Greece and European banks weigh down the Euro area

The news background for the beleaguered Euro area has remained poor. It has not received so much prominence against the competition of the migration crisis, but it remains serious.
The latest easing from the European Central Bank has not resolved the difficulties of credit creation in a zone with too many weak banks. The Bank of Portugal is now being sued over bond changes applied to Novo Banco in Portugal. The Head of the IMF has been undertaking an acrimonious correspondence with the Greek authorities about the lack of progress in their implementation of austerity policies as a prelude to extending further credit to them. The Italian authorities are said to be looking at ways of getting more capital into their weaker banks and relieving them of some of the problem loans that enfeeble them.

The Euro area economy remains mired in unemployment in much of the zone. The Spanish economy has improved a bit but one in five are still out of work. The Greeks are living with one in four out of work. In Greece one in two young people are out of a job and youth unemployment is still at 45% in Spain. Greece needs to borrow more to keep going. The European authorities and the IMF want Greece to make further cuts to pensions, and to press on with privatisations that many Greeks oppose.

The ECB has now set negative interest rates and is offering more cheap money to the commercial banks. All the time it also needs them to raise more cash and capital, which acts as brake on credit expansion. The Greek banks received extra capital in the last bail out package, but were damaged by the last Greek euro crisis.

The Greek crisis has not gone away. The recent flare up with the IMF is over the need for a longer term solution. The IMF appears to think Greece will need debt restructuring, a polite way of saying some of Greece’s large outstanding state debt has to be written off or put onto easier terms. The IMF also argues that there need to be more cuts all the time Greece is struggling with the present interest burden on her debts. It takes more reductions in public spending, more sales of public assets and more tax revenue, given the magnitude of interest charges and the future debt repayment burden.

We may be about to see a re-run of well rehearsed arguments and tensions. Germany is reluctant to give Greece more money, German electors are not in a giving mood. Any write off of debt burdens means in effect that money advanced to Greece by Germany and others ceases to be a loan and becomes a grant. Meanwhile Greece has a new argument to deploy in opposing austerity. The arrival of large numbers of migrants in Greece coupled with closing of borders to the north leaves Greece with substantial financial obligations to cater for the refugees and migrants. If Greece is to house and feed these people on behalf of the Schengen area and the wider EU, shouldn’t she be allowed some relaxation of the financial constraints?

To many in the rest of the EU the UK referendum is an unwelcome distraction from these big problems that swirl around the single currency. Wouldn’t the UK’s exit help the rest concentrate on the problems their currency scheme has created?


  1. Lifelogic
    April 12, 2016

    Indeed a Brexit would indeed help concentrate the mind of the EU or sorting out the complete mess they have made of the Euro area and many banks in the EU.

    A hugely biased Newsnight last night (even by the BBC’s appalling standards), They tried to compare a post Brexit Britain with an disused, derelict, anti-aircraft station in the North Sea off Felixstow. We then had a “representative” group of undecided voters who are asked if they prefer sovereignty to economic benefits, all but one said economics. What a false choice to offer them, the BBC trying to make people think we would lose economically by restoring democracy/sovereignty, the reverse is clearly the case. Without democracy and sovereignty we have little chance or long term prosperity as we are simply unable to act in our own interests.

    Having said that, the more we see of (disobliging comments ed) that is Peter Mandelson then the more Brexit support will grow.

    1. Lifelogic
      April 12, 2016

      Newsnight also kept the huge issue of open door immigration of hundreds of thousands PA totally out of the debate. For many this, and the restoration of some UK democracy, are the two main issues.

      They then asked what the panel thought of when they said “we”. But offered then only the choice of “we Britains” or “we Europeans” (4 each way, surely highly unrepresentative of the UK public I would have expect only one or two in a hundred to say Europe).

      I think most Britains would have thought “we English”, “we Scottish”, “we Welsh”, “we Irish” or “we Citizens of the World”. Perhaps a very few think of themselves as “we Europeans”, but surely none think of themselves as we “citizens of the EU”. The EU is simply not a real Demos on which any real democracy can rest.

      The remain side (including the BBC) deliberately confuse “Europe” with “the EU” and “the single market” with “free trade” every time. They also push the idea that we will have to have open borders, submit to all EU rules and have to pay a fee to trade with the EU. It is all complete and utter nonsense. If anything any fees should go the other way as we buy more from them then they do from us.

      The blatant pro EU bias of the BBC, and all the lefty/pro EU Newsnight presenters and agenda is just appalling. The bias of the academic “experts” the BBC select is very clear indeed too.

      1. Mick
        April 12, 2016

        I also watch the pro eu bias BBC news night and the free run that was given to mandelson by eu loving Evans and amount of times he cut short or interrupted Mr Graylin was diabolical, thank goodness it was put on the bias channel at a late time when decent people are in bed asleep

      2. Know-dice
        April 12, 2016

        My “take” on Newsnight last night.

        Chris Grayling came across Ok, but much too nice compared to (Mandelson ed)

        He got in the “they sell more to us…” bit but didn’t manage to make much headway counteracting the assertion that the EU would hit us with a 10% tariff – That works both ways and the Germans have already said they don’t want a tariff war…

        Mandy was really disingenuous about the way the EU works, suggesting that its the member states that instigate regulations and that it [the EU] only does what its member states want, when clearly its the other way around.

        His [Mandleson’s] only truthful contribution was that our elected representatives and civil servants “Gold plate” regulations handed down from Brussels, which is certainly true and needs to be addressed post Brexit even for our own Parliamentary laws…

        Suggestions that we would have to meet EU standards for anything exported to them, is a red herring. We already do that, so nothing changes and we don’t need to pay for the privilege. We also meet the local standards required for any nation that we export to – USA, Japan, Korea, Australia, New Zealand etc. nothing new or worth worrying about there…

        More strength should be put on the argument that as 1 of 28 we have no influence in what happens in the EU. And there comes a time to say “enough is enough” we can do much better on our own.

        And on a slightly different tack…the GOVERNMENT really needs to confirm that farm subsidies will continue after Brexit on the same basis as they are currently calculated. The Government can state this now, except of course they want to play politics with this, instead of being straightforward and plain honest to the UK public…

        1. Denis Cooper
          April 13, 2016

          This is the impression that Cameron and his allies wish to give:

          Farmers, scientists, anybody else presently receiving money via the EU will find that funding instantly cut off the day after we vote to leave the EU; all the citizens of other EU states who are resident in the UK will face summary deportation, and it will be the same for all UK citizens resident elsewhere in the EU; you won’t be able to pop across to the continent or even to the Irish Republic without a visa; if you do go to an EU country then they will let you die rather than give you any medical treatment; the French will send hordes of illegal immigrants to set up camps in Kent, and there would be nothing that the UK government could do about that; oh, and now there would be a meltdown not just of the UK economy but of the global economy; and so on and so forth, endless lies which this despicable government is using to threaten its own citizens and bully them into voting the way Cameron wants rather than how they may want, all of which are gross and unacceptable abuses of government power at taxpayers’ expense. And this is his idea of how democracy should work …

    2. lifelogic
      April 12, 2016

      I see that yet another failed politician David Miliband is getting in on the remain act too:-

      Leaving the EU would be an act of “unilateral political disarmament”, former Labour Foreign Secretary David Miliband will warn. In a rare foray into UK politics, Mr Miliband – will say a vote to leave would be disastrous for the UK and the world.

      Disastrous? To restore democracy to the UK and have just cooperation with the EU. Why on Earth would it be disastrous, other than for some failed politicians, lawyers and bureaucrats?

      As Miliband says this, and given his record in government, we can be certain that Brexit is the way to go. If we leave they would certainly have us back anyway (if we were ever daft enough to want to go back). We can see this as they are clearly so desperate to keep us in.

      If we fail to leave we will never get another chance to restore UK democracy again.

  2. The Active Citizen
    April 12, 2016

    “To many in the rest of the EU the UK referendum is an unwelcome distraction from these big problems that swirl around the single currency.”

    I agree. However there appears to be growing unease within the EU, leading to bad news being buried in the run up to June. Evidence seems to be mounting that the EU feels unable to enact Directives and new proposals which could adversely affect the result of the UK’s vote.

    It’s impossible for the EU to bury the continuing mismanagement of the migrant crisis. However the eurozone crisis isn’t mentioned on British TV and isn’t ‘telegenic’ – and it’s TV where most voters get their news. It will be interesting to see the extent to which the Eurozone member states can kick the can down the road until after June – indeed, whether the markets let them try once again.

    All serious commentators seem to agree that full fiscal and economic union for EZ countries is required as quickly as possible, and this was laid out in the ‘5 Presidents’ Report’ last year. This would of course involve the effective formation of one state, no matter how this might be dressed up for the increasingly sceptical voters within the EZ. Goodness knows how the Commission, ECB and others will be able to deceive German voters about this, but stranger things have happened in the EU.

    JR, you’re knowledgable in these things – has there ever been a case to your knowledge of a successful currency union being formed without political union?

    Reply No

    1. lifelogic
      April 12, 2016

      The single currency was always a ruse to force a single government onto the EU members. In the days of credit card and instant bank payments there was never any need for a single currency for free trade. People can deal in any currency they choose anyway.

      More to the point has there ever been a single country, similar in size to the EU, with such diverse countries, legal systems, histories, languages and state of economic development that has ever worked?

      Has there ever been a democracy resting on an alleged “demos” with such diverse interests, languages and states of economic development as those of the many EU members and would be members?

      The EU, democracy and self determination are totally incompatible. Proponents of remain must surely know this, they must surely want democracy to be fully extinguished in this way.

    2. Know-dice
      April 12, 2016

      (Mandelson ed)was saying last night on Newsnight that the Euro and Schengen would be the last major EU changes [paraphrase] but that’s just not true, full political union is the desire of the EU and we surely don’t want that and the inevitable cost to the UK population.

      And off topic for today 🙁

      German citizens can get in to Turkey for free whereas UK residents need a visa and pay £20 or £15 on line…

  3. Mark B
    April 12, 2016

    Good morning.

    Our kind hosts last sentence rather underlines what I have been saying recently. We need to look at the EU and BREXIT from the other end and the benefits to countries like Greece should we leave.

    If people really care what goes on and what to help and do good for Europe and Europeans, then they will vote to leave the EU.

    Leaving the EU will remove an obstacle (UK) from further an necessary integration. Naturally other EU countries, especially Germany, would like the UK to remain and, one day, join the Euro. They would like us to remain as we would be a net contributor, as we are now, and would alleviate some of the financial burden on them. How thoughtful – not !

    I think it is time that the arguments for BREXIT are broadened. I also think it time that we highlight the plight of countries like Greece and compare them to countries that are neither part of the Euro or the EU but, had similar financial difficulties at the same time. For example, and one of my favorites – Iceland. I would dearly love to hear a Europhile / Remainer explain to us why Iceland can do so much better than Greece when they are not part of a bigger club and, that simple fact totally contradicts their belief that being part of a bigger club (EU) is better for the UK. Perhaps our kind host might like to offer a prominent Europhile / Remainer (eg Lord Heseltine or Sir John Major, but anyone really) a guest slot / article on his diary. We can then all read their views and comment on them. I am sure many hear would jump at such an opportunity as I am sure they will to put forward their case for remaining.

    1. Lifelogic
      April 12, 2016

      Re. Iceland – Well it helps if you write off your debts and walk of with lots of cash deposits made by people and some daft UK local authorities I suppose.

      Clearly control of your own currency is important.

      If they UK wrote off Blair, Brown & Osborne’s massive £5 Trillion of debts we would save quite a lot of interest PA and be about £80,000 better off each person too.

      Not that I am suggesting we should. But perhaps we should ask Blair, Brown, Cameron and Osborne to put a bit into the pot as they are largely responsible for the increasing debt and failing to control the endless government waste.

  4. Jack
    April 12, 2016

    Unfortunately government deficits across the whole of Europe are far too small for there to be any significant GDP growth. If we want China’s double-digit growth, we need their double-digit government (+state bank lending) deficits!

    In the past we relied on mostly private sector deficits to fund economic growth, but the private sector is now too indebted and is still deleveraging even though the crash was 8 years ago. The BoE / ECB can cut rates all they want, it will only make it worse. Banks lend based on people’s income, which has been stagnant. And there’s no chance of the UK’s trade balance going positive any time soon, so there’ll be no GDP growth coming from there.

    MPs need to start speaking out that someone’s spending is someone else’s income. By definition, where there is a deficit there is a corresponding and equal surplus. For there to be a non-government surplus, there *needs* to be a government deficit. And if we want high GDP growth and prosperity, the private sector needs to be in surplus. Yet the EU is constantly pushing for government surpluses or at the very least lower deficits.

    For those preparing to say how this means more government debt, and how that’s “bad”, they need to understand reserve accounting and monetary operations. In a floating exchange rate system, the national debt is just all of the pounds that the government has spent but not taxed back yet. Therefore the government debt is just a part of the money supply, alongside money created by commercial banks when they lend. Even paying interest on that “debt” is a policy choice for a currency-issuing government, after all why should a pound automatically earn risk-free interest from the government for the virtue of being a pound?

    The *only* risk of too much government deficit spending, or any form of deficit spending for that matter, is inflation. But that’s a non-issue right now. And so the only way to protect our country from socialism is to understand how capitalism really works and cut taxes!

    1. Colin
      April 12, 2016

      “For there to be a non-government surplus, there *needs* to be a government deficit. And if we want high GDP growth and prosperity, the private sector needs to be in surplus.”

      Ye gods, is anyone still stupid enough to believe this pseudo-Keynesian magic money tree nonsense?

      1. Jack
        April 12, 2016

        Then at least include your argument. Can you disprove the basic accounting facts of sectoral balances?

        1. acorn
          April 13, 2016

          Well done Jack, a pretty good explanation of MMT. Unfortunately, you won’t find, but for a couple, anyone on this site, that has any understanding of sovereign fiat currency economics.

          I refer such people to the government accounts, where some realise that the UK appears to be trading insolvently. If it were a Tesco or the like, it would have filed for bankruptcy circa 1953.

          That is, until such people realise that issuing its own sovereign currency from “a magic money tree”, is the only way it can continue to exist; and, never go broke in its own currency.

          PS. The magic money tree takes all its money back to the branch it came from eventually, by a process called taxation. A little bit at a time, every time it moves from one person to another. And, the so called “national debt”, is the non-government sectors “national savings”.

      2. alan jutson
        April 12, 2016


        “Ye Gods..”

        I am lost for words to make any sensible comment on the original post.

  5. Ex-expat Colin
    April 12, 2016

    Simply distribute the money from North to South, so don’t leave please. That about sums it up. That’ll change to distribute South and East if not under way already. More demands for money to come I think.

    I have sent my pamphlet back for proper disposal I hope? Don’t think the post folk were to happy about the dump of that task on them. Does anybody use a brain in Govt?

    1. Lifelogic
      April 12, 2016

      Does anybody use a brain in Govt?

      Yes but their agenda is too look after themselves, keep their pensions and jobs and get their own way.

      This is very different from doing things in interests of the public. Very little that the government do is in the interests of the public, indeed much of that they do is about fining, taxing, indoctrinating, buying votes or generally inconveniencing the public.

  6. Antisthenes
    April 12, 2016

    The EU impoverishing her citizens who would of thought that would happen. So being a member of the EU does not make you more prosperous. One central plank of the reason d’etre of the EU demolished. Another one demolished is security. The borders are not protected or have not been up to now and millions have poured in and that is going to be another heavy financial burden for the EU citizens to bear. Crime and terrorism rising. Foreign meddling(Ukraine and Merkel’s invitation to immigrants to name the two most obvious) by the EU has caused frictions and new major problems that oblige the EU to make deals that are unfavourable for her citizens.

    The primary aim of the EU was a common market. Even that is not as common as it would appear because instead of being a place to trade unhindered and without the costs that international trade normally incurs it is weighted down with heavy regulations and costly obligations. It has also morphed into something quite different not just a market place but a whole political and economic system. A system that cannot possibly be maintained without considerable sacrifice. Apart from a minority EU citizens up to now have been prepared to accept that sacrifice. Although the UK and Holland are now showing that situation is beginning to change and more are finding the sacrifice too burdensome.

    It will not be long before others see the dangers of EU membership like us the more enlightened. For that to happen is for them too open there eyes and come out of their stupor and start seeing the obvious as the evidence is all around them. Evidence that you have listed in your article today and many times previously.

    1. getahead
      April 12, 2016

      “The primary aim of the EU was a common market. ”
      That is not true.
      “The European Union is (was) set up with the aim of ending the frequent and bloody wars between neighbours.”
      All part of the dream of a United States of Europe.

  7. alan jutson
    April 12, 2016

    Papering over the cracks (as they did last time) does not last for long.

    Can Greece cut back any more without the economy going into free fall ?

    Can the EU forever keep on giving Greeks more and more loans, which they will never be able to pay back ?

    Perhaps part of the solution would be to pay Greece some extra money to try and help it manage the Immigration crisis, instead of giving so much to Turkey in that farce of an agreement.

    It may have seemed like a joke post many months ago, when I suggested Greece could sell some Islands to the Germans, so they could develop them for tourism.
    Perhaps not such a farce now, indeed if the Germans purchased Kos it could gain their much needed immigrants (Merkel’s wish) from Turkey without them having to track so far through the EU to gain eventual German Nationalisation.

    What a bloody mess, the sooner we are out of this Club the better.

    In the meantime I can see generous Dave hosing some more of our taxpayer (borrowed) funds in that direction if we vote to remain.

    1. The Prangwizard
      April 12, 2016

      Club? I think of it more as a prison.

      1. Chris
        April 12, 2016

        So does Martin Schulz apparently.

        “He (Schulz) added: “If the British leave the EU, there will be demands for further “escape referendums”.

        Now, Mr Schulz, why should anyone want to escape……!

      2. alan jutson
        April 13, 2016

        The Prangwizard

        “Club? I think of it more as a prison”

        Maybe a prison for some who want to escape, but there are hundreds of thousands trying to get in (open door immigration) they think its a Club, but with someone else paying for their membership.

        Those who are trying to leave are finding the direct debits difficult to cancel.

    2. Lifelogic
      April 12, 2016

      Hosing other people’s borrowed money down the drain seems to be Cameron and Osborne’s strong point.

      That and also doing the opposite of what they promise or say, on low tax at heart, IHT, cast iron, no if no buts to the tens of thousands.

      Still not long for them now, unless the UK public are dafter than I think they are.

      Mind you Dave did at finally defend “aspiration” yesterday at long last.

    3. Martyn G
      April 12, 2016

      I can see the only 3 potential solutions regarding the Greece economic train crash. (i) the EU to impose direct governance of that country by removing the elected government (ii) the EU writes-off the Greek debt so all looks serene or (iii) Greece declares UDI and leaves the Euro.
      Naturally, Germany would have to largely fund solution (ii), which might cause a problem or three for the German electorate and their government.
      I must caveat my thoughts by admitting to a fundamental ignorance of how these things work but I would not be surprised if Greece was at some point taken over and governed by appointed and unelected EU technocrats.

  8. Chris
    April 12, 2016

    O/T, but I maybe you will let me post this about the Referendum leaflet:

    It won’t be, and hasn’t been a fair fight as the government (Cameron) has apparently broken the guidelines issued by the European Commission (Venice Commission) on referendums. Apologies for length of quote but important. This extract of points 13 and 14 is from page 17 of the document:

    Strasbourg, 19 March 2007 CDL-AD(2007)008



    The situation is different in the case of referendums, since it is legitimate for the different organs of government to convey their viewpoint in the debate for or against the text put to the vote. They must not abuse their position, however. In any event, the use of public funds for campaigning purposes must be prohibited in order to guarantee equality of opportunity and the freedom of voters to form an opinion. In addition, the public authorities at every level (national, regional or local), must not engage in excessive, one-sided campaigning, but show neutrality.

    Clearly, this does not mean they will not take a stand, but they must provide a certain amount of necessary information in order to enable voters to arrive at an informed opinion. Voters must be able to acquaint themselves, sufficiently in advance, with both the text put to the vote and, above all, a detailed explanation (point I.3.1.d):

    the best solution is for the authorities to provide voters with an explanatory report setting out not only their viewpoint or that of persons sharing it, but also the opposing viewpoint, in a balanced way;

    another possibility would be for the authorities to send voters balanced
    campaign material from the proposal’s supporters and opponents – corresponding, mutatis mutandis, to candidates’ election addresses made available to citizens prior to some elections.

    Both the text and the explanatory report or balanced campaign material must be
    sent directly to citizens sufficiently in advance of the vote (at least two weeks beforehand).

  9. agricola
    April 12, 2016

    From a none expert point of view it can go two ways, but what price experts, they created the mess.

    The EU can create the USEU in which the rich parts take responsibility for the poor parts in exchange for increasing loss of control by the poor parts. If they do it will be done without the consent of the people, because the EU does not believe in democracy. Witness their attitude over the Dutch referendum on EU membership for Ukraine. I do not believe that the people of Germany, Holland, Belgium, France and other northern states will buy into this. However, witness the political leadership of Holland, their politicians may do so, ensuring long term trouble and uncertainty.

    With the catalyst of a UK Brexit, the EU could begin to revert to the sovereignty of it’s component parts with their own currencies and national financial responsibility. Maybe a core Euro area could remain. This way democracy returns. Then by concentrating on free trade these countries could regain their self esteem.

    Whatever is decided, it will only work if it carries the majority of the people with it. Without consent it will be another version of the current disaster. Current policy is just many fingers in the dam as leaks occur, combined with kicking the can further down the lane.

  10. Denis Cooper
    April 12, 2016

    The eurozone’s difficulty may be the UK’s opportunity.

    Are they really going to want the added economic problems that would come from any disruption of their present lucrative trade with the UK, cutting their exports – the rest of the EU benefited from a £24 billion trade surplus with the UK just over the three months to February, with close to £3 of exports to the UK for every £2 of imports from the UK – and putting at risk more jobs across the rest of the EU than would be at risk here?

    In the worst case scenario, that favoured by our own scaremongering government to try to frighten the electorate into voting to remain in the EU, adding maybe another 5 million to the 20-odd million unemployed they already have?

    Well, perhaps they will; perhaps their governments will decide to be stupid and vindictive; perhaps they will also show themselves to be untrustworthy, by deciding to ignore their continuing solemn obligations under the EU treaties – Articles 3, 8 and 21 TEU; perhaps they will even show themselves to be childish by cutting off all co-operation in other fields such as the fight against terrorism.

    After all this is what Cameron and his allies are implicitly telling us; obviously they must believe that if we dare to tell our “European partners” that we don’t wish to join them on their wild ride to political union then they will undergo a Jekyll and Hyde transformation from being our good friends and allies to being particularly nasty enemies, and they will not be motivated by common sense and financial and other self-interest.

  11. Shieldsman
    April 12, 2016

    While Cameron and his acolytes are dreaming up outlandish claims that visa’s will be required to travel to Europe, if we leave, they completely ignore what is going on in the EU.

    The ‘Britain Stronger in Europe’ campaign team now led by the PM have not explained the workings of the EU, cost and disadvantages such as our Parliaments loss of Sovereignty. To them staying in is statis quo. There is no such thing as statis quo within the EU, just shows how ill informed Stuart Rose, Karren Brady, June Sarpong, all those youngsters jumping up and down in their I’M IN tee shirts, even the PM are. Ask any of them what the future in the EU holds, about the 5 Presidents Report, the Spinelli Group and you will be met with a blank look. Who is Martin Schulz, who is Elmar Bok – never heard of them!!

    The sheer lunacy of Cameron in thinking that he has carved out a separate niche for himself within the EU. The myth that he has reformed the EU and created another world and will guide the 19 Eurozone members away from closer union, Ha Ha. They could all be on a different planet for what they know about the EU. is pro Eu but is informative and critical of events. See – The week when Europe was hit by a perfect storm.
    Things only got worse on Wednesday. First there was the Dutch vote, which forced Prime Minister Mark Rutte to reconsider the EU-Ukraine trade agreement. The referendum did not only revive political turbulence on Europe’s Eastern borders. It also highlighted the widening gap between EU institutions and European voters.

    Indeed, the Dutch referendum highlights a persistent trend for Europeans to vote against any form of EU integration whenever they are given the opportunity to do so. In the summer of 2015, Greek voters already rejected the harsh terms of a third bailout programme meant to fix the country’s finances. And in December, Danes voted against a ‘flexible’ opt-in arrangement on EU justice legislation, choosing to stay away from further integration.

    Things do not brighten much on the economic front either. During a conference held on Wednesday to ‘sell’ Europe as investment destination, policymakers and analysts said loud and clear that Europe’s economic recipe was “not working” to use the words of Swedish former prime minister, Carl Bildt.

    With 22 million people out of work and weak growth figures, the European economy is still in crisis, Juncker admitted at the conference, eight years after the financial meltdown in the US sent global markets into a tailspin.
    “We have to do things better,” Juncker conceded. But despite the numerous calls for a revision of the European growth strategy, the former Luxembourg Prime Minister stuck to the EU’s failed mantra of “fiscal responsibility, structural reforms and investment”.

    “Europe is not capable of dealing with the big crises we face,” summarised Guy Verhofstadt, the leader of the liberal group in the European Parliament, and former prime minister of Belgium.

    Juncker labelled his mandate as the “last-chance Commission”. But his campaign manifesto is incapable of regaining the trust of European citizens, as the EU remains a half-built car heading toward the edge of the cliff.

    For some, including Verhofstadt, it is high time “for another way of Europe” by completing the car and sharing more competences on the economic field, migration and security. However, many Europeans disagree.

    With the EU in turmoil why stay on board for the crash.

    April 12, 2016

    We as a nation are not discussing the EU, its unemployment, economic failure, and the re-institution of its borders, despite a free Government comic book posted through every letterbox. Instead, personal attacks on the parents of Mr Cameron. Across the Pond a similar diversion from discussing economic and political realities. Mr Trump, not holding any political post whatsoever, is the diversion.

    The Panama Papers take the headlines. I hear the massive released details lack references to Americans and American companies. That the 400-journalist group releasing the data are financed and promoted by (named people ed)
    It’s strange the Labour Party’s research department is not on top of this. But they’re busy hunting down everyone’s father. Well,not their own…obviously.

  13. fedupsoutherner
    April 12, 2016

    On Radio 4 this morning David Miliband kept going on about how the UK already had full control over who came in or not and full control over our borders!!!!??? Obviously he wasn’t thinking about the millions of people in Europe who are allowed uncontrolled access to the UK. Only a few hundred thousand every year but who’s worried about that? Not him, he can get out of it when he wants to.

    The whole of the EU is in one big financial mess and the sooner we are out of it the better. I received a brilliant leaflet/small paper from the EFDD group yesterday and it was full of facts about how the EU operates and I was gobsmacked. Talk about fraud and embezzlement on a grand scale. We are being fleeced. The leave party needs to put around a leaflet eventually (when they are allowed to) on similar form. Bring it on. There is so much going on in the EU that the ordinary man in the street hasn’t a clue about including the fact that TTIP will have a big impact on our NHS. As for Germany buying Greek islands, well that leaves even less places to holiday in Europe.

  14. Kenneth
    April 12, 2016

    The problem is that the eu simply has too many crises to fit on the front page. The migrant crisis has knocked the Euro crisis off of the news.

    Until recently the ‘British referendum crisis” knocked both of them off of the news. However, the BBC has cleared the decks with its ‘tax-haven’ campaign dominating coverage.

    On that note, I notice that Mr Corbyn and Mr McDonnell pay a lot less tax than Mr Cameron and Mr Osborne. Not only that, Cameron and Osborne provided a lot more money from private sources whereas most of the tax paid by Corbyn and McDonnell is merely from money that I and my fellow taxpayers gave them in the first place. A bit like us paying the eu and getting a little bit of it back.

    Unfortunately I see no sign that the BBC will launch a “stop the Labour leadership leeching money from the British public” campaign.

  15. oldtimer
    April 12, 2016

    The can is getting bigger, heavier and more difficult to kick down the road. It looks as though there is a three way tussle between the ECB, IMF and German government about what to do next. It seems that the ECB’s negative interest rates policy is not welcome to German savers. It seems the IMF wants the German government and others to take a haircut on loans already extended to Greece before agreeing to yet another bail out package for that country. And it seems that Mrs Merkel is now stuck between a rock and a hard place on these and the migrant issue with her domestic political opponents. It is anyone’s guess how all of this will work out.

    April 12, 2016

    Many here and in Offshore EU view cheap Chinese steel as a dark catastrophe leading inevitably to at least one shiny red boil on the end of everyone’s nose requiring urgent application of magnesium sulphate paste. 1,375,137,837 think the opposite. The population of China as of 1st January 2016, plus and it’s a big PLUS, all those many nations and peoples who would rather buy cheap steel than more expensive EU steel. These nations do not have a Port Talbot, a Rotherham, a Scunthorpe or Sheffield.
    The EU faces a magnificent problem. The UK is getting itself roped into it. It has no choice as an EU member.
    There are calls from the British Labour Party and, others, and the EU, to put tariffs on Chinese Steel. In the words of the legendary Bruce Lee at the commencement of one particular fight in Enter the Dragon : “Boards..don’t fight back!”
    Past experience of trade wars between China and the EU usually end up with EU dignitaries traipsing to Beijing tails between their legs with a plane load of Business People and sitting down and enjoying a traditional Chinese meal and asking pretty please if China would spare a penny or two to buy some rather cute silk ties on the understanding the silk will come exclusively and directly from China.

  17. Bert Young
    April 12, 2016

    The only solution for Greece and the other “poor” countries in the EU is for Germany to take the brakes off its surplus . Germany benefits enormously from a weak currency and has been able as a result to impose its will disproportionately across the EU ; this Bismarckian attitude is a far cry from the harmonious Europe that all the member countries wanted and it will lead , inevitably , to its break up . Prussian dogmatism and the German discipline cannot be imposed across the cultural differences that exist . The IMF are wrong to focus on Greece alone ; the Euro exists and it must be considered as one monetary illness . If Germany doesn’t want to go along with this approach , then it should withdraw and face the consequences .

  18. Denis Cooper
    April 12, 2016

    Off-topic, Wendy Darling writes in a letter published in the Telegraph today:

    “It appears that Mr Cameron is intending to win the referendum by fair means or foul.

    However, should Brexit prevail, does he have any sort of positive alternative way forward for the country, or is he simply planning to walk away?”

    Well, that’s a very good question. Given his admission that the government is making no contingency plans in case it loses the vote, unlike the Wilson government in 1975, while at the same time he keeps asking those who wish to leave the EU to reveal their detailed plans in case they win the vote, I suppose the answer must be that if we vote the wrong way he, or his successor, will only then start work on the alternative.

    Which could be seen as a bit unfair on various groups who are left wondering what will happen to them because the government refuses to say, for example all the citizens of other EU countries already living in the UK, and UK citizens living elsewhere in the EU – see the letter in the FT yesterday which I reproduced on the previous thread – and farmers, who would like to know whether their EU farm payments will stop – presumably on the day after polling day – and not be replaced by any UK payments:

    “UK farmers want clarity on EU funds after referendum”

    This is not just an abandonment of responsibility by our Prime Minister, it seems to even have a touch of a deliberate “scorched earth” policy about it.

    1. Chris
      April 13, 2016

      It serves to make it appear even more alarming to those wavering. If we haven’t got a plan for Brexit, then it is safer to stay in (but there is a Flexcit plan, for example).

  19. Bert Young
    April 12, 2016

    The post code for 10 Downing St., is SW1A2AA . Everyone I spoke to yesterday has returned , or intends to return , their pamphlet .

  20. Denis Cooper
    April 12, 2016

    “Athens has to find more than 5 billion euros ($5.7 billion) to meet its debts in June — and another 5 billion euros in July. That’s 10 billion euros Greece doesn’t have; not, perhaps, a princely sum for a larger, healthier European state but that’s 20 percent of Greece’s annual tax income.”

    “Renewed concern about the European project is just starting to surface in the bond market. Investors are now charging Portugal 3.3 percentage points more for 10-year money than they demand from Germany, a spread that’s well above its six-month average of 2.2 points. Italy’s risk premium rose to 1.3 points last week, up from December’s low of 0.9 points, while Spain is at 1.4 points, up from 1.2 points a month ago. That’s not enough to ring alarm bells; but it’s odd at a time when the ECB is increasing its sovereign bond purchases.”

  21. NickW
    April 12, 2016

    Can we have a fair referendum please?

    Here are the rules from the Electoral Commission;

    Section 5 States;

    “Referendum spending is expenditure on certain campaigning activities (listed on page 6) that are intended to, or are otherwise in connection with, promoting or bringing about a
    particular outcome in the referendum.

    It includes spending on:

     items or services used during the referendum period including those bought before the period begins——”

    Cameron’s leaflet self evidently falls within the definition of Referendum spending; it cannot be considered as a Government leaflet because all those members of the Government who favour “leave” were excluded from any discussion regarding its contents and distribution.

    Spending before the Referendum period begins is specifically included, and the leaflet is clearly designed to “Promote or bring about a particular outcome”

    Cameron has already shown his contempt for the laws which protect the democratic process by election overspending.

    The Country expects the Electoral Commission to do its job, and it expects the Government to obey its own laws.

    1. NickW
      April 12, 2016

      Some may argue that because the leaflet was distributed before the referendum period began, it is excluded from the definition of referendum spending.

      However, as the leaflet and its contents will be “available” to the electorate throughout the referendum period, when it was distributed becomes irrelevant.

      In any event regardless of any legal decisions, the electorate know perfectly well that they are being taken for fools.

      1. alan jutson
        April 13, 2016


        Amazing how quickly the leaflet was produced wasn’t it.?

        Me thinks there was a lot of planning for this to happen a long time ago but was all kept under wraps so that there would be no time for any action to stop it happening.

        This was a very calculated move by those who want to keep us in.

    2. Denis Cooper
      April 13, 2016

      You were only promised a referendum, not a fair referendum!

  22. Mockbeggar
    April 12, 2016

    There was an item on the Today programme this morning about farm subsidies when (if) we leave the EU. Apparently civil servants in Defra are saying that there can be no guarantee that subsidies will continue the same as they do now under the Common Agricultural Policy. They are hiding behind the fact that nobody can predict the future which may, of course, be true. But it is a blatant contradiction of the their own minister Liz Truss who has said quite firmly that farmers will be no worse off if we leave than they are now. They have said nothing about the possibility that the Common Agricultural Policy could be changed at some future date for all we, or they, know.
    In my view they have no business saying anything at all as it is bound to be leaped upon by the BBC and other ‘Remain’ media as hard evidence. I don’t help pay for civil servants to express any political opinion at all, nor to produce expensive biased booklets at my expense.

    1. forthurst
      April 12, 2016

      “Apparently civil servants in Defra are saying that there can be no guarantee that subsidies will continue the same as they do now under the Common Agricultural Policy.”

      Post-Brexit, Defra will need far fewer civil servants despite having to adminster farm support for our farms and farmers. In fact, the Brussels regime is a job creation scheme for civil servants, implementing and adminstering a constant storm of meddlesome and job destroying directives.

    April 12, 2016

    The EU can play at banking , money printing, have EU delegations to this, EU delegations to that but it fails to achieve the penciled-in accession of Russia and its economic allies to EU membership in 2024. Without it, this “great power EU” lacks strategically important raw materials and minerals and the not unimportant physical territory. Few people realise too, Russia is a world leading grain exporter. In short, the EU lacks Empire and is attempting to play that game.. Africa and South American countries are fed up of its attempted bullying.
    The EU met: great pomp and ceremony and with importantly grooved brows decided to punish Russia. Zero result on Russia. She is now stronger. Her leadership, however nasty it may be, is even stronger as a result. The EU suffers on the international scene in trying to punch above its weight against giants. We’ll get knocked down with the EU if we do not leave it.

  24. peter davies
    April 12, 2016

    I read somewhere that Deutche bank was not doing too well either. Any truth in that?

    1. getahead
      April 12, 2016

      Something about derivatives crashing or the possibility of.

  25. ian
    April 12, 2016

    Top eurocrat, time for a EU ban on referendums.

  26. ian
    April 12, 2016

    Last year on shore borrowings of over 70 odd billion with 29 billion in assets sale, extra tax, bank fine money and other things, there no need to look at Greece when have unfolding hear right front of your eyes, it might take longer but out comes the same.
    As you can see with your services,

  27. Denis Cooper
    April 12, 2016

    I’ve just watched the video of your brief debate with Martin Wolf, JR:

    and although I’m biased I’d say that you won easily.

    However … there will be about 46 million people eligible to vote in the referendum, and our opponents will carry on incessantly shouting at the electors that leaving the EU would be an economic disaster – even those who know very well that is not true, because they have no scruples at all about how they push their eurofederalist geopolitical agenda – and you cannot be everywhere calmly debunking their nonsense as you did in the video.

    So what do I say to a family friend who wants to leave the EU in principle but is frightened to vote for that in practice because of the economic disaster which will follow, he has been officially informed, and the neighbour and her husband who are worried about what will happen to his pension fund when the stock market crashes, as they have been officially warned will happen, and more or less the day after polling day?

    Show them the video!

    1. Denis Cooper
      April 12, 2016

      I could in some cases, but it’s not always feasible.

    2. forthurst
      April 12, 2016

      “So what do I say to a family friend who wants to leave the EU in principle but is frightened to vote for that in practice because of the economic disaster which will follow”

      The trade issue is very much a straw man for the BSE lot; by constantly having to counter their lies, they are trying to prevent the Brexiters telling the even moe frightening consequences of a remain vote in terms of a total loss of national sovereignty because the nation itself will be abolished together with all our hard won freedoms starting in 1215 to be adminsterd by the faceless, unelected, undemocratic Brussels regime etc ed

  28. Nig L
    April 12, 2016

    Re Brexit I agree with your point JR, but I wonder whether they are already looking at the small print to somehow ensnare us into contributing to another massive ‘bail out’ exercise?

  29. behindthefrogs
    April 12, 2016

    If the UK leaves the EU the part of the extra money that we pay the EU will not be available to support these countries. We need to recognise that we have a social responsibility and belonging to the EU means that as a richer nation we should expect to pay in more than we receive. It is totally wrong to be using these extra payments as a reason for leaving the EU.

    We accept that within the UK the richer areas contribute to the welfare etc. of the poorer areas, surely the same applies to Europe. Those supporting BREXIT need to explain how we intend to continue supporting the poorer nations in the EU.

    1. Denis Cooper
      April 13, 2016

      No, the same does not apply to “Europe” because “Europe” is not (yet) a country.

      We do have a foreign aid budget and any subsidies to other European countries should come out of that, in competition with other countries around the world.

  30. ian
    April 12, 2016

    and nothing about the riots in France for the last month about putting their working week up from 35 hours to 48 hours, at the moment no one in france has to work mote than 35 hours in a week, the EU and the French government want it put up to 48 hours the same as hear.

  31. Margaret
    April 12, 2016

    Like everything else our prestige, our knowledge our foresight is being brought down to level with the snails in this world. They stand big- mouthedly attempting to find small fault with anything to give them credibility and when because of their incompetence we get taken back 20-30 years we all have to suffer again the same incompetence we managed to get out of. Then they have the cheek to take the credit for reusing our methods. It is my view that Manchester in most areas except for a few highly invested spots of success are 20 years behind other places which have had to progress without the drudgery and heavy slow boot of academia.
    An example is after getting a system which worked well, was efficient and effective and didn’t require writing out forms, eliminated to a great degree , people mistakes, we now have to go back 20 years to those inefficient days of handwriting forms and putting ink on bottles where there is not sufficient room and the ink runs. What took 60 secs is now taking at least half an hour and impacting on patient care. Where do they get these managers from ?Another is a trying to get me to se a system of taking ECG’s which wasn’t efficient when running around hospital wards when we have a perfectly good and accurate system . The Manchester mob want to take us back to those old inefficiencies. Doesn’t it tell you something about their European mind sets . They are trailing 20-30 years behind.

  32. ian wragg
    April 12, 2016

    Nothing, but nothing must get in the way of the European Project. no matter who starves or commits suicide, the gnomes of Brussels will carry on regardless.
    Etc ed
    With the EU, EURO and immigration problems, something has to give soon.
    I see visa restrictions for Ukraine are to be relaxed despite Holland voting no.
    130 million more foreigners coming to a doctors near you……………..soon.

  33. Mick
    April 12, 2016

    Just recieved the the Government referendum pamphlet today, but on reading it I’m sure it was written by the brothers Grimm because it’s full of fairie tales, but wouldn’t want to read it to a child at bed time in case they had a nightmares

    April 12, 2016

    Off Topic; slightly: The Referendum
    1/ Is the EU Referendum ballot going to be conducted properly by persons attending Voting Stations being required to produce proper ID and not just saying ” I am the person living at the address”(?)

    2/ As with Local Elections, will certain people be empowered to “take a sample” ( that is read some ballot papers ) and then deposit them back at the Count whilst the Count is mid-way? And, like in Local Elections, can those persons be members of a Political Party ( or have I and others witnessed something in one voting Local Authority that is not done elsewhere?
    3/ What percentage of voters will be contacted by official representatives ( not Party members or Local Authority workers ) to determine whether in fact their intended vote corresponds to the ballot paper they have supposedly completed? Just a routine check.
    4/The Referendum IS as the comic book sent out by Central Government possibly reads: “Important” (?)

  35. Denis Cooper
    April 12, 2016

    Quite amusing to see the IMF predicting “severe global damage” if the people of this supposedly small and insignificant country vote to change the treaty arrangements it has with its neighbours:

    Why should that be? Oh, apparently it could do that severe regional and global damage “by disrupting established trading relationships”; “Trade agreements would be torn up”, creating an “extended period of heightened uncertainty” as “protracted” negotiations with Brussels on a new deal “weigh heavily” on confidence and investment.

    My goodness, what on earth can we do? I suppose there are really two alternatives:

    1. We don’t vote to leave the EU and so we maintain those “established trading relationships”

    2. We do vote to leave the EU, and somehow it is arranged that nevertheless we maintain those “established trading relationships” even while changing the other things we don’t like.

    But, no, clearly it is beyond the wit of man to devise new treaties which would avert this global economic catastrophe.

    Some may think that “where there’s a will there’s a way”, and if there is a shared political will to do something – like prevent global economic catastrophe – then sovereign countries can always sort out the legalities, but apparently that is not the case.

    1. acorn
      April 12, 2016

      Remember Denis that the IMF operates as an extension of the US State Department, in parallel with the World Bank. This IMF statement, is basically to further US hegemony in Europe against Russia.

    2. JoeSoap
      April 12, 2016

      Also remember we are a country of very little influence, but which can cause severe global damage. Something doesn’t add up here.
      Also the Other Boy Miliband, Mr Obama’s advance party, on radio this morning. Liberal intelligentsia having kittens.

    3. matthu
      April 12, 2016

      Speaking to the BBC this afternoon, Mr. Farage said: “All the [people] who are part of the institutional infrastructure of big government: be suspicious of. They’re all the same people. They’re all interchangeable. They go from being government ministers to working for the IMF to working for the European Commission.

      “What this is about is big politics, big banks, and big businesses trying to bully the British people into staying part of a status quo that is not really working”.

      The news that the IMF thinks Britain leaving the European Union could be a massive blow to the global economy is at odds with how the ‘In’ campaign has been portraying Britain: as too small to go it alone, but somehow big enough to deal such a large economic shock worldwide as a result of Brexit.

      Mr. Farage added in a statement: “The IMF has been hijacked by the architects of the failing EU project, so of course they want the UK to remain.

      “This is all about the big banks and the establishment protecting their interests within a cosy EU cartel that looks after multi-national corporations and dismisses the democratic wishes of the average man, woman or small and medium sized business.

      “The IMF was wrong when it supported the Euro, wrong when it failed to predict the global recession and is wrong now it is trying to scare the British people.

      “The best way for the UK to protect its economic interests is by taking back control from Brussels, cutting burdensome EU red tape and start trading with the wider world – all things the EU bans us from doing as a member of their undemocratic and diminishing club.”

  36. Atlas
    April 12, 2016

    I often wonder with the EU – which is based upon Plato’ “Republic” – whether Plato ever envisaged ‘mere mortal men’ being the Guardians?

    Clearly the mere mortal men running the EU edifice are out of their depth !

    1. forthurst
      April 12, 2016

      “Clearly the mere mortal men running the EU edifice are out of their depth !”

      These creatures are driving us on a long march to an undisclosed destination and they have no concern how many little people have their lives destroyed on the way. Remember the pure evil of the Bolshevik Empire and imagine that similar people are operating behind the scenes in Brussels.

  37. Antisthenes
    April 12, 2016

    I liked this I found it on Cafe Hayek I hope you do to. It made me think if we all thought like this then the EU would definitely be redundant. You have to agree that surplus or deficit current accounts do not matter that much(Cafe Hayek argues that point as well but not here). If not then you will not like it.

    I quote

    Nearly everyone recognizes that murder, robbery, burglary, assault, battery, extortion, and fraud are wrong, and a strong argument may be made that if a government is to exist, it should occupy itself in preventing these wrongs and punishing those who perpetrate them.

    But if I am simply buying from or selling to someone outside the national borders, what possible grounds may be advanced in justice to warrant the use of state force against me for doing so? To say that people should be punished merely for trading freely, by means of taxes or prohibitions, and threatened with prison terms if they violate prohibitionist laws, is an outrageous moral proposal, wholly apart from its economic counter-productivity. The “protectionists” and the state acting on their behalf are the true criminals here, not those who peacefully buy from and sell to whatever trading partners they choose.

  38. ian
    April 12, 2016

    Bank bail-in in Austria.

    1. Monty
      April 12, 2016

      Ian does that mean like the bail-in they had in Cyprus?

      1. Denis Cooper
        April 13, 2016

        Actually I don’t think it is, at least it doesn’t seem to extend to depositors.

  39. Lindsay McDougall
    April 12, 2016

    When I last looked, Greek State debt was heading for 200% of GDP. If Greece won’t leave the EuroZone and the IMF and EU (Germany) won’t extend more credit, there are only two ways out:

    (1) A formal Greek default, with all that will ensue OR
    (2) Convert Greek debt to long term loans at a low interest rate (a back door default)

    Somehow, to avoid loss of pride, I think it will be (2). That will put Greece in the same situation that the UK was in post-WW2. What took everybody so long?

    1. Mark B
      April 12, 2016


      The problem with number 2 is, if they, the Greeks get it, then all the others are entitled to it. The EU is caught between a rock and a hard place of its own making.

      The only solution, is FULL FEDERAL EU. But we are not suppose to talk about that so, Shhhhhh !

      1. Lindsay McDougall
        April 13, 2016

        The creation of a full federal EU would go against centuries of English foreign policy, for the very good reason that we don’t want a single power dominating continental Europe. We are almost duty bound to try to stop it. I wish that the Greeks would reinstate the drachma – but they won’t.

      2. Lindsay McDougall
        April 13, 2016

        You are right about what would happen, and Italy would be at the head of the queue.

  40. ChrisS
    April 12, 2016

    Today the BBC has reached new depths in its biased coverage of the referendum

    First we had Miliband D on Today where there was no really serious attempt to challenge what were very obvious lies. I am using my words carefully. I do not mean misleading statements or half truths, I mean lies. For example :

    “FOM is a spurious argument because today, Britain controls who comes into this country”

    “We’ve got control today over who comes into Britain”

    “On Foreign Policy we have a veto on every single decision the European Union takes”

    Then we have had a succession of other very anti-Brexit news headlines throughout the day with just a few words by Nigel Farage quoted, but no interview. This was the minimum clearly a cynical effort at balance, the smallest they think they thought they could get away with.

    A formal complaint to the electoral commission and the BBC Trust about the conduct of the BBC News and Current Affairs Dept is long overdue.

  41. Gary
    April 12, 2016

    except counterparty risk is global. Bank risk doesn’t stop at the EU border. The next crisis will take the entire world economy down. $700 trillion notional derivatives outstanding (according to the BIS about 5 years ago, probably larger now) doesn’t reside all within the EU.

  42. ian
    April 12, 2016

    Cannot see what the IMF is talking about because everybody going to carry on trying to get as much growth as they can, unless it 10 billion the EU going to lose etc ed

  43. ian
    April 12, 2016

    I see today wet & mad still on about how he behind the EU going after big companies to show their tax in each country to stop them evading tax but still not stop people hear and overseas from opening up companies offshore and putting property in them and only paying 20% in rent as the rent go offshore and no CGT and no IHT, as I said yesterday he is complicity with them in evading this country tax.

  44. David Edwards
    April 13, 2016

    It certainly doesn’t help on the question of trust to hear from leading politicians “I’m Eurospectic, I’m Eurosceptic, I’m Eurosceptic… On no I’m not, I massively pro-EU” and will use all sorts of questionable strategies (I won’t say ‘dodgy’ otherwise I might be asked to leave) to persuade people to Remain. Its just sad, very sad and disappointing.

  45. Lindsay McDougall
    April 15, 2016

    And RBS is dragging down the sterling area. It was originally supposed to return to profit after 5 years but is still making losses after 7 years. This is a typical nationalised industry pattern. In RBS’s case, it has given up a lot of its investment banking because that is regarded as disreputable and risky, but its costs are too great for simple retail banking.

    It badly needs to be run by entrepreneurs under the commercial cosh. These people know what to economise on and where to spend. We should sell RBS now.

Comments are closed.