Saturday, 10 January 2009

Single Market - A Recent Case Study #1

The Calman Commission hasn't used this argument for its defence of the UK's supposed "single market" but it has been used by the political parties that set it up.

Their argument is that the recent financial crisis and the effects it has had on the Royal Bank of Scotland and Halifax Bank of Scotland underscore why we need the "union" since it was only by being in such a "union" that they could be bailed out.

However this doesn't stand up to international scrutiny.

On September 28, 2008 Associated Press reported that the three independent Benelux countries did the same for the Fortis bank:

Benelux nations partially nationalize Fortis bank

...The bailout will see Belgium invest €4.7 billion ($6.88 billion) and the Netherlands €4 billion ($5.86 billion) in Fortis' banking operations in the two countries. In return, they each receive 49% ownership in those national arms of the bank. Luxembourg will invest €2.7 billion ($3.95 billion) in the bank's Luxembourg operations, also for a 49% stake.
Following this, on 6 October 2008, the French bank BNP Paribas took control of Fortis's operations in Belgium and Luxembourg.

And on 30 September 2008 the French-Belgian bank Dexia was bailed out by the Belgian, French and Luxembourg governments who put in 6.4bn euros ($9bn; £5bn) to keep it afloat.

If we were to believe the arguments of the political parties that the supposed "single market" of the "union" was the only way to bail out RBS and HBOS then Dexia and Fortis could only have been bailed out by Napoleon's French Empire!

As the facts above show this is patent nonsense and it actually raises questions about the nature of the very "single market" they are supporting.

Since Halifax bank of Scotland by the very definition of it's name operates throughout both England and Scotland (and even the Republic of Ireland); and the RBS Group owns Natwest and Ulster Bank, the bailout of Dexia and Fortis by a number of independent states shows that similar arrangement amongst the nations of the British Isles was equally possible.

In fact in the case of Bradford & Bingley, Santander, a Spanish bank (and owner of Abbey National and Alliance & Leicester) was able to buy Bradford & Bingley's branch network and £21bn deposit book after a deal with Alistair Darling.

If the "union" was such a single market then those parties using that argument in Calman will have to explain what single market was in operation to bail out Fortis, Dexia and Bradford and Bingley?

The fact that Fortis, Dexia and Bradford and Bingley can be bailled out across sovereign state borders shows you can do so without a "union" and with a union of unity.

And if Calman raises the Credit Crunch in future reports as a reason for the "union" and uses the RBS/HBOS bail out as an example of its supposed "single market", then it will have to answer questions about why they have ignored those examples which show that a wider single market than the constitutional reach of the "union" is actually in operation?

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