Great news – France and Germany to help pay for Greek army


The winners last night at the EU summit were the Greek army. Today they can relax. Their future wages are now going to be paid by more EU loans, at lower rates of interest.

The losers last night were the French and German taxpayers. They have to lend more to Greece, for less return.

The markets say they like the deal. I do not see why. It does not solve very much. It delays sorting out the underlying problems for longer.

As always with political fixes, there is plenty of spin. All have come out telling papers to write that the “Euro has pulled back from the brink”, that ” the crisis has been solved”. Surprisingly many do.

There is a lack of detail. Questions to answer include:

What happens to private sector lenders to Greece who refuse to take a haircut?

Is this a default according to the Rating Agencies? – It looks like one to some of the commentators.

Will CDS insurance trigger? Who pays that?

Is the UK going to accept a cut in the interest rate on its loan to Ireland? We were told the rate was a good one as part of the selling job on it at the time.

When will we hear of the Franco-German plan to integrate the Euroland economies more? Does anyone else get to have  a say on it?

What will the UK demand as the price for its agreement to all this? Can we get some powers and money back?

Why should we believe Greece is a special case?

When will they beef up their intervention funds, so they could withstand a large country needing help?

All this looks like bad news for the better run Euroland states. They will pay more to ailing countries. They will use their own better credit ratings to borrow to lend more to the troubled countries. This could gradually erode their credit status.

Predictably the EU is going for more integration, not less, for doubling the bet on the Euro rather than quitting. They have a lot more to do to create a functioning transfer union. It is going to need much more money to fix, and a further major shift of decision taking from member states governments to the centre. Germany should remember how much it cost and how long it took to fix East Germany, and that was part of the same country. Greece, Portugal and the rest will prove altogether more difficult.

It’s a bit early to open the champagne.


  1. Dr Alf Oldman
    July 22, 2011

    Being a bit cynical, perhaps “bad news”, “good news”, “bad news” continues to sell newspaper in the cut-throat UK market?

    John Redwood raises some valid questions which I endorse.

    I am surprised that John Redwood did not comment on the Greek Marshall type plan? I personally believe that the weak economies of Europe need Marshall type plans – perhaps including the UK? With the IMF endorsing the plans (including the Greek Marshall type plan), does this mean that the Monetarists are losing sway to “Keynesians”?

    Dr Alf Oldman

    1. Javelin
      July 22, 2011

      The profile of the plan looks more like the Baker Plan than the Marshall Plan.

      Allister Heath says in City Am about the Eu leaderships attempt to brand Greek plan as a Marshall plan as “propagandistic nonsense ” and “absolutely no parallels between that and what is happening to Greece”.

      In reality it was more like the “Baker Plan” – and not even the “Brady Plan”. The Baker plan used Japanese surplus to fund debts in Latin America and Africa based on Japanese surpluses (today its North European “surpluses” – rather “credit” because they’re in debt too). A Brady Plan, to introduce zero coupon bonds would have caused a credit default and was rejected. So the Eu leadership had to resort to a poor mans Baker Plan, which was a failure and cost Latin America a decade of growth.

    2. Robert K
      July 22, 2011

      The Marshall plan was an offer to a country destroyed by war that could build on Germany’s natural industriousness. Greece’s economic problems are based on its thirst for debt and its natural idleness (hairdressers being allowed to retire on a state pension at the age of 47 because they work in a high risk industry, for example). The cure for a debtaholic is not more debt – and it ain’t freebies either.

    3. Stuart Fairney
      July 22, 2011

      As I understand it, the Marshall plan was deemed necessary because the post WW2 european economies were either bombed flat, occupied, formerly occupied and looted or utterly in hock to the USA, thus in order to have anyone to trade with the USA doled out the largesse.

      I can’t see how such conditions exist today and who would be “Marshall” anyway ??

      1. Mike Stallard
        July 22, 2011

        When America poured money into Germany for the Marshall Plan it was the richest country in the world. On August 2nd this year, it is all set to announce that it is broke.

  2. Mike Stallard
    July 22, 2011

    Two little niggles bother me – and thank you for your detailed analysis of yesterday which I found very helpful.

    Squeezing Greece into being Germany is either going to be a complete failure, or else it is going to demand brute force. Greeks are not Germans. The last time the “civilized” Italians and Germans used brute force was during Captain Corelli’s mandolin and, let’s be honest, it wasn’t that effective really.

    My second worry is that the EU has now wasted all its efforts on just a hundredth of its gross economy – Greece. Italy, however, is looming. And Spain. Who will pay for them? Between them, they control about a quarter of the whole economy of Europe.

    And the second eleven politicians in charge of Europe aren’t up to the job.

    1. EJT
      July 22, 2011

      The 1st. 11 wouldn’t be up to it either, or they wouldn’t be letting it happen.

  3. norman
    July 22, 2011

    With plans already advancing for a pan-European national minimum wage (set at 60% of the mean wage of each country) there can be no doubt which way things are going. Expect normalisation of tax rates to climb up the agenda too.

    We in the UK will be sucked into things whether we like it or not.

    Again and again I come back to the Reagan quote ‘Freedom is never more than one generation away from extinction. We didn’t pass it on to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children’s children what it was once like in the United States where men were free’

    Will we look back in 40 years time and see this as the start of that extinction or will a cataclysmic event happen that breaks up the EU?

    1. Mike Stallard
      July 22, 2011

      If you are right about the 60% minimum wage, then we can expect a lot more immigration and a lot less industry. We can also look forward to a lot more regulation, inspection and bureaucracy.

      1. norman
        July 22, 2011

        I read this in the latest UKIP bulletin. One of their MEP’s sits on some committee to do with these things and he was writing that one of the main things they are pushing is this EU wide minimum wage. He said that UK businesses were against it (you’d have to be bonkers to be for it) but that the danger was that the UK would ignore the issue thinking that it would be best to leave it til the last minute to intervene but that, as always happens, by this time it would have too much momentum to be stopped.

        It would also be implemented as a directive which means there’s nothing we could do about it.

        Whether this will happen now, or in x years, who knows but the one thing we can be absolutely certain about is that is is planned for some point and that it will happen.

        In the same way that VAT rates are now severely limited by the EU (fuel VAT decrease anyone?) we can expect tax rates and wage rates to be controlled by the EU in the years / decades to come.

        Anyone who doesn’t see this is living in denial.

        1. uanime5
          July 23, 2011

          The mean wage for an adult was £499 per week in 2010 according to ONS. This is £25,948 per year or £13.31 per hour. 60% of this is £15,569 per year or £7.99 per hour.

          As 13.5 million people currently earn less than £15,569 per year a significant part of the population will benefit from this law.

          The EU should ignore businesses, especially the greedy UK ones, and fight to ensure the welfare of their citizens.

      2. uanime5
        July 23, 2011

        Why would we need more regulation, inspection, or bureaucracy when we already have a system in place to ensure minimum wage is paid?

        Also this effects all EU countries so if it’s bad for us it’s equally bad for them.

    2. uanime5
      July 23, 2011

      Good to see the EU doing something useful for a changes. Wages are too low in this country and the Government lacks the courage to stand up to businesses.

  4. Martyn
    July 22, 2011

    I am a simple person with limited knowledge of international finance and so try to reduce what I read and hear regarding Greece and the Euro to simple terms I can understand. So as I see it, Greece is insolvent and to avoid total bankruptcy is being lent a lot of money so as to appear solvent to the world finance markets.
    Borrowing money to pay off debts ent with small chance of paying off the debt is hardly a sensible way of doing business and does little more that defer the day that that the bailiffs arrive at the front door with a seizure order. In the case of Greece, does that mean that the EU bailiffs will have to seize complete financial control (effectively, the governance) of that poor country? Baffles me……

  5. WanderingStar
    July 22, 2011

    I am glad there is at least a temporary fix. Maybe you could consider changing the record now?

    1. Stuart Fairney
      July 22, 2011

      Though we differ on many issues, one can at least say that JR is talking about something relevant not wether such and such ‘celeb’ had their phone hacked.

  6. Steve Cox
    July 22, 2011

    As far as I can gather this rescue mechanism will be funded by substantially beefing up the EFSF and turning it into some sort of nascent Eurozone Treasury. Question: how much will Britain be expected to contribute to this mechanism?

    The Europhiles’ joy may be short-lived, anyway, if the German Constitutional Court rules the bail-outs to be illegal in September. If the German press does a halfway decent job of explaining the financial consequences to its people then I suspect that there will be a lot of unhappiness there about it. Or will the German press be conveniently muzzled for the ‘greater good’, as appears to have happened to the ratings agencies in this case?

    Finally, given the views of many commentators this morning that this is the start of a genuine European fiscal transfer union, and so a sign of the ever-deeper union demanded by the Euro elites, I do start to wonder if the powers-that-be actually planned the Euro this way, knowing that inevitably it must fall apart in the end unless Europe becomes a ‘real’ single fiscal, budgetary and political entity? Are they really that smart?

    1. Chris
      July 22, 2011

      “Are they really that smart?”
      Unfortunately I think they are; at least, the ones whose faces you never see, the ones who are in the background while all the up-fronters like Merkel, Sarkozy, etc stand in the limelight.
      I do not want to see it, but I am suspicious that there are more dirty tricks in the offing. Someone here has already mentioned the idea that Cameron might try and sign us into the euro….and although our good host here would say “no he isn’t”, I’m afraid that I too think that it’s exactly what he’s got in mind. The days of the pound might be numbered. Why we would be signed up to a currency that is crashing is beyond me, but then, who am I but a mere miserable resident in the UK?

      Reply: For heaven’s sake, of course Mr Cameron will not try to sign us into the Euro.

      1. A.Sedgwick
        July 22, 2011

        This is not the wildest suggestion that I have heard. The Euro has remained remarkably strong in the face of the de facto defaults and the EU socialist bandwagon is getting up steam.
        This and the previous Government were/are timid in facing down the blatant demands and bureaucracy of the EU, the £ cannot be allowed to devalue much more without serious effects on our already declining standard of living and it is totally impracticable to envisage the current split personality of countries in and out of the Euro continuing ad infinitum.
        The option will come in the Euro or out of the EU, then maybe we will get the cast iron referendum.

      2. EJT
        July 22, 2011

        He doesn’t have to sign us up. Just entangle us in enough of the bailout payments etc. while failing to cut the deficit , so the the UK public finances become unsustainable. Then we will perceive ourselves to be at the mercy of the European Monetary Fund, or whatever the EU mechanisms get christened.

        1. zorro
          July 22, 2011

          EJT, he’s certainly going about the right way. He won’t put the milk bottles outside no.10 without seeking Clegg’s approval……


      3. zorro
        July 22, 2011

        Of course, we have David Blair’s cast iron guarantee on the matter. What could possibly go wrong….(Pietersen has just scored a very unconvincing hundred. The way he was celebrating you’d think it was his 100th hundred!)


  7. Bryan
    July 22, 2011

    Thanks to the Libdems and Mr Clegg in particular the Coalition will be compliant in whatever the Eurozone/EU wishes to do, whatever it costs us.

    Am I alone in wondering if Mr Cameron leads the wrong party?

    1. Robert K
      July 22, 2011

      no, you’re not alone

      1. Stuart Fairney
        July 22, 2011

        Parties, front benches anyway, don’t matter any more. They are triangulated away and will do more or less the same thing in power. The ‘Democracy’ we enjoy is just a pantomime to keep the plebs quiet, nothing more.

    2. lifelogic
      July 22, 2011

      Certainly not alone – Cameron is clearly a left of centre, pro EU, top down big state thinker. As the BBC is under a duty to be impartial I would have expected them to have attacked him for being to big government, too pro EU, going back on cast iron promises, too green and too top down (government knows best) which is what most sensible people think. But they never do this as those are BBC core beliefs too.

      So they just accuse him of cutting to fast and risking a double dip.
      When he is not cutting at all just taxing the private sector in to zero growth.

  8. Geoff not Hoon
    July 22, 2011

    Mr.Redwood, Haven’t we just moved another step closer to a federalist Europe?

  9. SImon
    July 22, 2011

    There is no political will to get any power or money back. Cameron does precisely the opposite at every opportunity.

  10. G. Tingey
    July 22, 2011

    Quote from Simon Jenkins via “Raedwald”: “German taxpayers may bail out the Greeks, because half the Greeks’ debts are to foreign banks. But these taxpayers will not also bail out the Portuguese, the Spaniards and the Italians. The attempted revival of the Holy Roman Empire is doomed. Luther’s theses will soon be nailed to the doors not of Wittenberg but of the Berlaymont palace in Brussels.”

  11. MickC
    July 22, 2011

    The “markets” like the result because they are extremely short term in their outlook. Provided the problem has been made to go away today, they are unconcerned that it will be back tomorrow-there is money to be made today.

    That is the problem with relying on market reaction-it is no true guide to the underlying real situation. Presumably this is because those in the market are not true investors but merely traders. The underlying banking crisis was obvious to anyone with common sense, but the markets continued to ramp bank shares and were taken by surprise.
    The only reason the “City” gets such a good press is because of its close relationship with the media-the reality is that the City is actually only good at making money for itself.

    1. Robert K
      July 22, 2011

      Markets are simply an aggregation of the actions of market participants. Some of those particpants are short-term traders, some are long-term investors. The direction of prices in a market and the volumes that are traded give good idea of how investors are reacting to events. Right now, it seems to me, markets are reasonably happy with the performance of the non-financial sector and are keen to buy, for example, shares in well run companies. What is freaking out investors is the actions of blinkered idealogues whose obsession with creating a single currency has overtaken rational thinking.
      By the way, the whole point of an exchange for shares, bonds commodities, futures and so on is that it allows short-term decision making. The greater the liquidity the better. So an investor who buys a share in the morning can be confident that he can sell it in the afternoon, if he so wishes. Plenty of investment goes on beyond publicly traded markets.

  12. Acorn
    July 22, 2011

    Probably even too early to open the Retsina, but at least you can use that as a weedkiller. Not only have they kicked the can down the road, they have painted it in Franco-German colours and tied ribbons to it. There is no way Greece will ever pay back these debts; expect civil war, particularly if the Greeks run out of money to pay the military.

    The U.S. may have invented the term “pork barrel” politics but the ruling Greek families took it to the top of Mount Olympus. Spiegel, has an excellent article on the matter; “Generations of Pork”.,1518,772176,00.html

    1. Robert K
      July 22, 2011

      Thanks for the link to a good article – shows how northern European taxpayers are being forced to subsidise a kleptocracy to feed the maw of the euro.

  13. Gary
    July 22, 2011

    The markets always sell the news (or in this case, buy the news). The outcome had already been priced in previously.

    But, as you say nothing has been solved, and so we can expect the markets to resume the march onward to the same beat as previous.

  14. Scottspeig
    July 22, 2011

    Insanity: doing the same thing over and over again and expecting different results. (Albert Einstein)

    Can you pass on this brilliant man’s quote to your Lib Dem leader Cameron and tell him to grow a pair and remove us from this incompetent parasitic group called the EU?!?

  15. Dan Hannan
    July 22, 2011

    The markets will turn soon enough. The EU is simply continuing with the policies that led to this point in the first place.

    1. norman
      July 22, 2011

      Looking at the headlines on the Telegraph site just now seems like reality has set in in less than 24 hours.

      Time to warm up those printing presses.

  16. oldtimer
    July 22, 2011

    The early release draft included a requirement for the EU Commission to come up with a proposal for its own credit rating scheme. Presumably the EU leaders think they can fool the markets by being the judge of their own credit worthiness.

    I am not optimistic that the coalition will extract anything in return for changes in euroland. Mr Cameron reportedly said at the 1922 Committee meeting the other evening that any changes in the UK position would have to be agreed with the LibDems.

  17. Javelin
    July 22, 2011

    Despite what anybody thinks past experience tells me this is going to end up in the courts, because a lot of people have been sold credit insurance and are still holding assets that are below junk.

    Either way there will be a credit event or there won’t. If there is a credit event then banks will lose a lot of money. If there is not a credit event then the Eu Soverign CDS market will change its shape drastically. For the small nations of Ireland, Portugal and Greece I think the CDS price will fall – temporarily and slightly – as tax payers bailouts will be priced in. Spain (France and Germany) will fall as well because of its dependency on Portugal. Taxes in the Eu will have to rise, GDP will be lowered because of Government cuts in the Club Med countries.

    However for Italy I don’t really see the risk profiles changing just because the other PIGS are safe. The Eu can’t afford to bail the Italians out and the risk on Italian bonds was not because of the PIGS or contagion from them. Italian debt was all about productivity and the long term size of the debt. Now that there is going to be large cutbacks in spending in the other Club Med countries I can’t see that helping the Italian economy. Neither can I see productivity in Italiy improving. In fact in the face of the BRIC countries and an aging population it is going to fall. So I think the focus will now shift to Italy – and specifically the Italian banks – where I have predicted for the past year this crisis will come to a head.

    1. Javelin
      July 22, 2011

      Had a few beers in the City and ended up talking to a senior Italian bond trader (yes there are such specialities). The choice sentence was “we are all very nervous … the games up for Italian Bonds”. He was saying Italy had been basically left to it’s own devices and the European Soverign bonds were being traded very much as separate entities. But now he said they are being compared directly with gilts and bunds and they “don’t offer such good value”. He said Italian business “stunk” and not to expect much improvent in “mama and papa” industries. On the critical 7% interest rate barrier being breached and causing a collapse he said “probably, more than 50% chance in the next 2 years”.

      So I would expect Italian productivity and growth to come into sharp focus in the coming months.

  18. Oldrightie
    July 22, 2011

    “What will the UK demand as the price for its agreement to all this? Can we get some powers and money back?”
    I assume, since naivete and Mr redwood are total strangers, this comment was ironic. Cameron will be working with Europe behind the scenes, to determine our signing up to the euro. As far as they are concerned it will be when, not if. The IMF confidence trick proves this. Those extra billions were earmarked for this latest agreement. The meeting yesterday was to rubber stamp a process already secured as shown by our IMF subscription increase prior to yesterday’s banquet.

  19. Oldrightie
    July 22, 2011

    Sorry for the typo, Mr Redwood.

  20. Peter van Leeuwen
    July 22, 2011

    Euroland isn’t China. Democracies can only move slowly, one step at a time.
    Compared to involuntarily uniting a continent, using armies and bombs, this is still a much cheaper and more pleasant long term development.

  21. stred
    July 22, 2011

    Could someone please tell us why the UK, with similar high debts and fiddled government balance sheets (PFI, public pensions, private debt depending on no housing price drop, high inflation, negative interest rates) enjoys lower borrowing costs? And will this continue?

  22. DennisA
    July 22, 2011

    So if I am deep in debt, I can’t afford the mortgage repayments, or the car loan, I go and see the Bank manager and he takes 3% off my interest rate and gives me longer to pay. Right…

  23. Jer
    July 22, 2011

    The Greeks having extracted (effectively) subsidies are precisely how likely to now reform their ways?

  24. Damien
    July 22, 2011

    Ireland had been asking for a 1% rate reduction on its bailout loan but had faced fierce opposition for Sarkosy over their 12.5% corporation tax rate. In the end the Irish now have a 2% cut in their borrowing rate and an extension of the repayment term from six to fifteen years. The Irish Times quoted Toaiseach

    1. Damien
      July 22, 2011


      Enda Kennedy stated in the Irish Times “We’ve achieved a substantial interest rate reduction and greater flexibility in terms of the fund without conditions attached,”

      This means that the Irish Corporation tax rate remains at 12.5% which hopefully will keep pressure on the other EU members to lower their corporation tax rates when they can afford to. If anything this latest development cements Ireland’s low corporation tax rate and will boost more companies moving their HQ to Ireland now that the Sarkosy objection was resolved.

      With a rate reduction of 2% Ireland will receive annual savings of between e600-e800 annually.

      The UK loan to Ireland was based on both goodwill and common sense as our UK banks have £90 billion exposure to Irish debt. It would be extraordinary if the terms of that loan did not reflect the new reality as agreed yesterday. What is certain is that Ireland will not default and early signs of recovery are being reported there, especially in exports. This is good news given the strategic importance of the Irish economy to the UK.

  25. Javelin
    July 22, 2011

    Turns out it wont trigger a credit event.

    In any event last month the head of the ISDA said there was only NET $5Billion Greek Soverign CDS in the market – so this would have meant at worst one cpty would pay out this much. I think the issue here is what happens to the British banks if the Irish take the same deal as the Greeks – so this is some good news for UK banks. Unless it goes to court.

  26. Neil Craig
    July 22, 2011

    Looking at history, the growing Turkish economy, its increasing dominance by Islamist parties, immigration from North Africa & the general mess in the middle east I can think of many worse things the EU can & does spend money on than the Greek army.

  27. Electro-Kevin
    July 22, 2011

    I suppose nothings changed in that ‘…better run countries pay more to ailing countries in Euroland.”

    It was ever thus and many of us have been concerned as to what European expansion brings us except a dilution of wealth.

    This entity has changed beyond all recognition since it was put to the British people. That fact alone should entitle us to an in/out referendum.

  28. Anthony Harrison
    July 22, 2011

    I echo Oldrightie’s implication that when you wrote, “What will the UK demand as the price for its agreement to all this? Can we get some powers and money back?” you were being either tongue in cheek, Mr Redwood, or simply rhetorical. Despite suggestions here and there that Osborne’s agenda might be to use the current contretemps as a lever with which to extract concessions, one has very little faith that he or Cameron are likely to do so on any meaningful scale.
    I read your blog because of your clear-sighted view of economic reality and the succinct, straightforward way in which you set out commonsense political solutions. I’d be delighted (and relieved) to see you as Chancellor. But the latest EU short term delaying tactic – albeit a hugely expensive one for N.European taxpayers – and our government’s likely response, or lack of it, highlights once more the disparity between your position and that of your Party’s leadership.
    For how much longer will you and others such as Daniel Hannan, Bill Cash et al continue to align yourselves loyally with a Party that has let us down so badly and which appears to lack the will to act decisively in this country’s evidently best interests?

    Reply: I was elected as a Conservative and will speak and vote as a Conservative. I do not vote for the Coalition in the Commons if the measure gives more powers or money to the EU

  29. forthurst
    July 22, 2011

    Europe is suffering from a surfeit of commissars and banksters: their interests are in power and wealth; the welfare of the people does not register on their radar. These people have accreted too much influence over our daily lives. One only has to look at some of the rebarbative specimens in full public view without having gone to the City or Brussels and turned over a few stones, to realise that at the very least these people are entirely superfluous to the common good. As far as I’m concerned, a have no problem with a world where Germans will continue to behave like Germans and Greeks likewise; the problem I have is with those that believe they are entitled to regard humanity as ‘production units’ to be homogenised, manipulated and exploited to satisfy their diseased psyches.

  30. Martin Adamson
    July 22, 2011

    Here’s wikipedia’s definition of a confidence trick. “A confidence artist is an individual working alone or in concert with others who exploits characteristics of the human psyche such as greed, both dishonesty and honesty, vanity, compassion, credulity, irresponsibility, naïveté, and the thought of trying to get something of value for nothing or for something far less valuable.”

    By exploiting the vanity, credulity, irresponsibility and naïveté of Europe’s political elite, Greek politicians have just succeeded in pulling off the biggest con trick in the history of the world. The Euro elite could not withstand the humiliation of having the Euro, their pet project fail and would pay any price – with someone else’s money – to prevent it happening. The Greeks knew this and have ruthlessly used it against them.

    From this point on, all attempts at Greek reform will come to an end, and no further debt repayments will ever be made, with the Greeks secure in the knowledge that when the next crisis comes, as it surely will, they will be bailed out again.

    1. cosmic
      July 22, 2011

      But the point of the Euro is that Greece will receive, if not bailouts, transfers, on a permanent, regular basis, and taxpayers eleswhere in the EU are conditioned to accept shelling out. In return the Greek government can’t continue to ply the old trade and has to operate within clear constraints set by a central authority. All rather like the way things work for say, South Dakota in the US, receiving federal funds. The amount of the GDP to be transferred would be larger than in the USA.

      The problem is getting the Greek province of the EU to accept their reduced status and expectations and whoever is paying to keep paying.

      I’m not quite sure how they clear up the current mess of Greek debt and the debts of Portugal and the others. Eurobonds? Basically it all has to be backed by Germany and a few others, which are not bottomless money pits.

      Yes, it has been a con trick, luring countries into a mess of debt, knowing they would take the bait and using it as an excuse to impose a central monetary authority without bothering to ask. It had to be done by a trick, because if they’d asked, people would have said no. The purpose of having a central monetary authority is to have a central political authority, again something which no one would accept if asked, so the Euro is part of a larger subterfuge.

      On a common sense basis, what good can anyone expect to achieve by forcing people into a union, they otherwise would not accept, by deceit?

  31. backofanenvelope
    July 22, 2011

    I liked your headline Mr Redwood. The Germans are also paying the salaries of the priests of the Greek Orthodox Church! I wonder if the German taxpayers know about this?

  32. Bob
    July 22, 2011

    If I owe you €100, it’s my problem, if I owe you €340 billion, it’s your problem.

  33. Norman Dee
    July 22, 2011

    But the Greeks are a special case, they are the most striking example of a country that should never have been even considered for membership of the Eurozone.

  34. davidb
    July 22, 2011

    This sort of intensely important stuff is the kind of thing I once would have expected the national broadcaster to explain to me. But now I cannot trust anything the BBC says and I am left adrift.

    And what is wrong with our country that we have Mr Cable around the Cabinet table while Mr Redwood enlightens us from the back benches and the blogosphere?

    A weekend of internet immersion calls as I try to figure out whats going to happen next.

    But hey, some actors and some footballers got their phones hacked. The big issues in the world clearly dont have much to do with EU policy.

    1. ReefKnot
      July 22, 2011

      Oh but you can trust the BBC. You can trust them to be pro EU, pro Immigration, anti Israeli, anti Military, pro Man Made Global Warming, anti Conservative etc etc. There are many issues you can trust the BBC on. And if you think the BBC are wrong, just pop over to the Guardian for some reassurance.

  35. GJ Wyatt
    July 22, 2011

    Predictably the EU is going for more integration …
    Precisely – this was an opportunity, and they have grasped it.

    But what’s in it for the national leaders who are agreeing to this? They seem more responsive to Barroso-Rompuy than to their own electorates.

    1. zorro
      July 22, 2011

      Absolutely, without the crisus they wouldn’t have the opportunity to further their agenda….makes you under about the prime cause eh?


    2. norman
      July 22, 2011

      Ask Nick ‘pension’ Clegg what’s in it for oblast apparatchiks.

  36. Robert K
    July 22, 2011

    I see you quoted in Parliament today as calling for a referendum. Yes please!

  37. zorro
    July 22, 2011

    Crises….(sorry for spelling at test match)

  38. BobE
    July 22, 2011

    The EU will destroy itself with its own incompetance.
    I may well get my country back and the gravy train will stop. The zombies may have to get real work. What a wheeze……………………………………….

  39. Kenneth
    July 23, 2011

    I think the market was bracing for very bad news and was happy with mere bad news (including my bank). I suspect the market rise was a short term correction.

  40. Robert Spratt
    July 23, 2011

    And down the track, the Greeks will renege on the deal — as certain as night follows day. After all why wouldn’t they given their impeccable record of success in blackmailing the EU.

    And I’ll also bet that no-one has thought to put the screws on them over Cyprus.

    Plus ca change?

  41. lindsay McDougall
    July 23, 2011

    Yes, Greece’s deal is a partial default. And who is to deny Ireland, Portugal, and perhaps Spain and Italy queuing up behind for similar deals?

    I’ll tell you who – the German electorate, who will be absolutely livid with Angela Merkel. How long has she got?

    David Cameron, I am giving you a clear warning. If you commit any UK resources to this nonsense, I will take great delight in giving you the boot at the next election. I did it Heath, I did it to Major, and so did many other people. Tory is a Tory does, especially on Europe.

  42. Fred Bloggs
    July 23, 2011

    John the deal will not trigger CDS as the exchange of Greek bonds for the different proposed instruments is voluntary as opposed to compulsory (not clear if they will get the 90% participation they are hoping for).

    This will damage the CDS market for sovereign debt more than any attempt to control it has. However its ultimate effect could be to increase funding costs if there is no quick and easy way to get hedge the risk other than selling the bonds.

  43. APL
    July 24, 2011

    The French economy doesn’t need austerity.

    Once again, who is the European Union for?

  44. Quietzapple
    July 25, 2011

    Are the Chinese pleased?



  45. Conrad Jones (Cheam)
    July 27, 2011

    Isn’t this just fantastic News for the Banks who will be bailed out by the French and German Taxpayers. The security for these loans are peoples hard work, time and skills, while the Banks magically create fictious money out of thin air inorder to loan it to someone or some Country to obtain Interest Payments.

    The sole purpose of a Bank is to lend “credit” and get interest – the last thing they want to hear is that a loan has been repayed – because it is then removed from their Assets ledger. Much better for them to issue unpayable loans, then issue further loans to keep the debt on their books and even increase the Asset and the Interest Payments, or extend the length of time of the repayments for perpetual interest payments and continued profits, rolling over the debt again and again.

    We get French and German Banks to create money – backed by future Taxation demands on French and German people, and lend this to the Greek People who then continue making interest payments to Greek Banks and Greek Treasury Bill interest payments.

    The authority to create money should solely be with the Sovereign Government and not with Banks as there is every incentive for Banks to create more credit money inorder to receive the interest payments. It’s a vicisious Open Loop Control System which is spinning out of control with no incentive for politicians to even fix the problem for fear that their Election Campaign Funding would suddenly dry up.

    When will the Eurotrash MPs finally admit that this EURO “Experiment” is killing people? When the whole of Europe is on Fire?

    The American Government is just as bad – playing “Chicken” with the Debt Ceiling and still capable of funding Military Expansion around the World.

    Greece has been taken over by a (questionable-ed) Government that is in direct conflict with it’s people – who appear to stupid to get rid of them.

    Perhaps we need monetary reform, don’t you think? What happended to the Bank Charter Act of 1844? If we do not update it – we will be within the crosshairs of the IMF ourselves.

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