather horrid multi-purpose church on the outskirts of the school campus and listen to a stereo play scratchy versions of Allegri’s ‘Miserere’.
Most oddly, he compares the compulsory attendance of chapel to paying taxes and earning a driving licence. But since when has forced religious observance been a ‘fundamental essential’ in any civil society?
Lucas Wessling
Winchester College, Hampshire
Beat that
Sir: James Delingpole’s admission that he knows nothing about electric guitars (‘When the music stops, blame environmental madness’, 17 September) is unnecessary, thanks to his assertion that Dave Grohl (Nirvana’s drummer) played one on ‘Smells Like Teen Spirit’.
John Quays
London SE15
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