Mrs Merkel wants to save the Euro


                There are soothing noises again about the Euro. It looks as if there is a wish to keep Greece in for a bit longer. Presumably Greece will be told there is no more money to borrow overall, to try to keep the Germans happy. Greece will also be told she can draw more of it down more quickly, to “tide her over”.  The can is kicked down the road again. More money is lent, but we will be told the tough discipline remains.

                     The European Central Bank has talked Spanish and Italian shorter bond yields down, lowering the cost of financing the governments for a bit.  They have done so by promising to buy loads of these bonds if needed to keep the interest rates down.

                    However, under the latest rules, they will only be allowed to buy bonds if Spain and Italy  first submits to an EU/IMF approved programme to cut the deficit further and faster. The Spanish Prime Minister is clearly reluctant to commit to this. Will the markets require it? Can the halo effect of a promise of bond buying last long enough to allow Spain to raise enough extra money to keep it going?

                  Mr Draghi is hoping the member states will do more. He wants them to supervise errant members more precisely. He wants them to get on with setting up the bail out fund and using that. He made plenty of money available to the banks to buy them time, not to become a permanent part of the system.

                      Meanwhile the southern states just want the European Central Bank to buy up the bonds they need to issue to borrow. They know the ECB cannot lend the money directly to their governments, but it can buy them in the secondary market. They know it does not have lots of money, but it could always like the Fed and Bank of England create it.

                        There’s a lot of people hoping someone else is going to administer the next fix. It does seem Mrs Merkel now wants them to fix it, but not at an any cost and not in a way which is too provocative to cautious German public opinion.

                        No-one is fixing the underlying probelms. The southern states remain uncompetitive at their locked in exchange rate. The northern states are still not sending enough money to the poorer parts of the union. The Euro limps on.

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  1. lifelogic
    Posted September 12, 2012 at 5:31 am | Permalink

    Indeed – No one is fixing the underlying problems. So they continue in their declining vicious circle. All the government including Cameron’s continue to pretend or ignore reality.

    • Disaffected
      Posted September 12, 2012 at 10:01 am | Permalink

      It was reported that Obama wants the EU mess to be stretched out until after the election in November. Perhaps this is another long grass game to help self interest rather than the millions suffering under the EU strangle hold. The Uk should have no part in it. There is no economic benefits. it is costing the UK an absolute fortune and will continue even after we leave. UKIP will only provide the opportunity to leave and a change in politics that is so desperately required.

      Clegg will go at the next election (possibly to the EU) and Cameron should follow him. It gives the Tories five years to rebuild.

    • lifelogic
      Posted September 12, 2012 at 10:17 am | Permalink

      Just like Major as he headed over the ERM cliff with the Tory party for 3 + terms so far – apology still awaited.
      in the telegraph today.

      • Disaffected
        Posted September 12, 2012 at 4:58 pm | Permalink

        An apology from whom? Major was knighted. Going on their current bashing of business leaders and taking back the knighthood rom Sir Fred, how many politicians should be stripped of their titles??? Major should be the starting point.

        Voting UKIP will force the other parties to change course.

    • Pete Chown
      Posted September 12, 2012 at 11:10 am | Permalink

      ‘All the government including Cameron’s continue to pretend or ignore reality.’

      I was wondering what we gained—regarding the economy—by electing the Coalition rather than Labour. Labour promised to halve the deficit by the next election. We’re about half way through the government’s term of office, and we’re half way to Labour’s target. It was achieved almost entirely by tax rises.

      Surely people in the government can see the irony. In spite of a lot of ill-informed coverage in the media, there is absolutely no difference between the parties in terms of their fiscal policy. When I’m asked to vote next time, will I be asked to choose between two competing visions for the country? Or will it just be an unseemly dispute between Cameron and Miliband about who gets to sit on the throne?

      • norman
        Posted September 12, 2012 at 1:35 pm | Permalink

        That’s why I laugh when people worry about Ed Balls being Chancellor. He’s in opposition, his job is to oppose what the government is doing. In reality if he were Chancellor tomorrow nothing would change. What would Labour do differently? Print more? Borrow more? Tax more?

        We’re at saturation point, Balls knows it but can’t come out and say he’d be doing exactly the same as Osborne is, wouldn’t be very political and Balls is a decent political operator.

        All we have is hot air from both parties but there’s no difference between them. Maybe the thing is simply too big for any of the current crop of Labour and Conservative higher ups to tackle. They simply don’t have the vision or any idea of what to do next so carry on stumbling down the road we’re on.

        That’s why the Conservative right shouldn’t be afraid to act to unseat Cameron. Yes it will end the coalition and herald in a Labour government but at least then we can have a chance at a Conservative Party leader who can convince us he/she can lead us out of this mess. The current leadership are done for, the only question is how long will they stay on life support.

        Let’s hope the right realise this and are marshalling forces behind the scenes to ensure a decent leader next time and not a disorganised panicky shambles ending in the election of another spiv and his mates.

        • Bob
          Posted September 12, 2012 at 5:48 pm | Permalink

          “He’s in opposition, his job is to oppose what the government is doing. In reality if he were Chancellor tomorrow nothing would change. “

          It’s the political equivalent of professional wrestling.

          Jackie Pallo summed it up in the title of his autobiography “You grunt, I’ll groan”

          • Bazman
            Posted September 13, 2012 at 5:19 pm | Permalink

            Is wrestling fixed?

        • rcp
          Posted September 13, 2012 at 2:59 pm | Permalink

          check out prof steve keen on you tube. radical ideas but so far I see no reason not to at least have his opinions aired and debated fully. listen to what he has to say and make up your own mind.

      • APL
        Posted September 12, 2012 at 3:08 pm | Permalink

        Pete Chown: “Or will it just be an unseemly dispute between Cameron and Miliband about who gets to sit on the throne?”

        There you have it!

        The three parties in the UK are simply the three different heads of the same beast.

      • Bob
        Posted September 12, 2012 at 5:54 pm | Permalink

        @Pete Chown
        “… there is absolutely no difference between the parties in terms of their fiscal policy.”

        Not just fiscal policy.

        I expect both would be equally as keen on enforced equality, foreign aid, immigration and increasing the size of the state.

        Watch “The Collectivist Conspiracy” on YouTube.

    • Disaffected
      Posted September 13, 2012 at 6:37 am | Permalink

      Mr Redwood, it is reported that the EU banking union will supervise, as the host regulator, British banks in the Eurozone area. What part of the banking union will supervise British banks and does this mean an actual taking of power from the Treasury/BoE to constitute an EU referendum to be held? Or is the government likely to pretend it does not apply to the UK when it appears it does?

      Reply: There are proposals to transfer more powers over banking. The Treasury has said it will resist these. I will write about it all soon.

  2. Gary Rickard
    Posted September 12, 2012 at 5:55 am | Permalink

    A clear summary of what is obvious to an economic amateur but for some reason is a million miles from what the governing experts can see.

    I suspect that they are simply blinded by faith in their ruinous project.

    Might be time to elect some better experts.

  3. ian
    Posted September 12, 2012 at 5:58 am | Permalink

    Bet that protest re Catalan independence in Barcelona is putting the willies up you,John. Just imagine if the Scots decide on the same thinbg as their Catalan comraids, full blown independence? The creation of a seperate state requiring withdrawal from the EU, then,requiring re-entry(though of course I pretty sure the Scots would want to remain in the Commonwealth) May the re-entry of such small states into the Euro family may be a way out of the current slump. My Catalan friends seem to rhink so.Sorey for typing errors – they are difficult to correct on ipads

    • Jose
      Posted September 12, 2012 at 4:47 pm | Permalink

      If Scotland leaves the Union then the Union is no more and then perhaps England could do more in its own interests rather than subsidising the Scots. Of course it would mean that England would be outside of the EU too, dream on!

    • Bob
      Posted September 12, 2012 at 5:58 pm | Permalink

      Mr Redwood,
      Did MPs get their tax free iPads yet (courtesy of hard working taxpayers)?

      Reply This one hasn’t

  4. Duyfken
    Posted September 12, 2012 at 6:14 am | Permalink

    So the benighted can is to be kicked further down the road yet again, and again. The effect must be to keep the EZ in a state of limbo and stagnation if not worse, and this should reignite the signal to those outside the EZ to seize the opportunity to escape European trading ties and develop alternatives. The troubles of the EZ must diminish the leverage the Continentals have over our island country, if only our government would throw its weight about in its dealings with them to free us from EU regulation.

    • Jose
      Posted September 12, 2012 at 4:48 pm | Permalink

      Sadly, they’re about to nobble us further with enhanced powers over non-EZ banks, not that I’ve got anything going for the banks!

  5. John Ward
    Posted September 12, 2012 at 6:30 am | Permalink

    Astute, succinct summary from Mr Redwood.
    The boil may be coming to a head, and the EU waters coming to the boil, or something: Karlsruhe at 9 am today, and last night toys out of Troika pram about Greek ‘savings’….

    • Bob
      Posted September 12, 2012 at 6:01 pm | Permalink

      @John Ward
      “… the EU water is coming to the boil…”

      And the frog is beginning to feel the heat.

  6. Mike Stallard
    Posted September 12, 2012 at 6:32 am | Permalink

    The euro limps on indeed.

    What about inflating it though and making the currency more competitive? How would the Germans feel if it slowly sank lower and lower to give the Mediterranean more edge in world trade?
    This, I believe, is what the Chinese did with their currency isn’t it?

    If the Germans are content just to take over the European market, though, they will want to keep the Euro as high as possible to prevent a resurgence of Italian and Spanish Cars and Greek shipping. They will naturally want a monopoly!

  7. ian
    Posted September 12, 2012 at 6:55 am | Permalink

    Sorry I couldn’t finish my last posting as it’s difficult to type on an i-pad.So to continue. Is the UK a goner then? Will you need to buy a visa at the Canny Scot services? Couldne see the Scots allowing the English in for free. Jokes aside but these trends -of what you may call devolved independence are gaining force spurred on by the recession. The last major one ended at Wigan Pier. With the Spanish British & Belgian states now being questioned by their own citizens, what we may see as a result of the recession is not the demise of the euro, but the shattering of the nation state. Once three states crumble then its only time before others follow Italy Greece -could easily be carved up in the turbulent Balkans. The Genie is coming out of the bottle…Just something to philosophise on

  8. merlin
    Posted September 12, 2012 at 7:00 am | Permalink

    The two solutions to the euro crisis are sticking plaster and kicking the can down the road. The only thing that will ensure that Euroland survives is growth in individual countries, this is never going to happen with the present euro arrangements. Money printing another solution again is kicking the can down the road. Procrastination could last, though, for a very long time, look at Japan’s situation. The euro is destroying and bankrupting nation states, but the unelected bureaucrats in brussels do not care one iota as long as they can pursue their false hope of a european superstate. My greatest concern is that there will be virtually no growth in Europe for many yeras to come which result in stagnation througout europe and very high unemployment and ultimately social unrest on a massive scale

    • uanime5
      Posted September 12, 2012 at 8:14 pm | Permalink

      Given that the euro is on “bankrupting” states that are badly run I doubt that leaving the euro will improve these countries. They need structural reform, not a different currency.

      • Lindsay McDougall
        Posted September 16, 2012 at 12:19 am | Permalink

        They need both.

  9. Richard1
    Posted September 12, 2012 at 7:18 am | Permalink

    Its a disasterous and foolish policy. The bond markets are the messenger & the ECB’s solution is to shoot the messanger not solve the problem. German taxpayers and voters need to wake up to the extreme danger which these policies now pose to their wealth and living standards and force a change. There needs to be a grand reckoning with debt write-offs, bank restructurings etc. Then Europe will have a clean sheet and there can be some hope of recovery. Postponement is making the probelm work. An interesting development not much commented on in the UK is there is a real debate in Finland now as to whether they should get out of the Euro (Finland is solvent and competitive like Germany).

  10. Gary
    Posted September 12, 2012 at 7:40 am | Permalink

    Kicking the can. Sounds like the pound and dollar.

  11. oldtimer
    Posted September 12, 2012 at 7:46 am | Permalink

    I have commented before that EZ politicians are in a game of pass the parcel over the Grexit decision. The Greek politicians want to stay in the EZ (many Greek voters still think the same way) and will not take responsibility for deciding on an exit. Politicians in the rest of the EZ (now clearly including Merkel) do not want to take the blame for ejecting Greece from the EZ and thus for the unpredictable consequences of such an event.

    It now seems to me that the decision could be delivered via the German constitutional court today that clamps down on German participation in the current EZ lending schemes; or refers the decision to a referendum by German voters. Alternatively Greek public opinion turns decisively against continued membership of the euro because of the grief and woe it is causing.

    Whatever the outcome, it marks an abysmal failure of the political leadership of the EZ countries. I note that the BBC remains faithful to the agenda of its EU Commission paymaster. This morning one of its correspondents was talking about being “left behind” because EZ banking regulation was to be based in Frankfurt, not in London!

    • RB
      Posted September 12, 2012 at 10:12 pm | Permalink

      “It now seems to me that the decision could be delivered via the German constitutional court today that clamps down on German participation in the current EZ lending schemes”

      Perhaps the decision lasts until Merkel is re-elected, giving her the best of both worlds. She can tell Germans that their exposure is capped at 190 billion and say lots about how she supports this in the interests of Germany. Then, after re-election she can raise the cap – the court said that there must not be unlimited liability, so the cap will just go up and up and never be “unlimited”.

  12. Leslie Singleton
    Posted September 12, 2012 at 7:50 am | Permalink

    Haven’t heard much about the basics recently. The Germans make BMW’s and the Greeks grow olives and there is no way, given the Euro, to make these trades (such as they are) balance. We are here because the French fear the Germans and the Germans fear themselves. Why on earth did they think it a good idea to descend to the pettiness of most European rules when there was not the slightest reason to do so, except possibly to froth up Brussels to make it seem important. Brussels should mind its own business and reduce its size by say 90%. No-one wants uniformity–if people want to feel at home, they can stay at home, besides uniformity is the enemy of competition. A pox on the especially silly and dangerous climate change rules with their massive expense–the timing of this being exquisite. One hears Greece wants the full war reparations that they never received from Germany–more power to them. There is major suffering in parts of the Eurozone while other parts eat cake. Hard to tell when it will happen but some spark or other and all Hell could break loose (again). It is a pity that Merkel and Co do not have the nous and the cojones to admit that they got it about as wrong as could be.

  13. Lindsay McDougall
    Posted September 12, 2012 at 7:50 am | Permalink

    Mr Draghi is relying on Mrs Merkel to give him the green light without bothering about the nicities of the German constitution, the Bundesbank, the German Parliament and the German electorate. A terrible retribution may await her – inside Germany.

    Mrs Merkel may be adopting the Cameron strategy to save the Euro – bear down on Club Med debt, make a modest amount of fiscal transfers, buy up bonds and allow the Euro to soften a little – a real pot pourri of measures. This is why she says it is a marathon, not a sprint. I think that in the end she will be defeated because we do not yet know the full extent of Spanish and Italian regional and banking debt.

    I challenge Mr Redwood to make a major speech IN GERMANY to a friendly audience, with lots of publicity, saying what is (probably) going on. Stir up the German opposition to Frau Merkel.

  14. Brian Tomkinson
    Posted September 12, 2012 at 7:52 am | Permalink

    What about the European Commission’s proposals being tabled today regarding banking union? According to the Telegraph : “Banks in London could be shut down or forced into taxpayer-funded bail-outs against the wishes of the British authorities under controversial “banking union” proposals from Brussels”. Another example of the duplicity of your leader? All the moves just confirm what most who contribute here know, which is that the EU is determined to forge ahead with its determination to become a country called Europe despite the wishes of the peoples of those member states. What are you going to do about it?

    • Brian Tomkinson
      Posted September 12, 2012 at 1:19 pm | Permalink

      I take it, that as you have not replied to my question, the answer is “nothing”.

      • Jerry
        Posted September 12, 2012 at 5:16 pm | Permalink

        Didn’t Mr Cameron use the UK veto on this, basically saying that if the EZ wanted such a Banking Union then that is their business and not ours (the wider, non EU)?

        • Bob
          Posted September 12, 2012 at 10:48 pm | Permalink

          Sounds more like an opt out.
          Or is it a rain cheque?

  15. MickC
    Posted September 12, 2012 at 7:56 am | Permalink

    The EU is as dead as the British Empire, but similarly doesn’t realise it, and won’t until too late, if then. It has the same hubris about its power, whilst more efficient rivals overtake it.

    Continuing to be part of the EU is like being handcuffed to a drowning man in a swimming race-it will take us with it.

  16. Acorn
    Posted September 12, 2012 at 8:27 am | Permalink

    Mr Draghi is becoming the de-facto Chancellor of the Exchequer for the Eurozone as well as Governor of its Central Bank. It is early days but his OMT plan will save the Euro me thinks. Vigilante Bond traders will not take on a currency issuing Central Bank, that says it will bury any trader who tries, in cash.

    No Eurozone State wants to exit the Euro. The ECB can’t allow any State to exit. Its calculator doesn’t have enough numbers to work out debt repayments in Pesetas etc. Once Draghi builds his own Praetorian Guard; sends his Vinny Jones equivalent around the Ezone with lock, stock and requisite number of barrels; then hello United States – sorry Regions – of Europe. Will we be in or out.

    Must check that Euro Bank account I opened when I was pissed; it wouldn’t surprise me if I might need it sooner than I thought. Do you think there is a very big pile of Euro notes and coins in a vault at HSBC; with what’s left of our Gold; serial numbers with a “J” prefix. 😉 😉 😉 .

  17. Peter van Leeuwen
    Posted September 12, 2012 at 8:37 am | Permalink

    Interestingly, I read that Jim O’Neill (Chairman of Goldman Sachs Asset Management) gives three bullish arguments against Mr. Redwoods more gloomy eurozone assesment, to be found on internet. He even sees the beginning of more competitiveness in some troubled Euro-area countries.

    • Brian Tomkinson
      Posted September 12, 2012 at 4:30 pm | Permalink

      I see you are still wearing your rose-tinted glasses!

      • Peter van Leeuwen
        Posted September 12, 2012 at 9:11 pm | Permalink

        Hi Brian,
        Just give me my moment of joy, after all the Dutch anti-EU lunatics (PVV) just lost about half their seats in parliament (from 24 ->13, or from 16% -> 9%) in the national elections!

        • Jerry
          Posted September 13, 2012 at 10:46 am | Permalink

          Peter, I think calling them “anti-EU” is being somewhat unkind to other anti-EU and eurosceptic parties and people, unless I’m mistaken the party you mention are far more than simply anti the EU.

          • Peter van Leeuwen
            Posted September 13, 2012 at 6:56 pm | Permalink

            You’re right Jerry, no offense intended to other anti-EU people (whom I wouldn’t call lunatics). The less said about this “freedom party” the better. Nett result of Dutch elections is pro-EU, but would take time to explain as there were rather many distinct “EU-flavors” to choose from, if one were to base one’s vote on the EU position only of the ten parties with MPs in parliament.

    • Bob
      Posted September 12, 2012 at 10:54 pm | Permalink

      @Peter van Leeuwen

      I believe that Goldman Sachs gave advice to Gordon Brown about selling the bulk of the UK’s gold reserves, didn’t they?

      (Dear Moderator – is that less controversial?)

      • Peter van Leeuwen
        Posted September 13, 2012 at 7:58 am | Permalink

        So you’re suggesting that the UK government listens to banks like Goldman Sachs, interesting!

        • Lindsay McDougall
          Posted September 13, 2012 at 8:17 pm | Permalink

          No, but I would suggest that the UK government and the EU authorities respect Barclays, who did not hold out a begging bowl to the UK government, more than they respect the semi-nationalised monsters RBS and Lloyds, who most definitely did.

          This is particularly because the UK government spent so much on overpriced shares that they have cost UK taxpayers £33 billion – and counting.

      • Jerry
        Posted September 13, 2012 at 10:49 am | Permalink

        That might be so Bob but did they tell him how to go about selling the Gold, it wasn’t so much the sale but the method of sale that annoyed many

        • Bob
          Posted September 13, 2012 at 7:18 pm | Permalink

          “did they tell him how to go about selling the Gold?”

          Well, I posted a comment hinting at the true purpose of the sale but it was suppressed by the moderator, hence my cryptic remark above.

          Suffice to say that the purpose of the sale was not to raise money for the treasury, but rather to bail out certain private institutions who had been caught “short” of gold, and their position threatened to create instability in a certain key business sector.

          Search on Google with the appropriate keywords and all will be revealed.

          A tangled web indeed.

          I hope I have been sufficiently vague to pass moderation this time.

          • Jerry
            Posted September 14, 2012 at 7:17 am | Permalink

            Sounds like one almighty conspiracy (theory) to be honest Bob… But even so it still doesn’t answer why Mr Brown went off to town and pre-announced his intentions.

          • Bob
            Posted September 14, 2012 at 12:59 pm | Permalink

            Depressing the market price prior to the sale was intentional.

            There is an article in the Telegraph by Thomas Pascoe.

            Search: “Revealed: why Gordon Brown sold Britain’s gold at a knock-down price”


  18. NickW
    Posted September 12, 2012 at 8:42 am | Permalink

    The perceived wisdom is that Frau Merkel is trying to keep the lid on the pot until the German elections are over.

    However; according to Wikipaedia these elections are a year away;

    “The next German federal election will be an election to determine the 598 (or more) members of the 18th Bundestag, the federal parliament of Germany.[1] If it is a regular election, it will be held on a Sunday or holiday between 1 September and 27 October 2013. It may be held earlier or later under exceptional circumstances”.

    It might be that Frau Merkel knows what the German Federal Court will say (today) regarding the ESM and that she knows that she has the opportunity to keep her hands clean and leave the protection of German interests to somebody else.

    I would have thought it optimistic in the extreme to believe that some kind of denouement can be averted for a year.

  19. The PrangWizard
    Posted September 12, 2012 at 8:59 am | Permalink

    More of the same Euro-debate. It is tiresome, no wonder we see reaction to the all-embracing stifling unelected Euro-dictatorship. Attempts at analysing each crisis, each mini-crisis, each rumour are becoming pointless; the Euro-elites do not listen to the people, they are prepared to protect themselves and their Grand Project at all costs.
    The people are naturally therefore turning to their ethnicity, their nationalities, their homeland loyalties. A massive demonstration in Barcelona yesterday is an example, and closer to home we have movements here in Britain for autonomy and independence. They all have the same root. However, England is ignored and is being denied, and the cynical decision by the Welsh Minister for Education to gain advantage for Welsh pupils over English pupils in the GCSE markings brings into focus the injustice the people of England are having to endure. The demand for an English parliament will grow and maybe, if our elites don’t listen and take notice there will be demonstrations on English streets.

    • sjb
      Posted September 12, 2012 at 9:00 pm | Permalink

      ThePrangWizard write: […] the cynical decision by the Welsh Minister for Education to gain advantage for Welsh pupils over English pupils in the GCSE markings brings into focus the injustice the people of England are having to endure.

      Why is the decision cynical? Gove also admitted that the GCSE candidates had been treated unfairly, but (so far) has chosen not to remedy the matter.

  20. David Jarman
    Posted September 12, 2012 at 9:08 am | Permalink

    Most people now KNOW the Euro will not survive as it is. It’s only the criminal politicians trying to protect their jobs by saving it who are saying otherwise. The real question is, will they all be arrested and locked up, including David Cameron & George Osborne who keep sending them OUR money while pretending its not.

  21. Atlas
    Posted September 12, 2012 at 9:40 am | Permalink

    So the German court says ‘alright’ and Barroso argues for a ‘Federation’.

    … and Dave approves no doubt…

    So the EU super-tanker proceeds on its ‘ever closer union’ way.

    I despair. It rather like waiting for this ‘bonfire of the regulations’ – one waits for ever for Hague’s ‘in Europe but not run by it’ to come to pass.

  22. David John Wilson
    Posted September 12, 2012 at 10:22 am | Permalink

    Europe urgently needs to turn itself into a federal state that controls finances across all countries and can thus provide the southern members with the proper support that they need. The UK must join this federal Europe and in doing so reduce the costs of the Westminster parliament and of having a civil service that duplicates much of which duplicates what does and should exist in Brussels.

    It will make little difference to most of the UK population whether they are governed by Westminster or Brussels and the best solution to avoiding all the un-necessary duplication is to join a federal Europe

    • Trevor Butler
      Posted September 12, 2012 at 6:32 pm | Permalink

      You can join a federal Europe – I’d rather emigrate.

    • Bob
      Posted September 12, 2012 at 6:42 pm | Permalink

      @DJ Wilson

      And we can completely dispense with the need to maintain any illusion of democracy!

      David, I think there could be a cushy little job with a generous tax free gold plated pension awaiting you in Brussels if you can convince enough people to submit to that idea without a fight.

      • David John Wilson
        Posted September 12, 2012 at 10:08 pm | Permalink

        If you read the posts on this blog, very few of the contributors believe that there is any democracy in this country anyway.

        • Bob
          Posted September 13, 2012 at 9:53 am | Permalink

          “very few of the contributors believe that there is any democracy in this country anyway.”

          That’s right, it’s just a pretence.
          But some of us soldier on regardless.

        • sm
          Posted September 13, 2012 at 10:32 am | Permalink

          Correct…but why create the conditions for nationalism, do you not see any possible danger of diplomacy by another means?

        • Jerry
          Posted September 13, 2012 at 11:01 am | Permalink

          Oh that’s OK then! Never mind regaining our democracy (most of which, had you not realised, has been sacrificed on the alter of the EU) we should dispense with what is left – pure madness…

    • Jerry
      Posted September 13, 2012 at 10:57 am | Permalink

      No, we need to dispense with the unneeded and unwanted duplication that is the EU, nothing the EU does can’t be done either nationally or (if really necessary) collectively through either NATO or the UN.

      • Jerry
        Posted September 13, 2012 at 11:05 am | Permalink

        Oh, and might I add, the WTO

  23. Mark
    Posted September 12, 2012 at 10:25 am | Permalink

    It must be depressing to be proved right that the plan to back-end spending cuts would be abandoned by Osborne. It seems that never mind the EU, we will have a battle on our hands to save the UK, which we are on our way to losing.

  24. Dave B
    Posted September 12, 2012 at 10:42 am | Permalink

    The Greek government seem to be preparing their next default already:

    “Greece has set up a “working group” to scour historical archives and tally how much Germany might owe in outstanding reparations for Nazi war crimes during World War II, the finance ministry announced Monday.”

    • zorro
      Posted September 13, 2012 at 7:06 pm | Permalink

      More bargaining chips……


  25. Sue
    Posted September 12, 2012 at 10:52 am | Permalink

    I think it’s pretty obvious by now that Greece, Italy and especially Spain realise they can get away with absolutely anything. The ambitions of the Eurocrats to form a dictatorship is so strong, they will not let any country escape, no matter how much it’s going to cost the taxpayer or how much misery is caused.

    Millions of Europeans are suffering terrible hardships, the suicide rates have risen and people are leaving children with government officials because cannot afford to feed them. Civil ethnic wars, supermarket looting and rioting is now commonplace in the Med and illegal immigrants are suffering physical attacks daily.

    Is this the sort of organisation we want to belong to?

    Not in my name!

    • uanime5
      Posted September 12, 2012 at 8:21 pm | Permalink

      Millions of Europeans are suffering terrible hardships, the suicide rates have risen and people are leaving children with government officials because cannot afford to feed them. Civil ethnic wars, supermarket looting and rioting is now commonplace in the Med and illegal immigrants are suffering physical attacks daily.

      Do you have any evidence to back up any of this or did you just make it all up?

      • APL
        Posted September 12, 2012 at 10:05 pm | Permalink

        uanime5: “Do you have any evidence to back up any of this or did you just make it all up?”

        Of course if you rely on the UK State broadcaster (bought and paid for by the EU) then you would hear about hardly any of this.

        • uanime5
          Posted September 13, 2012 at 7:47 pm | Permalink

          Care to explain why Sky News isn’t reporting this.

          • APL
            Posted September 14, 2012 at 5:00 pm | Permalink

            You are right, nor can I. But I am not paying for SKY.

      • David John Wilson
        Posted September 12, 2012 at 10:15 pm | Permalink

        Greece has the lowest suicide rate of all the countries in the EU.

        • Jerry
          Posted September 13, 2012 at 11:21 am | Permalink

          David, they might have very low suicide rate but that doesn’t mean suicide numbers are not rising. Even europhile newspapers such as the Guardian has reported such increases (headlining a 40% increase!), as even the most cursory search via Google will show. 🙁

      • zorro
        Posted September 13, 2012 at 7:11 pm | Permalink

        uanime5, I know….people should quote evidence like you always do religiously. I often find using a computer search engine, searching certain words and evaluating the evidence is a good start in assessing what someone might be saying….even you!


        • uanime5
          Posted September 13, 2012 at 7:50 pm | Permalink

          I have no intention of searching for evidence because someone was too lazy or stupid to provide evidence.

          After all if the evidence is so readily available they should have no problems finding dozens of reputable websites they can include in their post.

          • Jerry
            Posted September 14, 2012 at 7:36 am | Permalink

            Well I did have the intention “uanime5”, and proved both you and John wrong. I suspect the real issue you have “uanime5” is that you simply don’t want to see “dozens of reputable websites” telling you that your ‘european dream’ is turning into a very real nightmare for so many.

      • Lindsay McDougall
        Posted September 15, 2012 at 12:09 pm | Permalink

        “Greece’s economy remained in deep recession in the second quarter of the year [2012], contracting 6.2% on an annual basis ……………….” (Source: Wall Street Journal; is that good enough for you?)

        That came from Googling ‘Greek GDP’. I am now going to Google ‘Greek suicide rates’. This research is neither rocket science nor difficult.

        • Lindsay McDougall
          Posted September 15, 2012 at 12:23 pm | Permalink

          “Greece, a country whose Orthodox Church does not condone suicide, has always had one of the lowest suicide rates in Europe. But now, there were 350 suicide attempts and 50 deaths in Athens in June alone.” (Source: Der Spiegel 15th August 2012)

          These two nuggets of information took less than 10 minutes to unearth.

  26. Winston Smith
    Posted September 12, 2012 at 11:12 am | Permalink

    John, what is your position on the clear conflict of interest of Tim Yeo? He is head of the Environment Committee and directly influencing Govt policy, whilst takin large payments from environmental businesses and companies that have directly benefitted from Govt legislation that he has been involed in drafting. Its a disgrace.

  27. Ashley
    Posted September 12, 2012 at 12:10 pm | Permalink

    Nothing calamitous will happen to the Euro or Greece until the US elections are over as favour between fellow socialist politicians but after that I think all bets are off…

    • Jerry
      Posted September 13, 2012 at 11:26 am | Permalink

      If you are calling Obama “Socialist” you are another person who needs to educate themselves! More likely the Euro will survive, or that is the attempt, until the up coming German elections were Mrs Merkel faces real problems.

    • Lindsay McDougall
      Posted September 16, 2012 at 12:26 am | Permalink

      I think that you will find that the crunch with Greece will come in October. It is said that they will need another bail out payment ‘soon’ and Mrs Merkel has to justify that to her electorate. I understand that behind closed door ‘renegotiations’ are going on right now.

  28. Denis Cooper
    Posted September 12, 2012 at 12:44 pm | Permalink

    Mrs Merkel wants to save the euro, and Messrs Cameron, Hague and Osborne also want to save the euro, and all four of them want to maximise the chance that eventually the UK will be left with no “sensible” choice other than to join the euro.

    • Jerry
      Posted September 13, 2012 at 11:31 am | Permalink

      Far more sensible, if we are to join a political union, is to apply to become the 51st State of that Union to the west! Far more unites us than divides us, the same can’t be said about our closer neighbours to the east…

  29. Vanessa
    Posted September 12, 2012 at 1:14 pm | Permalink

    Yawn, yawn ! How much longer can they keep playing “footie” before it all unravells ?

  30. BobE
    Posted September 12, 2012 at 1:49 pm | Permalink

    This is as scary as the EU is.
    The North American Union (NAU) is a theoretical economic union, in some instances also a political union, of Canada, Mexico, and the United States. The concept can be viewed as loosely based on the European Union, including a common currency called the Amero or the North American Dollar.
    Watch out for the arival of the Amero!

    • Jerry
      Posted September 13, 2012 at 11:39 am | Permalink

      Somewhat over-shadowed by the NAFTA.

  31. Derek Emery
    Posted September 12, 2012 at 2:55 pm | Permalink

    Merkel only wants to save the Euro because this is seen as the minimum cost to Germany. Germany does not want full union because this means a debt and transfer union and is trying to avoid this because it would mean never-ending huge costs for Germany for keeping the PIIGS in the lifestyle they are used to. The PIIGS will use full union to continue to live beyond their means at German expense.

    The ECB produced a paper in 2010 on the impact of high and growing debt on economic growth see They found that the turning point for commencing negative growth was around 70-80% public debt/GDP growth and that an annual increase in debt/GDP profile was correspondingly linearly associated with negative per capita growth.
    EU economics are German economics and require each sovereign stage to take on more debt, pretty much guaranteeing negative effects on any existing economic growth.

    Applying the same paper’s conclusions to the UK would indicate that the UK at around 70-80% public debt/GDP ratio and increasing annually is likely to continue with low economic growth and probably declining in the future. The paper does not include the downward effects from very high personal debt which the UK has.

    An article in the Market Oracle at looks at “A Decade of Volatility: Demographics, Debt, and Deflation.” Though primarily addressed at the US similar demographics apply to many EU countries. In particular consumer spending makes up much of the GDP (and certainly in the UK).
    The article finds that the spending profile is determined by the composition of various age groups that make up society and that the future is deflation with a likely crash as the baby-boomers enter retirement..

  32. Chris
    Posted September 12, 2012 at 3:43 pm | Permalink

    I am interested that Zerohedge pas picked up on Nigel Farage’s response to this whole situation. Farage exposes clearly the menace behind the operation of the Euorpean project.

    • Bob
      Posted September 12, 2012 at 6:58 pm | Permalink

      what comes after HTTP?

      or just give us some keywords to search?

      • David Price
        Posted September 13, 2012 at 7:32 am | Permalink

        google for “zerohedge farage rebuttal”

        • Chris
          Posted September 13, 2012 at 10:01 am | Permalink

          I have twice tried to post the link with the message but it has been rejected by editor?

          Reply: I have not had the time to check it out

  33. Bert Young
    Posted September 12, 2012 at 3:46 pm | Permalink

    Interesting that the German decision on the Stability Fund , the announcement of the “Banking Union” and the creation of the Draghi Plan , all emerged at the same time . Apparently Osborne is in favour of the UK supporting the IMF/ECB combined approach , and a supporter of the Banking Union controls at work in the Eurozone . Does it now follow that a) we are committed to bailing out Eurozone Banks and b) agreeing to our own Banks being controlled by Brussels ? I have concluded that the events are rapidly moving away from us and we are not going to be able to influence what follows . Bill Cash is right ; the “Stop” has to be firmly in place . Please give support for this move .

  34. Terry
    Posted September 12, 2012 at 4:13 pm | Permalink

    Is no one within the EZ looking at the future implications of all of this borrowing? How will Greece ever be able to repay its debt unless it morphs into an industrialised nation like Germany? Not in a thousand years. Spain and Italy do have that capability but not the Greeks. Money handed to Greece will have to be written off before they can ever turn that country around and that will be more cash thrown down the drain.

    The Med States need to devalue to become competitive but they can’t because they are locked into that wretched Single Currency. And it seems, in the case of Spain, that 70+% of the people wish to stay with the Euro. Is it because they think they will always be bailed out by the other members? Madness.

    When will somebody within the EZ/EU, have the will and the bottle to just pull the plug on the whole disaster before it reduces the EU to an ‘also ran’ on the world stage. Just how much borrowing, printing and lending is too much? When the euro reaches the value of the 1923 Weimar Mark? No wonder the Germans are worried- apparently not their Leader, though.

    • Chris
      Posted September 13, 2012 at 10:40 am | Permalink

      I think that the eurocrats will decide that Greece does not have to repay as such, and this would be achieved if it were designated a “special economic zone” i.e. a zone of the greater European area which would always require help. There was something about this in Der Spiegel the other day. It would certainly mean that there would not be this issue of bailouts and targets not being reached. They would not have to be. I believe that the most recent assessments by the Troika of Greece’s situation show that Greece will not be able to meet the bailout requirements, but it has been decided, I understand, that this will not matter, and further bailout money will be sent Greece’s way. Greece will be kept in the eurozone irrespective. I hope I am wrong.

  35. Jon
    Posted September 12, 2012 at 7:21 pm | Permalink

    So no change there but Jose Barroso is pushing hard for federal Europe and a new treaty that includes banking and financial services reform their way. I shudder to think what might happen if Labour got in in 2015 and or a Labour Lib Dem coalition.

  36. uanime5
    Posted September 12, 2012 at 8:27 pm | Permalink

    Yet again the Eurozone shows that it isn’t as weak as some people claim. So many prediction of doom, yet the predictedcollapse still hasn’t occurred.

    In other news Welsh students are going to have their GCSEs marked according to the original criteria while children in England will have lower marks because Ofqual raised the boundaries for political reasons. Expect Gove to support the new criteria because it resulted in 143 more schools classed as failing, which enable Gove force them to become academies.

    • Bazman
      Posted September 13, 2012 at 5:29 pm | Permalink

      Let them eat pizza.

    • Lindsay McDougall
      Posted September 14, 2012 at 12:22 am | Permalink

      You mean the original criteria in THIS YEAR, after the creation of a wrongly conceived exam, the GCSE, and over 20 years of relentless dumbing dow.

      Why don’t you write what you mean instead of your usual self exculpatory gargage?

  37. merlin
    Posted September 12, 2012 at 11:37 pm | Permalink

    Barosso has now stated that he wants Europe to be a federation of nation states not a superstate. This really caught my attention because the general public will now think that sounds fine because we can all remain individual sovereign nations within this marvellous federal arrangement. What he really means is that he wants all countries to give up their sovereignity and become the united states of europe, basically he is lying, and obviously there is a new treaty on the way.

  38. Max Dunbar
    Posted September 12, 2012 at 11:47 pm | Permalink

    The longer it takes the bigger the fall…..and now for something completely different.

  39. David Langley
    Posted September 13, 2012 at 8:29 am | Permalink

    Uanime5, the pain is being felt by the poor in Europe. The collapse has happened but the poor and ignorant are staggering about moaning and wailing and joining food queues. Their governments have been staggeringly either incompetent or criminal in their handling of their economy. It boils down to the rich and powerful yet again twisting everything to suit their own needs. It will take some kind of revolution to turn this round. I believe in this country, we are educated enough now to see the wool being pulled over our eyes.
    I thank our people for providing us with the means to root out and banish at elections those who have transparently gone against the common sense wishes of those who want to see us prosper through our own efforts and not be corrupted by false wealth.

  40. Lindsay McDougall
    Posted September 13, 2012 at 9:24 am | Permalink

    Mrs Merkel has cleared her first hurdle by the German Constitutional court’s ruling that the EMS does not violate the German constitution. Whoever said that Germany doesn’t believe in just-in-time delivery?

    Now all she has to worry about are the German Parliament, the Bundesbank and the German electorate – and the results of due diligence on Greek, Spanish and Italian debt.

  41. Lindsay McDougall
    Posted September 13, 2012 at 9:47 am | Permalink

    I’ve just seen BBC’s parliament channel showing a live session of the European Parliament. Mr Barrosa gave his State of the Union address, whereupon Martin Callanan and Nigel Farage tore into his tired anti-democratic ‘more Europe’ attitude and demanded that the EU respect Member States as nations. Brilliant stuff.

  42. Chris
    Posted September 13, 2012 at 10:04 am | Permalink

    In response to Bob, I will try for the third time to post the link to zerohedge and Farage/Barroso, and hopefully it will not be edited out this time.

  43. sm
    Posted September 13, 2012 at 10:54 am | Permalink

    So who is holding and buying all these Euros and with what?

  • About John Redwood

    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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