A few figures

 

                         Today the EFSF did manage to borrow another 3bn euros. It had to pay 1.77% more than German bunds for ten year money. The trillion euro geared fund now probably has 6.5 bn euros to call on, but has to make payments to existing clients.  

                          Meanwhile we learned that the European Central Bank has bought 9.5 billion of  sovereign bonds in the last week, probably including Italian ones. Despite this Italian 10 year money rose to a new high for this century, and worried the governments about how Italy could raise the money it needs to borrow.

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19 Comments

  1. lifelogic
    Posted November 7, 2011 at 8:00 pm | Permalink

    Well with number like these perhaps the penny (or euro) will finally drop and Cameron & Clegg will at last realise that the game is really up.

    A “sustainable” (to use “Cameron Tory” language) solution is needed.

    Hopefully before they tip a further £40 Billion of hard earned tax payers money on to the fire.

  2. Sue
    Posted November 7, 2011 at 8:26 pm | Permalink

    Just an observation today as I was watching Cameron on BBC Parliament. He constantly refers to “global governance”, which does make many of us feel extremely uncomfortable. It’s all a bit New World Order and very distasteful.

    We don’t want the globe governed, we want each country to have the political system that their electorate chooses. That’s democracy!

    Secondly, he keeps mentioning the word “protectionism!”…. now if the Eurozone manage to circumvent democracy and create their inner circle leaving 10 other countries outside the “elitist” structure, isn’t that a form of protectionism?

    • oldtimer
      Posted November 8, 2011 at 10:37 am | Permalink

      Mr Cameron submitted a paper called Governance for Growth to the G20 meeting the other day. You can find it on the No 10 website, but it is heavy reading. It reminded me of the definition of Governmentium:

      Governmentium:
      To heck with copper or moly or niobium or germanium or gallium or arsenic,………….lets get some Governmentium.

      New research has led to the discovery of the heaviest element yet known to science. The new element, Governmentium (Gv), has one neutron, 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312.

      These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons. Since Governmentium has no electrons, it is inert; however, it can be detected, because it impedes every reaction with which it comes into contact. A minute amount of Governmentium can cause a reaction that would normally take less than a second to take from four days to four years to complete. Governmentium has a normal half-life of 5 years; It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places. In fact, Governmentium’s mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes.

      This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical level of concentration. This hypothetical quantity is referred to as critical morass. When catalyzed with money, Governmentium becomes Administratium, an element that radiates just as much energy as Governmentium since it has half as many peons but twice as many morons.

  3. Brian Tomkinson
    Posted November 7, 2011 at 9:01 pm | Permalink

    How much longer must we witness this madness? Is it not time that the so-called EU elite (I prefer the term political mafia), who keep telling the leaders of the Eurozone states to resign, were kicked out and preferably imprisoned. The damage these people have done is incalculable. I heard our foolish deputy Prime Minister say today that his lords and masters in Brussels were actually “inventing” all sorts of financial devices to save the Euro. I’m sure they sent him and Huhne to do their bit for the “project” in the UK parliament before it becomes defunct.

  4. Kenneth
    Posted November 7, 2011 at 9:03 pm | Permalink

    It is still not too late for Italy, Portugal and Spain to convert to their former currencies right now in a managed way. Yes it will be painful and chaotic but it is best to do it now rather than wait until it becomes 100 times more chaotic and painful later on (e.g. Greece).

    What business wants is to see the boil lanced. It needs more certainly than it has right now. Let’s get it over and done with instead of cruelly prolonging the agony and leaving ourselves with a bigger explosion later.

  5. stred
    Posted November 7, 2011 at 9:10 pm | Permalink

    Does anyone know whether the ECB used BoE methods to buy these bonds?

  6. Mike Stallard
    Posted November 8, 2011 at 7:11 am | Permalink

    The EFSF simply is not enough to save even Greece. Italy is up for 1,800,000,000 (sorry cannot work the Euro thinggy!)

    ASSUME makes an ASS out of U and ME – salesman’s joke.
    So let me ask in a quite logical way, without assuming that our host has any ideas on the subject at all, what would happen to Britain if we just walked out of the EU?
    Can anyone answer this question?

    Reply: Parliament of course is miles off wanting to do that. If a future Parliament repealed the 1972 Act and cancelled our membership unilaterally the government of the day would then have to sit down with the EU and hammer out new arrangements in a wide range of areas over trade, transport links, environment etc.

    • alan jutson
      Posted November 8, 2011 at 9:11 am | Permalink

      Rply to reply

      John that is why many of us want a simple in – out referendum question, as renegotiation then comes from a position of strength.

      Fully aware that you think most belive renegotiation first, but in my view that will result in years and years of procrastination with no end result.

      As the current fiasco goes on and on, there is surely a growing number that just want out.

      Reply: I understand that. I just think it is easier to get agreement to renegotiation and referendum. You never tell me how Parliament is suddenly going to vote to get us out or even to approve an In/Out referendum.

      • Jon Burgess
        Posted November 8, 2011 at 1:06 pm | Permalink

        Here’s a suggestion on how it could work:
        You and the 80 other ‘rebels’ leave the Conservative party, and stand for re-election as independents.
        The independents suddenly become the third largest party in parliament. This in itself might be enough to force an election but whether it is or not, the price of you joining a coalition government with the conservatives (or rejoining the party to fight an immediate election) is a simple in/our referendum to be held immediately.

      • alan jutson
        Posted November 8, 2011 at 5:42 pm | Permalink

        Reply to reply

        With every day that is passing more and more of the population are getting fed up with the EU, with every day that passes more and more people will eventually put pressure on their MP’s for the out solution, no it will not happen overnight, but I reckon in a years time a huge number will simply want out, and the pressure on Mp’s will increase.

        The pressure is sure to increase on Mr Cameron after the Euro Elections, just wait and see the results.

        • alan jutson
          Posted November 8, 2011 at 6:08 pm | Permalink

          Unlike many others on this site, I do not think you have to leave the Conservative Party in order to make your point on Europe.

          Your voting record speaks for itself, and if the other 80 people who reently voted for a referendum think likewise, then you already have a powerful opposition group to the present government policy.

          What you need to do is grow the 81 into 181, then we shall start seeing some real action. If the Labour group also grow, then the real action will start all the sooner.

          The only thing you have to worry about is if Miliband starts to go Euroceptic with his policy promises in a big way (referendum promises) and beats PR Dave to the punch.

    • Winston Smith
      Posted November 8, 2011 at 9:53 am | Permalink

      Perhaps, members of parliament, both on the back benches and in Government, can then do the duties that we pay them for. Instead of writing books, columns in newspapers, going on foreign ‘fact-finding’ missions, meeting with lobbyists and trade uions, etc,etc.

  7. Andy
    Posted November 8, 2011 at 9:09 am | Permalink

    EFSF is a damp squib. It’s just a joke, and a sick one at that.

  8. Denis Cooper
    Posted November 8, 2011 at 9:11 am | Permalink

    The EFSF will only have €6.5 billion in its account until Thursday, when the €3 billion it borrowed yesterday will be lent on to Ireland and the money it has left on hand will drop back down to about €3.5 billion.

    http://www.efsf.europa.eu/mediacentre/news/2011/2011-014-efsf-places-eur-3-billion-bond-in-support-of-ireland.htm

    People keep saying that the problem with the EFSF is that it’s too small and it needs to be €2 trillion or even €3 trillion not €1 trillion etc, but Alistair Darling was much closer to the mark last week when he said:

    http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm111102/debtext/111102-0001.htm

    “and as for the new rescue fund, which may be needed sooner than we think, it does not actually exist”.

    Its original subscribed capital was negligible, and so far it has borrowed a total of €16 billion and lent on a total of €9.5 billion, which will become €12.5 billion on Thursday.

  9. Chris
    Posted November 8, 2011 at 9:26 am | Permalink

    An interesting insight into the nature, quality and legitimacy of decision making with respect to the ECB and ESFS is given in two articles from Reuters and the Financial Times, referring to the “Groupe de Francfort” – “the new politburo” of the EU. The following quote from an official of the G de F may give a flavour:
    http://ca.reuters.com/article/businessNews/idCATRE7A513B20111106?sp=true

    “There is always a trade-off between legitimacy and efficacy,” said an EU official involved in the Frankfurt Group. “The euro area institutions were not designed for crisis management so we need innovative solutions.”
    For further details see http://ftalphaville.ft.com/blog/2011/11/07/729791/ including a quote from Obama to Merkel “I guess you guys have to be creative around here” (Obama to Merkel).

    The wrong technocrats
    Posted by Joseph Cotterill on Nov 07 12:35.

    I guess you guys have to be creative here.

    – Barack Obama to Angela Merkel

  10. javelin
    Posted November 8, 2011 at 10:21 am | Permalink

    The ClubMed social economic model is about to implode in

    1) Greece
    2) Italy
    3) France
    4) Spain
    5) Portugal

    They had their post war run – the economic species was born and thrived for a few years under the protection of the EU. Just like the Soviet Species of Communism the Club Med Species of Socialism may be about to go extinct, or may mutate into something that can survive.

  11. Bernard Otway
    Posted November 8, 2011 at 2:30 pm | Permalink

    To oldtimer from this one ,I want to thank you from the bottom of my heart for this brilliant
    piece of writing ,may I suggest that you register/patent it or something like that,it is a comment that deserves to be read all over the world,and as you ORIGINATED it as far as I know it IS YOURS.It could well go down in HISTORY,it SHOULD make the public service
    want to dig a big hole and jump in pulling the soil on top of themselves,plus all the Qangos
    and others. Once again THANKYOU

    • oldtimer
      Posted November 8, 2011 at 8:30 pm | Permalink

      It is not my composition – I found it on the web. I suspect it originally came from the USA. Please use as you feel fit. More people should be aware of this previously undefined, but pervasive, element that rules our lives.

  12. Lindsay McDougall
    Posted November 15, 2011 at 11:13 am | Permalink

    Who authorised the ECB to buy those bonds? Did Germany? Kicking the corpse (sorry, can) down the road.

One Trackback

  • By Eurozone: The Farce Continues | TradeCommands on November 8, 2011 at 4:41 pm

    […] Well, yes, there’s the little bit that so many people don’t understand as yet. There isn’t in fact any money in the EFSF. What there is is some guarantees. Promises from Germany, France and so on, that if the fnd loses money then they will step up and pay the losses. And that’s pretty much it. Of the $1 trillion there’s so far: […]

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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