During the past months, I have been involved in transferring all my UK pensions’ funds out of the UK via a wonderful system called QROPS. As I have been an expat for more than five years, I can transfer all my pension funds to an overseas fund provided it is recognised by the UK authorities. So I decided to transfer all my funds to New Zealand. My financial ‘advisors’ claimed it would only take a few weeks! Yeh…sure, I have lived in Ukraine for the past seven years and I have heard this story so many times.
The transfer process has been going on for nearly 8 months now. One fund even decided to transfer the money by CHEQUE to New Zealand as they claim they did not have electronic transfer facilities…yeh sure…welcome to the 21st Century. Moreover, they also claimed the name of the fund I wanted to transfer the money to was TOO BIG to fit onto the cheque. For crying out loud…do they think we are all stupid? But they eventually sent a CHEQUE (Can you believe this) to New Zealand, who only had to send it back to the UK for clearance via a UK bank and the whole process is due to take 30 days for the cheque to clear.
It’s still amazing how UK pension fund managers will do anything to delay funds being transferred. It worries me that there is a big problem still with UK pension funds. If you are not worried …you should be.
But the big question facing me from my new fund managers is…”What currency do you want us to transfer into?” e.g. Euro, US Dollars or GBP? Oh boy…with all the problems of the Euro at present, who really know which is the best currency to do anything with?
So I just took a gamble and said “Keep it in GBP (Sterling)”
On my desk as I write are two banknotes – £20 sterling and 20 euros. On the former is a picture of the Bank of England, the signature of Andrew Bailey, its Chief Cashier, and the head of the Queen. The euro note also carries a signature. It is illegible but, since it comes under the letters "ECB" (European Central Bank), perhaps it is that of Jean-Claude Trichet, the bank's President.
There is no picture of a financial location, and nobody's head. Instead, one side of the euro note depicts a couple of gothic windows, and the other, beside the map of Europe, a fine old bridge. It is no accident that the note carries no head. It is because the single European currency came into being without a single European economic government and without political union. It therefore has no ultimate authority. When the euro was launched at the end of the last century, both its friends and its foes predicted that this lack of authority could not last. At some point more power would have to be put behind it, or it would collapse.
We have now got close to that point. Euro notes carry the word "euro" in Roman lettering, of course, but also, in deference to one EU member, print it in Greek characters. It is Greece's sovereign debt crisis which began the current agonies. Will those Greek letters have to come off the notes? The same crisis threatens Portugal and now – much more serious – Spain. If it reaches Italy, the country with the third biggest public debt in the world, the game would appear to be over. The fine old bridge would be blown up.
The situation is not funny for the people of Greece, Portugal, Spain, and so on, because their governments have run up dreadful public debts while sacrificing their power to devalue to become competitive. They cannot cut their exchange rate, so they must cut wages and jobs. Unemployment in Spain is already 20 per cent – and 40 per cent among young people.
It is not funny for Germany, either. German banks are overcommitted in the southern countries now afflicted. The German people are fed up with paying for the profligacy of their poorer neighbours and furious at the suggestion that the only solution is that they should pay even more.
It is not even all that funny for the UK. All sorts of devices will be used to make us pay for the clean-up of the eurozone's financial version of the BP oil-spill, even though we aren't in the eurozone. (That trick about the "natural disasters" clause can be invoked by majority voting rather than the unanimity rule that applies to all budget questions, so we can be outvoted: an 8 billion euro liability is laid on us.) Besides, it is not in our interest if our main export markets are in slump, and our neighbours and allies in turmoil.
But there is no alternative vision in the eurozone. The leaders remain determined to have no Plan B. So what we are about to get is the missing bit of Plan A. They will try to create a sort of European Treasury with centralised economic and fiscal policy – the imposition, in short, of undemocratic European economic government.
Again and again in politics, great schemes don't work – Soviet Communism, for example, and now the euro. Rational people tend to conclude that, because a scheme doesn't work, it will quickly stop. Unfortunately, rational people are wrong. Bad political schemes are usually given up only when they have been tested literally to destruction. It would be much better for Europe if the euro had never happened, and I long for it somehow to fade away, but the process of destruction will be horrendous, and it is only just beginning.