The markets answer to the new EU bank stress tests yesterday was brutal. The cost of borrowing money for Spain and Italy soared. More rumours circulated about the difficulties of some banks borrowing the money they need to c arry on. There was a general mood that the EU authorities were still not taking the substantial measures needed to shore up their zone.
One of my constituents had just returned from Greece. Judging by the published figures, the economy is falling. Out put is down, real incomes are badly squeezed. Judging by the press comment, the public spending cuts are biting, with more lost jobs and money wage cuts.
I asked my source what it had been like. He said it was like going to a party. The restaurants were full where he visited. He saw plenty of economic activity. Everywhere he went he was told they liked tourists who pay with cash, not credit cards. The view seemed to be that they did not trust their government to spend their money wisely, so why go out of their way to put the income through the books or pay the taxes? If you could add the unofficial economy into the figures it might not look so bad.
This attitude is creating large tensions in the Euro zone. Germany and the other paymaster nations are asking why should they have to make good the tax revenues of Greece, and pay for the extra public spending. The more the potential paymasters lecture the Greeks on how to run their affairs, the more resentment it creates.
Meanwhile, the 400,000 strong Greek army of regulars and reserves needs paying and equipping. We are witnessing a struggle over who pays, and how. Expect some new fix based around more borrowing, this time in the name of Euroland as a whole. It will leave neither side happy. German taxpayers will be wary of the obligations they are taking on and will still ant more control over Greek spending and tax collection. The Greeks and other over borrowing states will come to resent the degree of surveillance of their affairs. We will soon need to ask the question again – what is the point of elections in some of these countries, where more and more will be settled in Brussels?
July 19, 2011
‘I asked my source what it had been like. He said it was like going to a party.’
When I read this line the scene from the film ‘Der Untergang’ came to mind where Eva Braun is having a birthday party in the Reichstag in April 1945, everyone is putting a brave face on it pretending to have a good time but every now and then the building would shake as the Red Army artillery unleashed another salvo a couple of miles away.
July 19, 2011
From what you describe it does not seem that different from the UK. If combined taxes, VAT, NI, licences and fines start to approach slavery levels then people have little choice but to go black market should they wish to continue to eat.
You ask “What is the point of elections in some of these countries, where more and more will be settled in Brussels?” Indeed just like the UK yet again.
Who will pay for the Greek party? The Europhile Cameron-Heath will pay with our money once again, one way or another – no doubt in return for a pat on the back.
July 19, 2011
On Radio 4 Today Program this morning the BBC is “not political” and “is impartial”.
Except when it comes to attempting to kill competition from Newcorp or pushing the big state, big tax, over regulation, pro EU, socialist, quack green exaggeration agenda every single day of the week I assume.
July 19, 2011
These BBC words (above) were even more irritating and untrue than the Natwest/RBS groups “Helpful Banking” adverts – when they are actually acting as a one bank, double dip, loans demanded back, recession machine for many sound businesses in the UK.
July 19, 2011
Did you ever think the day would dawn, Lifelogic, when the BBC overlaid Nelson Mandela’s birthday with something else?
The Guardian remained true though, through the storm and fire:
“Nelson Mandela serenaded by schoolchildren for 93rd birthday.
People urged to mark occasion by donating 67 minutes to community work, in tribute to his 67 years in public service.”
I trust you are all doing your 67 hours and trying not to think of those persuasive and community minded bombs.
July 19, 2011
Wittiest remark from the crafty old crocodile today: Question: “What about Tony Blair visiting you half way across the world?” Answer: “What? Who? That must have been something David Cameron arranged.”
July 19, 2011
Absolutely right, if governments treat their people like cash cows the people will make their own arrangements. I totally agree with the Greeks, why pay for what they didn’t have any say in? Just like Britain.
July 19, 2011
Re the overtaxed para, quite. That is the whole point. It’s everything. In the whole of the Western world its citizens are wildly overtaxed to support universally disfunctional and largely redundant state machines. The wealth creating sector is bled dry to support the wealth consuming sector. Sooner or later the patience of the former snaps and it says enough in whatever way it can. In Greece it is tax evasion on a massive scale, and let’s not forget that the state can only govern if it has the consent of the people. In Greece and elsewhere it does not.
The global political class has to get the message that trying to re-invent the illegimate Big State (post the truth revealing collapse of the Russian Empire) as a a giant ‘service provider’ is not just delusional it is impossible. The State is universally inefficient and inherently corrupt as such tax and spending always attracts the worst sorts of cronyism.
The Black Economy is de facto the real economy and is probably the only growth there is, anywhere, as it is not strangled by over-taxation and over-regulation.
July 19, 2011
Greek tax evasion is on a massive scale because they don’t tax people’s incomes, unlike every other EU country. If they started introducing sensible tax collection rather than relying on the people to pay the full of amount of tax the tax evasion would dramatically fall.
July 19, 2011
You are so right; I do not understand why the British have not woken up to how we are being fleeced (stolen from) by this idiotic “government” (bunch of wealthy toddlers) who know absolutely nothing about the world or business or how things work but throw OUR money at foreign countries left, right and centre with no consideration of what is happening at home. We should be rioting in the streets with every gun, machetty, water canon etc. to get rid of these morons. With ….. German companies ‘winning’ contracts to make OUR trains while a few thousand Englishmen lose their jobs and go on benefits. Is this government made up of complete and utter airheads? YES!
July 19, 2011
I entirely agree that most things are settled in the EU so I can’t see the point of our Government or elected members who simply tow the euro party line. I also resent tax being taken from me to be given to foreign causes. £25 billion net to the EU and foreign Aid alone. That doesn’t count the health costs for the economic migrants who approached 650,000 gross last year, or the 25% of children being educated in our schools where English is not their first language. Thats the real reason for the action on public sector pensions and cuts to pay for all these foreign issues. I think people have had enough and are wising up to our elective dictatorship, whether that be the small clique here or in the EU.
July 19, 2011
“what is the point of elections in some of these countries, where more and more will be settled in Brussels?”
Some are asking the same question about Britain.
July 19, 2011
It’s the same here in Spain, cash whenever possible. Business is still being dealt with in brown envelopes handed surreptitiously under the table.
The Spanish know how corrupt their government is and has been, and they’re not prepared to pay for that gluttony!
July 19, 2011
I agree with Sue. I live in Spain too. There is a saying in Andalucia that even God doesn’t pay tax (no paga ni Dios sus impuestos). While unemployment is officially high, the black economy is booming and extends beyond tourism and construction into professional sectors.
I have yet to meet a Spanish person who does not like the Euro. They believe that the Euro is protecting them, that the British were foolish not to join, and that Anglo-Saxon speculators are to blame for the economic woes.
July 19, 2011
“The Spanish know how corrupt their government is and has been, and they’re not prepared to pay for that gluttony!” The English are slowly coming to this realisation too encouraged by the motorist muggings and other fines, bin taxes, incompetent NHS and school and all the rest they are starting to see the true colours of many alleged “public services”
July 19, 2011
In the light of what you write, it seems the Spanish take their cue from their government’s corruption – or is it the other way around?
July 19, 2011
The Euro is a German/French construct. Is it possible Germany and France did not know/realise that by allowing Greece etc. to become euro members that this would reduce the value of the euro and allow German and French goods to be sold at highly competitive prices? I do not believe Germany and France were unaware of this consequence. They may not have anticipated quite this scale of disaster but there were those who predicted it even before Germany itself broke the 3% eurozone rule.It thus can’t now be wrong for Germany and France to pay for the mess they cynically and in large part created.
July 19, 2011
In any country/society those who have to pay the taxes (PAYE etc) often resent the part cash workers. Why am I expected to tip taxi-drivers? Fares are regulated (protected more like) by councils, entrants to the trade are heavily controlled by regulation and other obstacles (the Knowledge in London). Taxi drivers are no different from Bus Drivers or Accountants whom I am not expected to tip.
Is tax dodging worse in Greece than Germany? I don’t know. Tipping goes on in both.
As for the Greek Army to what extent is this a trick to hide unemployment etc.
Having said that since the financial crisis broke and all countries have had to rescue their banks has any country slashed the bankers wages/bonuses etc? These bankers are effectively on a very generous JSA.
July 19, 2011
I thought there were a lot of interesting points in this article but I’m very surprised at the final question. A lesson I draw from recent events in the Eurozone is that individual nations are looking after their own interests. There is almost no one of significance giving priority to the interests of the EU as a whole.
The point of elections in Germany is that the voters can select representatives to decide whether to continue to provide money to support the Greek and other governments and, of course, the German banks who have loaned money to them. These decisions will be made in Berlin, not Brussels.
The point of elections in Greece and other debtor nations is that the voters can select representatives to decide whether to default on the loans, and maybe even leave the euro. They can also change the size of their army and how effectively their taxes are collected, to pick up two of the points in the article, neither of which is decided in Brussels.
Nothing of note is being decided in Brussels, as far as I can see.
July 19, 2011
These decisions will be taken by the ‘elected representatives’ within the current power structures , between the houses, nowhere near quite the same thing as the people via an enforceable referenda.
I agree with the last sentence and intelligent people should think about the ramifications and put aside self-interest and be seen to be clear of self interest.
Mr Mark Reckless touched on a point i would like further details published if they are available.
Mark Reckless: Will my hon. Friend, as an ex-Member of the European Parliament, explain the difference between his position and that of the individuals he has described who, in some cases, have a pension from the European Commission? Does he agree that, were they to speak or act in a manner that was contrary to the interests of their previous employer, they might have their pensions taken away?
http://services.parliament.uk/hansard/Commons/bydate/20110711/mainchamberdebates/part005.html
July 19, 2011
“Nothing of note is being decided in Brussels, as far as I can see.”
There is little activity, I would agree.
The decisions have been made and the policies put in place. The EU is heading for the cliff, so why should the EU planners change anything?
They think that they will be able to create an even ‘fairer’ society from the rubble. It will be fairer for themselves, no doubt!
July 19, 2011
Do you remember what the BBC and their friends in the Press made sure happened to Mr Ridley when he described exactly this situation to the son of a close colleague in private? (To the point of saying there would be rioting in the streets of Europe.) And who was removed next – in November 1990, in case anyone has forgotten the date? The way they are trying to remove our present PM makes me suspect he may be sound on the point too, whatever some of you may say. Do you really think David Davis would survive, or even be allowed to win an election?
July 19, 2011
Who will pay for it? You and me, again, of course. The taxpayer has bottomless pockets, of course.
Anecdote. Friends were in Greece recently; when they went to pay their bill at the pension they had stayed at, seeing the credit card machine on the desk, they pulled out a card to pay.
Immediately – “machine broken. Cash only”.
No wonder they have a tax collection problem in Greece…
July 19, 2011
lifelogic
Posted July 19, 2011 at 8:42 am | Permalink
“On Radio 4 Today Program this morning the BBC is “not political” and “is impartial”.”
Indeed. And odd, is it not, as the USA teeters on the edge of sovereign default, and the Eurozone teeters on the edge of collapse, the BBC reports on nothing else than the travails of News International.
Likewise The Guardian.
They can hardly contain their glee.
Impartial, my arse.
July 19, 2011
DT page 3 today “the BBC should give less coverage to opponents of global warming than it does to the climate change lobby…..” on the basis that climate change is an established scientific fact. No bias there,then….
July 19, 2011
As Orwell pointed out:
Day by day and almost minute by minute the past was brought up to date. In this way every prediction made by the Party could be shown by documentary evidence to have been correct; nor was any item of news, or any expression of opinion, which conflicted with the needs of the moment, ever allowed to remain on record. All history was a palimpsest, scraped clean and reinscribed exactly as often as was necessary.
July 19, 2011
It Orwell was writing today he be commenting that the media was devoid of any useful facts and focused solely on celebrities and television programs. Who needs biased reporting when you can report rubbish instead.
July 19, 2011
“We will soon need to ask the question again – what is the point of elections in some of these countries, where more and more will be settled in Brussels?”
We’ve been asking this question for a long time in Britain, but no-one answers so why should the Greeks expect an answer?
When one listens to the remarks by various mandarins in Brussels, as far as they are concerned democracy has ceased to exist; yes you can have elections if you like, but your government has got to do exactly what we tell them to do.
Britain had a general election but it changed absolutely nothing. Ireland also had a change of government, but again it made no difference.
This country has a huge debt crisis, yet we continue to borrow even more to pay to the EU and “lend” to the “PIIGS”. We will cut our military so that we can pay for the Greek army, which per capita, is at least twice the size of ours.
Meanwhile, we get obsessed by a phone hacking scandal!
The lunatics are clearly running the asylum!
July 19, 2011
Having been to Greece recently, I found the ordinary Greeks pretty honest, but cash is preferred everywhere as they know their taxes are wasted. The only people who are well off are state employees such as (some? ed) corrupt police and their families, who receive large pensions. Not very different from England, or should it be called Bungland.
July 19, 2011
We can only hope that the German’s and others give Greece another bailout and avoid default. The bank stress tests did not allow for a default and if that were to occur then our own banks would need a higher level of capitalisation than currently provided.
Everywhere I go in London there is evidence of a growing cash economy which I attribute to the new immigrant business people bringing a culture that is acceptable in their homeland.
It is some years now since the recession began yet I was surprised to read in yesterdays Telegraph that “The Financial Reporting Council’s Audit Inspection Unit (AIU) said firms were failing to provide “professional scepticism, particularly in respect of key areas of audit judgments, such as the valuation of assets and the impairment of goodwill and other intangible assets”.
In particular, the report said audits at three “subsidiaries of overseas banks [out of 10 banks and building societies reviewed] were assessed as requiring significant improvements”. This does not surprise me but again I can understand why investors are wary that toxicity remains lurking in the balance sheets of some of our banks.
July 19, 2011
Perhaps we could send the German army to Greece, to allow Greece to cut defence spending?
This is the EU Endkampf anyway, so why not be overt about it ?
July 19, 2011
I though the German “management team” you talked about a few years back was economic .
On a serious note do you think we will see foreign police “invited” into any country to “assist” their own police to maintain order ?
If we do do you think Cameron would be stupid enough to fall it or would the alarm bells start ringing in his head like they should ?
July 19, 2011
“On a serious note do you think we will see foreign police “invited” into any country to “assist” their own police to maintain order ?”
I thought the laws were already in place for this, so we are just waiting for the command!
July 20, 2011
“..foreign police ..”
The BBC has already run a piece about how all the foreign workers need a police presence that can speak the language and understands their culture.
The foot has been placed firmly in the door.
July 19, 2011
Reading these comments I am wondering how the main parties polled so many votes in 2010.
July 19, 2011
Reading these comments I’m surprised that the public voted to remain in the EU.
July 20, 2011
It wasn’t the EU then. It was an economic arrangement between certain democracies for Free Trade across their borders. That is why the Unions and the Labour Party opposed it. Also, the then PM, Edward Heath, lied about it and what he was secretly agreeing (to give away our fish among other things), not just to us, but to the Cabinet, and to Parliament. Presumably to the Queen as well, but that we shall never know.
July 20, 2011
To be clear, the referendum to stay in was under Mr Wilson, but the treachery was Mr Heath’s.
July 20, 2011
You should take a look at, for example, the Tory party vote (in numbers, not percentage) in the 1980’s compared to now. Even though we have 5 or so million more people Cameron polled 2-3 million less votes. Who’d have thought we had so many far-right extremists 25 years ago?
Turnout is declining every election and when you look back to the 1950’s 95%+ of people who did vote voted Tory or Labour, now that hovers around 65%.
People are fed up with party politics and lobby fodder politicians, it’s just that there’s no credible alternative on offer at the moment.
July 19, 2011
John, there are so many threads of genuine disconted here and they all seem to come to a head with corrupt politicians,corrupt media and corrupt police and the very real doubts that the great and the good are unlikely to resolve matters when by and large they are involved. “We are all in this together” I dont think so for the simple reason that when the chips are down its the tax payer that picks up the bill and political responsibilty/accountablity goes out the window with such meanlingless phases as “we share your concern” and “lessons will be learnt” and the coverall classic “I have made it clear”
As bad as the hacking issue is we are not dealing with the deficit, still throwing money at the EU, sneaking thro parliament measures to uplift our contribution to the IMF and increasing our overseas aid budget. Plus of course we have two political ego trip wars to fight. And finally there must be doubts that any government department is fit for purpose.
Unless the political class come back to the real world and understand the effects on voters not just of the cuts we all must face but also how our money is spent and not wasted the next election will not make pleasant reading for the Tory. At this point in time the only organsiation that would get my vote would be the Army
July 19, 2011
I have just seen a artile on Reuters
“(Reuters) – A tax on euro zone banks and cheaper, longer-dated official loans are the least risky way to provide extra funding for debt-stricken Greece, a confidential paper drafted ahead of a European summit showed on Tuesday.”
So they are not going to issue bonds, but tax them and banks too … the UK is expected to bail ot the PIGS. I hope a fierce rejection is going to be given to this.
July 19, 2011
On Thursday they simply need to decide between a Eurostate and a break-up. Once this decision is out in the open they can start managing once the market is certain where they are going.
Trouble is, I doubt they will take this monumental step. They are not up to the job; they are not big enough to do it.
As I read recently, they are keeping the whole thing going while they look for somewhere relatively safe to crash the plane. Trouble is, they will soon be out of fuel.
An unmanaged chaotic end to this is looming and how irresponsible that would be.
July 19, 2011
Perhaps the last word should be Bonn and Paris rather than Brussells?
July 19, 2011
Off comment I know but watching the Murdoch’s on Sky at the moment,I now know what a STALINIST SHOW TRIAL LOOKED LIKE, (personal reference left out-ed),I give him warning, be very afraid IF I ever stand in front of you with my brain and my mouth I will endeavour to reduce you to the level of Tears that I reduced the liebour and libdem candidates
to in an open meeting of candidates in my constituency prior to May 6 last year.It only goes to completely break any last respect I have for the Political class and at 66 has made me an absolute potential revolutionary,because that is what this country needs in my opinion at this moment in time,and what I believe will now happen at some point,all my best friends and I have 5 others who have known each other since 1960 all feel the same,
and we are from both sides of the political divide,but now are all anti EU anti the establishment whom I compare to THE ILLUMINATI and more to the point WHAT can you do to us, etc
Reply: Radical change in the UK can be achieved through the ballot box and is best achieved by majority peaceful actions.
July 19, 2011
Further to what I said above whenever I see Alan Rusbridger on TV about this and what he supposedly advised DC on about Coulson,he looks to me Like Sylvester the cat caught with Tweetie Pie in his mouth
July 19, 2011
So much for David Cameron’s pledge to limit immigration, but only from without EU borders. Where will all the unemployed and brassic young Greeks head for ?
Sorry to keep banging on about it but there seems to be little point in discussing anything, from pensions to energy, without first knowing roughly how many people are going to be here and what they will be contributing (or taking.)
Without proper control any article on economic policy is founded on wild speculation and a bit pointless.
July 19, 2011
If we can encourage apathy and welfare in Greece they probably won’t want to leave.
July 19, 2011
Everyone has had their say on the EU. It is quite obvious to me that “a fish rots from the head”. Our head is Brussels and so our senior politicians, police and journalists are rotting slowly too.
But that isn’t what I wanted to ask.
In your question to Dr Liam Fox, you mentioned the shutting down of a barracks in your manor and the opening of a vast new town. We have got the same over here where a barracks is to be shut and then reopened as a huge new town with no facilities – water, roads, rail links, schools, hospitals, churches, etc etc.
I wonder if all this is to pay for Mr Brown’s aircraft carriers with no aircraft?
Also does Dr Fox realise that there are, at the moment 6 bureaucrats for every 5 soldiers?
Bassingbourne near here is a lovely place where young soldiers are trained. It will be a great shame to close it for the two reasons above.
Reply: The MOD under plans developed a few years ago does intend to shut bases and sell the land on for housing, with the aim to pocket the gain on planning permission. Wokingham Council wishes to accommodate this, identifying the area as one for housing development in its local plan. I just wish to make sure the government as vendor realises there will be public investment costs for a large new settlement.
July 19, 2011
On the aircraft carriers you might also note that by the time they are built not only will we have no aircraft for them ,we will have no aircrew who know how to operate fixed wing aircraft from ships or train others to do so. Presumably, therefore, the plan is to sell them on completion – perhaps the Chinese will be interested
July 19, 2011
Of course we go to cash. Ive done it, it saves taxes and VAT. Quite sensible really. I don’want to pay for the MPs first class travel. I pay cash evereyware I can now. I recon to save a fortune that way.
July 19, 2011
Cash is the new way to beat waste
July 20, 2011
” Everywhere he went he was told they liked tourists who pay with cash, not credit cards. The view seemed to be that they did not trust their government to spend their money wisely, so why go out of their way to put the income through the books or pay the taxes? ”
The logical answer to this makes me shudder at it implication. The only way government can ensure that all taxable income is revealed is to do away with cash all together. That way every single transaction can be accounted for, killing off the black market and tax dodging in one go. The computer infrastructure is quickly reaching a point that would allow for this.
July 20, 2011
Or making it a crime for people on benefits to carry more than say twenty pounds in cash and instead only able to use a state issued debit card credited by special terminals and only accepted in state approved businesses?