The German state claims to have strong finances. It is true it has no running deficit for the time being. It is true the German economy runs a huge balance of payments surplus, which causes all sorts of stresses and strains in the wider European markets. It is true Germany has huge surpluses held in the form of claims on the European Central Bank. So far so good for Germany, though not so good for the rest of Europe. Germany’s surplus is the mirror image problem of the southern countries deficits which Germany herself is so unhappy about.
All is not strength elsewhere in Germany’s financial arrangements. The state has relatively high levels of government debt like much of the rest of Europe. Germany’s commercial banks cause worries from time to time. Whilst German politicians are busy lecturing the Greeks, Spaniards and Italians to run a more prudent policy, at home Germany has to work away at improving the balance sheet strength and profitability of her commercial banks.
This week unnamed hedge fund raiders and others have had another go at the Deutschebank share price. They appear to have driven it down on unsubstantiated rumours of withdrawals of money from that bank, and on interpretations of the bank’s capital and cash positions that are unflattering. They ignore the relatively strong balance sheet ratios the bank points out, and discount the ECB’s continuing confidence in the bank. The US authorities large fine on the bank will make an impact on its capital if it all has to be paid. Negative interest rates and low rates for lending longer make it more difficult for the bank to make good profits from traditional activities.
Commerzbank has also had to announce changes to try to improve its profits and future balance sheet ratios. It has decided to cut 9600 jobs or around one fifth of its workforce. It is reducing securities trading activities, merging company banking and cancelling dividend payments to conserve cash. All these are usual corporate responses to tough times.
All of this is one consequence of the continuing negative interest rate policy, allied to the creation of a ramped market in bonds meaning rates are low across all time horizons. The authorities are making savers lives a misery, and impeding the generation of profits by banks out of lending to rebuild their financial strength. Banks may well continue to be very unpopular, but the truth is you cannot have a sound and sustainable economic recovery without properly functioning banks and sensible levels of new debt to support investment and larger item purchases.You can only have stronger banks if they make a bit more profit which they retain, and distribute better dividends to allow them to sell more shares to raise more capital. The policies the ECB is using to stimulate the Euro area economy are in practice delaying bank repair, which in turn impedes a proper recovery. Low rates also probably make savers more cautious about spending, which hits demand.
October 2, 2016
Two banks do not make it a “Euro area banking problem”, in fact it hartdlyt makes it a German banking problem, the real story here is (if true) the part Hedge Funds are playing in this, once again these shadowy funds are happy to play loose and fast with the worlds banking system just so they can make fast money themselves. The real headline here is surely ‘Hedge Funds cause yet more turmoil across the world’?…
October 2, 2016
That was the argument put forward by Mr Fuld the CEO of Lehman. The fact is these banks are still far too leveraged, and doubts over the quality of part of their huge balance sheets are bound to raise questions over their solvency. It’s no good shooting the messenger.
October 2, 2016
@Richard1; But there are doesn’t appear to be any questions over the solvency with these two banks, Deutschebank have a fine to pay in the USA (the exact amount is yet unknown but the maximum is) that will not send the bank insolvent, also our host is wrong about the job cuts at Commerzbank, the net losses are less, being 7,300 jobs. The problem, at least with DB has been caused by stock market speculation.
If a UK bank were to suffer a regulatory fine (that can be paid without state intervention), and another was to restructure, would our host really question the stability of the UK banking system, if not sterling?!…
Reply Nor did I over German banks and the Euro
October 2, 2016
Insovlvent? Nope.
Able to make new loans? Disappeared.
The volume of loans is a multiple of the capital, and that’s been hit by the fine.
The damage is multiples of the fine
October 2, 2016
JR reply; If you say so, but then why not just title your entry for today something like ‘More banking problems’ (or indeed the one I suggested originally), after all with Deutschebank at least it was actually their USD area operations that have caused problems, not their EUR area operations.
October 2, 2016
Jerry: “If you say so, but then why not just title your entry for today something like ‘More banking problems’ .. ”
Because:
1. it’s Redwood’s blog.
2. Deutsche bank, Commerz bank, and at least one of the Landesbanken -Bremen, are all experiencing difficulties. Now if this was a pre Euro post, it would have likely been Deutschemark Banks experience problems.
But it’s not so he didn’t. Now, it’s not as if other Euro zone banks have not had problems, Greece is but the most prominent, Cyprus had to bail its banks ‘in’ only a couple of years ago, Italy was just recently calling for a bail out for one of its own banks – Which Merkel refused, by the way.
So, Cyprus, Germany, Greece, Italy – what have they all got in common? Why the Currency, and of course, lax banking practices.
October 4, 2016
@APL; If we are going to start naming all banks that have problems then the title would have to read “Worldwide banking problems – again”, with all the implications that has, never mind throwing a political lifeline to those left of Mr Corbyn.
But of course our host has an anti EU, anti Euro agenda so rather than call this for what it is -German banking problems- he chose to use a broad brush. I bet if a US bank was in trouble that had an exposure to a regulatory fine here in the UK, few UK politicos would try and rubbish the whole UK banking sector, no they would be falling over themselves to explain that the problem was in the USA and not the UK.
Reply In recent weeks there have been problems with German, Italian,and Dutch banks as part of a general Euro area problem.
October 4, 2016
@JR reply; There is a country by country, bank by bank problem, it is not a Euro-area wide banking problem, what about all the banks or EZ countries you have not named because there is no problem but have tarred with your broad bush…
You are conflating Euro currency issues and problems with some EU27 banks.
Reply There have been bank problems in several other countries of the zone, with Cyprus the worst so far. Spain and Portugal have had bad banking news etc. There is a Euro area issue, following the assumption of responsibility for regulating them by the ECB. They do all belong to the same banking system, and the big issue is how much mutual support/common insurance etc should there be. Who stands behind them?
October 4, 2016
Jerry: “There is a country by country, bank by bank problem, it is not a Euro-area wide banking problem, ..”
The Euro area is overseen by the ECB which seems to be the regulatory authority and lender of last resort – more accurately the printer of last resort.
If the European Central Bank is the oversight authority of Greek, French, German, Italian, Spanish banks. Of course it’s not a Euro area banking problem. It must be an individual Drachma, Frank, Deutschmark, Lira, Peseta problem.
Jerry: “If we are going to start naming all banks that have problems … ”
Well, yes. We are in a deflationary cycle,and all the fatuous economics that worked in an expansionary period don’t work now. So yes, watch this space.
October 4, 2016
@JR reply; In which case it must be a European problems, not a “Euro area” problems as there has also been, and still are, problems in the the UK…
Anyway, as I said, the cause of the problems for Deutschebank wasn’t even in the Euro area, wasn’t even in Germany, and wasn’t regulated by the ECB, the problem originated in their USD area operations, regulated by US regulators.
October 5, 2016
@APL; @John Redwood; If this is a “Euro area problem”, does this mean that banks in, if not the banking systems of, both Andorra and Monaco are problematic, what about those French overseas departments and territories that are in the Euro area, do all these countries banks have the same problems of those in Greece, Spain or Germany etc?
Put it another way, if a bank in the US state of Vermont (even if it was a bank in Texas) were to have similar problems that Deutschebank have would people really cast doubt on the other 49 states of the Union but also countries such as Puerto Rico simply because they are all in the ‘USD area’, use the same currency, perhaps share the same regulation – the only people who would seriously do so are those who have an agenda against the USA, the USD or both.
October 2, 2016
Just the 7300 job losses did you say Jerry?
October 2, 2016
@Edward2; Once again you choose to take one of my comments totally out of the context, sure job losses are bad news, my comment to our hoist though was in relation to his inaccurate figure.
October 2, 2016
Well Jerry if Nissan laid off 7500 I would bet you would be typing in capitals for a week !
October 2, 2016
Jerry
You do know what a hedge fund is right? What exactly do you think that some hedge funds are doing that is causing turmoil ? Why shouldn’t hedge funds be able to manage its equity holdings on behalf of its investors? In what way are hedge funds any different to say the Porsche Cars raid on VW shares in a short selling sting a few years ago? What about the other “raiders” JR mentioned i.e. Investment banks, trading houses and pensions companies. By all means complain about the banking system and stock markets but you might find you need something to replace them with.
October 2, 2016
Agreed Libertarian
The lack of business knowledge is remarkable by some posters.
October 4, 2016
@Edward2; More filthy pots calling the kettle dusty, at times both you and @libertarian appear tied at the hip in this respect, indeed libertarian doesn’t seem to have heard of VAG. There is a world of difference between a company group protecting one of their own and the actions of shadowy Hedge Funds (and indeed some speculators) -for them it is their financial gain/losses that matters, not the underlying health of the businesses they play fast and loose with that counts.
October 4, 2016
Jerry, I am willing to bet that Libby and Eddy2, don’t have a clue how a Hedge Fund works. Alas, you should direct your anger at Casino Banks (so called, Investment Banks).
Hedge Funds are a small part of the financial system compared to Casino Banks. They have little systemic risk and are rarely geared at more than 1.5:1 by their Primary Broker risk managers. Unlike the Casino Banks that were geared 70:1 just before the 2008 crash.
As I fundamentally object to “selling short”, which Hedge Funds “hedge” with “bought cheap” collateral, they are not one of my favourite things.
October 2, 2016
With the UK not contributing to the EU Germany will now pay 4500 million extra toward the EU after Brexit. With about 44 million employed in Germany that means each German on average will be paying 1000 extra in taxes but in reality the burden will fall on the higher earning Germans.
October 2, 2016
4500/44 = 1000?
October 3, 2016
102.27 more per French citizen. Given what the tax is over there, I don’t think it will create much of a stir!
October 2, 2016
France should take up the slack now it has taken over as 5th largest economy (allegedly.)
October 2, 2016
Or the EU has to make cuts
October 2, 2016
But bank margins and fees on new lending are still very high indeed. The problem is bad and misguided regulation of the banks by government and historic problems on their books that are “disguised” in their accounts. They are slow, inefficient and have huge overheads that need cutting massively.
The peer to peer lending market is also hitting them.
On most of the UK big bank premier/platinum/gold accounts you used to get £10,000 overdrafts in the region of base plus 2.5% included but now their published rates are more like 15-19% or so when base rates are .25%. The problem they have is not their margins it is historic holes in their accounts (from bat bets that they are still filling in) and poor & misguided government regulations. Filling the holes by over charging new customers. They are able to do this only due to the lack of competition in the market, that the government clearly seems to approves of.
Competition and new efficient banks and other forms of lenders are what is needed.
You lend £500K to the bank unsecured one week and they give you circa .2% then next week you want to borrow £500K well secured on a property and they want to charge you perhaps 4% or 20 time what they gave you. Yet you are a far better risk than the bank too.
Margins are certainly not their problem. Historic holes, poor regulation and bloated overheads are.
October 2, 2016
So this week we will perhaps see what May is made of (or not).
Workers and customers on company board, workers rights, Hinkley C, gender pay reporting, no cancellation of HS2, no new runways, no clear Brexit agenda, now cheap energy agenda, no bonfire of red tape, immigration still not addresses, no points based system (but no alternative offered), more religious schools………. so far I give her perhaps 1 out of 10. The 1 for grammar schools (which she must well know she will be unable to deliver this term anyway).
How much more evidence do we need that she is another dire lefty from the Libdim Cameron/Osborne school?
I hope she proves me wrong but I doubt it, on the evidence so far.
October 2, 2016
Theresa May will on Sunday announce she will repeal the 1972 European Communities Act in a move that will formally begin the process of making Britain’s Parliament sovereign once again.
“We will introduce, in the next Queen’s Speech, a Great Repeal Bill that will remove the European Communities Act from the statute book. That was the act that took us into the European Union.
When will we finally get all this repeal? How will she get it past her lefty wets and through the Lords? When will the UK get its independence bank holiday day, British Passports and the likes. Will she perhaps be too busy with gender pay reporting, workers on boards, more religious schools and damaging nonsense?
October 2, 2016
“That was the act that took us into the European Union.”
is technically incorrect, and not just because it was not the EU in 1972.
We are in the EU by virtue of the instruments of ratification of the successive EU treaties that the government has deposited, not by virtue of any domestic legislation which is just a necessary precursor for ratification.
Hence repeal of ECA72 will not by itself take us out of the EU, that will need action of the international plane not the domestic plane.
In any case I think that while it would be possible to pass an Act saying:
“The European Communities Act 1972 is hereby repealed”
in practice it will need lawyers to carefully examine every part of the Act and check for all the direct and indirect legal ramifications created since it was passed, so that there are no unintended consequences of the repeal. It may be that some special provisions will have to be made to prevent that.
Assuming the government can get the Bill of repeal through the Commons in the teeth of residual anti-democratic diehard opposition from all sides of the House then it will be necessary to get it through the Lords where such people are in a great majority and have no need to fear the anger of constituents, or wait about thirteen months so that the Commons can use the Parliament Acts to by-pass those unelected legislators-for-life.
I would suggest that Theresa May starts off another Bill in parallel to the Bill to repeal ECA72, one to reduce the period of delay available to the House of Lords to one month for all Bills, not just Money Bills, which could be pushed through to neutralise this anachronism without abolishing it.
As for Article 50 TEU, we are waiting upon the courts to decide whether the government has the prerogative right to serve the notice without any further process in Parliament, or lazy and inattentive parliamentarians will be rescued from the consequences of their own incompetence so that they can then delay or prevent our departure from the EU.
October 2, 2016
Lifelogic
“….When will we get it….”
As soon as Mp’s are given a vote on it.
I guess it will be sold as, do you want Sovereignty back, so that we can make all of our own rules and laws.
Any MP that does not vote for that, is failing in their constitutional duty and the very point of their existence as a Member of Parliament, and would surely be voted out of office by the electorate at the next election.
What is the point of electing an MP who does not want the power/opportunity to influence/run our own Country.
October 2, 2016
Correct.
The Lib dems and tuition fees is mild in comparison to ignoring a referendum
October 2, 2016
“do you want Sovereignty back”
Some Remainers think Sovereignty is the Brexiter’s romantic vision of a head on a coin.
No.
It is the right to be able to sack politicians we dislike and for it to make a difference when we do.
October 2, 2016
This is a very thin bone with no meat on it, thrown to the Brexiteers as a sop. She would rather keep them quiet for a bit so she can get on with more of her favourite items like gender pay equality, smaller puds in restaurants and a handful of grammar schools, which even her own side won’t vote for.
There is not even an indication of when the Brexiteers may begin gnawing on this bone – just an ‘after we leave’ with no further date on invoking Article 50. The best bet seems to be a couple of years after Article 50 is enacted, which at present means something like the 12th of never or after a month of Sundays. This will run into the GE in 2020 and probably be wished away as a mandate having expired. This is written before her speech so I hope to be proved wrong and would relish some egg on my face.
Regarding workers and customers rights, these already exist in Company law. Under Director’s responsibilities, the shareholders are last on the list under the Companies Act of 2006, behind the workforce, clients, the environment, the government etc. so no need to worry about that, it already exists, but like about 90 percent of the laws enacted by Parliament, no-one actually enforces any of it.
October 2, 2016
Or perhaps Theresa will be too busy helping Jeremy Hunt. Instructing or legislating on the vital issue of the size and sweetness restaurant puddings. Will one be permitted to eat two or more portions one wonders, or will that be outlawed? Clearly they will need to stop people popping into the shop next door to buy a post-prandial Mint Magnum or a Mars Bar too.
Are Osborne’s moronic sugar tax and central national wage controls still going ahead?
October 2, 2016
Surely you accept that one of the reasons that the NHS is creaking is the large number of obese people that it has to support. In that case I do not understand why you criticise the moves that the government makes to improve the situation. As a country we cannot afford to pump more and more money into the NHS. Perhaps you can suggest better workable solutions to the obesity problem.
October 2, 2016
Could it simply be that LL is just a permanent moaner? When I think he is some head of some companies, I just hope he is one of his kind. Otherwise Brexit or not, the future of the UK exports does not look too bright.
October 2, 2016
I’m afraid as so often the question is “Who would you have instead?”.
I’m not impressed by some of her policies but if she takes us of the EU, and out of its legal ambit as well, without our lovely European partners deliberately inflicting too much economic damage on us, then that will overshadow everything else.
October 2, 2016
If I were in Mrs May’s position, I would stick firmly to my policy of not revealing my hand on Brexit, and so far as possible not get sidetracked into other contentious issues until Brexit is sorted.
I agree it’s hard to distinguish waiting for the right moment to move from doing nothing, but doing nothing means losing the next election, perhaps not to Labour. We shall see.
October 2, 2016
Good to see that all the climate alarmist prediction on Arctic ice are proving to be as wrong as their ones for global temperature increases in recent years.
When will these “experts” finally admit they were exaggerating hugely, wasting billions in the process and causing far more harm than good? Get on with fracking and some new gas generators and cut all the subsidies for the loony “unreliables”.
October 2, 2016
Hear, hear to that! Apparently the Australian public are finally seeing through the renewables scam and are experiencing regular major power cuts due to wind power!! Bring it on!
October 2, 2016
We clearly need to concentrate on those renewables that are not intermitant due to the weather etc.. We are still failing to take advantage of the weirs on our rivers that have a continuous flow throughout the year. For example of the 28 weirs on the Thames that have a viable flow throughout the year only four have turbines or have them planned. Nothing is planned down stream of Windsor where there is real potential for cost effective power generation.
October 2, 2016
behindthefrogs. Are you aware of the vast subsidies all these ideas will need making our electricity more and more expensive and therefore making us less competitive?
October 2, 2016
Meanwhile the powerful forces for remain are still regrouping.
https://www.theguardian.com/politics/2016/oct/01/hard-brexit-new-bigotry-warns-nicky-morgan
The BBC, academia, the state sector, the luvvies, Osborne, Anna Soubry (famous for her ‘finger up bottom’ remark) and the likes.
October 2, 2016
Perhaps we do indeed need an election to get a decent “Real Tory” majority. It seems people like Dianne Abbott are doing their very best to help the Tories after all.
People who voted for Brexit (52%) were racists and bigots she averred. In fact it would have been near 66% without slanted pitch, the death of Jo Cox and the absurd Cameron/Osborne & BBC lies & propaganda. Far more than 52% in many labour areas anyway.
October 2, 2016
Load of rubbish, you might think that some fascist dictator had seized power and was about to launch massacres and mass deportations of foreigners. The plain fact is that overwhelmingly the British public do not want those EU citizens who are already here to be treated badly, Leavers as much as Remainers, and the pogroms will only occur in her fevered imagination. She should make herself a nice cup of tea, sit down and relax and watch some soap opera or read a book, until she has calmed down.
October 2, 2016
Indeed as Cameron might have put it, just calm down dear!
All the public wanted was some democratic control over quality and overall numbers. Which we apparently now have to do without using “a points systems” as Theresa has ruled that out. So we will have to award them “merits”, “bonuses” or “banana marks” instead of points!
October 2, 2016
Theresa just now on Marr & on why she sacked Osborne:- “George as contributed hugely to the political systems”, at least she did not say any of it was a positive contribution.
IHT ratting, pension pot mugging, tenant and landlord mugging, fiscal over complexity, scrapping allowances and child benefits for many, 10% insurance (IPT tax), 15% stamp duty, 45% income tax, CGT at up to 28% on non real gains, the GAAR (The Mugabe you owe what we say mate) tax, still dysfunctional banking, ripping off of savers, devaluing the currency, central wage controls, sugar taxes ……. It all needs to be undone as soon as possible please.
October 2, 2016
Don’t forget one real problem. The fact that people earning less than a living wage are expected to pay national insurance on their earnings.
October 2, 2016
I see that the BBC has issued a statement in relation to new staff at The Now Show, saying something like:-
While the new charter does set us diversity targets we always appoint presenters on merit.
How exactly can you do diversity and still appoint on merit? You can do one or the other are the BBC staff too thick to understand this?
Of course they still have the overriding requirement that you must be well to the left, an arts graduate who believes in magic money economics, everything that is “politically correct’, a reaminer and worships the climate alarmism religion unquestioningly.
October 2, 2016
a remainer
October 2, 2016
merit = good enough and will fit in, not ‘the best’
October 2, 2016
I believe Germany has expressed “disappointment” about the USA’s huge fine against Deutschebank and the USA has expressed “disappointment” about the huge fine via Ireland on Apple Inc.
Both the EU and the USA have expressed “disappointment” about the breakdown in talks on TTIP
Mario Draghi has expressed “disappointment” about the USDollar/ Euro exchange rate.
There would seem to be many “disappointments” ahead for the EU . One solution could be to say “Oh rats! ” as it is shorter.
October 2, 2016
The US comes up with a high figure fine…shares drop. We hear then that the US will cut the fine considerably.
Something real smelly about this…again!
October 2, 2016
Not smelly, pragmatism.
Take DB out and you end up loosing even more money, plus you won’t get the fine paid as well.
October 2, 2016
True enough but of course the low interest rates come hand in hand with the QE manoeuvres that supposedly induce investors to take on more risk and actually inflate asset prices of many classes of assets held by banks, thereby allowing them to avoid huge write downs that if made would expose their insolvency.
October 2, 2016
Financial storm clouds are gathering for all of us. QE and negative interest rates may have been the short term answer or so it is believed. For the long term it is a recipe for disaster. When the asset bubbles it engendered burst and the mal-investment it fosters works through the system it will undoubtedly cause a much bigger crash than the last financial crisis.
Apart from that Germany are going to suffer economic problems. Their contribution to the EU will rise because of Brexit, their mass migration policy is adding billions to their welfare, health, policing and infrastructure bills and Greece’s debt is a burden that one day will land on their treasuries desk. The whole EU edifice is crumbling even France is no longer a support for the project but becoming a financial drag on it. At some point Germany is going to face a massive bill to keep many member states from going bankrupt. Sure it will be the ECB that will pump the funds in but it will be Germany who will have to underwrite those funds.
Brexit cannot happen soon enough because to weather the storm clouds whilst being a member of the EU is not a position the UK wants to find itself in. It would be like fighting a war on two fronts without the resources needed to be able to do so.
October 2, 2016
The problem is not the German banking system, although that is in a pretty poor state.
The problem is, as ever the Euro. The fundamental issue is the difference between the performances of the German and ClubMed economies that have resulted in Germany building up those huge surpluses.
Because there is no possibility of the problem being largely self-correcting by exchange rate movements making German goods more expensive and French and Italian products cheaper, the ECB has had to resort to extreme measures in a fruitless attempt to keep the single currency going. There will come a point when the millions of unemployed across the Eurozone will come to realise that there is no chance of them getting jobs while the Euro continues to do such huge damage to their countries.
The longer this goes on, the more damage is being done. When the inevitable break up of the single currency happens. the results will be extremely difficult for the economies of every EU state.
One thing is certain, There will no longer be any possibility of Germany continuing to subsidise the Brussels budget to the extent it currently does, let alone covering the £9.8m net loss caused by Brexit.
Brussels will have to adapt to a very different fiscal environment and any possibility of Juncker being able to keep the former Eastern Bloc states under his thumb will end when he can no longer buy them off with massive subsidies paid for from UK and Germany net contributions.
It is essential that we get out as quickly as possible before these things happen. Our economy will suffer a lot less from the failure of the single currency when we have built up our trade with the rest of the world.
October 2, 2016
The EU is certainly not the ‘safe ocean liner into a lifeboat’ situation some claim Brexit to be.
Remainers are every bit as blinkered as they claim their opponents to be.
The Mail on Sunday is at it again, that the Brexit vote was won on lies about what could be done about immigration. They forget that – before the ‘lies’ – the referendum had to be called because people were so deeply unhappy with the EU that they were going to fringe parties.
It is now majority opinion – confirmed by referendum – that the EU is a bad thing and a referendum taken today would deliver a 70% for Out result.
That you are still having to fight the referendum battle to get us out of the EU shows just how unfair and unreasonable the Remainers are.
The biggest lie told is the one staring us in the face today. That the Remainers would respect the result of the referendum whichever way it went.
Instead they are doing everything to prevent Brexit and to cause a re-run and I don’t think it’s underestimating it to say that I hate them for it.
The EU has me hating my fellow countrymen (and one or two Dutchmen) and I don’t think I’m particularly unusual in taking this so seriously.
So much for the EU being a force for peace and unity !
*It is quite clear that Newmania feels hatred too.
October 2, 2016
Many are saying that the Brexit result was racist. Nicky Morgan is at it too.
Without a shred of evidence they criminalise the Brexit vote in order to force us to back pedal on it. Racism is a crime in Britain. It is a serious accusation to make against anyone.
We accuse someone of a crime without good evidence but Remainers are quite obvious in what they’re up to – crushing a democratic majority decision with unfounded accusations.
The slur has to be stopped.
October 2, 2016
Edit: We *can’t* accuse someone of a crime without good evidence…
October 2, 2016
Dear Anonymous–I too hate the protectionism and bureaucracy and inflexibility and the damage caused on the Continent and the fact that the EU should be but is not in two parts, N & S, with a Neuro & a Seuro and the fact that the Remainiacs are going to continue to try, possibly aided by our laws, to impede matters.The likes of Ken Clarke with his blathering that a Referendum (of everyone) is just an opinion poll (of a tiny sample) is hateful in itself indeed barely believable. What we need is a change in our laws and the Constitution to reflect the onset of Referenda and then many more of them.
October 2, 2016
Leslie – Thank you. After writing these posts I thought, have I been too strong ? Too unfair ?
We have waited patiently. Used the correct democratic process after a hard fought referendum in which both sides had their say – Remain more so, I might add.
The Leave side argued repeatedly before referendum day that Brexit would be terminal for Britain – the Prime Minister warned the people of dire consequences if we voted Leave, as did the President of America, so I am offended by the equivocation on “what do we mean by Brexit ?” or “OK. So there’s ‘soft’ Brexit and ‘hard’ Brexit” soft being another way of saying we’re staying in the EU with a few tweaks.
No.
None were more unequivocal about what Brexit meant in the run up to the referendum that the Leave side themselves. Now they lie about it.
Worse.
I am deeply offended when someone says we voted to leave out of racism. They criminalise those who voted for Brexit in order to nullify the referendum result. Again they lie and smear the opposition.
I am also deeply offended when I am told I was easily led. Again in order to nullify the referendum result.
So when I say I hate people for doing this I mean it.
It is my duty to report such feelings because many like me feel like it. In fact part of the motive for getting out to the polling booths was to hit the people who tell these lies where it hurts. But more than that. Having waited patiently for so long, and put up with policies which we dislike (because we believe in democracy and the rule of law) and having won the vote after a protracted campaign and contest where all views and misgivings were expressed – where do we go next if we continue to be ignored and insulted ? Just roll over ?
The PM’s speech today was encouraging and seemed to pay respect to the referendum result.
The debate is over. For better or worse now we leave.
October 2, 2016
Edit: The Leave side argued repeatedly before referendum day that Brexit would be terminal for Britain (start of 3rd para)
should read:
The *Remain* side argued repeatedly…
October 2, 2016
And…
Edit: None were more unequivocal about what Brexit meant in the run up to the referendum that the Leave side themselves. Now they lie about it.
Should read:
None were more unequivocal about what Brexit meant in the run up to the referendum that the *Remain* side themselves. Now they lie about it.
—–
Sorry. I did not see my mistakes in the first few readings. Self checking rarely works. I need a secretary !
October 2, 2016
I have yet to meet anyone who has anything good to say about the QE and interest rate policy or to read or hear any coherent defence of it. Apparently the Bank of England is now about to embark on a £10bn purchase of corporate bonds. Can this really be right? How can Mrs May and Mr Hammond sit by and allow this nonsense? Plain common sense tells you it is an absurdity.
October 2, 2016
Indeed.
October 2, 2016
Meanwhile at home British banks (worry about continental banks’ possibility ed) to collapse and bring them down and Mrs May’s government fails to do anything to get us out of Europe or do anything of note at all.
October 2, 2016
Matching the hysteria from Nicky Morgan there is that from Christopher Booker:
http://www.telegraph.co.uk/news/2016/10/01/this-is-the-only-way-brexit-wont-plunge-us-over-the-cliff/
“This is the only way Brexit won’t plunge us over the cliff”.
The “only way” being his preferred way, of course; despite “some limited power” to control immigration from the rest of the EU falling well short of what the bulk of the electorate wants, even if other EEA member states would allow us to stay in the EEA knowing that we intend to abuse Article 112 in the EEA Agreement.
I’ve also been reading a Handbook of EEA Law, and I find that I like it less and less.
October 2, 2016
The idea that there is only “one way” is rather daft, there are clearly countless ways to Brexit sensibly.
October 2, 2016
I thought Christopher Booker was an arch Eurosceptic. I must say, I find his conversion a bit disturbing.
October 2, 2016
It does need answering. Perhaps Dr Redwood, or you, could do so point by point.
My own position is that there this is not a ‘tariff free zone’. The tariffs we pay for Single Market membership are huge social and welfare costs in freedom of movement. No matter how hard we work, or how EU we become, we are dutybound to take the EU’s unemployed in continuance of our welfare system – either one or the other must go.
Fat use us having 30,000 manufacturing jobs if 2 million unemployed arrive on our shores to compete for them.
If I’m going to be poor I’d rather I had the space to be poor.
October 2, 2016
Spot on.
A min wage migrant doesn’t pay their way.
Solution. Don’t allow low paid migrants to come to the UK
October 2, 2016
I’d be interested to hear from JR as to why C Booker is wrong – I don’t believe we have ever seen a post on this. The fact is there are many issues other than tariffs, and moving to a Swiss type arrangement under EEA / EFTA might well be a sensible interim solution – it could always be changed later if not satisfactory. It would also have the merit of reassuring the undoubted business majority in favour of ‘soft’ Brexit, and creating some degree of unity and consensus in the Country, which is now very divided.
Reply I have endlessly explained why I think we can secure good access to the single market without belonging to it! Relax, it will work. Just as there is no recession.
October 2, 2016
JR: “Relax, it will work. Just as there is no recession. ”
Sorry, sentiments like that hardly engender confidence.
Richard1: “might well be a sensible interim solution ”
Yes, and the significant word in that phrase is ‘interim‘.
October 2, 2016
I fear that an interim “solution” of EEA could end up being the permanent solution, should there be a change of government, worse still, a springboard for being taken back into the EU by another government. Not beyond the realms of possibility. There is real urgency for Theresa May to trigger Article 50 and repeal the ECA so that there can be no turning back. In an ideal world the whole process of leaving the EU should not be hurried, but time is a luxury we do not have, as unexpected “events” may throw things off course.
October 3, 2016
It is indeed a significant word, as most of the arguments for staying in the EEA would have the same force in five or ten years as now.
October 2, 2016
Reply to reply: I have seen you endlessly and no doubt correctly say that the Germans will still want to sell us cars and the French wine, etc, and that therefore the imposition of tariffs is unlikely.
But I do not believe I have ever seen you address the point Christopher Booker makes – that there are more important, non-tariff, issues such as customs clearance procedures, which, if we were out of the single market, would mean a significant cost and risk for the UK.
Reply I don’t agree. The USA, China etc trade fine with the rest of the EU. They will not want a war of paperwork when they sell us so much!
October 2, 2016
Reply to reply: I don’t disagree with you John. I want to see you joust with Christopher Booker. Why not here ?
Reply I have no wish to joust with Mr Booker.
October 2, 2016
On second thoughts. This contradicts my position that the debating has been done and the vote won.
Edit/delete me as you wish (and against which I rarely, if ever, complain as I trust your judgment.)
October 2, 2016
EUReferendum should merge with Open-Britain and call their excruciatingly detailed plan for continuing to import millions of persons, ‘Flexcit’.
October 2, 2016
Reply to Denis: I too am very concerned by what RN and CB are pushing, and have posted about this on the comments section of 2 October Diary article.
I believe their main problem is that they seem to refuse to countenance the major role mass immigration has played in the whole EU debate, and they are pursuing an exit plan which may be effective in terms of economics, but one that would represent political suicide, in that it does not provide a means of effectively addressing the sovereignty/control of border/immigration problems.
October 2, 2016
I’m confident that Germany will overcome its difficulties, albeit at a price, a price paid mainly by other countries in the eurozone and the rest of the EU. Those who suppose that the EU is on the verge of collapse through economic and financial problems should remember that this is above all a political, or geopolitical, project, which will only terminate when the political will has been exhausted. I think it is still a long way from that.
October 2, 2016
The situation you describe just shows the huge imbalance between the finances of the Countries that make up the EU, and why it will eventually fail them all.
October 2, 2016
Just seem Our Prime Minister on the Andrew Marr show this morning.
Thought she handled herself very well, and pleased she has now suggested the end of March as the latest date for triggering article 50, also pleased we are going to get a Great Repeal Bill, to cancel the origional Bill that took us into the Common Market as it was then.
Given the above, and the fact that all EU law past to date will remain approved by our Parliament for the time being, should simplify and reduce the timescale for any leave negotiation procedures to take place.
I will look forward and listen to her Conference speech with interest.
October 2, 2016
No sure I would want to hold shares in a bank with E15b of capital and E615b of assets
October 2, 2016
We need to cut as many links with the EU’s financial sector to try to minimise the effect of the next financial crisis, when it comes out of Germany.
October 2, 2016
The next financial crisis, when it comes out of Germany, and Greece, and Italy, and Japan, and above all….and China!
October 2, 2016
Or Italy …
October 2, 2016
Hedge funds are a “fictitious” form of investment ; they do nothing to add to the real value of shares and – to the likes of me who has never taken up an option with any of them , create confusion . That German Banks – and Germany in particular , face a future of mounting responsibility , is beyond doubt ; Germany has gained substantially from the low valued Euro and has built its surpluses largely from this source , it must now face up to the consequences .
Today Hungary goes to the polls ; the predictions all show that another wedge is likely to be driven into the EU and provide further proof that ” one size does not fit all “. The result of the migrant crisis has spread across the whole of the region resulting in each country having to produce something of a solution of its own . We must stand firm on our position – after all we are the most densely populated country in Europe and controlled immigration was the determining factor in the referendum . Border protection is paramount – we ought not to succumb to any sort of outside pressure be it from UNICEF or elsewhere .
The Conservative Conference intends to focus on wider issues rather than just the Brexit case . Statements of intent would do well to focus on the health of our economy before any drive towards weakening the Labour cause . Cameron made a major mistake in trying to shift to the centre ground ; he lost out by failing to understand that the electorate wanted security and independence above all else . Theresa must not overlook this determination .
October 2, 2016
Off-topic, I’ve been reading this proposal for a “Continental Partnership”:
http://bruegel.org/2016/08/europe-after-brexit-a-proposal-for-a-continental-partnership/
I think these passages are worth copying and pasting:
“As a political project the single market consists of all four freedoms. Arguably, freedom of movement of workers, whereby EU citizens are entitled to look for a job in another EU country and to work there without needing a work permit, constitutes the element that makes the single-market part of the EU into a political project. Granting access to the domestic labour market to some 510 million citizens is a significant political choice and a powerful symbol of integration amongst EU countries. It is this political project that the UK electorate has effectively rejected.”
“From a purely economic viewpoint, however, goods, services and capital can be freely exchanged in a deeply integrated market without free movement of workers, though not entirely without some labour mobility. It is also possible for capital to move freely and for banking services to be provided across borders without free movement. Free movement of workers is, thus, not indispensable for the smooth functioning of economic integration in goods, services and capital. On the other hand, some degree of labour mobility is an essential counterpart of the free flow of goods, services and capital. Firms that operate in foreign countries need to be able to transfer workers abroad, at least for temporary periods, in order to produce efficiently The four freedoms of the European single market are therefore closely economically connected, but not inalienable for deep economic integration[6]. Free movement of workers can be separated from the rest, but some temporary labour mobility is needed. Our proposal is, accordingly, about how to manage the governance of the single market in this functional sense without everyone being a full member of the EU.”
Unfortunately as far as most leading continental politicians are concerned free movement cannot be separated from the rest, they have a quasi-religious belief that the four freedoms are indivisible; and even though they say that there can be no negotiations before the UK has put in the formal notification that it is leaving they are already publicly stating that as one of their red lines in the forthcoming negotiations.
Reply I have now read this piece. It seems to be a kind of EU lite which will either be impossible to negotiate because we do have control or will entail us sacrificing some of the control we have voted to restore.
October 3, 2016
Nice to see you mention deutsche bank in this post John. The chat is so loud that not only have you allowed comment past moderation but also mentioning yourself. There have been questions about their stability for a while, not only are their finances in question but also their biggest internal business change and IS/IT outsourcing changes ….etc ed