21 December 2011

Posted by DMC on 22 December 2011 in Diary |

What I have reproduced below purports to be an open letter from Sir Frederick Forsyth, the author. Whether or not this is a hoax, in terms of the authorship I know not. However, as to the sentiments expressed in this letter I am sure they will touch a chord with most readers, they are certainly topical so I take this unusual are reproducing this letter in toto.


By Frederick Forsyth

Dear Madam Chancellor

PERMIT me to begin this letter with a brief description of my knowledge of, and affection for, your country.

I first came to Germany as a boy student aged 13 in 1952, two years before you were born. After three extended vacations with German families who spoke no English I found at the age of 16 and to my pleasure that I could pass for German among Germans.

In my 20s I was posted as a foreign correspondent to East Germany in 1963, when you would have been a schoolgirl just north of East Berlin where I lived. I know Germany, Frau Merkel, from the alleys of Hamburg to the spires of Dresden, from the Rhine to the Oder, from the bleak Baltic coast to the snows of the Bavarian Alps. I say this only to show you that I am neither ignoramus nor enemy.

 also had occasion in those years to visit the many thousands of my countrymen who held the line of the Elbe against 50,000 Soviet main battle tanks and thus kept Germany free to recover, modernise and prosper at no defence cost to herself. And from inside the Cold War I saw our decades of effort to defeat the Soviet empire and set your East Germany free.
I was therefore disappointed last Friday to see you take the part of a small and vindictive Frenchman in what can only be seen as a targeted attack on the land of my fathers.

We both know that every country has at least one aspect of its society or economy that is so crucial, so vital that it simply cannot be conceded. For Germany it is surely your automotive sector, your car industry. Any foreign-sourced measure to target German cars and render them unsalable would have to be opposed to veto point by a German chancellor.

For France it is the agricultural sector. For more than 50 years members of the EU have been taxed under the terms of the Common Agricultural Policy in order to subsidise France’s agriculture. Indeed, the CAP has been the cornerstone of every EU budget since the first day.
Attack it and France fights back.

For us the crucial corner of our economy is the financial services industry. Although parts of it exist all over the country it is concentrated in that part of London known even internationally as “the City”. It is not just a few greedy bankers; we both have those but the City is far more. It is indeed a vast banking agglomeration of more banks than anywhere else in the world. But that is the tip of the iceberg. Also in the City is the world’s greatest concentration of insurance companies. Add to that the brokers; traders in stocks and shares worldwide, second only, and then maybe not, to Wall Street. But it is not just stocks. The City is also home to the “exchanges” of gold and precious metals, diamonds, base metals, commodities, futures, derivatives, coffee, cocoa… the list goes on and on. And it does not yet touch upon shipping, aviation, fuels, energy, textiles… enough. Suffice to say the City is the biggest and busiest marketplace in the world. It makes the Paris Bourse look like a parish council set against the United Nations and even dwarfs your Frankfurt many times.

That, surely, is the point of what happened in Brussels. The French wish to wreck it and you seem to have agreed. Its contribution to the British economy is not simply useful nor even merely valuable. It is absolutely crucial. The financial services industry contributes 10 per cent of our Gross Domestic Product and 17.5 per cent of our taxation revenue.

A direct and targeted attack on the City is an attack on my country. But that, although devised in Paris, is what you have chosen to support. You seem to have decided that Britain is once again Germany’s enemy, a situation that has not existed since 1945. I deeply regret this but the choice was yours and entirely yours. The Transaction Tax or Tobin Tax you reserve the right to impose would not even generate money for Brussels .It would simply lead to massive emigration from London to other havens. Long ago it was necessary to live in a city to trade
in it.

In the days when deals can flash across the world in a nanosecond all a major brokerage needs is a suite of rooms, computers, telephones and the talent of the young people barking offers and agreements down the phone. Such a suite of rooms could be in Berne, Thun, Zurich or even Singapore. Under your Tobin Tax tens of thousands would leave London. This would not help Brussels, it would simply help destroy the British economy. Your conference did not even save the euro.

Permit me a few home truths about it. The euro is a Franco-German construct. It was a German chancellor (Kohl) who ordered a German banker (Karl Otto Pohl) to get together with a French civil servant (Delors) on the orders of a French president (Mitterrand) and create a common currency. Which they did. It was a flawed construct. Like a ship with a twisted hull it might float in calm water but if it ever hit a force eight it would probably founder. Even then it might have worked for it was launched with a manual of rules, the Growth And Stability Pact. If the terms of that book of rules had been complied with the Good Ship Euro might have survived. But compliance was entrusted to the European Central Bank which catastrophically failed to insist on that compliance.

Rules governing the growing of cucumbers are more zealously enforced. This was a European Bank in a German city under a French president and it failed in its primary, even its sole, duty. This had everything to do with France and Germany and nothing whatever to do with Britain. Yet in Brussels last week the EU pack seemed intent only on venting its spleen on the country that wisely refused to abolish its pound. You did not even address yourselves to saving the euro but only to seeking a way to ensure it might work in some future time.

But the euro will not be saved. It is crumbling now. And since you have now turned against my country, from this side of the Channel, Madame Chancellor, one can only say of the euro:


Wow I must’ve missed this. I’ had never heard of the Tobin Tax. This tax idea was certainly no hoax I checked up on Google. Apparently it was dreamt up by James Tobin, now deceased, a Nobel prize-winning American economist. Basically he proposed a tax on currency market transactions. It was subsequently suggested that such tax should be extended to cover trades in shares, bonds and derivatives. As London in the centre of world for such transactions it is said that such attacks could destroy ‘The City’, as banks and other financial institutions could just as easily work offshore and out of the clutches of the EU to raise this matter again, at this stage, my look like an infantile reaction to the UK vetoing the Eurozone Constitution. As a German Finance Minister, Wolfgang Schaeuble has suggested it could go ahead in just the Eurozone then the logic here is, that, in the event that it becomes a realit,y the UK should opt out of the Eurozone altogether rather than belonging to an organisation which would cream off 17% of our GDP and in effect destroy our economy. There must be more to it than and I have no doubt it will all become clearer should the proposition be seriously made.>

In the meantime click here for a little EU story that touches the right spot! and because it’s Christmas click here for a bonus

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