It’s good news that the UK will play no part in any Euro bail out under the new system from 2013 onwards. What most of us want to know is who will bail out and how will they bail out any member state in the Euro that gets into trouble in 2011 and 2012.
I want to see the Heads of government agree a sensible plan to ensure the stability of the Spanish banking system, and to ensure the continued funding of the Euro member states that have borrowed too much. These are pressing and immediate issues, not things to resove in 2013.
The Uk must avoid being dragged into the financial turmoil within the Euro area. The Uk needs to continue to nurse its own damaged finances and banks back into health. We do not have the financial strength to go to the financial support of any more Euro area states and banking systems.
December 17, 2010
I agree but do Cameron and Clegg?
December 17, 2010
As a weary sceptic, I smell a rat. By 2013, any agreement will have subtly changed and the long suffering citizens of this country will still have to pay.
Anyway, procrastinating until 2013 is a cop out. Once again our government has failed to put a stake in the ground -‘This far and no further’ – and has bent to the will of our EU masters. Brussels has seen once again that Cameron and Osborne are not bothered to fight to put their country first.
I despair for the future.
December 17, 2010
An excellent summary of the quislings who pass for Government. Just surrender monkeys to The EU Federalist dictatorship.
December 17, 2010
Colin D: “By 2013, any agreement will have subtly changed and the long suffering citizens of this country will still have to pay.”
Agreed to that. By and large our political class as a group might best be described as poisonious self serving traitors.
I suggest that by 2013 the economic landscape will be so changed as to be unrecognisable.
December 17, 2010
“by 2013 the economic landscape will be so changed as to be unrecognisable”
I agree. Or at least so much so that the agreement made now will be meaningless.
December 17, 2010
I believe Chancellor Darling after Labour had lost the election committed us to this bailout to 2013, why is he not being called to account for this?
On the general point of our constitution and if we ever get a written one in my view we need a judicial star chamber, fully independent, to review gross and dubious errors by ministers. Currently they get off lightly and the setting of soft inquiries are no answer. In most cases I would only see massive censure and blots on careers as the outcome but it may make some think more clearly why they are in government.
December 17, 2010
Because Osborne agreed to it
December 17, 2010
Where is the guarantee that the UK won’t be dragged into eurozone bailouts from 2013 onwards?
All I’ve seen so far is this paragraph in the statement from van Rompuy:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/118572.pdf
“This amendment will not increase the competence of the Union and only affect the members of the Eurozone themselves. That’s why everybody agreed to use a simplified revision procedure.”
The first part of the first sentence is open to debate, the second part is a mere assertion in a political statement, and both are designed primarily to validate the use of the simplified revision procedure and so provide an argument against the amendment being put to any national referendum.
What will actually go into the treaties and acquire legal force are these words:
“The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”
Even though the stability mechanism will be established and presumably activated by the eurozone states alone, there’s nothing in those words which would exclude other EU member states from participating in it.
Moreover
“Therefore the future European Stability Mechanism will be designed on the basis of the current mechanism, so IMF involvement is foreseen.”
so at the minimum we would be dragged in through the IMF.
Bear in mind that although we’re not in the eurozone we’ve nonetheless been dragged into eurozone bail-outs which are illegal under the present treaties, bail-out schemes which should be barred to even the eurozone states because they are illegal and so shouldn’t exist; therefore unless there’s an explicit, unequivocal treaty prohibition on non-eurozone countries participating in eurozone bail-outs once they have become legal it seems quite likely that we will still be dragged into participation.
December 17, 2010
The 2013 deadline is simply an encouragement to the markets to ensure that a full blown crisis occurs under the old rules before then. It buys a few months to prepare for it at most.
December 17, 2010
The Dutch nrc wrote last night (16.12.2010):
Germany, like the Netherlands, is against euro-bonds. But quietly, the German Minister of Finance Schäuble, supported by other euro countries, is drafting a plan to make the fund more powerful with euro-bonds Merkel knows this. But tonight, she only wants to talk about a treaty amendment. A larger fund and / or Eurobonds she will only discuss in January. Merkel finds it risky to guide two issues simultaneously through the Bundestag. For bonds she wants to wait until the stability of the euro would get in real jeopardy.
It this paper is right, once a German style financial discipline is secured (enforced) help may still be on the way. How about governments agreeing to act as if the treaty-amendment had been ratified already?
December 17, 2010
But the treaty amendment hasn’t been ratified by the national parliaments and it is not in legal force, and therefore what you are suggesting is that the governments should act illegally by contravening the “no bail-out” clauses which are already in the treaties as ratified by the national parliaments and so are presently in legal force, but which would be effectively neutralised by this amendment when it came into force.
Or to be more precise, continue to act illegally; but instead of abusing a provision which is already in the treaties, Article 122.2 TFEU, as cover for their illegal actions, you think they should use a provision which is not yet even in the treaties.
December 17, 2010
I saw Daniel Hannan speaking about the EU. He said now would be a good time to get some of our powers back from Europe. I would like to see the end of the so called Human Rights nonsense.
December 17, 2010
I very much doubt they are telling the truth. Come 2013 they will change their minds, citing ‘unexpected’ circumstances, financial stability, riots etc.
The process of taxing people on under 30k p.a. to subsidise bankers on ten times that will continue unabated.
December 17, 2010
Am I right to say that from 2013, the bond speculators will have to cover some of their own losses? That is to say that the liabilities no longer rest solely with the state ? [not that the ever should have in the first place]. Could this be the reason that individual sovereign states are not obliged to remedy one another’s woes?
I don’t know the answer myself but I wondered if haircutting had anything to do with the date or is the 2013 coincidental?
Reply: The proposal is that new debt issued from 2013 will contain a risk clause about possible haircuts.
December 17, 2010
No, Eion. The proposal is not for “speculators” – short sellers etc. – to take haircuts, it’s for bond holders to take haircuts.
December 17, 2010
Interesting exchange on ‘This Week’ last night on BBC 1. Closing predictions for the bigs issues for 2011. Michael Portillo “The Euro” – Andrew Neil (in shock) “You think that will still be an issue then?” Michael: “Still? It’s not even started!”
It can only be guesswork why we must wait two years for a plan to address a Euro crisis, but the most cursory glance over current political debate shows a worrying tendency to ignore the presence of the elephant in the drawing room. Quite frankly, if Spain topples, I think the prospect is so terrifying that the establishment simply cannot imagine how it will manage. Germany can pay for that one, surely?
December 17, 2010
Sorry – meant Germany cannot pay……….
December 17, 2010
Anyone who thinks we will ever “get some of our powers back from Europe” is living in cloud cuckoo land. It is a one way street towards ever closer union, it was written into the Treaty of Rome, and anyone who cannot see it after 50 years of evidence is a self-deluding fool. The only way to get our powers back from the EU is to leave. Anything is else is deluded propaganda.
December 17, 2010
Exactly, JR. (And well done for your efforts in the HoC, of late).
Just-this-once-Dave has obviously agreed with the EU in private to participate in bailing out other EU countries.
We will. I would bet my house on it happening.
December 17, 2010
The problems of exposure at Lloyds (nee HBOS) in Ireland and no doubt elsewhere will, I imagine, mean that HMG can claim to have a close vested interest in preserving stability aka bailing out Eurozone members. It’d be interesting to hear how you think this might be headed off at the pass.
December 17, 2010
Under the Labour government parliament voted on whether or not to hold a referendum on the Lisbon Treaty.
The Lib Dems abstained because they said would only support an in/out referendum. So what are we waiting for?? Are the Tories holding them back??
December 17, 2010
We’ve had successive British governments hell bent on dragging us further into the EU. The upper echelons of these parties have definitely been so inclined. The problem they’ve had is that the voting public does not share their enthusiasm, hence the constant subterfuge and downright lies, amply illustrated by the behaviours of all three parties with regard to the EU Constitution/Lisbon Treaty.
The Tories have had an extra problem in that most of their membership has been Eurosceptic, at least wanting significant reform of our engagement with the EU e.g. wanting repatriation of powers such as return of the fisheries to UK control, which they have chosen to finesse with false hopes and easily forgotten promises. The latest manifestation is the transparently disingenuous referendum lock.
The idea that we won’t be supporting the Euro after 2013, I take to be another will-o’-the-wisp commitment. Let’s face it, there’s too much ‘previous’ on the part of governments of all shades to take it seriously. Anyway, it’s a long time to 2013 and while the grass is growing the horse is starving.
Dissembling and prattling about jam tomorrow; same old same old.
December 17, 2010
Please ask H.M. Government to ensure the UK doesn’t get involved in supporting the mega-tsunami known as the US Dollar. The US government deficit continues onwards and upwards. The Tea Party after much fuss at the elections seem to be on board the tax cut and spend agenda!
It is about time that both the Sterling and Euro-zone interest rates moved upwards to more sensible levels? This would signal to the world a return to sound money. This will attract funds to both Sterling and the Euro and improve liquidity.
Maybe we can’t do that as the US Dollar would really come under the spot light!
December 18, 2010
The total debt of EU27 governments is currently running at 74% of total GDP (Source: Wikipedia). Doubtless the Eurozone percentage is somewhat similar. The percentage for Germany alone is 73.4%.
So the whole EU has a dangerously high level of government debt and Germany is in no position to bail everybody else out. Conclusion: each EU member state must reduce its government debt.
December 18, 2010
Wikipedia states the figure for the USA is “approximately 94%” !