2 B or not 2 B – the Rating Agency row

The French attack upon the UK’s debts, deficits, inflation and growth rate looked like an attempt to deflect attention from France’s plunging rating. There have been two big differences so far between France and the UK. The first is the UK can print and devalue to keep its debt afloat, whilst France is locked into the Euro. The second is UK government debt rests on very low AAA rates of interest, whilst French borrowing rates have risen above the comparable AAA levels.

The French and others who were very willing to criticise the Rating Agencies for failing to mark down dodgy credits in the private sector prior to 2007, are now having a hissy fit about the Agencies daring to downgrade sovereign debt in good time, before their struggles become more obvious. The Ratings Agencies are doing their job by downgrading overborrowed and overborrowing sovereigns. As Greece shows, countries can renege on their debts. The Agencies do not seem to be leading the markets, but usually follow them. The Euro area threats of downgrades came after the markets had pushed up interest rates in many cases, and after many private sector commentators had warned of problems ahead.

I suspect the French anger about the UK is mainly owing to the need to provide some offsetting publicity at a time of downgrade discussions for France herself. It is also likely that a President trailing in the polls reckons bashing Britain could win him an easy good headline or two in the French press. He has long held a wish to blame Angla Saxon capitalism for any French failings, so these latest rants just carry on with that government tradition.

The main French protagonists say they are doing it as tit for tat, as a response to some UK criticisms of the Euro and the French position. I have long argued that Ministers should have just one line on the Euro “We do not provide a running commentary on the Euro”, with background briefing that the UK has no wish to say or do anything that could make the position of the Euro worse. However, I do not accept that Ministers have said things that justify this very personal attack on the UK in retaliation.

All of this will feed the groundswell of anti EU sentiment in the UK. If our closest friend and ally on the continent sets out to rubbish the UK’s economy and credit standing, it is a far from friendly act. Were France to succeed, it would push up UK government borrowing rates, making us all poorer as a result, as the state had to pay more for its credit.

I agree with Mr Clegg’s wish this morning to condemn xenophobia and chauvinism. It’s a rising problem in many continental countries, as the politics of anger emerges from the troubles of the Euro. I am an open minded freedom loving globalist. Our message should be that we like our new century, which is bringing prosperity and opportunity to many of the world’s poor in Asia and Latin America, thanks to their hard work and enterprise. We should seize the advantage this brings us as well, offering new markets and many millions of new consumers. Over the next ten years Asia and Latin America will rise as a growing proportion of the world’s wealth and trade, and the EU will shrink. The UK’s outlook and foreign policy should reflect that reality.

Mr Clegg says he wants the Euro area members to be able to use the EU institutions to enforce their proposed fiscal pact. He should be careful lest he gets what he wishes for. This pact may well intensify the Euro countries economic struggles and the politics of discontent. The UK needs to be careful to avoid ourselves being more entangled with a failing currency project, which will have a great cost in subsidies, transfer payments, losses on loans, unemployment and economic misery in all too many countries.


  1. Dr Alf Oldman
    December 17, 2011

    I fully endorse John Redwood’s viewpoint.

    The recent responses of the French President, Finance Minister and Head of the Bank of France were inappropriate, showing signs of envy and close to hostility. With a former French President given a two years suspended sentence this week, French politicians probably need to be a little less arrogent. It is time for France to cool down as proposed by Nick Clegg. French votors will not be fooled.

    With regard to credit rating agencies, I believe that they are fulfilling a valuable role in challenging policy-makers to take action.

    1. lifelogic
      December 17, 2011

      I agree 100%. I even, for once, agree with Nick Clegg in telling the French to calm down. Is perhaps Nick Clegg finally beginning to see the world as it really is, rather than through the EU, rose coloured glasses, the Libdems usually use before they come out with the Huhne and Hughes type of drivel.

      1. lifelogic
        December 17, 2011

        I see the tribunal are still awarding huge sums of about £4M+ in compensation to employees. I assume this is just to encourage the claim to keep coming and keep the tribunals in work.

        It certainly must be a great encouragement to take someone on that and the fact that you now have to employ them until they are 104 or similar.

        It is usual for people suffering a loss to have on obligation to mitigate this loss. In the case of a good employee they can leave the job where they feel treated badly and get another one. Why on earth should damages ever be more than say 6 months pay. £4M is about 5 lifetimes pay for most people.

        If the government want more employment then we need a cap. £10,000 is more than enough and a fair balance of risk and costs too for the two parties.

        1. Robert Christopher
          December 17, 2011

          While £4M is a large amount, this doctor wasn’t “most people”; she was a doctor who was “one of the best”.

          It is a very distressing story but the award probably reflects current remuneration, which may itself be too large. Better to focus on that, which is a less complicated problem to “solve”.

          The [employment] panel said: “We are positively outraged at the way this employer has behaved. The claimant has lost her role and status. She is never going to return to work as a doctor, a profession which she cherished together with all the status that brings with it.

          The [employment] tribunal singled out (named Dr -ed), a former medical director of the trust, for particular criticism, concluding: “Dr (X) has to be regarded by us as a self-acknowledged liar.”

          The Telegraph reports says: This doctor left with post traumatic stress and severe depression after she endured five years of harassment and false allegations from senior doctors in reaction to covering for her maternity leave.

          It therefore hasn’t been an ‘accidental’ incident, so should this [state] employer continue to exist in its current form?

          If it was a private business, one would have expected the owners to have made some contribution!

          If it was a private business, the public could take their business elsewhere.

          1. lifelogic
            December 17, 2011

            I do not want to discuss this particular case but nevertheless I cannot accept that treatment by other employees prevents people working for ever more. Anyway why should I as an employer compensate some one because another of my employee allegedly pinched her bum or something, Can they not sue the bum-pincher for say £50 or something directly. This is an absurd game for the enrichment of lawyers, tribunals and disgruntled staff. It costs growth, jobs and even closes good businesses down with jobs lost all round. A £10,000 cap is more than sufficient. If they are any good they can quickly get another job if not they should go anyway.

            It also encourages pointless defensive legal employment systems which also wastes money and renders business unable to compete.

          2. lifelogic
            December 17, 2011

            The tribunals only exist if they can keep people bringing claims what better way to encourage this than turning it into a sort of national lottery. It serves their interests to award such absurd sums and get such publicity.

          3. uanime5
            December 17, 2011

            lifelogic an employer is vicariously liable for their employees and have a duty to prevent harassment. If they fail in this duty they can and should be sued. This country has no need of employers who allow their employees to be abused.

            Your arbitrary cap of £10,000 is wholly insufficient for someone who will be unable to work in this field and in no way reflects the loss of income these employees will suffer.

          4. lifelogic
            December 17, 2011

            I still think £10,000 is plenty for someone if they are any good they can just dust themselves down and get another job – but if you like make it £20,000 or £30,000 fine but £4M! The are not dead or mortally injured after all.

            What about the other say 20 workers made redundant by a company having to close down just to pay perhaps £4M? Surely they all deserve £4M each these worker who have done nothing wrong and loose their jobs due to the tribunal’s ruling – rather than just a small redundancy payment?

          5. lojolondon
            December 18, 2011

            Sorry, Robert, that is NOT the NHS’s money, not the lawyers money and not the tribunal’s money. IT IS MY MONEY. It is taxpayers money and it is paid by hard-working people to make sick people better, not to compensate one person for another person making jokes at their expense or whatever the case is.
            As lifelogic says, if someone was cruel to this lady, let there be a criminal or a civil case against the individual, but no payout from NHS funds.

        2. David Price
          December 17, 2011

          An employer can breach a contract yet the employee is required to mitigate the loss and the employer doesn’t even get punished, that is hardly a balanced approach. What is to stop the employer breaking contracts again – which is hardly comforting to the employees that remain.

          Not all jobs invole the selling or trading of stuff, many require years of learning and experience. High value, highly specialised jobs in medicine or technology are not fungible like goods so it is not as easy to move between them or careers as you seem to think.

          I have experienced outrageous behaviour by employees and employers. There needs to be appropriate safeguards, punishments and recompense whomsoever is the victim otherwise you end up with a working society with no trust or motivation to strive.

          Or, would you rather a situation where no-one trusts contracts from anyone or that lawyers get involved in all internal and external aspects of employment.

          More to the point, the actions of a few bad managers has damaged the reputation of that trust as an employer and possibly their ability to attract good people, destroyed the career of a doctor and caused a very high cost on the taxpayer. I wonder if those individuals responsible will be punished to an appropriate degree.

          1. lifelogic
            December 17, 2011

            It is normal to mitigate the loss if you break a leg you pay to get it fixed and get another job not sit about saying I can never work again.

          2. lifelogic
            December 17, 2011

            You say “which is hardly comforting to the employees that remain.”

            Is it more comforting for staff to know that the company can be put out of business by just one tribunal ruling and they will all be made redundant as a result?

        3. alan jutson
          December 17, 2011


          I agree, £4.5 million is a staggering amount of money, a sum which only a few could ever dream of earning.

          Guess the award is tax free as well !

          Compare with many other sums awarded to wounded soldiers, medical malpractice cases where childrens lives (and their parents) are destroyed on birth etc.

          BUT THE TAXPAYER WILL PAY since it was the NHS who were deemed at fault.

          Have the people who were involved (mentally injured this Doctor) been sacked without compensation, are they still working, or did they get a payoff as well.

          If this Doctor is capable of working again/recovers in time, I wonder if a clause has been written into the agreement for medical assessments to be made over the years, and the sum reduced if a recovery is made.

          Seems no logic to some decisions on amounts awarded.

          And they wonder why Companies do not freely take on more staff.

          1. uanime5
            December 17, 2011

            You have no idea how expensive it is for the NHS if they cause a child to be physically or mentally handicapped.

            The compensation is a reflection of the damage suffered, so if will not be reduced if the doctor ever recovers.

            If companies don’t abuse their staff they have nothing to fear.

          2. lifelogic
            December 17, 2011

            You say “If companies don’t abuse their staff they have nothing to fear.” That is clearly nonsense even if they win the case and have done nothing wrong it cost them a fortune which is not recoverable. Anyway the outcome of the court case is often close to a lottery.

            Why on earth would any employer want to abuse their staff anyway what interest do they have in doing that – they just want to get the best out of them.

          3. lifelogic
            December 17, 2011

            I would cap medical injury claims in the NHS too and have fixed levels of compensation accepted when you agree to accept the treatment.

          4. Bazman
            December 17, 2011

            ‘Why on earth would any employer want to abuse their staff anyway what interest do they have in doing that? They just want to get the best out of them.
            Were you born yesterday?

          5. lifelogic
            December 17, 2011

            Were you born yesterday? Alas no but you do not get the best out of staff by abusing them as employers very quickly learn.

        4. Robert Christopher
          December 17, 2011

          “I cannot accept that treatment by other employees prevents people working for ever more. ”

          You are fortunate to be in this position!

          “Anyway why should I as an employer compensate some one because another of my employee allegedly pinched her bum or something”

          A case such as this should be dealt with promptly. You have forgotten the secret management meetings to ensure CONTINUED harassment and false allegations from senior members of staff, for FIVE years!

          Was there no one in a powerful enough position, with any powers of observation and judgement, working in that part of the Trust, for FIVE years? What was the problem: a peculiar sort of ‘team work’?

          When I wrote: “If it was a private business, one would have expected the owners to have made some contribution!” I was thinking of a private business where the owner was directly involved with staff, not a plc.

          At least with a plc there is accountability through to the shareholders, even if it has to be done after the fact!

          1. Fox in sox
            December 17, 2011

            The doctor concerned has a case before the GMC shortly concerning significant allegations. This does not justify what went on in Pinderfields hospital, but may give some indication as to her relationships with colleagues.

            Employment law needs reform. This doctor was appointed at interview by many of the people cited in the antidosmissal case. Clearly they were not Xenophobic misogynists, but something happened that made normal working relationships impossible. It would have been better for all concerned if the case could have been resolved differently.

            Reply: This site does not take sides in disputes like these, and leaves them to proper process to sort out.

          2. alan jutson
            December 17, 2011

            Most Companies have a “grievance proceedure”, which can usually be taken up to the highest possible level as required to resiolve a dispute.

            I find it difficult to understand why that route was not taken up within the NHS, which has such a proceedure in place.

            The Doctor is an intelligent person, so proceedures surely were not beyond their understanding, and if the complaint was serious enough, then all you do is escalate it to a higher level each time, if dissatisfied with the outcome, why wait 5 years.

            Clearly no one wants staff to be subject to mental torment, or indeed anything else unpleasant.

            I do not know the details of this case so cannot comment, and will not comment on its judgement, but the need for this sort of action and result, does seem to me to be excessive in every way.

            One is forced to ask, was the CEO of this Trust aware, and if not, why was it not bought to their attention before a possible Court case.

          3. lifelogic
            December 17, 2011

            It is interesting to compare the employed with a self employed person. Perhaps someone who quoted for a large consultancy job. But the client decided he did not like pregnant women who were say part Spanish part Dutch, were vegetarians and might anyway have to take a break to have a baby during the job, so she just uses another consultant.

            Would the self employed person have any course of action? Would they be able not to work ever again and get huge compensation due the huge stress caused? Or would they just dust themselves down and try to get another more reasonable client? Surely the latter.

          4. forthurst
            December 17, 2011

            This case raises a couple of general issues:

            To what extent should employers be treated as extensions of the Welfare State?

            How can government have such an exaggerated respect for one (female) employee’s rights and at the same time permit employers to replace all their employees with Indians or others either here or abroad.

            This country is suffering from an auto-immune disorder caused by Cultural Marxists. Whenever someone says, “we need to obtain the best talent from wherever it may be found”, they actually mean, “let’s displace the English from their own country”.

        5. Bazman
          December 17, 2011

          The managers and doctors who got the hospital in this position should be sacked. End of.
          I my industry many of the agencies are reclassifying overalls as a uniform so legally if you leave with twelve weeks or are dropped, which happens all the time, you have to pay for them. It is a scam as legally they are bound to pay for safety equipment require to do the job. This is what many people who cannot tell their employers to ram it are dealing with every day.
          The idea of no workers right or compensation is absolutely unacceptable and a basic right of living in this country. This idea that a few wealthy people, the “producers” hand everything down to the rest of us “the parasites”, is fundamentally at odds with the concept of democracy.

          1. lifelogic
            December 18, 2011

            You say “The managers and doctors who got the hospital in this position should be sacked. End of.”

            Would they then all be off to the tribunal for their £4M each too?

      2. lifelogic
        December 17, 2011

        I see Michael Gove, one of the better government ministers is to send
        every state school in England a new copy of the King James Bible from the government – with a brief foreword by Michael Gove himself.

        I cannot help thinking they would be far better off with a copy of Christopher Hitchins’s “God is not great” (who very sadly died two days ago) or the very funny and highly entertaining “The God Delusion” by Richard Dawkins. Indeed all of Dawkins books should certainly be in every school.

        It will be interesting to see what Gove’s forward will say about the inconsistencies, the racism, sexism and plain absurdities contained. Hopefully it will just say “Please read this together with the Richard Dawkins’s “The God Delusion” and think about them.

        1. APL
          December 17, 2011

          Lifelogic: “a new copy of the King James Bible from the government”

          Stand by for bible burning demonstrations in certain parts of England.

          Lifelogic: “God is not great”, “The God Delusion”

          He he he!

          Send all three, we could time them to arrive just before November 5th, stand back and watch the fireworks.

        2. Mark
          December 17, 2011

          I suggest the reason why the Bible and Shakespeare are standard issue on Desert Island Discs is that the language they contain is so rich. We use it today without thinking about it, because so many phrases have simply become part of the language. View it as a work of literature that is in part history (some of which echoes down to modern times in terms of relationships in the Eastern Mediterranean) and in part the basis on which the moral codes of the Western world are founded, with different emphases down the centuries. That I would suggest gives several reasons why it is worthy of some study.

          “The God Delusion” is a polemic that is among the least attractive of Dawkins’ writings. He is much better in “The Blind Watchmaker” and “The Selfish Gene” – his early work where he sets out his ideas freshly. It is a nice paradox that religions have provided some of the most successful memes that the human race has ever devised. It would strongly suggest that they have survival value: they provide societal organisation for greater effectiveness in much the same way as in a beehive or ant colony. They remain a feature of the vast majority of the world’s population today.

          You may care to compare the influence of the Protestant work ethic on the development of the country during the Industrial Revolution with today’s sloth bound atheists absorbing religious putdowns from their telescreens and waiting for their next welfare cheque. Does that have survival value?

          1. lifelogic
            December 17, 2011

            I agree that welfare cheques have often made people slothful (or perhaps just logical given the absurd system) but I am not sure that this is just an atheist trait R Dawkins and C Hitchins and many others seem quite hard working to me.

          2. Robert Christopher
            December 17, 2011

            I thought the reason why The Bible and Shakespeare are standard issue on Desert Island Discs is because so many castaways would have chosen one or the other, and Roy P. wanted to get some variety.
            Sorry, I mean he wanted to give the listener a more enriching experience.

          3. Mark
            December 17, 2011

            I think both gentlemen have read the bible and were introduced to the KJV whilst at school.

        3. forthurst
          December 17, 2011

          I hope this will be the unadorned King James’ version rather than the extremely subversive Scofield Reference bible. I would hope that Gove has done his research so that he knows which particular claque of Non Christians financed that version and its role in grooming American children into crazed beliefs about the ME and in their support for the insupportable.

        4. Rebecca Hanson
          December 17, 2011

          Perhaps we could suggest that each school sends him a copy of this: http://www.amazon.co.uk/Education-State-Study-Political-Economy/dp/0865971358/ref=sr_1_1?ie=UTF8&qid=1324151717&sr=8-1
          as a return gift.

          Oh how wonderful it would have been had any of his ‘experts’ (http://www.linkedin.com/groups/UK-Education-126310) actually considered education to be of sufficient value as an idea to bother to educate themselves about the politics and economics of education instead of deciding that they were so bright they didn’t need to.

      3. Disaffected
        December 17, 2011

        Clegg has one fanatical dream for the UK to become part of a pan European state. Cameron has said he did not wish the EURO countries to use the EU institutions and Clegg has undermined him on this point. I hope and trust Cameron will remind him of his minority failed position. It is reported the new draft treaty requires a majority of 9 countries signing to prevent referendums and national government interference. Hardly sounds like democracy to me- where is Clegg on this point??

        Clegg continues to denigrate the UK and its culture and has the bare faced cheek to lecture about xenophobia. At the beginning of the week we were a “pygmy” nation. Is it any wonder France or any other country thinks it is okay to bash Britain with Clegg in government? Let me remind you of his views before the election.

        Whilst an MEP Clegg, for four years, wrote a fortnightly column for Guardian Unlimited. One particular article in 2002 accused Gordon Brown of encouraging “condescension” towards Germany. In an article, Clegg wrote that “all nations have a cross to bear, and none more so than Germany with its memories of Nazism. But the British cross is more insidious still. A misplaced sense of superiority, sustained by delusions of grandeur and a tenacious obsession with the last war, is much harder to shake off”.[38][39. The article was dusted down during the 2010 General Election campaign when the Daily Mail interpreted the article as being a “Nazi slur on Britain” and Clegg had begun to feel the full heat of the British tabloid press following his success during the first leaders debate.

        This is not the words of a person who seeks to protect the national interest. The Eurosceptics need to oust Cameron before it is too late.

  2. Mike Stallard
    December 17, 2011

    By now the EU should have broken up into various regions with each region being tightly controlled by Brussels. The UK should have been broken up into regions like Scotland, Wales, the North East, the South East, Northern Ireland and Eire and to have ceased to exist as a real entity. The Regional Councils (ours is EEDA) should now be ruling us. “Nationalism” should have been confined to History.

    The EU Parliament should by now have become like the EU parliament – a debating Chamber, pompous, meaningless and very tightly controlled indeed. “Populism” – the attempt to rule by keeping close tabs on the people of the land – should have become a word like “Racism” or “Sexism” – utterly beyond the pale.

    All decisions should have been, by now, taken behind closed doors by “experts” and the hand-outs to the tightly controlled media should have, by now, become bland and meaningless.

    Instead we have Mr Sarkozy, Mr Clegg and Mrs Merkel along with a lot of other people too listening to their voters, being utterly nationalistic.

    The project is faltering. Let us hope that it very soon falls into History too.

    1. john w
      December 17, 2011

      you said it so i dont have too,cheers

    2. Mark
      December 17, 2011

      One of the more fascinating of our family heirlooms is an atlas that dates from the early 19th century. Fascinating because countries that disappeared under carve-ups of empire and the effect of two world wars re-emerged in the late 20th century. How the architects of the EU ever thought they were going to outdo history continues to puzzle me. Perhaps they should have read some?

  3. Ralph Musgrave
    December 17, 2011

    Re Nick Clegg’s condemnation of “xenophobia”, I don’t know of any evidence that Euroskeptics hate foreigners – that’s what xenophobia is: hatred of foreigners. Nor do I know of any evidence to support the claim, often made by the politically correct, that those with concerns about immigration also xenophobes.

    Only nasty and small minded people ascribe hatred to others, unless there is good evidence to back the accusation.

    1. Disaffected
      December 17, 2011

      +1. Clegg ought to be more concerned with his own language denigrating the Uk and its culture rather than labelling other people. The same would apply to other prominent LibDem politicians.

    2. lifelogic
      December 17, 2011

      I agree fully, in my experience living in France, Italy and the Britain Euroskeptics, who are really “EUsocialist-undemocratic-big-government-sceptics” usually like Europe very much indeed and often enjoy the company and variety of perspectives of all types of foreigners.

      This is why, we hate the huge damage the EU undemocratic socialism is doing to Europe.

      As they have no arguments, beyond the bogus “a seat at the table” and “50% of trade”, they just have to resort to personal abuse. (As the BBC and the AGWarming priests do on that issue too). It is because they have nothing else to say.

    3. Jeremy Hummerstone
      December 17, 2011

      “Fear” of foreigners.

      1. A different Simon
        December 17, 2011

        I recognise your profile picture as being from one of my favourite childhood story books .

        How many pancakes was it again ?

    4. Bazman
      December 17, 2011

      Legging It should have used the word ‘jingoistic’, but that would have been to close to the truth.

    5. Martyn
      December 17, 2011

      I suspect that Nick Clegg’s use of the word “xenophobia” was because he was not aware of its true meaning. After all, is it now not against the Law to incite hatred, race, religion or whatever? I doubt that he meant to do so and was similar to the number of BBC and other peoples who do not know the difference between ‘less’ and ‘fewer’. How many times do we hear someone incorreclty announce ‘less people were present on this occasion’ or suchlike. Sadly, an ability to use our wonderful English language properly seems of little importance these days….

      1. lifelogic
        December 17, 2011

        The battle between “less” and “fewer” seems to have been totally lost. Only Waitrose still seems to have the “10 items or fewer” lane I notice. But a language clearly should adapt. Spelling should too, but alas this has been fixed in an irrational aspic by self appointed dictionary compilers, but is that write, rite or right I am not really so sure it is.

        Also do we really need capital letters, especially as I keep hitting the control key or caps lock instead of Caps with very annoying results.

        1. APL
          December 17, 2011

          Lifelogic: “rite”

          Is already occupied.

          1. lifelogic
            December 19, 2011

            Yes it is – but we do not need a different spelling for each meaning, any more than we need a different sound for each word meaning.

  4. JimF
    December 17, 2011

    Your last paragraph is spot on.
    We need to neutralise the UK’s position, as far as possible. We are in a trade grouping with France and the other countries in the EU, and it is mutually beneficial to keep things that way. We should be leaving it at that, focussing on the benefits of growing business and links with non-EU countries around the world, where they would be friendly with us. Getting closer and cuddly (a la Clegg) with other EU members at this time isn’t in our immediate interest. Cameron’s stance recently has been correct, but Clegg is too closely involved with the neighbours to be truly objective, and should be locked in a dark room on this subject.

  5. Kevin Ronald Lohse
    December 17, 2011

    The slash-and-burn antics were made to look even more foolish yesterday when Fitch downgraded French debt from stable to negative, citing exposure to the EFSF and EMF and the deteriorating position of French banks.
    Fitch is, of course, 60% owned by a French conglomerate.

  6. Gary
    December 17, 2011

    Ratings agencies are a statist joke. This is crony capitalism. Make laws to enforce pensions and other large investors to adjust their holdings on the basis of ratings decrees by dubious monopolies, and you can rig markets anywhere that you choose. Here we have central banks colluding with govts to ratchet up govt debt, and an entire sector living off this trade, with the ratings agencies doing the political dirty work on who should be put to financial death, or not.

    The markets are going to eventually wash this entire cesspit away, it is just a pity that we are all going to suffer so much.

    1. libertarian
      December 17, 2011

      Dear Gary

      Are you ever going to find out about free markets and capitalism, and how financial markers work or do you intend to keep on boring us with your tin foil hat conspiracy theory?

      1. forthurst
        December 17, 2011

        I have seen attempts on this site to exculpate industry insiders for the 2008 financial collapse blaming it entirely on poor regulation. It may be true that the private secret bankster-owned (but which?) Fed was responsible for an enormous credit expansion under which a property bubble grew, but the fact that that bubble was substantially composed of fraudulent mortgages which were subsequently repackaged as (dubious-ed) CDOs which were (wrongly -ed) assigned investment grade ratings by ratings agencies was not the direct consequence of poor regulation but of (bad conduct-ed).

        “The FBI Estimates That 80 Percent Of All Mortgage Fraud Involves Collaboration Or Collusion By Industry Insiders”

        “In other words, banks made loans to borrowers who they knew couldn’t really repay because the heads of the banks could make huge bonuses based on high volumes and fraudulent appraisals, and they didn’t care if their own companies later failed.”


        So insiders at all levels ripped of their employers who having been bankrupted were subsequently refloated after industry insiders wearing their new executive governmental hats exhorted legislators to save the bankrupted financial shells now by bankrupting future generations of taxpayers.

        We know who was paying the Ratings agencies then; who are paying them now and why? The motivations of organisations unless it is othwerwise known can savely be assumed to in favour of their paymasters. That equally applies to political parties.

        1. Gary
          December 19, 2011

          This is true , no matter how “Libertarian” , who works for a bank, tries to spin it. It is a cesspit that we go to extraordinary lengths to protect.

          No one knows more than Prof William K Black about these crimes and potential prosecutions. He successfully oversaw the prosecution and jailing over 1000 bankers during the S&L crisis. He says this is far worse. You can find any number of current articles of his on the web.

      2. Gary
        December 18, 2011

        An agency applying ratings, that force funds by law to invest according those ratings, is statist.

        For a guy with a moniker of “libertarian”, you know surprisingly little about free markets or libertarianism.

        1. Frederick Bloggs
          December 18, 2011

          They only require pension funds to invest in bonds which are “investment grade” and above. That only gives fund managers about 5,000 different companies to invest in.

          As a pension holder I would not like my fund manager buying the bonds of sub-investment grade companies.

          1. Gary
            December 19, 2011

            It is worse. Bank are required to be invested according to agency ratings to determine the quality of their reserves, as well as a host of other market skewing inducements. Here is the synopsis :

            1. The credit rating agencies are quasi-governmental entities because they have been given the power to grant regulatory licenses to various types of businesses. For example, the United States Treasury Department, through the Comptroller of the Currency, adopted credit ratings as the appropriate measure of the quality of national banks’ bond portfolios, requiring that banks write-down the value of bonds in their portfolio that did not have sufficiently high ratings, but allowing bonds with sufficiently high ratings to be carried on the banks’ books at cost.

            2. Similarly, national banks long have been prohibited by the Comptroller of the Currency from purchasing securities that are not of investment grade, as determined by the rating agencies

            3. SEC Rule 15c3-1 states that the percentage of the market value of securities that can be counted towards a broker-dealer firm’s net capital requirement will be determined by the credit rating assigned to the securities by the NRSROs (Ratings Agencies)

            4. Ratings determine which securities may be purchased by money market mutual funds on the basis of the rating assigned to the securities by the NRSROs (only those securities that have one of the two highest ratings for short-term debt may be included in the money market fund’s portfolio);

            5. Permit issuers whose securities have been given investment grade ratings from the NRSROs to utilize the streamlined S-3 registration forms when issuing securities

            6. exempt persons engaged in the distribution of nonconvertible debt securities from certain anti-manipulation rules if the securities being distributed have been given an investment-grade rating by at least one NRSRO (these anti-manipulation rules generally prohibit those involved in distributing securities from buying and selling the securities during the distribution

            7. One of the sad consequences of this onslaught of regulation is that they have had the cumulative effect of removing both market forces and market incentives from the work performed by NRSROs. The NRSROs incentives in today’s regulatory environment are to reduce costs as much as possible, knowing that regulation guarantees a fixed, stable demand for their services. The massive fees paid to NRSROs can be viewed as a form of tax, ultimately paid by investors, but paid in the first instance by banks, mutual funds, insurance companies, securities firms, and issuers as a cost of doing business.

            8. However, in today’s regulatory environment, ratings downgrades are at least partially self-fulfilling prophecies. Securities issued by firms that have been down-graded are worth less than identical securities that have not been downgraded due solely to regulatory factors. Similarly, firms with high ratings may enjoy lower capital costs due to regulations that make it attractive for institutional investors to keep such higher-rated securities in their portfolios, rather than because they are actually better managed or more strongly capitalized than lower-rated rivals.


        2. libertarian
          December 18, 2011

          You know remakably little about investment and markets Gary, you can’t even tell the difference between different types of financial institutions

  7. backofanenvelope
    December 17, 2011

    We need to grow up. Our partners in the EU are friends, partners, allies – AND – enemies and rivals. Far too often we seem to think we are playing cricket. They don’t.

    1. APL
      December 17, 2011

      backofanenvelope: “allies – AND – enemies and rivals.”

      Which is one good reason why we should not be shackled to them.

  8. Duyfken
    December 17, 2011

    Showing my tenuous grip on knowledge of international finance, may I ask a few (probably asinine) questions please, about currency.
    1. If I were to purchase Euros from a country in the EZ and deposited them there, and that country subsequently reverted to its own currency and possibly also devalued against others, would not my Euros be safe because I could sell them in another EZ country without suffering any loss?
    2. Would the same be the case were I to hold my Euros outside that country?
    3. If all Euros are interchangeable within the EZ, does this not make the Euro currency as strong as the strongest link (Germany), and is a part reason why the Euro has kept its value relatively unscathed so far?
    4. Since ratings agencies discriminate between various EZ countries, rather than treat the EZ as a whole, in what way does the credit risk differ from the currency risk? Were a Fiscal Union to be implemented, would that change the situation?
    5. For safety, is it sensible to convert any Euro holdings into another currency?

    Reply: It is not clear who would lose in the event of a weaker state pulling out and devaluing . It would depend on the rules imposed over compulsory conbversion or retention of Euros. The Euro is not as strong as its strongest economy – it is an amalgam of them all.

    1. Duyfken
      December 17, 2011


  9. figurewizard
    December 17, 2011

    France is committed to the Eurozone rescue plan. Fitch warn however that six Eurozone members are likely to be downgraded because their efforts to conform to the plan are ‘unachievable.’ France however is to keep her triple A status.

    This signals a huge reduction in Eurozone membership and France has seen this coming, which is why they have chosen to lambast us in the UK. They are using us a cypher to attack the financial markets; much of whose activity is based in London for having brought their discredited currency down and the concept of a united Europe with it. France and the rest of them actually only have themselves to blame.

  10. Rebecca Hanson
    December 17, 2011

    Is the Clegg comments you’re referring to John?

    Instead of focusing on trying to cancel the negatives why don’t we emphasise some of the positives which people can get on and do something positive about – such as European twinning which is still very active here:
    and the opportunities for global twinning of schools opened up by the British Council and currently being offered in conjunction with the Olympic Games.

    I think, John, that you are forgetting to notice that most of the French don’t actually think that much of Sarkozy but are happy to get on with building personal friendships with Brits. Let’s emphasise and build on that and some of the very many positive colloborative projects like, er,
    ITER: http://en.wikipedia.org/wiki/ITER
    and loads more.

    Cut the criticism of Sarkozy’s bluster – yes it is just hot air – lets fill that air with positive stuff we can all agree on.

  11. Peter van Leeuwen
    December 17, 2011

    I fully agree . . . but also with Nick Glegg. I for one (or for hundred millions) hope the euro will not be a failing currency project.

    1. KwH
      December 17, 2011

      The signs are all there that the currency needs to completely change from its current format and it needs to let some of the struggling countries leave. It simply needs to happen for the sake of the ordinary people living and trying to work in those countries.

      The fact that plenty of people could forsee the problems ahead doesn’t make us happy. It makes us feel sad for people losing their livelihoods. Ordinary people like you and me stuck in the middle of a huge political mistake.

      1. figurewizard
        December 17, 2011

        Germany doesn’t want any of the Eurozone members to quit. The fact that countries like Greece, Italy and Spain have not had the discipline of devaluation to reflect the true state of their economies means that German exports to those countries have prospered at their expense. The reinstatement of a Drachma, Lira or Peseta would change all that; hence Merkel’s insistence on saving the Euro in its present form.

        She is only concerned with the welfare of her own people.

        1. uanime5
          December 17, 2011

          The large amount of mismanagement in these economies also hasn’t helped.

    2. libertarian
      December 17, 2011

      Dear Peter,

      Sorry mate but the Euro has already failed, its crippled many countries its decimated employment prospects for huge numbers of Europeans. It is only still struggling on due to the ignorant vanity of the political class. The EU as a region is now crashing down the earnings league table.

      Its time to lift your head up and face a new challenge, global markets

      1. lifelogic
        December 17, 2011

        “ignorant vanity of the political class” (and self interest)

    3. lojolondon
      December 20, 2011

      How can you hope it will not be a failing project?? It has demonstrably failed on every level, held together now only by the EU writing cheques to be paid by tomorrow’s children. This is an apocalypse on the same level as the second world war, you just haven’t realised it yet!!

  12. Pete the Bike
    December 17, 2011

    Not only would the UK be hugely better off out of the EU in the economic, political and democratic sense it would also make it harder for incompetent Euro politicians to blame us for their own stupidity and greed. Not that they wouldn’t try of course. That is the way governments operate – lie, bluster and steal until they can’t hide the consequences then cast around for someone to blame, maybe start a pointless war or two to divert attention and keep their party going for as long as possible.

  13. Brian Tomkinson
    December 17, 2011

    This “failing currency project” is just part of a failing political project to create a country called Europe. It is perhaps unsurprising that politicians wedded to this idea are incapable of grappling with the economic monster they have created. They are so obsessed by this political project that they are unwilling to allow anything to stand in their way including the wishes of their own people or their economic prospects.

  14. Caterpillar
    December 17, 2011

    The rating agencies recognise the importance of appropriate systems of governance, the French are perhaps under pressure because the EZ doesn’t (can’t really) have one, the UK DPM wishes the EZ did have one.

    [Also perhaps the French presidential election being four months away, the ‘acheter et produire francais’ campaign/debate that seems to be going on may add to the context … hmmm where will UK source its nuclear power stations?]

    1. A different Simon
      December 17, 2011

      Looks like Toshiba’s Westinghouse subsiduary rather than Areva doesn’t it ?

  15. alan jutson
    December 17, 2011

    Just like a poor salesman, the French are using spoiling tactics to rubbish the competition, because they lack any good points to highlight about their own product.

    I can see France drifting away (and being sidelined) from the Kozy arrangement they appear to have with Germany in the not too distant future.

    We are supposed (have chosen) to have Defence arrangements with France, even sharing a Carrier, what were we thinking of at the time ?

    I hope DC sticks to his guns, and plays hard ball with the EU.

    1. APL
      December 17, 2011

      Alan Jutson: “I hope DC sticks to his guns, and plays hard ball with the EU.”

      I hope DC is in range of Redwood’s guns, ‘ pour l’encourager”.

    2. uanime5
      December 17, 2011

      Playing hard ball isn’t in our interests. There are simply too many countries who want the Euro crisis to end and will not take kindly to our attempts to milk this crisis for all we can get.

      1. APL
        December 17, 2011

        uanime5: There are simply too many countries who want the Euro crisis to end”

        What they ‘want’ and what they will get are two very different things.

        Chris Martenson: There is only one country in the world that has ever managed to grow its economy from a debt level of 260% of GDP and that was England during the period 1815 – 1900. She had two things going for her, 1) The end of the Napoleonic war. 2) The Industrial revolution.

  16. English Pensioner
    December 17, 2011

    Remember that we have entered into defence agreements with France to share some facilities.
    Are these now worth any more than the paper that they are written on?

  17. Anoneumouse
    December 17, 2011

    Come on Glegg, My Grandad defended to his death the right of France to slag of the English

    1. David Tomlinson
      December 17, 2011

      And in June 1940 (retreating to Cherbourg after Dunkirk) my father fought (and killed) French men who tried to get him to surrender his unit to the Germans. Then in June/July 1941 he fought the French in the Syrian War – he called it the nastiest little war he fought in (incidentally he was ‘hostilities only’ TA). People forget that we were at war against France in the lifetimes of many of us.
      As for the iniquities of the French as so-called ‘allies’ in WWII in the Middle East read James Barr’s excellent new book ‘A Line in the Sand’.
      But I respect the French. They defend their national interests at all times, in all places.

      1. Mactheknife
        December 17, 2011

        They are still sore at Churchill for sinking their fleet in North Africa in WW2 because our gallant allies were about to hand it over to the Germans.

        The French have always acted in their own interests, witness their illegal activity in regards to British Beef a few years ago claiming it was a health hazard, whilst feeding their own cattle on (dubious material-ed) ! What happen in the EU courts…nothing of course.

  18. Antisthenes
    December 17, 2011

    Of course if the UK were to come out boldly and say that they do not believe the euro is now a viable currency and their commitment to their contribution to IMF fund was being reconsidered that would sink the euro-zone and the French with it. France is playing a dangerous game as their ability to harm the UK with their rhetoric is nothing to what the UK can do to them. The French no doubt have considered that the UK will do no such thing as it would in their opinion be self defeating. However I am not sure that it is in the medium to long term, it may be in the short term. The UK may wake up to that fact and decide it is better to sort out the problem in one fell swoop and accept the pain get it over with and start to rebuild for the future. That way is certainty the alternative is continued uncertainty that is only postponing and increasing the problem not in anyway solving it.

  19. Tedgo
    December 17, 2011

    With friend like France I really don’t no why we stay in the EU.

    Just imagine the UK announcing that it is pulling out of the EU in 3 months time and pointing out all payments to the EU will stop. Also point out that all EU nationals, other than those from the UK and Ireland, will have to return to their countries of origin and apply for work permits. Also point out those applications will take a very long time to process.

    Of course we would invite individual countries in the EU to negotiate free trade agreements with us, there would be no negotiation through the EU.

    A day to look forward to.

    1. uanime5
      December 17, 2011

      1) Every EU country would sent English workers back to the UK.

      2) We are the fifth largest net contributor to the EU thanks to our rebate.

      3) 53% of out exports go to the EU. These exports account for 10% of GDP so the UK will suffer a major loss of income.

      4) No EU country will lose anything like 10% of its GDP by not trading with the UK.

      So if we leave the EU it will hurt use far more than any EU country. Any trade deal will be on EU terms, not UK terms.

      1. libertarian
        December 17, 2011

        As normal you are wrong on all counts,

        Why not just look it up, oh it would spoil your arguement if you used the facts

      2. Tedgo
        December 17, 2011

        You have a very cowering view regarding the strength of the British position. Governments and business have an genetically inbreed greed for doing business and if the only deal on the table is individual free trade agreements they would take it.

        I am sure our friends in the EU would have free trade, work and visiting agreements in place within weeks if not days.

        We would of course make sure that it went to wire with France, the sight of Renaults and Champagne backing up in French ports would be worth it.

      3. zorro
        December 17, 2011

        Look at this site and the 2010 figures for net contributions to the EU….http://www.money-go-round.eu/Default.aspx


  20. Boudicca
    December 17, 2011

    We should be seeking to distance ourselves as far as possible from both the collapsing Eurozone and the dictatorial and anti-democratic EU.

    After telling Merkozy that he would not sign up to their power-grab Treaty, Cameron should now be actively looking to extract us from the EU and towards the emerging economies. Instead, he seems prepared to allow Clegg to ‘make nice’ with the EU: appeasement in in the air again.

    As for the French; mini-Sarkozy is blowing a gasket because the British correctly predicted what would happen to the one-size-fits-all Euro; France is now trapped in the vice-like grip of a Germany which is now obviously the senior ‘partner’ and in a few months’ time he is likely to be an ex-President. A cornered animal will always attack.

    1. Disaffected
      December 17, 2011

      He also appears to be letting Clegg say the Euro countries should be able to use the EU institutions after Cameron said he would not as part of a bargaining tactic. The new draft treaty requires a majority of 9 to sign to ratify it. it prevents referendums and national governments arguing over it. Democracy????? The Uk needs out of the EU ASAP and the Tory party needs to get rid of Cameron ASAP before we are dragged in to Clegg’s pan European state Dream

  21. Sue
    December 17, 2011

    “All of this will feed the groundswell of anti EU sentiment in the UK”

    As far as I’m concerned, they can carry on. There’s nothing the British hate more than the French cowardly sniping at us. It brings about a renewed sense of Nationalism, something we know the EU project was intent on eradicating and replacing with “Europeanism” (a term which makes me feel quite ill)….

    For far too long people have been unaware of the dangers of belonging to this very expensive communitarian project which malevolently disguises itself as a European Community.

    @Anoneumouse Clegg is the fiercest Europhile in the government at the moment. His only intent is to calm Britons’ anger lest it invoke an hysterical backlash of cries of “REFERENDUM”, that most feared word in the Eutopian Autocratic bubble.

    1. Sue
      December 17, 2011


      The best thing we can do is rid ourselves of this ticking bomb before it explodes as it surely will. We need to limit our exposure instead of propping a project that is now doomed to failure.

      Our exports will suffer either way, best to change tactics and look to trading with the remaining 161 countries in the world, who are also “isolated” from the EU.

      We don’t want to be dragged down with it.

      1. john w
        December 17, 2011

        Sue,your comments are bang on,i like the fact that sneaky behavior dont get past you.Democracy is always high on the agenda.Iron lady in the making i reckon.

    2. APL
      December 17, 2011

      Sue: “Clegg is the fiercest Europhile in the government at the moment.”

      Don’t underestimate Ken Clarke.

      1. forthurst
        December 17, 2011

        …or Bilderbergers, in general e.g. Gideon Osborne.

        1. john w
          December 18, 2011

          Have a look at end game by alex jones.Mr Monti likes his bilderberg.

  22. Oliver Cromwell
    December 17, 2011

    Of far more importance to the debate about EU debt and deficits is the issue of debt maturity profiles of those nations that make up the EU.

    Britain as far more long dated gilts (average age to maturity around 15 years) than any other nation in Europe which alleviates somewhat our annual funding needs relative to the French, Germans and all the other EU nations.

    In fact France as around 450bn Euro’s worth of debt up for refinancing in 2012 which represents around 50% of its entire debt. That is crunch time for the Euro and for France while Britain can focus on the important matter of reducing our deficit without worrying too much about possible downgrades from RA’s.

    1. Mark
      December 17, 2011

      The debt maturity profile problem for the UK is for its banks, which need some £140bn of refinancing in 2012 concentrated in the first half of the year (including repayments under the SLS and CGS) according to the BoE Financial Stability Report. The BoE seems to have managed to slip in some replacement funding almost without comment in the form of the ECTR (which reads to me as “electro-convulsive therapy prescription”).

  23. Simon 123
    December 17, 2011

    I completely agree with your comments on the developing world. We have a ready made institution called the Commonwealth. We talk a lot about our aid budget but the world’s emerging economies need practical help to enable them to grow. China has already grasped this truth and is well ahead of us in the game.

    One problem is that the UK political and media classes love to polish their halos – what better way to do it than writing aid cheques using other people’s money. We would also do well to ditch our post-independence imperial cringe.

    Partner the Commonwealth, not the sclerotic economies of the EU, where a left-liberal political class has borrowed more than it can ever pay back.

    1. uanime5
      December 17, 2011

      53% of our exports go to the EU.

      Also China mainly exports to the EU, USA, and Japan because it’s more profitable to export to rich countries rather than poor ones.

      1. libertarian
        December 17, 2011

        Wrong again
        Our exports to EU are now at 43% and set to fall another 17%, ( oh and the bulk of that is to Ireland) whilst our non EU i.e. global exports have risen 37%.

        That’s the problem with the EU by focusing on an internal customs union we have been missing out on global trade.

        The fact is Germany and France need us far more than we need them in trade terms

  24. oldtimer
    December 17, 2011

    Was it not Mr Clegg who referred to “pygmy” Britain? This pejorative description of the UK was surely worse than anything a French minister has said. It seems to me that their description of the state of the UK economy was as factually correct as it was unwise to give voice to it in the way they did.

    1. Frederick Bloggs
      December 18, 2011

      Clegg is an Anglophobe.

  25. Atlas
    December 17, 2011


    A quote from today’s Daily Telegraph:

    “Last night, a draft version of the proposed new EU treaty which Britain is refusing to sign, was published. Unlike any previous treaties the pact will come into force when nine out of the 17 eurozone countries have ratified it, meaning it cannot be blocked by individual referendums or national parliaments.”

    It would seem that ‘solidarity’ in the Euro-zone is an endangered species…

    I presume Clegg is all signed up to this democracy filleting move?

    1. Mactheknife
      December 17, 2011

      Democracy is dead. The Eurozone 17 have their PM appointed by Merkosy. The 26 now looks increasingly beyond agreement as they realise what “the plan” is.

    2. Denis Cooper
      December 17, 2011

      That last paragraph in the Telegraph article is potentially misleading.

      “Last night, a draft version of the proposed new EU treaty which Britain is refusing to sign, was published. Unlike any previous treaties the pact will come into force when nine out of the 17 eurozone countries have ratified it, meaning it cannot be blocked by individual referendums or national parliaments.”

      It’s better to read the text of the draft agreement, which is available here:


      Firstly it’s not an EU treaty, the document being described as just an “International Agreement”, and in fact Article 2 of the agreement acknowledges that the existing EU treaties and laws take precedence over anything in the agreement.

      Secondly under Article 14 the agreement would come into force once nine eurozone states which had signed it had also ratified it, but apart from Title V it would only bind those eurozone signatory states which had actually ratified it, not any eurozone signatory states which had not gone on to ratify it.

      As Title V is only about Euro Summit Meetings it imposes no obligations on the signatory states apart from allowing those meetings to take place and participating in them.

      As I read it, technically if a eurozone state doesn’t even sign up to the agreement – obviously there’ll be intense political pressure to do so, but there’s no legal obligation – then its Head of State or Government couldn’t be invited to those Euro Summit meetings.

    3. uanime5
      December 17, 2011

      Since when has the decision of the majority been against democracy. Parliament regularly passes laws based on a majority vote, rather than trying to get the support of 100% of the MPs.

  26. David John Wilson
    December 17, 2011

    To vent our anger we have as a family agreed to ban French cheeses from our Christmas fare. This is not a real problem because you can buy British versions of many of them that are better and usually cheaper.

    1. Kevin Ronald Lohse
      December 17, 2011

      I hope that you have also informed your electricity company that you want none of that French nuclear energy to cook your turkey,light your Christmas tree and heat your house over the holiday period. 🙂

  27. APL
    December 17, 2011

    JR: “The first is the UK can print and devalue to keep its debt afloat, ”

    1. That can only go on so long, before the lenders get annoyed at the gradual default.

    2. No talk of spending cuts. No sign of spending cuts either.

  28. Bernard Otway
    December 17, 2011

    Off comment again BUT JOHN,I want you to know that I cut pasted and sent my comment
    of two days ago,alongside the CENSORED item you allowed,to all my usual people with the
    request to pass on to as many as possible, my own list is over 50 people,one of mine is able to and has sent it on to an organisation representing 32000 government employees,I have also had
    replies from Canada ,Australia and South Africa,and my friend columnist David Bullard
    now in New Zealand is very interested and concerned,so WILL be writing about this.What I wrote and the wording ARE NOT in any way shape or form either actionable or can be construed as fomenting division ,my OWN 43 yrs old Daughter [Professor of LAW ]
    is ASTOUNDED,saying she expects this from the LEFT BUT BUT BUT the RIGHT.

  29. David Price
    December 17, 2011

    I agree with your position that we should not give a running commentary on the Euro. I suppose I grudgingly agree that we should also not rise to the whining insults from the French senior politicians, though their central banker making partisan accouncements is a bit off.

    However, we should definitely not forget the attitude of France and others, we need to bear in mind just how friendly and trustworthy our so-called allies really are.

    As for Mr Clegg and Lord Oakeshot, they do not seem to have the interests of our country or people at the fore of their consideration at all? They appear to think Europe is one country where we are merely an insignificant tribe within it who stand in their way of greater things.

  30. Norman Dee
    December 17, 2011

    I feel sorry for the French people, who are roundly getting blamed for the problems created by the same group of people causing the problems in our own country ie Politicians. My good and honest friend in Paris is completely stumped, he despises Sarkozy, will not vote socialist or nationalist and has little confidence in Bayreou. This leads to some of the biggest Gallic shrugs you will see anywhere. The French desperately need a new right wing candidate, if you can find one please address him to Paris and claim your 100 new Francs.

    1. Robert Christopher
      December 17, 2011

      And Norman, it is not as if the French “always get it wrong”.

      Don’t forget the headlines on Monday, 30 May, 2005:

      French say firm ‘No’ to EU treaty

      Almost 55% of people voted “No”, with 45% in favour. Turnout was high, at about 70%.
      The vote could deal a fatal blow to the EU constitution, which needs to be ratified by all 25 member states.
      President Jacques Chirac accepted the voters’ “sovereign decision”, but said it created “a difficult context for the defence of our interests in Europe”

      So Jacques Chirac accepted the voters’ “sovereign decision”!

      What ever happened to him?

      What ever happened to “sovereign decision”?

    2. APL
      December 17, 2011

      Norman Dee: “new right wing candidate, if you can find one please ”

      We could do with one over here.

  31. Mark
    December 17, 2011

    The French should have directed their anger at the Chinese who downgraded them a week ago to A+ with negative outlook from AA-. The markets are in any case pricing French debt lower still.

    UK debt is in an artificial yield bubble as the BoE buys more gilts under QE than the DMO issues to fund the government deficit: no-one should be fooled into believing that this represents free market prices. The Chinese aren’t: they downgraded the UK to A+ with negative outlook from AA- back in May after it became clear that Osborne wasn’t really going to cut spending.

    Ratings agencies in the West continue to operate by looking in the rear view mirror with blinkers on. Banks only use them to “persuade” their customers to buy the debts they are marketing: internally, they’ll be looking at CDS premia and other methods of assessing creditworthiness.

    A sight modification of Hamlet that seems to preoccupy Ed Miliband:

    Whether ’tis nobler in the mind
    to suffer the slings and arrows of outrageous fortune
    or to take alms against a sea of troubles
    and by opposing, end them?

  32. pete
    December 17, 2011

    It does seem like bizare behaviour by french politicians, let them rant away – this will in the long run make them look more stupid.

  33. Quietzaple
    December 17, 2011

    The biggest differences are that France’s economy is public sector heavy and their debts are shorter term than those Labour left. Oh, and they have a President who fears for his re-election and a media which is owned by French people, while Cameron has been continually on the electoral fiddle and has a supine foreign owned media to rely on.

    Sark must be jealous.

  34. Quietzaple
    December 17, 2011

    Credit Ratings agencies are decidedly fallible and we must be grateful that they don’t run the Eurozone. Their differences of opinion makes their pronouncements resemble a cacophony of cuckoo clocks.

    I am shifting my view towards favouring political, economic and social
    union with France prior to a united states of Europe as per Churchill. Obvious from Cameron’s utterly disgraceful claim to be a Christian that some civilising inuence is desperately needed here.

  35. Christopher Ekstrom
    December 17, 2011

    This is where the false equality imposed by zealots culminates: absurd claims of psychological ills caused by being told your a bloody pain in the ass! Maternity leave forces normal practices to surreal ends. Only when our decadent former “first world” is overcome by Latin America & the Asians will the perfectly stupid equality myth be clear. Men & Women are most certainly not equal.

  36. Bernard Otway
    December 17, 2011

    The French had that revolution,cut off some heads including the Monarch’s,had some chaos
    for a few years,then got another Monarch called an Emperor [also a midget],and basically they have been ruled by a CLIQUE in place of a monarchy BUT a Clique that acts like the MONARCHY.They like to get their own way and if they don’t Woh betide.BUT their leaders are like Patsys in front of TRUE POWER,Sarkozy is just a sucker fish riding on German backs,remember VICHY FRANCE,do not ask my late departed mother QA nurse
    Lilian Mary Gutteridge who rescued over 600 wounded at Dunkirk via Cherbourg and got on almost the last destroyer,otherwise she would have been a POW and maybe I WOULD NOT BE HERE plus my brother and sister nor all our children.Anyone can read her story
    on the QA site . The way to treat the French is to treat them EXACTLY like they treat you,
    then see a change,in my bad first marriage my then wife used to not talk for two weeks at a time if not more ,THEN I started not talking for a MONTH,you should have seen the CHANGE,because when dialogue started again IT HAD ULTIMATUMS attatched.

  37. Andrew Smith
    December 17, 2011

    I thought for a minute the Eurozone had been down graded to BB!

    The criticism of the ratiung agencies has some merit but it cannot be pressed home for two reasons:

    Everyone makes mistakes, and their’s was to believe the spin coming from the political class on both sides of the Channel and both sides of the Atlantic – the Euro is a success, they all said.

    Many of the more disastrous products were never actually rated by the agencies at all.

  38. uanime5
    December 17, 2011

    Given all the posts about trade with the EU I thought I would provide everyone with some real figures. Here is a list of countries and how much they export to their main trading partners.

    United Kingdom: US 11.4%, Germany 11.2%, Netherlands 8.5%, France 7.7%, Ireland 6.8%, Belgium 5.4% (2010)

    Australia: China 25.1%, Japan 18.9%, South Korea 8.9%, India 7.1%, US 4% (2010)

    Belgium: Germany 19.1%, France 17%, Netherlands 12.2%, UK 7.2%, US 5.3%, Italy 4.7% (2010)

    China: US 18%, Hong Kong 13.8%, Japan 7.6%, South Korea 4.4%, Germany 4.3% (2010)

    France: Germany 16.4%, Italy 8.2%, Belgium 7.7%, Spain 7.6%, UK 6.8%, US 5.1%, Netherlands 4.2% (2010)

    Germany: France 10.1%, US 6.7%, UK 6.6%, Netherlands 6.6%, Italy 6.3%, Austria 5.7%, Belgium 5.2%, China 4.7%, Switzerland 4.5% (2009)

    India: US 12.6%, UAE 12.2%, China 8.1%, Hong Kong 4.1% (2010)

    Ireland: US 22.1%, UK 16.1%, Belgium 15.1%, Germany 8.1%, France 5.3%, Switzerland 4.2% (2010)

    Netherlands: Germany 26%, Belgium 13%, France 9.2%, UK 7.7%, Italy 4.9% (2010)

    New Zealand: Australia 23.1%, China 11.2%, US 8.6%, Japan 7.8% (2010)

    South Africa: China 13.7%, US 10.1%, Japan 8.7%, Germany 7.3%, UK 7.1%, India 4.3% (2010)

    United States: Canada 19.4%, Mexico 12.8%, China 7.2%, Japan 4.7% (2010)


    1. Mike Fowle
      December 17, 2011

      Many years ago I worked in the DTI compiling statistics of trade. Some of my colleagues completed a major exercise comparing countries’ exports with other countries’ imports. They should have balanced out. They didn’t. A lot of trade with Europe is through trade to other countries.

    2. libertarian
      December 18, 2011

      So did you bother to add it up? Because earlier you posted incorrect figures

      1. uanime5
        December 18, 2011

        My earlier post said 53% of the UK’s exports go to the EU. This post says 41% of UK exports go to 5 European countries. The remaining 12% goes to the other 21 countries in the EU.

  39. Barbara Stevens
    December 17, 2011

    It sounds like sour grapes to me, and the truth finally setting in, the euro idea is doomed. Clegg’s told them to calm down, may be he should to. The French are poor losers, always have been; when their backs are against the wall they surrender. We should have ignored them totally, and made them look silly with silence. No, Clegg as to interfere, talking as though he runs the country when he does not. I notice Cameron remained silent with dignaty, as one would expect from a PM. I just hope they have prepared for an orderly withdraw from this doomed currancy. They have made France look silly with their remarks, and it’s not deflected from their problem one bit, it will still be there come the morn. We can all throw insults, make statements, but the truth is the eurozone as many problems, many countries that cannot keep up with the rich states, unless they are prepared to support them entirely. Of course we all know they refuse to do that, thus the markets reactions. Can’t they see that, we can so why not them? Another good blog Mr Redwood, and great explanations. Thanks.

  40. john w
    December 17, 2011

    John,i think that clegg is pushing his luck with the public.Most of us dont want the eu.Xenophobia is a serious insult to British people.This man is the most disgusting man in politics.F.U to the eu debate then give it large all weekend. There is no need for you to mention angry politics,clegg creates this every weekend if he can in my opinion.National interest,more like self interest.88 votes in front of ukip and he wants to call names and the shots.Lord tebbit reckons he needs to be kept on a short leash.I agree,10 foot beam,2 foot leash and one trap door.I am an ordinary bloke and eurosceptic.They forget who they are insulting when they insult you.I will remind them and demand they say sorry.I am sorry if i have used some strong words.I want him fired not hung.Not a happy bunny tonight

  41. Bazman
    December 17, 2011

    Who in the right mind would take notice of the ratings after Iceland’s triple A rating fiasco? Even I could smell a rat on that one purely on the basis of their interest rates looked to good to be true.

  42. stuart
    December 17, 2011

    Posted by ‘Lifelogic’

    “I see the tribunal are still awarding huge sums of about £4M+ in compensation to employees. I assume this is just to encourage the claim to keep coming and keep the tribunals in work.

    It certainly must be a great encouragement to take someone on that and the fact that you now have to employ them until they are 104 or similar.

    It is usual for people suffering a loss to have on obligation to mitigate this loss. In the case of a good employee they can leave the job where they feel treated badly and get another one. Why on earth should damages ever be more than say 6 months pay. £4M is about 5 lifetimes pay for most people.

    If the government want more employment then we need a cap. £10,000 is more than enough and a fair balance of risk and costs too for the two parties.”

    I have followed this case in ‘Private Eye’ where it was first reported.

    I can only presume that ‘Lifelogic’ has been reading the Daily Mail, and even if you had read that, you should have noted that this Dr was the subject of an organised conspiriacy, after she had had the temerity to get pregnant.

    The fact that it took 9 people to replace her because she was a highly skilled and efficient surgeon, obviously did not register with ‘Lifelogic’, and yes the award is large, because of the activities of her colleauges, in effectively destroying her career, and her life.

    It was meant to be an exemplary award for that purpose, to deter others from entering into such conspiriaces, and engaging in bullying, the fact that the medical director has been publically called a ‘self confessed liar’, and various others in the trust behaved dishonarably, and lied should be an indication of why the award was so large.

    As we have all lost the services of a highly skilled health service professional, who could have changed so many lives, and saved lives.

    I just wonder what would happen if this kind of treatment were meted out to ‘Lifelogic’, whether he or she would think that £10,ooo was adeqaute compensation for the loss of their career, and the destruction of their life.

    I’ll leave the final words to Dr Michilaks husband, who is now also her full time carer, and had to give up his own career as a scientific researcher;

    “Last night, Dr DeHavilland said: ‘This payout is not a win. All she ever wanted was to work. No one would trade their mental health for any amount of money.’

    Read more: http://www.dailymail.co.uk/news/article-2074963/Top-woman-doctor-awarded-staggering-4-5-MILLION-hounded-job-baby.html#ixzz1gpxzpKXz

  43. Gary
    December 18, 2011

    Testimony of Jonathan R. Macey,
    J. DuPratt White Professor of Law,
    Cornell Law School,
    before the
    United States Committee on
    Governmental Affairs
    March 20, 2002

    Most Americans think that
    the large, well-known credit rating
    organizations like Moodys and
    Standard and Poors are purely
    private enterprises: they are
    unaware of the fact that these
    organizations are, in fact, more
    properly viewed as quasi-
    governmental entities. The credit
    rating agencies are quasi-
    governmental entities because they
    have been given the power to grant
    regulatory licenses to various types
    of businesses. For example, the
    United States Treasury Department,
    through the Comptroller of the
    Currency, adopted credit ratings as
    the appropriate measure of the
    quality of national banks’ bond
    portfolios, requiring that banks
    write-down the value of bonds in
    their portfolio that did not have
    sufficiently high ratings, but
    allowing bonds with sufficiently
    high ratings to be carried on the
    banks’ books at cost.1 Similarly,
    national banks long have been
    prohibited by the Comptroller of the
    Currency from purchasing securities
    that are not of investment grade, as
    determined by the rating
    agencies. 2
    These regulations not only
    have increased the demand for the
    services of the credit rating agencies
    dramatically and artificially, they
    also have changed the nature of the
    services provided by credit rating

  44. Hugh
    December 18, 2011


    If the markets downgrade Sarkozy’s bonds, does’nt that make him more likely to lose his election, when he will then be replaced by Socialists.

    Being Socialists they will then destroy what is left of the French economy, so, two pretty unattractive options for the French voter, and we will then suffer in the fallout.

    Should we in the UK be trying to make Sarkozy’s job easier for him, an option which now probably sticks in many English throats.

    I need you sane analysis on this please.

    Reply: I don’t think the outcome of the French election is in the UK’s gift. Like you I do not relish any of the main contenders, but it is not my country or my call. They are both EU enthusiasts.

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