Will printing money save the Euro?

The Euro is a political project. It may masquerade as a high design created by independent and talented experts, but in the end it will be judged by unruly electorates by whether it helps make them more prosperous or not. The problem for the ECB and the other custodians of the Euro flame is how to reconcile the wishes and needs of the debtor nations with the wishes and needs of the richer surplus countries within the zone. If they get this balance wrong, or fail to meet enough of the legitimate and often conflicting wishes of the two groups, the scheme will perish by the votes of countries driven to elect non believing governments keen to push the Euro too far or even wanting out.

The other way the Euro could be lost is technical incompetence by the governing class. They demonstrated this in 2011 when the Euro was beset by a rolling crisis, as country after country amongst the financially weaker nations experienced large sell offs in their state debt markets, leading to a crisis in how to finance government in these territories.It was demonstrated again when the Cypriot banks got into trouble, and the Euro architects decided not to stand behind the Cyprus Euro or Cyprus banks within the system. They weathered both these crises by compromise and by diluting the pure doctrine of each state and bank having to run itself prudently so it does not strain the system.

The creation of E1.08 trillion will ease some of the tensions within the financial system. There is insufficient money and credit in circulation in several of the weaker states. That is thanks to the need for public and private sector austerity at the same time. The states have been spending too much and have to cut their budgets to cut their deficits, at the same time as the ECB is reining in their commercial banks, cutting private sector credit. The result is mass unemployment and long recessions in the worst affected countries. Printing money and trying to get some of it into these states will be a modest offset to the crunch created by the austerity policies. I have likened it before to the ECB and EU authorities driving the economies of Greece and Italy with the foot firmly on the brake – they are now pressing the other foot on the money accelerator.

The problem comes for them with the politics. The easing may not be enough to transform the economic prospects of the struggling small businesses and the unemployed of Greece or Italy or Portugal. It is quite enough to alarm a lot of Germans. Whilst the ECB claims they have avoided putting German taxes behind most of their interventions, time will tell if that is true. It is likely to mean court case challenges to the actions of the ECB. The main winners of all this are likely to be the lawyers. This action is sufficient to keep the Euro going, but not early enough clarity or action to solve the underlying structural problems of the Euro. It is only when the full weight of German taxes and revenues is put behind the currency and used in the poorer areas that it can start to work properly.

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  1. Gary
    Posted January 24, 2015 at 5:32 am | Permalink

    Call it what it is, QE is a bank bailout.

    QE does not raise inflation outside of the bond market. it raises deflation outside of the bond market. QE increases debt, after 25 years of QE Japan went from the biggest creditor nation to the biggest debtor nation.

    QE is theft.

    • Nick
      Posted January 24, 2015 at 10:05 am | Permalink

      It’s not a bank bail out. In the UK the QE money has gone to the state. It’s spent it. It hasn’t gone to the banks. It’s all about allowing John Redwood to carry on spending the cash.

      See the accounts of the Asset Purchase Facility

      Meanwhile, look at what he’s done the banks.

      1. Penal rates of interest on the bailout money. 35 bn profit and all spent. All the money repaid.

      2. Brown’s share trading. 10 bn down on RBS. Lloyds breaking even.

      3. Taxing capital which means less lending

      4. Changing banking ratios which mean less lending.

      5. Taxing the banks – 600 b n taken since the crash from the banking sector.

      Meanwhile the state’s little scam continues.

      7.3 bn of pension debts hidden off the books. Total true debt of 9 trillion.

      The state is 15 times geared. Never going to be paid.

      Mr Median’s share is 300K and he’s on 26.5K. Never going to be paid.

      They can’t print their way out because its inflation linked debt.

      The annual rate of increase is 636 bn a year .[2010 numbers]. That’s more than taxes now.

      • Gary
        Posted January 24, 2015 at 3:54 pm | Permalink

        The govt bonds are NOT purchase from the govt, the bonds are already prior issued bonds purchased in the secondary market from the institutions that primarily deal in these instruments, the banks !

        When the central bank announces that it will stand ready to buy bonds then the speculators (mostly banks in this case) hoover up all the bonds they can lay their hands on to sell them to the central bank. Money leaves the productive economy and gets trapped up in this bond trade vortex. The banks make stellar risk free profits.

        This is a bank bailout by subterfuge.

        • Denis Cooper
          Posted January 24, 2015 at 7:09 pm | Permalink

          I’m sure I’ve pointed out to you before that in fact the commercial banks are a relatively small class among the normal gilts investors, the largest being pension funds and insurance companies. You could check the truth of this for yourself quite easily by going on the website of the Debt Management Office; I can’t be bothered to do that again and provide information which is then ignored.

          There was certainly some speculative activity before Darling finally announced that he would be turning the Bank of England into a captive gilts investor buying up previously issued gilts from normal gilts investors so that he could be sure of being able to fund his budget deficit by selling new gilts to much the same set of normal gilts investors at much the same rate as the Bank was buying.

          And there’s little doubt that the Bank will have given good prices to participating gilts investors so that they would make a small profit on each overall cycle of selling some of their existing holdings to the Bank but replacing them with new gilts bought from the Treasury, the cycle which JR dubbed the “money-go-round”.

          However disregarding those small transmission losses the net flow of money was from the Bank of England to the Treasury through the gilts market, while gilts flowed in the opposite direction from Treasury to the Bank, or more exactly to a wholly owned subsidiary of the Bank; which is why that subsidiary of the Bank has become the largest single investor in gilts, not a normal but an abnormal, captive investor; and the paramount purpose of the exercise when Darling started it up was to make sure that the Treasury could pay all of the Labour government’s bills in full and on time without the need to make drastic cuts in public spending in the year leading up to the 2010 general election; insofar as that could be described as a “bailout”, it was a “bailout” of a financially incompetent Labour government, not the commercial banks.

          • Gary
            Posted January 26, 2015 at 5:10 am | Permalink

            I am sure that I have pointed out to you before that it doesn’t matter who holds the gilts, it is who is designated to DEAL in gilts. All parties deal with the central bank through the designated broker dealers ie the banks.

            Iow. the banks buy the gilts and sell them to the central bank.

    • Denis Cooper
      Posted January 24, 2015 at 10:10 am | Permalink

      By depressing interest rates QE will tend to push up the prices of all assets, shares and property as well as bonds. But if the QE is implemented by buying up the bonds previously issued by a government running a large budget deficit then it will also tend to push up consumer prices by ensuring that the government can continue with its excessive spending. The £375 billion of new money that the Bank of England indirectly lent to the UK government had that effect; and while there can be arguments over whether it was an extra 8% cumulatively added to CPI as a result, or more or less than that, there is no doubt that the effect was there and contributed to the so-called “cost of living crisis”.

  2. petermartin2001
    Posted January 24, 2015 at 6:23 am | Permalink

    “Will printing money save the Euro?”

    The sort answer is: Possibly

    A longer answer would be: The words “printing money” are usually used by those who don’t like the idea that money should be printed, even though it obviously is, and even though they don’t usually feel they can go as far as advocating that currencies should be put back onto some sort of gold standard.

    So let’s take it that we do all agree that money should be printed. The question is: “how much?” Can we all agree that if government, or governments (in the case of Euroland) print too much, then we’ll have too much inflation? No problem there, I would expect.

    But what if they don’t “print” enough? If too much =inflation, doesn’t it follow that to little = deflation?

    But, having said all that, the extra money does need to go where it is needed to boost demand in the stagnating economies of Spain, Greece, Italy, France etc. It doesn’t need to go to Germany and the Netherlands.

    Is the the announced first round of European QE likely to mean that any new issue of Euros is likely to be targeted effectively? The details haven’t been fully released yet, so I can’t say for sure, but I’m very sceptical!

  3. Peter van Leeuwen
    Posted January 24, 2015 at 6:58 am | Permalink

    As a “never again” project for peace after WWII, the EU has been a political project from its inception in 1952. Part of Britain favoured a divided continent and has continued to strive for this.
    But with what success? Becoming a member and dividing from within? Staying out of Schengen? Staying out of the euro? Pushing to increase the EU membership from 12 to 28? Hoping for the euro to break up with the financial crisis? Casting a “veto” over the fiscal compact? Hoping for a Greek departure? Hoping for an uprising of the German public? Going for a British departure?
    It seems to me that the divisions within Britain itself ought to be of greater concern. One could argue whether the euro as it is now, will always survive. But even if not, it would be replaced by something more adequate, and a return to a divided continent would not likely follow. Sorry for Putin. Sorry for some in divided Britain.

    • JoeSoap
      Posted January 24, 2015 at 9:02 am | Permalink

      You do seem finally to be arguing from the back foot.
      Let’s be clear:
      The majority of Britons want to be part of a trade zone with Europe, and probably actually with North America and the Commonwealth as well
      The majority of Britons would say NO to the Euro, to political integration, to the undemocratic and gargantuan undemocratic European governing institutions which meddle in their daily lives

      Being part of a trade zone with Europe kept the peace in Europe for over 40 years, before the Euro ever existed. We can remain at peace without a Euro, without political integration. Infact those 2 things are more likely to cause conflict than resolve it. You only have 36 hours to wait to see that in Greece.

      • Mike Stallard
        Posted January 24, 2015 at 9:33 am | Permalink

        So that is exactly why we ought to leave the EU now and join EFTA.
        Why is nobody listening to Mr Paterson?
        Why is nobody on EUReferendum?
        Sometimes I despair.

      • Nick
        Posted January 24, 2015 at 10:06 am | Permalink

        So the EU has kept the peace? Are you having a laugh.

        Nothing to do with NATO.

        What about Boznia?

        What about all the wars the UK has been involved in?

      • Peter van Leeuwen
        Posted January 24, 2015 at 10:43 am | Permalink

        @JoeSoap: I hadn’t noticed my back foot, but I understand that it would come as a surprise if any changes in the euro could ever be contemplated by the “EU-fanatics” 🙂 You should realise however that there has always been a very rich and wide spectrum of opinions in countries like mine (the Netherlands) about the best way forward (a neuro and a seuro, splitting North and South? A parallel currency, Eurobonds, whatever). The overriding opinion is that a banking union and more leverage on countries to reform are the best instruments for the time being. Added now some QE. No great fear for the Greek elections either, after all, that is just the democratic process. Personally I hope that Syriza wins. There has been too much emphasis on austerity only, and democracies may now force more emphasis on battling unemployment. The EU is not equal to Germany or the Netherlands, solutions must be found which work for all the countries. The difference between us and some in Britain is that we work towards solutions and success, and some in Britain hope for failure and the EU breaking up.

        • petermartin2001
          Posted January 24, 2015 at 8:11 pm | Permalink

          Peter Van Leeuwen,

          “The overriding opinion is that a banking union and more leverage on countries to reform are the best instruments for the time being. ”

          A banking union is a reasonably good idea but the idea of “reform” of individual countries, is based on a fallacy of composition.

          In a theatre , if a few people stand up, they’ll get a better view. If everyone stands up, everyone gets more or less the same view as before, but they are less comfortable. So, a fallacy of composition would be that standing in a theatre gives everyone a better view.

          In Euroland , Germany and the Netherlands are the ones currently doing the standing. They are exporters, they are taking in money from the rest of the EZ – so they are doing OK. It’s a fallacy of composition that all countries in Euroland can be large net exporters like Germany. But that is what the SGP rules require.

          Euroland is therefore based on a flawed theory. “The overriding opinion” is wrong and has led the Euroland to where it is now. The idea of “reform” or “structural reform”, for individual countries rather than the system as a whole, is based on a fallacy of composition.

          It’s often hard enough to get things to work when theory tells you they should. It’s just about impossible if theory is against you too!

      • Jagman84
        Posted January 24, 2015 at 1:42 pm | Permalink

        “The majority of Britons want to be part of a trade zone with Europe”.
        The majority of British politicians (and big business) want to stay in this dysfunctional club. I would rather be free to trade with the whole world under conditions decided by us, not an unelected official of a competitor nation, at a cost of £55m/day and a £100bn/year deficit. Even with the present constraints, we have a trade surplus with the rest of the world.

    • Edward2
      Posted January 24, 2015 at 9:24 am | Permalink

      Now trying to blame the UK for the failures of the EU elite to bring prosperity to most of its member states. I note Peter.

      I would support the EU project if it were a roaring success bringing employment and wealth and increased freedoms to its citizens but it is not.

      Perhaps if the EU elite had followed the advice of the UK over the years it would not be turning out so badly.

      • Peter van leeuwen
        Posted January 24, 2015 at 4:25 pm | Permalink

        @Edward2: The Netherlands is doing quite ok. I believe that Poland”s GDP doubled. It”s not all bad over here.

        • peter davies
          Posted January 24, 2015 at 7:43 pm | Permalink

          I didn’t realize Poland had joined the Euro

          • Peter van leeuwen
            Posted January 24, 2015 at 10:54 pm | Permalink

            True, but Poland is an EU member, which Edward was mentioning

          • Edward2
            Posted January 25, 2015 at 4:14 pm | Permalink

            I never mentioned Poland, Peter

        • Andy
          Posted January 24, 2015 at 9:16 pm | Permalink

          You’re not doing so hot in Greece through are you ? There the Euro, together with vile Greek politicians, has helped to destroy probably about a third of the Greek economy and brought destitution and despair to vast numbers.

          Sir Winston Churchill died 50 years ago today. He said that given the choice between the ‘United States of Europe’ and the open seas, the British should always chose the open seas. A wise man indeed.

        • Edward2
          Posted January 24, 2015 at 10:59 pm | Permalink

          I suppose two plus Germany out of 28 is good.

    • agricola
      Posted January 24, 2015 at 9:41 am | Permalink

      Your first paragraph is partly true and it was laudable to try to avoid a sequel to WW2. However a stable political entity can only thrive on the back of a successful economy. If only they had been content to harmonise free trade without subsidy, professional interchange and some basic rules of operation across Europe they might have created the basis for a political entity called the EU. Their haste has impoverished great swathes of the European population and now you have the political unrest that will surely follow. Read” Animal Farm” if you need an allegorical explanation.

      Looking around, at this stage of the glorious Brussels totalitarian project, and landing on the UK as a scapegoat for your failure is pathetic. Look within rather than to the UK. The division within the UK is between the metro elite political classes and the electorate. We rather hope that in May the electorate win.

      Do not arrogantly feel sorry for us because we are just beginning to be successful. Free of the political yolk of the EU just watch us fly.

      • A different Simon
        Posted January 24, 2015 at 4:40 pm | Permalink

        agricola ,

        “Your first paragraph is partly true and it was laudable to try to avoid a sequel to WW2”

        By all means try to avoid war but what we have witnessed is a surrender without a bullet being fired .

        Let’s not forget that the British establishment was fully behind Hitler in the 1930’s , including the leader of the Labour party .

        Churchill was a lone voice in the wilderness and they did their best to stop him being heard or as we say now deny him a platform .

        The 1930’s British Establishment have got their wish – the UK currently part of Greater Germany .

        Look what a high brow cabinet we’ve got these days and all the familiar family names in quangos making policy – and implementing directives from overseas .

        Germany do have a lot to shout about and don’t want to be contained .

        Given their stature they will never be satisfied with playing a small part in the world .

        We won’t get anywhere until we relearn how to govern ourselves .

      • peter davies
        Posted January 24, 2015 at 7:45 pm | Permalink

        A typical leftie trait. When their pet projects go tits up – blame others.

        • Lifelogic
          Posted January 25, 2015 at 5:55 pm | Permalink

          as they invariably do!

      • Peter van Leeuwen
        Posted January 24, 2015 at 11:14 pm | Permalink

        @agricola: I don’t blame you for not understanding what the EU is about, but I would point out that I’m not making you (UK) a scapegoat for anything (try and read my contribution again). I’m just pointing out that the eurosceptic part of Britain hasn’t been very successful so far. When I wrote sorry for Putin, sorry for some in Britain, I didn’t mean to express compassion for either of you, so maybe I should have written and you should read ” bad luck for Putin, bad luck for some in Britai”

    • agricola
      Posted January 24, 2015 at 9:52 am | Permalink

      I would add further that the thinking population in the UK do not glory in the failure of a major trading partner or her currency. We know only too well that such failure can lead to the two major problems we were forced to fight against in Europe during the last century. You will find the evidence in numerous cemeteries across France Belgium, Holland and in your facility to make a balls of your freedom at present.

      • Peter van Leeuwen
        Posted January 24, 2015 at 11:22 pm | Permalink

        @agricola: There the old story cones back again ” we gave our lives for you freedom” which should make me infinitely more grateful to Putin, considering the number of Russians who gave their lives in order to topple Hitler.
        But I’m ever so humbly grateful that you don’t glory in the failure (which?) of you major trading partner the Netherlands, which is doing quite well, while being an EU and EZ member. Can’t you even see that you are still hoping that the euro will prove a failure? A hope and prediction that sounds more hollow by the day.

        • petermartin2001
          Posted January 26, 2015 at 12:05 am | Permalink

          PVL, The Netherlands may be doing “quite well” relatively but it can only do that in Euroland by running a 10% trade surplus. What’s the point of that? What’s the point of swapping €10 worth of real goods and services for €9 worth , year in and year out? What’s the point of trading on such an unequal basis indefinitely?

          Furthermore has it ever occurred to anyone in Germany or the Netherlands that you can only do that if someone else runs a deficit?

    • Jerry
      Posted January 24, 2015 at 10:08 am | Permalink

      @PvL; “As a “never again” project for peace after WWII”

      Peter, the debate today is about the Euro/EU, not NATO…

      “[the UK] Staying out of Schengen?”

      Hmm, the problem is not staying out of the Schengen area but there being a Schengen area in the first place, there was free movement of people are trade within member states back in the days of the EEC – yes people and trade might or might not checked at country boarders but was that such a big deal (for hauliers there were and still are international agreements such as TIR to help), now an illegal migrant or contraband can enter the EU in the south or east and might not get noticed until trying to gain access to the UK!

      “It seems to me that the divisions within Britain”

      …and parts of Europe (EU member countries, and now want-to-be member countries) are not divided, there are three of four regional semi devolved areas in Spain alone, Germany also have there regional governments, thus your point was what exactly?

      • Peter van Leeuwen
        Posted January 24, 2015 at 11:30 pm | Permalink

        @Jerry: Do realise that you are very much alone with regard to (staying out of) Schengen. Even Iceland, Switzerland, and Norway wante toe be in Schengen and are part of it now. I have known and experienced the time before Schengen, which was rather different (and I wasn’t a truc-driver.

        With regard to divisions, I expect that in the case of a Brexit, you might get into trouble with Scotland. That is the division which would concern me, if I were a British eurosceptic

        • Jerry
          Posted January 25, 2015 at 5:20 pm | Permalink

          @PvL; I knew European travel before the UK was even a part of the old EEC, so please don’t tell me that the Schengen area is necessary for the free moment of people and trade, nor does it dispense with the need for “EU citizens” to carry either passports or ID cards when not within their own member countries border.

    • alan jutson
      Posted January 24, 2015 at 10:09 am | Permalink

      Peter, you seem to be making an excellent case for us to be kicked out of this Club.

      I wonder why you all actually put up with such a troublesome member ?

      Are we more trouble than we are worth !

      Perhaps not yet.

      • Peter van Leeuwen
        Posted January 24, 2015 at 11:35 pm | Permalink

        @agricola: There the old story cones back again ” we gave our lives for you freedom” which should make me infinitely more grateful to Putin, considering the number of Russians who gave their lives in order to topple Hitler.
        But I’m ever so humbly grateful that you don’t glory in the failure (which?) of you major trading partner the Netherlands, which is doing quite well, while being an EU and EZ member. Can’t you even see that you are still hoping that the euro will prove a failure? A hope and prediction that sounds more hollow by the day.

    • Gary
      Posted January 24, 2015 at 10:13 am | Permalink

      @Peter van Leeweren

      divide and conquer, play from within. The old trick of empire. Straight out of Machiavelli’s playbook. Janus faced, play both sides, sow confusion and discord. If you can’t be bothered to manufacture your way to the top, just destroy everyone else and arrrive at the top by default.

      That most people fail to understand this is a testament to what I believe Henry Ford said, that you will never go broke underestimating the intelligence of the people.

      This is what starts wars.

    • BeeCee
      Posted January 24, 2015 at 10:15 am | Permalink

      Gosh Peter, if you keep blogging in this vein one may just start to think that you are in favour of the EU project and everything it entails?

      Perhaps the best thing since sliced bread – to coin a much used phrase.

      But, if you take off those rose coloured spectacles, you may just find that the EU bread is now very very stale.

      And for an increasing number of people – very difficult to swallow without it being rammed down the throat!

    • forthurst
      Posted January 24, 2015 at 12:36 pm | Permalink

      “Part of Britain favoured a divided continent…”

      Who decided that ‘continents’, in particular, Europe, should consist of one political entity? I don’t recall voting on that one; perhaps it was one of those decisions which are too important to be left to the vagaries of popular sentiment.

    • Joseph
      Posted January 24, 2015 at 12:57 pm | Permalink

      Hello Peter,

      It seems to me that your latest note is a tad ingenuous. Each of the member states has to fight its own corner when it comes to negotiations within the Council of Europe. Your “list” seems to be proof positive that some UK politicians have indeed fought for some things in the belief that they are in the UK national interest; perhaps even of interest to the voters too as a sop to democracy.

      Although sadly you conclude that it has been a political project since 1952, why do the people who run the EU run scared of the voters. If it is such a wonderful construct then why not be inclusive and seek for political and democratic solutions to the many problems. If there’s one thing that really upsets UK voters it’s politicians saying one thing and doing another. We have seen enough of that with the UK parties but to witness time after time, the EU bending and twisting and breaking its own rules hardly helps endear it to any citizen other than those in thrall of the whole politically broken project.

      • Peter van Leeuwen
        Posted January 24, 2015 at 11:44 pm | Permalink

        In the EU I don’t know many examples of politicians saying one thing and doing another, I see that more often in the Netherlands and the UK.
        You seem to think that the EU is a politically broken project. I call that wishful thinking on your part.

    • lojolondon
      Posted January 24, 2015 at 1:28 pm | Permalink

      Peter, we want to live in a democracy and be ruled by elected, accountable parliamentarians in Westminster. We do not want to be managed as one of the richest and most disliked areas in the EUSSR, seen as a source of income, to be abused and bossed around by unelected apparatchiks. Many people in the Netherlands feel this way, as in every country the politicians and media do not, as they are financially driven to ever closer ties with the EU. Why not have a referendum on the EU and see the results?

      • Peter van Leeuwen
        Posted January 24, 2015 at 11:51 pm | Permalink

        @Lojolondon: if you want to be ruled by elected, accountable parliamentarians, why don’t have them decide on your EU membership?
        Don’t you trust a UKSSR (as I suppose you want to call it)

    • Mondeo Man
      Posted January 24, 2015 at 1:52 pm | Permalink

      Peter – We Ukippers don’t wish to divide the EU from within. We simply wish to get out of the EU and wish to stop interfering in other people’s affairs – and they in ours.

      For this we are called little Englanders. A moniker we should be proud of.

      • Peter van Leeuwen
        Posted January 24, 2015 at 11:53 pm | Permalink

        @Mondeo Man: the way democracies work: as soon as you’ll have a majority yor wish will become fulfilled.

  4. Lifelogic
    Posted January 24, 2015 at 7:23 am | Permalink

    Indeed. It is only when the full weight of German taxes and revenues is put behind the currency and used in the poorer areas that it can start to work properly. Even then how will they stop the local governments bloating their state sectors again, with endless pointless over paid non jobs for friends and family.

    You say “The other way the Euro could be lost is technical incompetence by the governing class”. Well we can be fairly sure to get of plenty of this. Often rather nearer “dishonesty, theft and blatant government corruption” than “technical incompetence” alas.

    “It may masquerade as a high design created by independent and talented experts”, Are these the same sort of talented “group think” experts who advised Major to join the ERM and the EURO, push electric car before the technology the there and endlessly tell us grossly exaggerated nonsense about climate change and sea levels?

    Much nonsense talked about the price of milk on Any Questions yesterday, can no one see that the current low price of milk is exactly the way the market tell some milk farmers to farm something else? This is how the market works and should work. Price is the signal needed to match supply and demand. The alternative is over production or queues and rationing like the incompetent NHS.

    Just why do the BBC endlessly have people like Bea Campbell on political programmes, surely they could find someone with something remotely sensible to say instead? Picking someone at random off the street would get you rather more sensible answers.

    • stred
      Posted January 24, 2015 at 10:33 am | Permalink

      A dairy farmer was interviewed yesterday, while selling his prized cows at a market, as he could not continue to make losses. He said he was pleased at the price at auction. As it is difficult to imagine why other dairy farmers would want to buy, I wondered whether our best dairy stock might be heading east, where Russia is aiming to build up production to replace the banned dairy, fruit and veg. If so it would be an ironic consequence of the EU pushing its boundaries. Personally, I am making sure that my milk and cheese is from our farms and not the imported UHT in tetra boxes.

      • Mondeo Man
        Posted January 24, 2015 at 5:33 pm | Permalink

        Stred – What happens to the price of milk when the competition is killed off ?

    • Bazman
      Posted January 24, 2015 at 1:26 pm | Permalink

      You have yet to come up with any ‘sensible’ sources about global warming exaggeration have you? So why do you repeat the same constantly? Are you a PPE graduate and a righty non science bigot? Where do you get these facts?
      Have you seen what the Chinese and Russians are doing? Stupidly and absurdly building a high speed rail link from Moscow to Beijing that could cut Trans-Siberian journey time by 4 DAYS! LOL! New plans will see journey cut to take only TWO DAYS! Costing £144bn They are even planning to eventually reach the USA!
      What are they thinking have they not heard of planes that take a matter of hours? Idiots.

      • Lifelogic
        Posted January 24, 2015 at 8:12 pm | Permalink

        That facts are that it has not warmed for circa 16 years how may more years will it take before you and the government stop believing the exaggerations (if that is they do actually believe them).

        The weather is a complex and chaotic system and we cannot predict it for a few days, let alone 100 years, we do not even know most of the inputs nor the feed backs. It could not be predicted even if we did have all this data.

        We cannot after all even predict the output from the Sun for 100 year with any certainty.

        The weather forecasts show this inaccuracy every day. Start with the very sensible Richard Lindzen if you want an injection of climate realism.

        • Bazman
          Posted January 25, 2015 at 9:27 am | Permalink

          You try to cast doubt on anything you do not believe and muddy the waters hoping it will become unbelievable. This is not sceintific and typical behaviour of extremists. However when you find a source which agrees it is the scientific truth.
          Richard Lindzen is one of the approximately 3 percent of climate scientists who believe the human influence on global warming is relatively small (though Lindzen is now retired, no longer doing scientific research). More importantly, he’s been wrong about nearly every major climate argument he’s made over the past two decades. Lindzen is arguably the climate scientist who’s been the wrongest, longest.
          Where models have been running for sufficient time, they have been proved to make accurate predictions. For example, the eruption of Mt. Pinatubo allowed modellers to test the accuracy of models by feeding in the data about the eruption. The models successfully predicted the climatic response after the eruption.
          Climate modelling does not predict events as you claim it predicts trends. Are you able to tell the differnce between the two?
          Models correctly also predicted other effects subsequently confirmed by observation, including greater warming in the Arctic and over land, greater warming at night, and stratospheric cooling.
          The climate models, far from being melodramatic, may be conservative in the predictions they produce. For example, sea level rise which has been proved by satellite observation.
          No amount of factual evidence will be enough for you on anything you do not believe, you will always want more without providing any of your own which is what we have seen in most of your posts. Extremist right wing beliefs that cannot be refuted in any way no matter what past or future evidence is shown. Harrumphing any proof and when the poster has gone away repeating the same hoping that without refute it will become truth or is truth.

          • Jerry
            Posted January 26, 2015 at 7:38 am | Permalink

            @Bazman; Many better informed people than those on here are successfully muddying the waters when it comes to the promotion and claims about climate change ‘science’, the real problem is that people like you never question that ‘science’ because the left have found a means to achieve their left-wing agenda without calling it socialism (never mind communism…). No one is suggesting that the world goes back to pumping out pollutants like we did in the 1800s early years of the 19th century.

            Not that I’m defending LL, his comment all to often come not from any better understanding than you or I have (and most others here), just a different set of political/social values, his comment about milk price and supply is a case in point – what the milk price shows is how greedy the middle supply chain is and how ill-informed the average shopper is, not how poorly farmers are running their farms, shelf price not being everything and milk is not the only product were the supermarkets are expecting the suppler to take the loss when wanting to use something as a loss-leader to get the footfall through the doors.

          • Bazman
            Posted January 26, 2015 at 7:12 pm | Permalink

            Rants about communism are the sort we expect from global warming deniers and right wing fantasists such as yourself, no evidence to support your so called questioning which is really just denial for any facts you do not like. The socialism we are seeing is in fact communism for the rich. The losses are socialised and the profits privatised. All evidence points to this.

          • Jerry
            Posted January 27, 2015 at 1:19 pm | Permalink

            @Bazman; Try reading the full unabridged UK Green Parties policies and come back and repeat your comment about “global warming deniers and right wing fantasists”. Oh and you might also care to cite some evidence that proves global warming, evidence that is not based on a mere 100 years or so, a mere dot on the page of climate history that shows and proves nothing.

            Global warming and the “fight against CO2 emmisions” have become nothing more than an industry, from climate scientists being funded from public grants to putting PV panels on the roofs, insulating already insulated roof spaces and the like from public funds – it has become a revolving door of easy money, funded from taxation.

            CO2 is a natural element that has been released, indeed needs to be released, into the atmosphere since life first appeared on Earth, long before Man was burning coal, gas and oil nature was releasing vast quantities of CO2 from volcanic eruptions, wild fires and such.

          • Bazman
            Posted January 27, 2015 at 7:31 pm | Permalink

            97% of climate scientists say different Jerry they have in many cases gone into the research in an open mind and often not wanting to believe the facts, but being scientific and credible they have been forced to accept the evidence produced and have has it checked it many times by their peers. You will not no matter how much evidence is produced. What does that tell you?
            I have never denied that many green scams are going on and are often an excuse for more taxation.
            In many cases it would be wise to finance the insulation of property on a street by street basis. I’m a big fan of the insulation route as it not only prevents emissions, but puts the home owner in control of how much energy they need.
            Cars get more efficient every year, but not houses. The developers just do what they can get away with like landlords putting in electric heating to save themselves money and let the tenant pick up the bills in their often uninsulated houses. Do the savings ever get passed on. As if.

          • Jerry
            Posted January 28, 2015 at 3:02 pm | Permalink

            @Bazman; “97% of climate scientists say different”

            Not quite Baz me old mate, that should have been ‘97% of climate scientists, who subscribe to the notion of (man made) climate change say different’.

            “What does that tell you?”

            The polite answer, not a awful lot, in fact nothing at all.

            Bazman, have you never stopped to wondered why all these so called climate scientists tend to use graphs that would suggest the worlds existence is a mere few hundred years old (or at least, nothing before such a time scale is significant) and not a few billion years, or a million odd years ago if only talking about the evolution of Homo erectus?

            As I suggested, if your research grant is dependant on there being “climate change” who is going to not find climate change, how many turkeys vote for Christmas?!…

          • Bazman
            Posted January 29, 2015 at 7:40 pm | Permalink

            Your weasel words will not help you. Misquoting is easy to find on the web as is other information. Have look and stop deluding yourself.
            What a survey said of over 12,000 peer-reviewed abstracts on the subjects of ‘global warming’ and ‘global climate change’ published between 1991 and 2011 found that of the papers taking a position on the cause of global warming, over 97% agreed that humans are causing it (Cook 2013). The scientific authors of the papers were also contacted and asked to rate their own papers, and again over 97% whose papers took a position on the cause said humans are causing global warming.
            They took a position on global warming and agreed that humans were causing it. That is what it tell me and you.
            Now come up with some evidence or stop writing things you cannot prove.

      • Edward2
        Posted January 24, 2015 at 11:04 pm | Permalink

        One sensible source is our own UK Met Office Baz
        It shows still less than one degree rise in the last 115 years.
        The graphs show a plateau since 2000.
        The opposite of predictions made by the peer rdviewed 97%, at a time CO2 is still rising.
        Its a puzzle.
        Any idea whats happenning?

        • Bazman
          Posted January 26, 2015 at 7:57 pm | Permalink

          One school of though says that the Oceans are absorbing the heat. It has not stopped, but slowed.

    • Bazman
      Posted January 26, 2015 at 7:56 pm | Permalink

      The price of milk will fall and the farmers will sell off their land to property developers they don’t want to farm anything else as they have invested in milk and had the rug pulled out from under them. The price will then go skyward due to a shortage of British milk producers what will you have to say about it then? More reactionary nonsense for sure, but maybe all this cheap milk might pull the rug out from under you by providing more cheap nasty property? The only reason you are able to jack up you rents to ever higher rates is due to the shortage of property not your entrepreneurial skills, intellect and the free market as we can clearly see.
      Fat right wing thoughts and stupidity is no way to go through life son.

  5. Ian wragg
    Posted January 24, 2015 at 8:37 am | Permalink

    Regardless of the problems of the Euro many in government would still like to sign up to this ill fated project. What drives politicians to continue this madness is anyones guess
    In years to come it when the truth comes out it will be interesting to see who is benefitting .
    What about the next disaster to unfold. TTIP another secretive and undemocratic act by our ruling elite.

    • Jerry
      Posted January 24, 2015 at 10:31 am | Permalink

      @Ian wragg: “What about the next disaster to unfold. TTIP another secretive and undemocratic act by our ruling elite.”

      Indeed, and if both UKIP and the Greens are against TTIP then you can be sure that something is very amiss…

    • Mitchel
      Posted January 24, 2015 at 1:19 pm | Permalink

      The TTIP,in so far as we know much about, is deeply troubling.I would really like to know what independent voices in the Conservative Party think of it.

      All we are told is that the average household “will” be £Xk better off;Even if true,I suspect that “average” will be the net of the usual few gaining significantly and everyone getting no benefit,whilst having our sovereignty further diminished.

  6. Jerry
    Posted January 24, 2015 at 9:12 am | Permalink

    If the Greeks default, how much of this E1.08 trillion (invented money) will be left in the pot for other QE tasks, I suspect that the ECB has acted far to late to affect what happens in at least one southern member country, although the way the Euro has slipped in value with the GBP we might see another property bubble in the rest – and so the economic boom then bust cycle starts again…

    • Nick
      Posted January 24, 2015 at 11:49 am | Permalink

      That’s an interesting observation. EZ QE is probably all about funding the Greek default.

  7. agricola
    Posted January 24, 2015 at 9:18 am | Permalink

    Printing money can only be a temporary fix. Whatever your political philosophy, it can only be put into practise in a successful economy. The economies of many of the Mediterranean countries, including France have not grasped this, even to the point of fantasy.

    Greece for instance will possibly vote for a party tomorrow that promises the electorate a world of plenty still within the euro with, as far as I can see, no indication of how the plenty is to be created apart from on the backs of other members of the euro. It is a dependency culture gone mad. Their only real chance is to revert to the Drachma and let it find a level where their tourist industry, olives, cheese and wine attract customers. There are plenty of Greek communities around the World with no doubt a few successful entrepreneurs. An economy that is successful might encourage some of them to invest in activity in their homeland.

    Putting the weight of the German’s tax revenue behind the euro will not alter the mindset in the dependant countries. It will only reinforce their dependency and alienate the German electorate. I would question whether there is enough tax take in the German economy to support all these dependant countries. Maybe a solution would be for Germany to move much of it’s low tech industry to these dependant states, and I would include the car industry in this. Then Germany could concentrate on high tech alternatives to generate wealth. It is a very big ask of Germany and her people at a time when her wealth creation is under pressure at home.

    • JoeSoap
      Posted January 24, 2015 at 9:36 am | Permalink

      Good thinking.
      The only way this was ever going to work was for Germany to do what you have put in para 3, and just how many Mercedes plants are there in Greece? Zero, to my knowledge. Siemens, BMW, VW, Porsche, Thyssen-Krupp? Zilch. Czech, East Germany, yes, Greece, no.

      • agricola
        Posted January 24, 2015 at 4:38 pm | Permalink

        In fairness to VW they do have plants in Spain (Seat) and I think Poland (Skoda), Renault are tied in with Nissan and Dacia (Romania). Ford are in Spain as well as Germany. It just indicates that in principal it can be done and could benefit Greece by giving it a means of further enhancing it’s wealth and employing it’s people. It is I think a more acceptable solution than forcing the uprooting of the working population so that they can find work in some of the more successful economies.

    • Bazman
      Posted January 24, 2015 at 1:58 pm | Permalink

      How will austerity help the 50% youth unemployment or low pay for them in Greece? Many who can find work earn $500 a month and pay $300 in rent. An extreme version of here with some saying that there should be No NHS. This will help them further by cutting their tax bills and crate more $500 jobs for us?

  8. Mike Stallard
    Posted January 24, 2015 at 9:36 am | Permalink

    Once again the EU is lying.
    The Germans were promised there would be no shenanigans with the D Mark if they joined the Euro. Many Germans lost the lot in 1923 and again in 1945. They have a folk memory of inflation. Oh – the EU would never do that to them!
    Now it has.
    And we can do business with these people? I think not.

  9. Denis Cooper
    Posted January 24, 2015 at 9:57 am | Permalink

    As I’ve repeatedly warned for something like eight years now, the eurofederalists who control the EU will do whatever they possibly can, legal or illegal, ethical or unethical, to preserve the eurozone intact. There may occasionally be veiled threats from one quarter or another that a certain state could be thrown out of the euro, and the EU, if it doesn’t mend its ways; but the reality is that they will do more or less anything to avoid the precedent of a country which has joined the euro later leaving it, when the plan has always been and still is that every EU member state will eventually join it – as Merkel herself has publicly stated, and making no exceptions for the UK and Denmark, the only two EU member states which are free from the treaty obligation to join it.

    And it is obvious that the eurofederalists who control the three old UK political parties are not only well aware of this but choose to actively support the campaign to Save the Euro; while those who lead UKIP have not always been so clear about it, and in some cases have swallowed the reassuring myth put about that sooner or later the eurozone will spontaneously break up under the weight of its own contradictions.

    But not only has that predicted spontaneous disintegration failed to materialise, in fact the eurozone has continued to expand during its protracted period of crisis; and I see even less reason now than I did eight years ago to doubt that if it is left unopposed then it will eventually fulfil the eurofederalists’ plan by expanding to include the whole of the EU, including the UK if we are still in it; and far from opposing that process, both the last UK government and the present UK government have actively assisted it.

  10. Iain Moore
    Posted January 24, 2015 at 10:02 am | Permalink

    No it won’t .

    The structural problems of the Euro cannot be fixed by printing money, as I don’t believe the structural problems of the world economy is being fixed by debasing our currencies with QE either. They should have stopped the QE policy after initial need to shore up the balance sheets of the banks had been achieved. All the subsequent QE has done is to inflate the assets of the asset rich classes.

    The structural problems that need fixing is the massive surpluses being racked us by some countries , like China and Germany, and the massive deficits being racked up by others, like the US and UK, and where the corrective stabilising mechanisms, currency fluctuations, had been compromised by Germany hiding its surpluses in the Euro and China by fixing its exchange rate to the Dollar.

    Instead of feeding money in at the top with QE that doesn’t trickle beyond asset rich classes, they would be better off giving off everybody 1000Euros and tell them to go out and spend it, that would at least immediate effect on inflation.

  11. English Pensioner
    Posted January 24, 2015 at 10:05 am | Permalink

    Hopefully this will increase the German peoples’ anti-Euro and anti-EU sentiment.
    They still have visions of the inflation that happened between the wars and the way that million mark notes became common currency, you have only to look at the postage stamps of the time to see them with overprints in, first, thousands of marks and then millions of marks. Whatever the banks and politicians say, and claim this might do, it could cause significant problems for Angela Merkel.

  12. Kenneth
    Posted January 24, 2015 at 10:33 am | Permalink

    The arrival of the Euro meant that countries that previously nodded to the East, or America or Mediterranean influences were now forced to tip their begging bowl to Germany.

    This scheme is slowly forcing Germany to be in a place most of her people are scared to go. Germany just wants to be a peaceful team player, yet is being forced to lead Europe, sowing the seeds for another conflict.

    Printing money will make this worse and may bring down a lot more than just the Euro.

  13. formula57
    Posted January 24, 2015 at 10:41 am | Permalink

    There are more than a few economic commentators who consider that the ECB’s QE will make very little difference and they may well be right. The main benefit is perhaps buying even more time for the political leaders but whether much more “extend and pretend” by them is appropriate must be doubted. We should perhaps applaud the German taxpayer in at long last joining most other Eurozone citizens in making material sacrifices to support the Euro. From our perspective in the UK, this ought to benefit us, both economically and politically, so we should cheer and encourage, even if we suspect the Eurozone is only either hastening or delaying its own eventual doom.

  14. Denis Cooper
    Posted January 24, 2015 at 10:48 am | Permalink

    As to the headline question: “Will printing money save the Euro?”, my answer would be that to a first approximation the money printing scheme proposed by ECB will not help to preserve the eurozone intact because the new money will be spread across all of the eurozone states rather than being concentrated on the distressed states. Indeed as I understand Greece will actually be excluded from this scheme, so its government will still have to be propped up by other routes. There may be secondary effects which would help Save the Euro, that if there is an economic stimulus in the parts of the eurozone which are not doing too badly now then they may be more inclined to help the parts which are struggling, and that some of their increased prosperity may spill over, but these would only be indirect and secondary effects. As the stresses within the eurozone have arisen primarily from the growing imbalances between members which should never have been pushed into sharing the same currency obviously the most effective remedy would be for some of them to leave and revert to their own floating national currencies, but just as obviously the eurofederalists controlling the EU will never allow that to happen if they can find any way at all to prevent it.

  15. Bert Young
    Posted January 24, 2015 at 10:52 am | Permalink

    The differences of wealth , economic vigour and sheer capability are too vast in the EZ for it to come together and be treated as one . Germany cannot sustain the development and growth necessary across the EZ . Over time it will weaken its resources down to nil if it continues in its efforts in trying to make it the same all over .

    Of course all the poor countries of Europe want some kind of saviour to come forward and deliver for them the same standards that they envy and see on their television boxes ; but they cannot make the transformation at the pace the disciplines call for . In Greece they have already taken on more debt than they can ever realistically pay off . What Greece wants – and what all the poorer EZ countries want , are “gifts” to immediately lift their lifestyles .

    The QE that the ECB have announced will a) be unlikely to receive the necessary approval of the Bundesbank and b) if it is approved , only be of benefit to those countries in the EZ that have the economic diversity and resources to take on the advantages of low interest . In any event the debt and liabilities have to be paid off eventually . The internationally competitive world will not wait for a “catching up” ; it will march on with ever more increasing technology and change .

  16. alan jutson
    Posted January 24, 2015 at 10:53 am | Permalink

    QE is not a magic quick fix, it is simply another means of theft by devaluation and stealth from the population.

    Its a smoke and mirrors policy designed to cover up the policies and failure of the incompetent.

    Will printing money save the Euro, probably not, but it will prolong it for a while.

  17. Antisthenes
    Posted January 24, 2015 at 11:24 am | Permalink

    QE is to admit that forcing social change/engineering using socialist ideology, policies and practices is economically untenable. Free market capitalism and libertarianism has and does far more to improve lives, prosperity, equalities and social justice. Albeit much more slowly and unevenly than state imposed methods. While the former is not a perfect system(but it is self correcting over time and gradually the unevenness is addressed) it is at least sustainable whilst the latter is not and eventually runs into the problem of not being able to fund itself.

    As for the QE that the ECB is to introduce it is as much to protect France and Hollande’s socialism(a disaster for France that RedED wants to emulate here in the UK), Greece and Italy’s prolific spending and corrupt governance as it is to prop up the euro-zone’s lack of growth.

  18. Tad Davison
    Posted January 24, 2015 at 11:42 am | Permalink

    A good appraisal John.

    I despair of those who still say the EU is a fantastic institution and for it to be successful, all we need is more of it and ever-closer integration. But its apologists are having the ground beneath their very feet eroded. How is it they were so blind for so long?


  19. brian
    Posted January 24, 2015 at 11:46 am | Permalink

    As a nation which is perceived to be one of logical thinkers, Germany has been wilfully deceiving itself. It benefits hugely from having neighbours in a trading zone who cannot devalue their currency to adjust for their economic difficulties and has a centrally imposed cheap money policy which means the neighbours can more easily buy its goods. If the Euro (and the EU) are to be “saved” Germany will eventually have to back it with its own money, accumulated through favourable trading conditions. Nicholas Ridley’s comment about a “German racket” comes to mind.

  20. David Murfin
    Posted January 24, 2015 at 11:52 am | Permalink

    “I have likened it before to the ECB and EU authorities driving the economies of Greece and Italy with the foot firmly on the brake – they are now pressing the other foot on the money accelerator.”
    That will burn out either the brake shoes or the clutch.

  21. Ralph Musgrave
    Posted January 24, 2015 at 11:53 am | Permalink

    JR’s final sentence reads, “It is only when the full weight of German taxes and revenues is put behind the currency and used in the poorer areas that it can start to work properly.”

    Are German taxpayers really likely to hand out blank cheques to Greek tax cheats, and other nefarious south European characters? I think that’s unrealistic.

    • petermartin2001
      Posted January 25, 2015 at 8:59 am | Permalink


      Germany and the Netherlands were happy, regardless of any deficiencies on the part of their customers, \ to recycle their surpluses when they used different currencies to Greece and Spain. They had to. Without them no trade surplus, initially, would have been possible on their part.

      Nothing fundamentally changes now they are using the same currency. Surpluses still have to be recycled. Customers either have the money to pay for German imports or they don’t. Germany has, in its own interests, to ensure that its customers always have the ability to pay for their products.

  22. Gumpy Goat
    Posted January 24, 2015 at 12:03 pm | Permalink

    decent comment for once

  23. stred
    Posted January 24, 2015 at 12:35 pm | Permalink

    QE in this country seems to have roughly equated to the deficit overspend and has replaced the money created by banks, which have been regulated in order to decrease leverage. This is why inflation has been moderate. It has been a way of robbing savers to pay for cheaper mortgages and government spending, while allowing government keep its own borrowing costs down. Where money has found its way into circulation it has mostly ended up in property and other assets, but little has gone to small and medium business expansion.

    This may be popular within a single country, but what are the Germans and Dutch going to make of the southern partners financing excess deficits, bureaucracies and property inflation?

    • Denis Cooper
      Posted January 24, 2015 at 5:44 pm | Permalink

      In the UK the QE money certainly found its way into general circulation.

      That would have been more obvious if we were still in the days when most everyday payments were made with notes and coins, and the Bank had literally printed £375 billion in new banknotes. Then probably many people would have noticed that there was an unusually high proportion of crisp new banknotes going around, turning up in their pay packets, in the cash pensions and social security payments they got from the post office, in their change in the shops, etc.

      Electronic payments have helped to disguise what has been done.

  24. Peter van Leeuwen
    Posted January 24, 2015 at 12:46 pm | Permalink

    Is Goldman Sach’s president another EU-fanatic?? In an interview on the BBC website, he sees it as imperative for Britain to remain an EU member. “having the UK be part of Europe is the best for all of us”, meaning “part of the EU”. OK, he’s only an American banker, but he is also sounding a warning to the UK. He doesn’t say “scrap the euro”, just that QE can only do part of the job for the continent.

    • formula57
      Posted January 24, 2015 at 4:10 pm | Permalink

      Where a Goldmanista says “best for all of us” he will mean best for all at Goldman Sachs – as is only appropriate in the world of the market state.

    • agricola
      Posted January 24, 2015 at 4:48 pm | Permalink

      Goldman Sachs are a big player and as such are in a position to control the game. The sentiments of their president will evolve from self interest not from a higher moral motivation. You need to understand that seriously big business write the rules for their whole industry. Once having done this to their own advantage they do not want the inconvenience of being outside the rule writing book.

      • Lifelogic
        Posted January 24, 2015 at 8:20 pm | Permalink

        Exactly big business and their political “consultants” lobbyists and bureaucrats fix the rules.

  25. behindthefrogs
    Posted January 24, 2015 at 12:51 pm | Permalink

    We need to be concerned about the resulting increase in the value of sterling against the euro. This needs some immediate action by our government to make our exports more competitive and to reduce the impact of cheaper imports from Europe. While we are obviously restrict by the EU in terms of the action that can be taken, there seems to be an inviting solution of reducing employers’ NICs. This would have added advantages of a worldwide effect and also of possibly increasing employment.

  26. Bazman
    Posted January 24, 2015 at 1:37 pm | Permalink

    I see Cameron is still procrastination about a debate with other political parties even though his Green party bluff has been called by the BBC, SKY, ITV and C4 who are threatening to hold the debate with an empty chair? The BBC? I said C4, ITV and SKY too. So what is the left wing conspiracy there then? Cameron knows what will happen and it will be Miliband not Farage who will do the most damage to the Tory boy and his sense of entitlement.
    What would be the reaction of the posters on here had it been a Labour government and Blair? Don’t hold back with you excuses and conspiracy theories against the Tories and Who will start first about lies, cowardice and North Korea? Go on we need a laugh and this is the perfect opportunity for the deluded liars fantasists to have field day.

    • BeeCee
      Posted January 24, 2015 at 4:29 pm | Permalink

      Bro David knows that he would be cannon fodder for all of the other participants.

      He has learnt the lesson from 2010 and would be an idiot to take part.

      Idiot he is not!

      • Lifelogic
        Posted January 24, 2015 at 8:24 pm | Permalink

        He certainly cannot afford to debate Farage on any fair basis as Cameron simply has no rational position to defend on the EU, open door immigration, his ratting, 299+ tax increases, grammar schools or his expensive religious energy lunacy.

        • Bazman
          Posted January 25, 2015 at 10:16 am | Permalink

          Expensive religious energy lunacy?
          Will that include French state owned EDF’s nuclear plant at Hinkly Point which if they get round to building will be make a KW/h costing £7500 after subsidy with no guarantees of generation. Or standby power being bought for £39 per KW/h but when put out for tender being only £19.40. Begging the question how much has been wasted in the past.
          Just windmills?

          • stred
            Posted January 26, 2015 at 3:58 pm | Permalink

            EDF’s nuke at Hinkley wil not make a KWh cost £7500. The cost per kWH will be about the same as wind + inflation. The £7500 is the building or capacity cost to generate a kWh. The cost of wind and EDF nuclear is much higher than present gas generation and we will all have to pay for it. The Green Party would do away with nuclear and fossil fuel, so how do they propose to supply electricity for heating, to replace gas, and other use as at present, when the wind fails for 80% of the time? Burning wood? The UK has about enough wood for a week and the US supplies use the same area as Rhode Island every year.

          • Bazman
            Posted January 26, 2015 at 8:11 pm | Permalink

            Massive construction cost will see the consumer and the government picking up the tab as they did in the 70’s and 80’s
            The claim that nuclear power is or could be cost competitive with alternative technologies has been based on hope and hype, according to Dr Mark Cooper, senior fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School.
            The cost of building new nuclear power stations continues to escalate. When the Government re-visited the cost of new reactors in 2008 it estimated capital costs to be around $2,000/kW. EDF Energy now estimates
            the cost of its proposed Hinkley C reactors at $4,260. Estimates from other parts of the world suggest that $6,000/kW might be a more realistic figure, but Moody‘s Investor Services in the US put the number closer to
            $7,500/kW, while a leading US expert suggests it might even be as high as $10,000/kW.
            In 2008 the Government put the cost of nuclear electricity at around £42/MWh, whereas Citigroup recently
            told the House of Commons Energy and Climate Change Committee that a more realistic figure would be
            around £93/MWh. However, if the costs being discussed in America turn out to be closer to the mark, and a
            more realistic discount rate is used for waste and decommissioning costs the figure could approach as much
            as £250/MWh

      • Bazman
        Posted January 25, 2015 at 10:10 am | Permalink

        The real reason is that he cannot justify what his government has done and will be ripped to shreds for it. Funny how you would not hold the same voiw if it was a Labour leader. What does that tell us?

    • A different Simon
      Posted January 24, 2015 at 4:57 pm | Permalink

      Depends who the Green party send .

      Natalie Bennett could well burst the green bubble from within and Ed Miliband should be the main beneficiary .

      She will struggle to keep up the pretense for an hour and the everyone will see the greens in all their authoritarian , species self-hating foulness .

      • stred
        Posted January 25, 2015 at 5:57 am | Permalink

        How do the Australians manage to import a lot of our best young doctors, plumbers and other useful people but send us extreme lefties like Natalie Bennet and Peter Mandelson?

        • Jerry
          Posted January 25, 2015 at 5:46 pm | Permalink

          @stred; They seem to be sending us those they don’t want themselves, what ever their politics……..

      • Jerry
        Posted January 25, 2015 at 5:44 pm | Permalink

        @ADS; “[Natalie Bennett] will struggle to keep up the pretense for an hour”

        The Greens are brutally frank as to what their policies are, assuming one actually reads the various policy documents. No party will ever have a royal flush of policies for the majority of those who decide elections, and here I’m referring to the floating or disaffected vote, such people will weigh-up what they approve of, what they object to, what are “lines in the sand that can’t be crossed” and what they can live with even though they might object etc. for each party, thus coming to decision about who they will vote for. Do not under estimate the Greens, there are a lot of annoyed voters out there, probably more so now than in 2010.

    • Leslie Singleton
      Posted January 24, 2015 at 5:14 pm | Permalink

      He should state loudly that he is not going to join such a circus, end of story. To hell with the TV Broadcasters, always necessarily trying to set up a spectacle, I could not care less what those taking part look like and would be perfectly happy with a debate on the Radio–an empty podium wouldn’t matter then.

      • Bazman
        Posted January 25, 2015 at 10:03 am | Permalink

        Leslie. Read the post. SKY, C4 and ITV are also talking about hosting debates and trying to hide will not help him even on the radio. You think he should be allowed to hide?

      • Jerry
        Posted January 25, 2015 at 5:52 pm | Permalink

        Leslie Singleton; “I could not care less what those taking part look like and would be perfectly happy with a debate on the Radio–an empty podium wouldn’t matter then.”

        Ever head of what broadcasters call “dead air”, more than 10 seconds of it and many will soon get the message, repeat that every time Mr Cameron would have had microphone time and most people will remember his non-attendance more than what ever anyone else says!

    • Jerry
      Posted January 24, 2015 at 5:29 pm | Permalink

      @Bazman; These debates are far from a reality even now, surely if the SNP and PC are invited then why not the NI parties [1], and as Mr Galloway says, if his “Respect” party puts up candidates across the UK, never mind that it has the same number of MPs in the current parliament as the Greens, why has he not been invited, and what about other political parties that might or might not have candidates across the UK (such as the SLP or even The Official Monster Raving Loony Party?!

      [1] assuming that they are actually willing to actively sit in the Westminster parliament of course…

      • Bazman
        Posted January 26, 2015 at 7:21 pm | Permalink

        He is the leader of one of the two main political parties in this country and the party in power he and the Tories has cut the living standards of millions in this country and have yet to tell us how they intend to improve them. To avoid answering this question and not attending these debates is just wrong and I remind all of you as to what your reactions would be had this been a Labour government? You would all be screaming blue murder as you would have been doing had ANY party tried to stop the bankers.
        The Soviet Union and its deluded supporters are alive and well in this country in particular within the Tory party.

        • Jerry
          Posted January 27, 2015 at 1:45 pm | Permalink

          @Bazman; “Tories has cut the living standards of millions in this country and have yet to tell us how they intend to improve them.”

          The phrase You can lead a horse to water but you can’t force a horse to drink comes to mind. It is not the job of the government to “improve living standards”, at best all they can do is give us mere Plebs (of what ever wealth and class) the tools that allow us to improve our own living standards, that was as true back in 1945 as it is today.

          “and I remind all of you as to what your reactions would be had this been a Labour [leader objecting to the format of the debates]”

          As for the debates, I didn’t agree with them in 2010 and I still don’t in 2015, the format is far to personality rather than policy driven [1] so actually I for one would be cheering if they don’t go ahead – even if it was Ed and not Dave objecting!

          [1] if it wasn’t personality driven then it would not matter who appeared for each party, who leads the party into the election is largely irrelevant as in our electoral system it is quite possible for the party leader to loose their own seat but the party to win a majority (or hold the balance of power)…

  27. Aatif Ahmad
    Posted January 24, 2015 at 1:43 pm | Permalink

    QE doesn’t work. There is little evidence that it does. It was tried in Japan in the 90s and again by Abe but failed in both attempts. We don’t know whether the UK/US rebound in 2013 was due to QE or despite it. QE is a risky strategy – trying to engineer a particular rate of inflation is like trying to dock a spacecraft on to a space station. You may well miss the target massively. Besides QE has not been tried before and we don’t know and can’t measure the risks involved.
    If QE was the free lunch that it’s made out to be it would be quite easy for countries to escape enormous debt burdens without loss of output and everyone would have been doing it.

  28. Margaret Brandreth-J
    Posted January 24, 2015 at 3:07 pm | Permalink

    When many accept that money does not work on its own, the better insight into financial matters will occur.At present it is being treated as something which is superimposed upon society and not an integral part of it.Will the Euro survive QE; well yes if enough people want it to .

  29. Terry
    Posted January 24, 2015 at 4:02 pm | Permalink

    The euro has been wonderful. Alas, only for Germany.
    Germany has boomed within the Eurozone but at the expense of the Southern States, who were never going to match the German production rates and always thus become uncompetitive in a common market place under a common currency.
    Prior to their joining the single currency, these same States had the FX differential to compensate for their inefficiencies but upon joining the euro zone that edge was eliminated and it was never going to be anything but a nightmare for them. Why was this inevitability never contemplated in Brussels? It must have been via another of their mysterious and inept decision making processes.

    If printing money was the solution, there would never ever be a credit problem. No problem in Weimar Germany nor in Argentina nor in Zimbabwe.

    QE has not worked in Japan, the USA and the UK. It has not grown the economy nor increased inflation. Instead, it has exacerbated the situation with increased debt and lowered interest rates which are a root cause of deflation.
    Savers are deterred from spending because they can no longert save and Debtors will not spend as they taking advantage to pay down their debts instead. Easy credit is no longer working in the High Streets but it is increasing National Debt.
    With Gilts interest payments running close to £1 Billion per week and massive overspending in the Public Sector, just how long can this country afford to maintain the farce? About four and a bit months I’d say. Until after the General Election in May. Then the true muck will hit the fan.

    No individual nor company is permitted to borrow extra in the vain hope that the additional funds will prevent bankruptcy. They default – they are shut off from all credit.
    To expect a Credit Card company to loan a defaulting debtor even more money in order to pay back the overdue interest. is simply ludicrous. So why should it be any different for Governments?

    We are supposed to live in a capitalist economy where boom and bust go together. The bust cycle corrects the extravagances of the boom cycle. When CBs and Governments interfere and try to manipulate the centuries old cycle it will always end badly. Worse than it would have done had the nature of capitalism had been allowed to take its own true course.
    And now, despite failings elsewhere, the EU has decided to join the crazy world of money printing. Only the rich and the banks will benefit from this disastrous move. The citizens will just have to pick up the tab further down the road. Again – and nobody will take the blame. Again.
    I look to the next few months and a decade hence with much foreboding.

  30. formula57
    Posted January 24, 2015 at 4:16 pm | Permalink

    Succinctly noted and asked by Mish Shedlock on his glablaeconomicanalysis BlogSpot: –

    •No fiscal union
    •Wildly differing social agendas of member states
    •Wide variances in productivity
    •Wage discrepancies
    •Retirement benefit discrepancies
    •One size fits all monetary policy
    •To make treaty changes every eurozone country must agree
    •Target2 imbalances

    What the hell good would even €5 trillion in QE do to fix those?

    What good would it do if the ECB bought every bond from every country and pushed rates to zero across the board? How would it fix any structural problem?”

    • Leslie Singleton
      Posted January 24, 2015 at 5:26 pm | Permalink

      Yes excellent, but global has of course been garbled

  31. ian
    Posted January 24, 2015 at 8:47 pm | Permalink

    The ECB is like the UK but without shared sovereignty, tax and debt but with a shared currency.
    England uses the other three country in the union to keep it currency cheap for exports and for extra troops in time of war, for this, like in Scotland we give extra money about 1600 pounds per person, government jobs and built north sea oil where you will fined some of the best jobs in the union also a financial infrastructure which includes RBS in one of Scotland biggest uni cities. This is how England keeps the union together with bribes but as we do not export a lot now and troops are not needed and because our empire has collapsed and the union is collapsing under the weight of debt. 9 trillion pounds worth as nick says but i think it more.

    The labour party is a Scottish party which join up with the workers unions under the banner of socialism which the welch MPs liked and also join the labour party to fight the English empire and the elite who run it. Labours big chance come during the second world war handing out socialist leaflets and union boss giving speech to workers at work about NHS, NIs and so on the people loved it. After labour party give Scotland devolve powers a another party called the SNP came along and took power in the Scottish parliament because labour MPs were to busy becoming millionaires and lost control of their power base, just like the torys during the war. The SNP MPs hope to hold sway in the English parliament come may 2015 with over forty Scottish MPs. I say a English parliament because that is what it is and always will be the other three country MPs are just guests to the english parliament, they can be cast out at any time. The reason for calling it a union parliament is because of the old empire and keeping the pound low for exports and so on. The main block on a English parliament is the English treasury.

    Germany is now building their empire called the eurozone and trying to avoid the mistake that England made with shared sovereignty tax and debt. Southern Europeans will never leave the ECB because their think by having the euro currency that makes them Germans, they now think that it their birth right to be Germans and no pretend and extend with QE will not work. The ECB will print 3 trillion euros for country to buy thrir debt back from their banks in EU and still go down the pan with us and the rest.

    Their is not the intelligence to stop it. happy voting.

  32. petermartin2001
    Posted January 25, 2015 at 4:41 am | Permalink

    “It is only when the full weight of German taxes and revenues is put behind the currency and used in the poorer areas that it can start to work properly.”

    I know this statement sounds good and plausible , but is it true?

    Suppose we consider two equal sized countries, who join together to form a common currency union. Prior to the union, Country A has a strong economy and ran a 5% trade surplus with the the rest of the world and also Country B. Country B has a weaker economy and runs a 5% deficit with the rest of the world and also Country A.

    Because Country A has more money coming in to its economy the Government has to run a 5% budget surplus to avoid inflation. (We’ll assume that the population neither save nor de-save). Country B is losing money to pay for imports and therefore runs a 5% budget deficit. (Same assumption about saving/de-saving).

    What happens when we put the two together using the same currency? We’ll have one big country which is neither an importer nor an exporter. (The population still neither save nor de-save.) The total budget of the unified currency zone is now balanced. Even if the zone has two governments each has to run the same budget as before. One 5% in surplus. One 5% in deficit for things to remain the same.

    But neither the taxpayers of country A nor country B are paying anymore taxes than they did previously. But having said that, the government of country A does have to realise that they can’t hang to their budget surplus as they did previously. They do have to give it, not lend it, to country B.

    So the initial statement is TRUE. But the possible implication in the statement that German taxpayers will have to pay more is NOT TRUE. The above argument is somewhat complicated by the fact that Germans are big savers. So whereas they run a large trade surplus, their government surplus is quite small. So this will mean they’ll have to get used to running a deficit, like everyone else, after they have handed over the necessary number of Euros to the “country B’s” of the the Eurozone.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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