In July we were told 440 billion Euros would fix it. More recently we were told 3 trillion would do the job and would be available last Sunday. Then we were toldĀ 2 trillion was enough, to be confirmed today. Now we are told there might be just 1 trillion along sometime soon.
The Euro is a currency in search of a country to love it and a governemnt to support it. If it doesn’t find them soon, it will inflict yet more eocnomic damage on the various countries tied up in its embrace.
There is a large state debt problem in Euroland. They need to spend less and borrow less. The countries meeting today to rattle the collecting tin and to construct yet more fanciful leveraged vehicles should instead do something useful. They should cut the EU budget, so the EU makes a contribution to the lower spending the weaker members need.
The EU should stop grandstanding over spending and deficits, and make a contribution to resolving the problem.Ā The rest is another attempt to kick the can down the road. If they do not want to live together with a single budget, single government and singleĀ currency, they had better plan an orderly expulsion of the weak or of the strong before yet more economic damage is done.
October 26, 2011
The Euro mess isn’t a liquidity crisis, its a solvency crisis and you can’t solve that with financial engineering. The only solution is default, partial or complete.
However the UK is just as much up the swanee as Greece, and in one way even more so.
UK GDP to debt – bigger than Greece [Official Bernie Maddoff’ed figures].
Deficit – same as Greece
The advantage the UK has is that the maturities of its borrowing is longer.
The major disadvantage is that for the Greeks they are in a mess because they aren’t collecting taxes. The UK is one of the highest levels of taxes in the world, and is still up the proverbial creek.
October 26, 2011
Indeed the UK has some of the highest tax rates in the world and this is why actual tax receipts and growth are so low and destined to remain low until Cameron takes some action to cut the state down to size.
October 26, 2011
They why doesn’t Denmark have this problem when they have an even higher tax rate than the UK?
October 27, 2011
They have had very low growth indeed too about 2% (Singapore 14%) but have not had the over large banking sector that the UK has to drag it down.
Also their state sector is far better run than in the UK as indeed most are.
October 27, 2011
Denmark also has one of the highest proportions of adult population in work – most families have two adults working
October 26, 2011
The UK also has some of the lowest tax rates in the world. London is almost a tax haven for many supper rich and it is questionable what advantages if any this has for the UK and the rest of the world. A billionaire only paying council tax and living in this country is not acceptable by any standards.
October 27, 2011
Bazman.
Non Doms have to pay Ā£30,000 rising to Ā£50,000 after 12 years plus tax on their UK income and consumption taxes they also usually invest, create jobs and spend here. This is at least ten times the average taxpayer the more we have in the UK the better for all.
October 26, 2011
Why are your figures so out of line with the standard ones Nick?
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt
October 26, 2011
The problem for Europe is also future liabilities – the interest rate swaps and credit default swaps because Euro banks are on the wrong side of those trades in a recession. Look how Greece was sold interest rate swaps by Goldmans to hide their losses. Well other Euro countries and corporates will have been keeping that same derivative desk busy. There are never just one of these trades. All of them off balance sheet.
If these trades kick off I would put the figure closer to Ā£9 trillion if the downward spiral gets out of control. On the plus side assets will be alot cheaper in Europe. The UK and US should be able to hoover up. Tactically it will be hard but strategically owning prize assets in Europe will be worth it.
October 26, 2011
New petition for an EU referendum:
https://submissions.epetitions.direct.gov.uk/petitions/20133
October 26, 2011
stop this is a better bet
http://epetitions.direct.gov.uk/petitions/356
October 26, 2011
I don’t agree with asking for a repeat. Maybe one to remove whips from all decisions outside of manifesto pledges would be better…
October 26, 2011
The remarkable thing is that absolutely none of the euro crisis was necessary. All that was a needed was a decision not to create the euro in the first place. Then, today’s nightmare – the most dangerous for Europe since the Weimar Republic – would not have existed.
It’s the ultimate fiat currency.
October 26, 2011
Indeed and they had already seen the damage it would cause with Major’s idiotic and predictable ERM fiasco (still no apology from him) and just as we had seen a small fore run of the banking fiasco with the Lloyds of London insurance underwriting pack of cards racket.
Lucky we have all the banking, EU, Economists and double first Oxford PPE “experts” in charge to “help” us through the complexity!
If Cameron wanted to reform employment laws (as desperately need doing) to bring in easy hire and fire he should have done it over a year ago so it could have had some effect already. Just cap damages to say two months pay maximum regardless and bring it in now! If the employee is any good they can get another job anyway.
October 26, 2011
“If Cameron wanted to reform employment laws (as desperately need doing) to bring in easy hire and fire he should have done it over a year ago so it could have had some effect already.”
You really should think more about these laws. If it becomes easier to fire people then employers will fire the weakest employees; such as women who are pregnant or have young children, the sick, the disabled, and anyone over 50. As these people are also the least likely to be employed you can expect the number of long term welfare claimants to dramatically increase.
October 27, 2011
They may well fire the least effective employees and that would be good for the business, the country, growth, the remaining workers and would enable the business to grow and win more business and then employ more people.
They are not likely to fire pregnant women if they are performing well. They are not pregnant for long.
October 27, 2011
Uanime5 – They won’t be on benefits if they are married to a wage earner.
My wife was not entitled to benefits despite having worked for 15 years in a well paid profession.
October 26, 2011
If the employee is any good they can get another job anyway.
Pity this way of thinking does not apply to many of the elite in companies who just get more pay for less work and performance.
Sacking someone who has worked for the same company for years to hire someone who will work for less and no other reason? A woman for becoming pregnant? A person who becomes sick after 30 years of service or who’s child becomes sick? This is acceptable? If it is then say why. Or are you just stupid?
Employers just pursue a race to the bottom trying to find the most desperate employees who will work the most for the least. They have a lot to choose from. People who need protection from employers like this and themselves. I’m out for sure. They can ram it, and many people will have the same attitude. What are you planning to do with them? Cut their benefits as part of this policy to get them to work for employers such as these. Why should any British person tolerate this? They will not and quite rightly so.
October 26, 2011
@lifelogic
āIf the employee is any good they can get another job anyway.ā
That’s precisely the point, if they were any good they probably wouldn’t be getting the elbow. And spare a thought for the lawyers who depend on employment disputes for their living.
As someone remarked very pertinently on LBC this morning, “in this country you don’t employ people, you adopt them”.
October 26, 2011
Indeed the fewer lawyers and the fewer people aspiring to become lawyers the better for all.
October 27, 2011
Simplistic fantasies by silly middle class people in cushy jobs.
October 29, 2011
Play the ball Baz, not the man.
October 26, 2011
There were fiscal rules – but nobody followed them.
Do you see Cameron insisting these rules are enforced today? Nah. He wants the Ei to fail too.
October 26, 2011
How many times do they need to told the possible solutions before they will put one into effect?
As you say:-
“If they do not want to live together with a single budget, single government and single currency, they had better plan an orderly expulsion of the weak or of the strong before yet more economic damage is done.”
If not they had better keep paying up each month until their electorates get sick of it. Difficult to see Italy taking orders from direct from Brussels for very long anyway.
From Delingpole’s blog in his piece about how Cameron has now descended even below Ted Heath as a Tory leader – he gives a quote from Boris Johnson:-
Mr Johnson told a Westminster lunch: “I think it would be absolutely crazy to decide the solution to the eurozone crisis is to intensify fiscal union and try to create an economic government of Europe. I really can’t see for the life of me how that is going to work.”
Nor can I, nor my Italian wife or nor her family nor my many French friends.
October 26, 2011
Fiscal union will pave the way to a fully planned economy where price control, rent control, wage control and birth control will ensure that everyone gets what they need.
October 26, 2011
Question? why would Italy,Spain,Greece or any of the other countries in large debt eanestly try to reduce they,re deficit if they know they would be bailed out to save the Euro.If it all collapses they take the same hit as the rest of Europe anyway.
October 26, 2011
They clearly will not unless forced to in some way.
October 26, 2011
This is the crux of the problem. Who shall face austerity in these countries. The average person many on a thousand Euro a month?
October 26, 2011
About 5 years ago I spent a week in Poland and my friend introduced me to her friend who was an officer worker .
She took home the equivalent of 200 Euro’s a month and ended up spending almost half of it getting to work by the mini-bus services which operated in the rural areas .
That really was a lesson in austerity , minus 20c at night and houses heated to just above freezing point because that’s all they could afford .
October 27, 2011
You propose the average British person should follow this example I presume?
October 26, 2011
2 Trillion, 2 Trillion? Have I any other bids? You sir, surely this specimen of a rare currency is worth more than this? Do I hear 2 Trillion, 500 billion, worth in in oil alone to anyone from The Gulf! Mr. Cameron, are you still in the bidding…………
October 26, 2011
If it was a Dutch auction Cameron would be the first bidder with taxpayers money .
It’s not a question of whether the UK will be on the hook for a Eurozone bailout , only how much .
October 26, 2011
The E.U. pays over the top wages and pensions to it’s officers and officials . The pension entitlement can be withdrawn after service if the person speaks badly of the E.U. In short they are bribing rather than paying their employees .
Would be interesting to see what would happen if the various nations were to cut off the funds it uses to grease it’s progress .
With the benefit of hindsight it is clear that as soon as the ruinous policy of bailing out banks and socialising their losses was established that all the banks would want a slice of the action .
Give the banks money and they will keep coming back for more .
October 26, 2011
Trouble is John, even if they do get the begging bowl out, who has enough (any left) to put any in it !
Perhaps they may print some, it seems to be all the rage in todays world.
USA and UK to name but two.
Hey, how about an original thought.
If all of the Countries in the world printed more, and more, of their own money, would that not increase the money supply for everyone, make us all millionaires, allow governments to keep spending, and keep exchange rate comparisions as they are. World wide co-operation, but no forests left, thus increased global warming, oh dear.
Perhaps not such a good idea.
An Alternative:
I know how, about living within your means, and governments not spending more than the tax revenue from the preceding year.
Make it a law, penalty for failure, jail for those politicians in power, jail sentence should be as long as it takes to get back into credit..
October 26, 2011
Politicians voting for their own imprisonment? I can’t see it somehow…
As to the first idea, they have more or less adopted it I think; we now have a conservative party (sic) whose basic policy is inflation to get us out of the debt albeit they will never admit it.
October 26, 2011
The Euro area will QE/print to make up any fighting fund no matter what they or their Constitution states. As in USA, and the UK, the EU will debase its money and use inflation to reduce the debt. It is the only way that they will make headway on the debt. High inflation and continually falling living standards over at least the next ten years. This, of course, depends on them not screwing up and multiple bank defaults triggering a credit event……a credit event around Greece might be containable but the worry of the Euro area suggests that it would not be so and that their heavy exposure might be greater than already admitted….In short, they are scared.
zorro
October 26, 2011
Stuart
Jail
Yes I know It was wishful thinking, but It would concentrate the mind if it ever happened, would you not agree.
Then again they would probably print themselves a get out of jail free card knowing this lot, they like printing things like: money, regulations, new tax laws etc.
Been making serious points for too long, so today thought I would add a bit of humour to some of my posts, ref printing more and more money and only stopping when the rain forests used up, and my outline of the pocket money plan.
October 26, 2011
Agree and plse dont forget the results of the last euro banking stress test which indicated that only Ā£2.5b might be sufficient to sort out their banks. Seems that the EU is already planning at least eu100b for banking bail outs. LOL
December 29, 2011
This is a really intelligent way to answer the qestuion.
October 26, 2011
The Euro has always been a political project as opposed to a financial necessity, thats why the politico’s in Euroland will fight to the death to keep the Euro alive – even if it borders on the ridiculous and even dangerous.
I just wonder how long the German people will put up with being the financial pocket that’s being picked month after month? Surely with all the polls suggest a growing backlash the German government must take heed?
October 26, 2011
I see that the Taxpayers’ Alliance have a e-petition to stop further money from UK being used for bailouts for eurozone economies. In view of the potentially very large sums of money now being talked about, it seems highly likely that the UK will effectively be required to contribute even more, both directly and indirectly through the IMF (I understand that the IMF may well be involved in another vehicle for pouring additional money into the eurozone, which will obviously involve us). I am not sure how realistic this petition is but it certainly appeals. http://www.gopetition.com/petitions/oppose-the-eu-bailouts.html
October 26, 2011
What are your thoughts on Ashcroft’s writings on Con Home? He believes the Tories should keep quiet on the EU for fear of losing the next GE. He is (or was) the major donor to the Party and had a role in recent election strategy. It’s pretty clear to me that nothing will change and Cameron and his clique will continue down the same path to self-destruction for Party and Country. Does it give you sufficient satisfaction to snipe from the sidelines and then sit back and say “I told you so”? Surely, you need to be thinking about changing tact and becoming more proactive.
October 26, 2011
Unloved? By you? By the UK population? By the EU population? Presumably the result of another poll?
Let’s get beyond the bluster about opinions to some facts.
As you say, “There is a large state debt problem in Euroland. They need to spend less and borrow less.” That is a problem independent of the currency these countries are using. They would still have huge fiscal problems if they were all using their individual currencies still. Banks across Europe would still have liabilities across Europe even if they were still using their own previous currencies.
Why this fixation on the irrevocably fixed exchange rate? Why this belief that a devaluation is an unmitigated good thing for all involved? Again, did you miss econ101?
October 26, 2011
Thanks James. Can you explain to us what would have happened to the Greek economy if they had not been using the Euro in 2008?
October 28, 2011
Can you explain how Iceland got into its mess, with reference to the currency it uses?
October 29, 2011
No, can you?
October 30, 2011
I don’t need to, I’m merely making the point that the euro isn’t the sole cause of financial crises, and I’m glad you’ve accepted that.
Now, since you can’t explain that, tone down on your unwarranted attacks on a currency that you don’t even use and isn’t even in your own country.
October 27, 2011
because without the irrevocably fixed exchange rate –
1. countries would not have been offered credit so easily in the first place so the problem would have been addressed earlier.
2. countries would have more ways of ways of addressing their deficits. For example the UK can use QE and currency devaluation in combination with deficit cutting to reduces the depth of the cuts needed and helps to prevent total stagnation.
Which part of econ101 deems these things untrue please?
October 28, 2011
Haha love the defiant tone there Rebecca. Assume you studied econ101 at university?
The point is a currency devaluation is not a panacea. It makes imports more expensive, which likely also makes final products for export more expensive too. It helps some, it hurts others, and it certainly hasn’t led to the UK emerging strongly since 2008, has it?
Then on the credit point, I’m fairly sure a few percentage points less hardly made much difference to the Greek government over the last few decades as it woefully overspent.
And finally, Iceland managed to screw itself up pretty effectively despite being outside the Eurozone. How do you explain that one?
October 28, 2011
Surely the point is that Iceland has been able to adjust quickly and is now benefitting from exports and tourism. Also, if a country devalues and imported materials become more expensive, then the additional cost of subsequent exports is only the added cost of manufacturing and these goods will still be cheaper to countries which have not devalued.
Would you please let us know in which university you learned your economics?
October 30, 2011
Stred, is it? Have you looked at growth figures recently or are you just making conjectures? You see, this link (http://www.tradingeconomics.com/iceland/gdp-growth) suggests they aren’t really prospering all that much. As I said, an exchange rate devaluation aint all it’s cracked up to be. It buggers up all those firms that import parts, and generally depresses consumption since the goods people buy are more expensive.
As for where I learnt my economics? Durham and Oxford and now Birmingham, if you feel the need to know. How about you?
October 26, 2011
And who will pay for all this in the end?
> the banking system………Britain’s biggest advantage………and their share-holders
> tax-payers of bigger, richer countries
October 26, 2011
Patience patience, democracy takes time and 17 democracies a little more time. Blindly cutting the EU budget would hurt countries like Poland and what the EU needs is making targeted investments towards growth and jobs.
I’m glad to read that Britain (in view of its continued EU membership) wants to make a contribution to resolving the problem. Investments via the in green technologies in debt-ridden countries perhaps?
October 26, 2011
None of the countries in the European Union are democracies are they .
It’s the big business political class vs the rest of us and they always win .
Referendums and elections are just a bit of window dressing to make people think the power lies with them .
Don’t forget the golden rule – he who has all the gold makes all the rules .
October 26, 2011
@ A different Simon:
You may not like current representative democracies but that’s another matter. Just google for some global democracy rankings and you’ll find the Netherlands in the top-ten together with Scandinavian countries. You won’t find the UK in the top-ten. Maybe it’s too subservient to the City (āhe who has all the goldā) ?
October 26, 2011
Did you notice this in the Guardian:
“Robin Smith, a 48-year-old former Conservative councillor for Wokingham town council, said he was one of many part-time protesters at the camp.”
October 26, 2011
The EU Government has failed spectacularly and has blighted the whole of Europe.
The European electorate should kick them all out ignominiously and replace them with people with the will and ability to solve Europe’s problems.
But they can’t.
The cretins, bigots and failures remain in charge.
October 26, 2011
How much extra is it going to cost us through the IMF to try and save a currency which is part of a political fraud against the peoples of the various European states?
October 26, 2011
Constantin Gurdgiev is head of research with St. Columbanus IA and lecturer in finance at Trinity College, Dublin
“Missed amidst the endless news flow on the euro crisis, the European parliament has been quietly working toward obtaining a ground-breaking set of new powers. If adopted, these would give the body unprecedented authority, which could lead to witch-hunt type trials of EU critics and those who challenge the status quo.
The proposed change, approved by the EU parliamentās constitutional affairs committee, would oblige member states āto punish, in accordance with their national rules, those who refuse without justification to provide documents or to testify, and likewise those who give false testimony or bribe witnesses.ā
While no one can object to powers being extended to cover violations of the law, the new legislation would give the parliament adjoining powers to allow its committees of inquiry āto conduct on-the-spot investigations and get help when needed from national authorities,ā with āthe right to ask any person to provide relevant documents, in full compliance with national rules on seizure of objects.ā
Further, any EU citizen could be summoned to testify at the committee’s behest. Witnesses could be asked to speak under oath, but would retain the right to refuse, as well as other safeguards afforded by national laws in similar cases.
If passed, the new set of powers could improve the effectiveness of parliamentary inquiries. However, the very same powers could also be used to deliver character assassinations of critics of the EU or its policies. And in cases of national referendums, they could enable EU politicians to strong-arm those leading or backing opposition platforms. Nothing in the past performance of EU officials or politicians suggests that the parliament will refrain from using new powers to interfere in the democratic processes of member states.
For example, during the Lisbon 1 and 2 referendums in Ireland and during the French and Dutch votes in 2005, both the parliament and the EU Commission directly interfered in the national referendum processes in a biased and acrimonious manner. This interference included numerous efforts to discredit the leadership of the opposing campaigns. In the more recent past, EU officials and politicians have actively interfered in the sovereign decisions taken by member states during the current economic crisis. Such interference can only be strengthened by the new powers.
It is erroneous to compare the proposed powers to those of the U.S. Congress for one simple reason: The EU institutions have neither the democratic credentials nor functioning checks and balances to ensure that the new powers are not being abused”.
Is this really the United Kingdom you want your children and grandchildren to live in Mr Redwood? Don’t you think that the general population ought to know what is happening in the name of democracy behind their backs?
October 26, 2011
John,
The UK could not afford the Ā£9 billion it contributed in July or the Ā£7 billion it “loaned” to Ireland. The UK cannot afford the Ā£11.5 billion for overseas aid which is siphoned off for corrupt regimes, nuclear powers, space programmes and so forth rather than feeding or helping the poor. Ā£17 billion on the EU- Ā£40 million pounds a day rising to Ā£60 million a day in 2012. Madness.
The UK provides arms to waring factions in countries on the one hand which causes destitution, hunger, famine and humane suffering and then wants its citizens to donate in taxes through overseas aid and from their own pockets to help address the problems it caused. Cameron’s school boy economics might be fit for a PPE course at Oxbridge, however it is not a fit system to the run the country. If Cameron had the personal experience of running a household budget or had the experience of anxiety not knowing if could afford to pay every bill he might, just might, wake up and apply a common sense approach that you should not spend more than you earn. It is as simple and basic as that.
Despite being repeatedly told we are in dire fiscal circumstance and financial crisis after crisis, how can the public take the government seriously when it still wastes and throws away billions of taxpayers’ money that it has borrowed?? Economic lunacy.
If your child spent his pocket money or first wage like this a responsible parent would make sure the child understood to live within his means. Why cannot Oxbridge students who attended the PPE courses understand this??? The Oxbridge courses need to be scrapped and the places used to increase the numbers in engineering, science, medicine, and technology. It is in our national interest.
October 26, 2011
Escrow accounts are a legitimate form of protest…
If ‘call me Dave’ had balls he’d demand whatever he wanted from the Eurozone, with the condition that all net payments towards the EU would be placed into an escrow account until negotiations were concluded to our satisfaction.
Would be interesting to see how quickly the continent’s politicians were able to move under such a scenario, oh and it would help to recapitalise our banks too. š
October 26, 2011
“If they do not want to live together with a single budget, single government and single currency, they had better plan an orderly expulsion of the weak or of the strong before yet more economic damage is done.”
Plus, an orderly withdrawal from the single currency of those who may be either weak or strong but who in any case don’t want to be swept along into a single budget and single government.
Plus, relieving 8 EU member states which haven’t yet joined the euro of their legal obligation to do so at the earliest opportunity.
Plus, re-drafting the terms of EU accession for Croatia and all other EU candidates so that unreasonable legal obligation will no longer be imposed upon them.
October 26, 2011
The Brits need to be patient. Such an integration is complicated and cannot happen overnight. When you hear politicians equating the euro’s success with that of the EU, you will realise that your plusses are on nobody’s agenda nor should they be.
October 27, 2011
Peter van Leeuwen: “The Brits need to be patient.”
30 years, half a life time. That is patience enough!
October 27, 2011
As the governments of the eurozone states are already pushing ahead with their first intra-eurozone treaty, the vile ESM treaty signed on July 11th which is rightly condemned in this video (German with English subtitles):
http://www.youtube.com/watch?v=rxMOW94V6xQ
and as Merkel has been talking about getting that it into effect in 2012 rather than 2013, there is in truth little time for the UK government to get its act together.
If enough MPs made it clear now that they would not vote to pass the Bill to approve the radical and potentially very dangerous EU treaty change agreed by EU leaders on March 25th, the EU treaty change which is necessary to allow the eurozone states to proceed with the ESM treaty and similar measures, then that would help to focus the minds of government ministers.
October 27, 2011
Denis, I suspect you are old enough to remember Roy Jenkins et al issuing the Limehouse Declaration in 1981.
Now, imagine if 25+ Tory Eurosceptic MPs announced their intention to leave the Conservative Party and form a party committed to a referendum on the EU. The new party is likely to get extensive media coverage (remember the SDP?). The Coalition would lose its majority in the HoC perhaps leading to an early general election.
reply: It would not lose its majority on EU issues because Labour vote with the Coalition.
October 27, 2011
The vote does not need to be on a EU matter at all.
For example, in 1979 a vote – ironically about a referendum (Scottish) – led to a no confidence motion which the Labour government lost.
October 26, 2011
The EUSSR is a rogue trader. It has been an extremely unprofitable employee and should be let go.
October 26, 2011
But the trades have not been exercised yet. It’s all talk. There will be winners and losers when the defaults happen and when interest rates go up as a consequence.
October 26, 2011
Whilst a massive increase in debt to prevent the demise of the whole of the southern mediterranean may be facile in the early stages it still does nothing to help the innocent people of all those countries fom being embroiled again later in another showdown. The work ethics of each of those countries apart from the nature of their economies can only be rationalised via floating exchange rates. For however long the EURO exists the economies will never converge. Anything other than floating rates will either condemn the poorest to even greater penury or will lead the stronger nations into raging inflation.
October 26, 2011
Ever since Mr Salter produced his brilliant idea in China in the late 1930s in front of M. Monnet for a United States of Europe, the federalists have been intriguing for their idea of a Europe under an unelected General Secretary with a Civil Service of his own.
At no point have the views of ordinary people, and very not even of the British government, been taken fully into consideration. It has always been a Franco-German pact.
Look at the current argument. Where is the Polish input? Or the Swedish? Or the Spanish? It has been reported as a spat between M. Sarkozy and Angela Merkel. Sr Berlusconi is on the sidelines somewhere, where Italy has always been. (Up for about one and a half trillion Euros).
At least two major French banks are up for what is laughingly called a haircut. That actually means following Lehman Bros into oblivion. Hence the efforts to keep the Euro afloat, with other people’s money, of course.
I really do hope that we do not give even one penny to this hopeless cause. But, of course, good old Conservatives will hand out lots and lots of borrowed money to keep the peace.
Do you know what? The chances of Mr Cameron being re elected get smaller and smaller by the day as we get deeper and deeper into a morass of officious Directives and heavier and heavier piles of debt.
October 26, 2011
It only takes one member state to break ranks and the whole thing could tumble.
My feeling is that soon one will say ‘enough is enough’. Stop the train. I want to get off!
October 26, 2011
Are the Germans hopoing we will do it for them, so they can blame us and then reap the benefit?
October 26, 2011
John. You are correct. I have a simple solution.
End all subsidies.
It’s so simple.
Citizens pay for what they want rather than for what politicains want.
Current subsudy funds in EU and UK can be diverted into paying off the deficit and the debts. In the EU’s case, that would mean almost all receipts going to pay off debts as the EU is just a basket case for the transfer of subsidies. In the UK, we would simply use the money that would have been wasted on HS2 and wind farms and the Tube and Trains etc….
So in fact, we can pay off the debt and be more free than we were before.
Yes, I know, I’m a genius.
And in fact, I’m on a roll here, we could break up monopolies in the private sector, in the public sector and in the labour market. If this was done on a Europe wide scale we would be even better off than we were before and we would start to get economic growth. What a plan! Any country that doesn’t do this should be forced to leave the EU and or the Euro – wow, even better!
October 26, 2011
Two or three trillion – give or take.
Hmm.
Well what’s a trillion here or there ? And that’s not to fix the problem but to buy a bit of time.
James Reade thinks the polls are wrong and that the people don’t really care much about the EU. Who is he kidding ?
And if they don’t care then they ruddy well should.
We’ll put their ignorance down to poor economics teachers with Lefty agendas shall we ?
October 26, 2011
No. Put their ignorance down to the BBC.
Tonight the ‘European parliament’ voted against a motion to decrease their Ā£260 per day expenses by 5%.
This story has been relegated to the nether regions of BBC output.
We are busy people. How can we know what is going on when we are not told?
October 27, 2011
“We are busy people. How can we know what is going on when we are not told?”
This is true for very many people, if you have a full time job you don’t have the ime to engage in politics let alone the complexities of the EU.
One assumes the civil servants and politicians are competent and doing a proper job in promoting and safeguarding the UK’s interests. Trouble is I don’t think this has been happening at all. Instead, it seems the left leaning government and it’s friends have been busily passing power & control of the UK to their friends in the EU. From some of the comments by Labour MPs in the referendum debate they certainly see the EU as the key to maintaining worker friendly conditions.
Meanwhile their friends in the media have been quiet about things and not looking into some of the more outragious goings on, such as your example or even the EU getting it’s books audited properly, presumably because it is not the right time.
October 27, 2011
Electro-Kevin: “Well whatās a trillion here or there ?”
Pretty soon your talking about real money.
But their bail out fund, its just another debt instrument.
October 26, 2011
Dont believe the scare stories that contagion will spread to the UK or US banking system. I’ve been an IT contractor in some of the largest investment banks and I’ve seen straight down to their databases. The UK and US banks are well insured against sovereign and corporate defaults in Europe – it’s the European banks who sold the insurance and will have to payout. I guess there’s no reason other than blind optimism by Euro banks that they each believed their fellow Euro passengers would bail them out. Think how well HSBC came out the 2007 crisis, well the UK and US banks have taken their lead – it’s the Euro banks who will cone out of this mess weaker.
This should be seen as an opportunity for UK and US banks to take over the good assets in Europe not a moment to be panicked by Europhiles.
October 27, 2011
Javelin: “The UK and US banks are well insured against sovereign and corporate defaults in Europe .. ”
A little heartened by your remarks. But one niggling question remains, in these insurance deals, I assume you mean CDS and other swaps, how do we know the counterparty has funds to deliver in the event of an event being triggered?
For example we know a number of French banks are horribly exposed to Greek national debt, if a British bank has a CDS deal with one of those French banks to insure its exposure, it will probably never be able to collect since the French bank is bankrupt. Consequently, the insurance is worthless.
Just using French banks for purposes of illustration.
October 26, 2011
If only there was some way for the EU to suddenly create vast amounts of money. Wait there is a way, it’s called qualitative easing and if it’s good enough for the UK it’s good enough for the EU.
October 27, 2011
uanime5: ” itās called qualitative easing ”
The European institutions are already full to the gunnels with Greek National debt, it is already worthless. You can only take a thing so far before you destroy the basis of your currency.
October 26, 2011
The weaker EU states need growth, Italy notoriously so.
Then their national debts – Italy’s is much the same as France’s – will be more manageable.
The Euro is a pillar of the world’s economy as the Chinese and Americans say.
The crisis is one of growth: The debts persist.
October 26, 2011
Germany seems to be more democratic than the UK in respect of the EU bailout mess. Bound by a new ruling of their highest court, under the new German laws, Germany’s representatives will have to follow the parliament’s instructions. As a result of that the chancellor will now have to enter the negotiations with her hands more or less tied.
Now, that’s an example of democracy at work that Cameron should emulate, instead of shrugging off Parliament as mere irritation on the way to being entirely absorbed into the EU.
October 26, 2011
Everybody has taken a nutral position until after the Greek default in November. Italy may or may not follow.
October 26, 2011
While I agree with all this and understand both the urgency and the history of this situation, I still very strongly feel that the UK public needs the opportunity to vote on ways forward, rather than on its feelings against the status quo.
If we are unhappy about the lack of honesty of past policy, then we must counter this with honest policy.
“The essence of the problem was that monetary integration was forced through without political integration to create an unstable situation.”
Is this not the heart of the problem? Would addressing force the creation of an honest system to which proper systems of accountability could be applied?
If this is the heart of the problem we then need to clearly define the level of political integration which is needed between countries for them to be part of the same currency. We then need to hammer that clear message in all directions – testing it out against the different unions which exist in a context of open discussion to start to see how countries respond to this stark reality. I can’t help on the details of the boundaries political integration which need to be defined (although I know people who could) but I could help very rapidly harness cyberspace to engage people across Europe and beyond in discussion.
I can also advise on the ways in which cyberspace can be used to make honest systems which might previously have seemed too long and distant more accountable in the future.
All free gratis and for nothing. I’m not selling anything. I just can do this and I care.
October 26, 2011
Well Papandreou has a tiny majority which may just ebb away. If Greece ends up in even more turmoil who can say there wont be a coup ??
October 26, 2011
Sarko to pony up to the Chinese. Europeans have to ask a third world country to lend them money now. People who earn Ā£45 a month are to help pay the bills for people who get more than Ā£45 a week for doing nothing. Oh how the mighty are fallen.
October 26, 2011
Prawns with eggplant, roasted turbot with spinach and a trio of sorbets for the European leaders, Eurostar catering (?) for Mr. Cameron, and efforts to get China involved, either via EFSF or IMF. China might just have some cash to spare, so there is still hope for the eurozone!
October 27, 2011
Javelin are you sticking by the two dates of 11th or 12th Nov as significant,that you mentioned about 3 weeks ago.And what about the comments of Tuesday about Ā£9 trillion as opposed to
Ā£2 trillion where derivatives were concerned.By the way anyone watch Newsnight and the
interview including Nick Leeson,his comments were very instructive,as were the Tullet Prebon CEO who destroyed the pro euro lady,and as for old Paxo he is now forced to go with
the flow and can’t follow the party [BBC] line as EVENTS are overtaking the propagandists
inside the bbc,they and he are discovering that you can put the telescope to your blind eye
and say “I see no ships” when a fleet of 250000 ton supertankers are bearing down on your little rowing boat sitting between Dover and Calais but know FULL WELL that you are SUNK,so the best thing is to start up the outboard and get out FAST.
October 27, 2011
“unloved currency” – is that the one one with a 5% and rising inflation rate that nobody official is bothered about?
October 27, 2011
How can Germany, Greece, Italy and Portugal, let alone Ireland and France all live together using the same currency and the same interest rate? It can only go wrong again.