Slugger O'Toole

Conversation, politics and stray insights

Cameron hits his own European wall?

Sat 10 December 2011, 1:34pm

If you are wondering, as I have been, what in earth led to the Cameron walkout, I think Bagehot gets close to nailing it here:

By a certain point on Thursday night, I am told, a majority of countries were growing interested in a quick and dirty legal fix, suggested by the president of the European Council, Herman Van Rompuy. The fix was dreamed up by lawyers working for Mr Van Rompuy. They said that a legal device, known as “Protocol 12″, would allow the 27 leaders of the EU to agree most of the new rules and mechanisms for fiscal union in the euro zone by a simple, unanimous decision among themselves.

Suddenly, Germany looked isolated. Mr Van Rompuy, a former Belgian prime minister elected by EU leaders to chair their summits, decided to see if he could sweeten the deal for the wavering EU leaders, and asked Mr Cameron if he would consider dropping some of his requests. This made sense to some leaders in the room. Mr Cameron’s demands were already more than many of his colleagues would tolerate, and Britain had already said publicly it would tailor its demands to the scale of the treaty change on the table. Mr Cameron said he would not lower his ambitions, and that his demands would be the same in the event of Protocol 12 being used, or a full-blown EU treaty.

My colleague Paul, whose insiderly insight into how politics is really done is much sharper than mine, once told me that Gordon Brown’s problem with policy production was that he didnt bring his own people into the deal until the last minute. This was the opposite of Blair, who would only bin a policy after months of collegial work on it, if the focus group numbers were agin it.

It seems to me that wherever your sympathies lie on these issues (and I’m more inclined to trust Cameron over a bunch of crafty Eurocrats), the British PM has failed to build both provenance and intelligence around these issues, and seems to have been forced to withdraw just as soon as he saw the brick wall at the end of the road.

Talking to an Irish friend in Washington last night, Cameron’s biggest problem may be that in walking out (the final card in any diplomatic negotiations) he, and the UK, are no longer seen as strategically relevant to the future of the EU. As yet, it’s not clear whether that’s a good or a bad thing. In Washington politics such a scenario is not viewed favourably.

As a final aside, keep an eye on UKIP’s share if the vote next time out. They’re currently level pegging with the Liberal Democrats in the polls just now. Whatever else about their policy offering (or lack of it) they have a consistency on these matters that Cameron’s withdrawal may yet help reward handsomely.

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Comments (69)

  1. Drumlins Rock (profile) says:

    Mick, ignoring the UK position for a while, will the “pact” actually work? Giving it a 50/50 chance is generous in my opinion,if it dosn’t then is the UK better in than out. The agreement that was made makes me feel very queazy in the powers it has given unaccountable Eurocrats, think I will unearth those old conspiricy theory books!

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  2. Mick Fealty (profile) says:

    Like I said above Drumlin, I just don’t know.

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  3. John Ó Néill (profile) says:

    You think his eurosceptic flank is that exposed that he traded the walkout for leverage of a local micro-party (without an eye to the slightly larger threat from his europhile coalition partners)? There were rumours that a major European bank nearly failed two weeks ago. I wonder if we are hearing everything that is relevant to this, just yet.

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  4. Drumlins Rock (profile) says:

    Its a gamble, however it came about I think it is the better outcome for now, will Britian stand alone for long? I’m not so sure, will any country dare ask their people? has anything actually been solved? From the outside I’m extremly uncomfortable, surely many people will ask questions in the other states?

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  5. Mick Fealty (profile) says:

    Again, a rumours a rumour. WSJ says “Splendid isolation” on its front page, but when you turn to the depth analysis inside it ecomes clear it means isolated, but necessarily splendidly. I don’t get the sense that any of this is as a result of clever shot selection.

    Cameron’s ‘sinn fein’ (h/t Kate) positioning looks like a result of having no other options open to him. We may have to wait three or four years to see how that works out for him. There has always been an unsung virtue to masterly inaction. Its the apparent lack of process that would concern me.

    The same lack of process that’s similarly evident in SF’s own inchoate European policy.

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  6. DC (profile) says:

    Cameron’s ‘sinn fein’ (h/t Kate) positioning looks like a result of having no other options open to him.

    Yes I think that about sums it up – even if he didn’t walk away he would have hit a brick wall anyway – I guess he knows what is coming down the pipes and didn’t want anything to do with it. Much tighter financial regulation is coming which may well see Britain excluded from doing business within the EU unless it plays by the rules; clearly, Cameron doesn’t like these rules so he won’t have to answer to his financial masters in London whenever they complain to him about just how unfair it all is. Rock and a hard place.

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  7. Cynic2 (profile) says:

    I suspect it all depends.

    If the Euro (and EU) survives then it may have been a bad call but personally I put the chances of this at less than 50%. The scale of sovreignty that was signed away by desperate politicians is stunning. I dont believe that, when they realise how far this goes, in many states, their peoples will have it.

    This isnt just a matter =of getting 50% +1 even in those states that need a referrendum. All over Europe there will be significant groups who feel their state and their freedome had just been stolen from under their feet. And when they face severe economic hgardhsip because f German and French decisions on ‘their’ budgets for example, they will react.

    I fear that we are in for a period of deep unrest. I just do not see the EU surviving this – and I speak as a Europhile – but a realistic one.

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  8. Alias (profile) says:

    There isn’t any EU ‘plan’ to solve the economic crisis that its relentless expansionism has created.

    All that Cameron is guilty of is refusing to play along with another deperate EU charade. The EU isn’t even pretending anymore that it isn’t a club for former sovereign nations that are now servile to German and French interests, and that the Germans and the French don’t call the shots.

    Nowhere is it written in any of the treaties that Merkel and Sarkozy can grant exemption to a Transaction Tax to Ireland or refuse to grant it for the UK but that is exactly what these two chancers did. Who gave them the sovereign authority? No nation ever ratified a treaty that put those two in charge.

    There is no plan. What there is in place of a plan is a power-grabbing exercise by the europhile fanatics whose lack of planning has created the mess.

    What is actually occuring is no more than a hoax – a low-grade confidence trick. It is pure desperation which says no more to bond markets than “Please continue to lend your money to bankrupt states because they’re really, really serious about not wasting a single penny of it. By the way, how do you like our new EU President’s palace? It’s a snip at a mere £280 million of your money.”

    It’s really just the crew of the Titanic running around the deck assuring everybody that re-arranging the chairs will save the day.

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  9. Alias (profile) says:

    Incidentally, Enda Kenny’s ‘plan’ to trade fiscal sovereignty for a reduction in interest rates is quite possibly the most stupid idea ever to enter the head of an Irish politician (and that’s quite an acheivement).

    What does he think is going to happen once the ECB starts monetizeing the debt by buying up bonds other than price inflation and interest rate increases?

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  10. Alias (profile) says:

    And in case the dots still don’t join: interest rates increase = mortgages default. Mortgage default = bank losses. Bank losses = recapitalisation. Recapitalisation = more government bonds. More government bonds = more ECB monetization. More ECB monetization = higher interest rates. It’s a spiral that will end in ruin.

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  11. Greenflag (profile) says:

    Cynic 2,

    ‘All over Europe there will be significant groups who feel their state and their freedome had just been stolen from under their feet. ‘

    Up to a point but there are more many many more who believe that their State or Governments are in thrall to the financial sector and the international bankers who have for the past couple of decades used and abused the ‘deregulatory’ climate imposed on world economies by the neo conservative extremists of the right .

    They also understand that individual countries such as Greece or Spain or Italy or Ireland are powerless to take on the ‘international bond traders’ just as much as is the USA or UK or even Germany .We can see this from the Italian ‘bond ‘ rates now hitting 7% .

    The EU 26 assuming it holds together in its course of action represents the only possible ‘defence ‘ in the absence of American or British ‘action’ against the forces of chaotic international finance which care for naught but paper profit gouged from the backs of the worlds middle and working classes the 99% .

    Sarkozy & Merkel will have their work cut out for them . Its a shame that the UK is not with them -choosing instead to defend the ‘banksters’ of the City of London & Wall St :(

    The 26 will either stick together on moves for effective reform or they will be ‘hanged ‘ separately by those forces that brought about this current crisis of financial sector led capitalism.

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  12. BluesJazz (profile) black spot says:

    Greenflag
    Bob hits nail on head…

    http://www.independent.co.uk/opinion/commentators/fisk/robert-fisk-bankers-are-the-dictators-of-the-west-6275084.html

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  13. Mick Fealty (profile) says:

    BluesJazz,

    An awful lot of ideological spleen there and very little useful analysis.

    Try this, from Jon Worth:

    Merkel & Sarkozy: To stabilise the Eurozone we want to agree a new EU Treaty among all 27 Member States.
    David Cameron: I will agree to that only if you add a protocol to the Treaty protecting the City of London, changing some areas of financial service legislation to Unanimity rather than Qualified Majority Voting* (paper summarising Cameron’s proposals here).
    Merkel & Sarkozy: But this Treaty is about the stability of the Eurozone, not about financial services. Why are you raising these issues now?
    David Cameron: I am raising these issues because they are vital for the UK.
    Merkel & Sarkozy: We know that. But we do not want to discuss financial services now. We need to stabilise the Eurozone. So will you help us?
    David Cameron: Not without the protocol.
    Merkel & Sarkozy:  OK, so we will go ahead in the Eurozone without you, because we can, and you knew that was the danger. And as there will be no protocol as a result of us doing this, then rules for regulating financial markets remain unchanged.

    Result: Merkel & Sarkozy get the Eurozone integration that they want, albeit with legal complexity to make it work outside the EU treaties. David Cameron gets nothing, because without the protocol the provisions of the Treaty of Lisbon apply.

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  14. Cynic2 (profile) says:

    Greenflag

    I have to say that I think your analtysios is findamentally flawed and very US / UK centric.

    The problems in Greece are different. In general Greeks dont pay their taxes. They fiddle the books as does the Governmnet. Debt was run up on ‘social measures ‘ and pensions opassed out as electoral bribes. and deliberateley hidden from lenders and the EU.

    Italy has a differents et of issues.

    In Ireland it was a housing bubble. Spain – housing and debt.

    In France we dont know because they are still pretending their banks are OK when everyone knows that they arent.

    Differnt countries. Different problems to different degrees and with different causes. And that is the whole point. Theya re different but their desperate ‘leaders’ just lcoked them in to a dance of economic death with all thsoe ortehr disparate economies.

    Blaming the bank is the current meme but its just nonsense and too glib.Mind you the bond traders will make a fortune as the Euro collapses.

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  15. dodrade (profile) says:

    Britain is isolated only in the sense of being the only turkey in Brussels that didn’t vote for christmas.

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  16. I quite liked this one as a bonne-bouche:

    First of all whoever decided to give Governments of Ireland, Greece, Italy cheap loans and expected them to exercise prudence didn’t do too much homework, and some sort of fiscal oversight would probably have been useful.

    Then I found that pretty-well everything I felt (“thought” is too flattering a definition after the second bottle) and had been saying was listed by Faisal Islam’s “Ten curiosities about David Cameron’s veto”.

    Now, unless the software has been updated, I’ve run out of html-links, so that last one is at http://blogs.channel4.com/faisal-islam-on-economics/ten-curiosities-about-david-camerons-veto/15844

    Onwards and upward

    Nobody has a clue whether this latest “fix” is the last one. My assumption is that, come Monday’s opening bell, a fair number of City-slickers will be betting both-ways-against-the-middle. Doubtless, win, lose or draw, there’s money to be made.

    It’s anyone’s guess on the mid-term political payoff.

    It’s kept the Daily Mail happy, for the moment. The backbench types Simon Hoggart renders as “a cross between Salad Days and the cast of the Plan 9 from Outer Space” will be cheering Cameron to the rafters on Monday.

    Still, Cameron has bet the farm. How does he follow up when the detailed discussions begin (about next March, if I read the press-release aright)? Especially if he’s already vetoed/voted not to be present for the nitty-gritty (which may well involved the FTT/Tobin tax — which wasn’t due on the agenda until … next March or so).

    A [can't be arsed about subscripts] C2H5OH-induced thought: the Antwerp Bourse went belly-up around 1552, which generated the whole pre-capitalist English expansion. Antwerp survives, but Bristol and London flourished. Nothing, though, is immutable. What if the €-area decides to keep its future €-dealings in house? Might 1552 be reversed? Antwerp is up for it (among a whole string of other venues). What price real-estate in Threadneedle Street then?

    If — thanks to Dave getting a spanking in last Wednesday’s PMQs — we have crossed some Rubicon ( a piddling little stream — the Zenne/Senne in Brussels is also pretty well invisible), we’ll have to wait and see.

    There’s that financial-correspondents’ mantra, though: a budget that looks good the day after, has usually gone very, very sour by the following Monday.

    Yep: this one has legs, and a bit still to run.

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  17. Harry Flashman (profile) says:

    There used to be a phenomenon in Australia called the “cultural cringe”, it was were educated Australians were eternally embarrassed by the gaucheness of their own land and could see nothing of merit in their own nation when compared to the “Mother Country” ie Britain. Britain was where proper culture was, Britain was civilization, sophistication and class whereas their own fair land was a backward dustbowl full of hicks and dullards.

    Pathetic wasn’t it? To do down one’s own country in favour of the charms of another alien land, such lickspittles, such creeps. Thankfully Australians have got over their inferiority complex and while still respecting Britain recognize it as equal to their own nation.

    The cultural cringe is however alive and well in the elites of Britain (and substantial parts of the Irish elites too) when it comes to their relations with Europe. Ooh, how the BBC shrieks like a maiden aunt at the sight of a mouse, pass the smelling salts to the Guardian editorial board;

    “Britain is ISOLATED! ISOLATED! I tell you, oh the horror! Oh the Humanity!”

    Being isolated from the slo-mo Euro train wreck is precisely the situation one should hope to be in. The ordinary populations of Europe, you know the people whose opinions nobody ever cares to ask, are not looking smugly at Britain saying “pathetic island monkeys, isolated again”, they are looking wistfully at Britain and wishing their nations could be as isolated too.

    Europe is finished, Europe is dead if it had time to stiffen. Europe is last century’s story and what a ghastly story it was.

    Europe is the place full of crumbling ruins, populated by aging Europeans and vigorous young men from North Africa and the Turkish Anatolia which will be visited by wealthy Asians in the future to learn how not to run a society.

    I’m not convinced Britain will be any better, but it couldn’t be any worse not shackled to that particular corpse.

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  18. BluesJazz (profile) black spot says:

    Just a link to the Storyville ‘Inside Job’ film, you can form your own point of view:

    http://www.bbc.co.uk/iplayer/episode/b0183l0t/Storyville_20112012_Inside_Job/

    Anyone who has seen ‘Enron: The smartest guys in the room’ will get the deja vu.

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  19. Frustrated Democrat (profile) says:

    The EU isn’t working, it is bureaucratic nightmare full of corruption, the Euro is a disaster. Merkel is now running the 26 although her nation doesn’t want the Euro any longer.

    Whoever thinks the PM was wrong to protect the UK from future raids by Merkel and Sarcozy on the UK’s financial sector has completely lost the plot.

    Ed Milliband’s pathetic response without saying what he would have done about sums up the opposition.

    Well done to the PM

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  20. Alias (profile) says:

    “Merkel & Sarkozy: OK, so we will go ahead in the Eurozone without you, because we can, and you knew that was the danger. And as there will be no protocol as a result of us doing this, then rules for regulating financial markets remain unchanged.”

    There is a bit of truth in that statement.

    As Sarzoky points out, the UK does not hold a veto. The European Council, wherein the respective heads of state assert the collective interest of the EU, proceeds via qualified majority voting. It is only the IGC, wherein the heads of state assert their respective national interest, that proceeds to a treaty via the unanimity rule.

    Since the UK does not have a veto, it could not have exercised a veto; and since no treaty was presented to the European Council, no treaty could have been vetoed.

    So why are the British media and some elements of the political class claiming that Cameron vetoed a treaty when he did nothing of the sort?

    Probably because they have as much respect for truth as they have for the other values that have been corrupted by relentless EU propaganda such as democracy.

    It is clear that the EU doesn’t want a treaty that would require democratic approval in certain states as there is no support for the EU’s anti-democratic agenda among the nations of Europe, and so the agenda is to avoid a treaty by blaming Cameron for ‘forcing’ them to go the shifty route of trojan legal mechanisms.

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  21. Alias @ 1:35 am:

    … why are the British media and some elements of the political class claiming that Cameron vetoed a treaty when he did nothing of the sort?

    Because that’s what Cameron claims, loudly and repeatedly, he did!

    Do try to keep up.

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  22. Alias (profile) says:

    Cameron is pacifiying his own backbenchers, Malcolm.

    That is hardly a reason why the media and Milliband to assist him in the deception, is it?

    But thank you for sharing that psychedelic moment with us.

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  23. Alias (profile) says:

    Malcolm, now that you have convinced yourself that the British media and the leader of the opposition are promoting the misleading impression that Cameron vetoed a treaty for the purpose of assisting Cameron’s domestic political considerations, perhaps you’d like to explain why you think they would collude to mislead the public for the greater good of Cameron?

    Or perhaps you think that Miliband, the EU and its servile media, the British media, et al, only think there was a treaty and that it was vetoed because Cameron has led them to think this but would not think it is he didn’t?

    Perhaps the EU is confused and now thinks itself that the European Council was presented with a treaty or that its method of voting had changed from qualified majority voting to the unanimity rule or that it and not the Interovernmental Conference would approve a treaty?

    Is it possible that Mr Cameron could really have caused all this confusion?

    Well, if a wily old fox such as you thinks it is, then who am I to say that you have been brainwashed with dismal falsehoods from your usual sources and duly parrot them to others without cognitive interception?

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  24. dwatch (profile) says:

    Alias… “why are the British media and some elements of the political class claiming that Cameron vetoed a treaty when he did nothing of the sort?”

    Malcolm Redfellow:… “Because that’s what Cameron claims, loudly and repeatedly, he did!”

    to veto a treaty prevents that treaty from going ahead. This was not so as the treaty went ahead with 26 EU members instead of 27. All Cameron did was opt out of signing the treaty. That is not a veto, and surely Cameron should know the difference?

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  25. dwatch (profile) says:

    Even BT wrongly call it a veto. However, irrespective what it is called Cameron and his advisors were not going to be caught out signing up to Merkosky’s new transactions tax.

    Read what Ireland’s Finance spokesperson Michael McGrath has to say:

    “Veto ‘may hit Irish finance sector’”

    British Prime Minister David Cameron’s opt-out of the latest European political deal could give London’s financial sector an international advantage, Fianna Fail has said.
    Finance spokesperson Michael McGrath expressed fears the British government move could have serious consequences for the future of the financial services industry in Ireland.

    He said the Prime Minister rejected the European Union (EU) proposals to protect the City of London.

    “Given that a new financial transactions tax is likely to form part of the new arrangements that will apply to the other 26 EU countries, this could put Ireland’s financial services industry at a major disadvantage compared to London,” he said.

    “We could soon have a situation where the financial services industry in Ireland will be subject to a new transactions tax, but the City of London will be exempt. Such a scenario could have serious ramifications for what is a critically important industry in Ireland.

    “The financial services industry is highly mobile and we cannot allow a situation where London becomes a more attractive base than Ireland because of a new tax.”

    He said the sector employed more than 30,000 people in the Irish Republic and was a major contributor to its economy.

    “The Taoiseach Enda Kenny needs to urgently clarify if Ireland has committed to a new financial transactions tax and to state clearly what the implications of such a tax would be for Ireland given that the UK will be exempt.”

    Michael McNamara, a representative of coalition government partners Labour, said the Fianna Fail comments were opportunistic.

    “The latest Fianna Fail fad is to follow David Cameron’s eurosceptic agenda,” he said. “Of course, we realise that a transaction tax, like other fiscal harmonisation measures has to be carefully considered. However, there can be no blanket exemptions, least of all for those who contributed most to the mess we’re in.”

    Read more: http://www.belfasttelegraph.co.uk/news/local-national/republic-of-ireland/veto-may-hit-irish-finance-sector-16089455.html#ixzz1gCHTebQc

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  26. Alias (profile) says:

    dwatch, he does know the difference. Others obviously don’t.

    The European Council operates by qualified majority voting, so it requires 55% of the member vote or 65% of the EU population. It only requires consensus (i.e. unanimity) among its members for decisions that are outside of the scope of the consolidated treaty. It is the similarly-named (but very different) Council of the European Union and the IGC where a treaty is progressed, not the European Council.

    There was no treaty presented to Mr Cameron at the European Council for his rejection or otherwise.

    Who but a euro-quisling would commit his country to a treaty that hadn’t even been drafted yet? Cameron did the right thing. That is why the unstable Sarkozy – the new joint-dictator of the EU – had to be physically restrained when venting his eurogombeen rage.

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  27. Alias (profile) says:

    Incidentally, I wonder how Mr Kenny will continue to sell fiscal union to the Irish when the Germans decide that too much taxes are being spent in the Irish budget on hospital beds and schools and not enough are being diverted to repaying German bondholders?

    I wonder how he will continue to sell fiscal union to the Irish when ECB monetization of debt leads inevitably to price inflation and higher interest rates while those German-engineered austerity measures force wage deflation and unprecedented poverty on them?

    I wonder how he will continue to sell fiscal union to the Irish when tax harmonisation terminates Irish exports that are 95% controlled by foreign businesses that only continue to trade here because the higher cost of doing business is off-set by a lower corporate tax rate? The level of unemployment in Ireland that will result from this fiscal union will make the 30s look like a boom.

    I’d rather be Cameron than Kenny, since Kenny is the more likely of the two to end up swinging from a lamppost…

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  28. Cynic2 (profile) says:

    “The 26 will either stick together on moves for effective reform or they will be ‘hanged ‘ separately”

    I fear that even if they do stick together they cannot hold the forces against them – which are driven by rationality and a real assessment of the EUs financial position. All they have done is convert that financial crisis into a political one as well – pne that will destroy the EU unless it becomes a real political dictatorship as well as a financial one.

    Will the Irish / Czechs / Slovaks / Serbians accept that they no longer can control their state? Elect those who rule over them? Accept Franco – German hegemony?

    In 10 years Cameron will be seen as a statesman! An accidental statesman perhaps – but a ststesman none the less.

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  29. dwatch (profile) says:

    Wonder what odds the Dublin bookies are giving to which country is going to default (or be kicked out of the Eurozone first, Ireland Greece or Portual) or leave the EU altogether before the UK?

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  30. dwatch (profile) says:

    “dwatch, he does know the difference. Others obviously don’t.”

    Indeed Alias, those others are mostly the nodding donkey press, even Ireland’s Finance spokesperson Michael McGrath calls it an [OPT OUT] instead of a veto. He said: “British Prime Minister David Cameron’s opt-out of the latest European political deal could give London’s financial sector an international advantage, Fianna Fail has said.”

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  31. Alias @ 2:21 am:

    Clearly rust never sleeps. I do, which is why I’m in catch-up mode.

    Malcolm, now that you have convinced yourself that the British media and the leader of the opposition are promoting the misleading impression that Cameron vetoed a treaty for the purpose of assisting Cameron’s domestic political considerations, perhaps you’d like to explain why you think they would collude to mislead the public for the greater good of Cameron?

    Did I really involve Miliband in this business? I don’t recall that. Quite frankly what Labour, the SNP or Mebyon Kernow say and do is irrelevant here: as you rightly say, this is all about the Tory party’s inability to cope with foreigners. Sadly, the real issue — the €-zone and its governance — was only a pressing interest for 440 of us 500 million ordinary European guys and gals. The unlucky 60m are at the beck, call and behest of a few swivel-eyed Tories who haven’t got over their party’s sell-out of the Sudetenland (hence all those recent mentions of 1938).

    However, I’d draw your attention to the weekend UK press. Not much sign of collusion there. And that nice boy Clegg seems to have relocated his marbles.

    As for “dictatorship”, this year we have just had elections (with numerous changes of government) in Bulgaria, Croatia, Cyprus, Denmark, Estonia, Finland, Ireland, Latvia, Poland, Portugal, Slovenia and Spain — and those are the ones even my drink-raddled recollection holds. In 2012 France elects a (hopefully, new) president, Belgium votes at the provincial and municipal levels, Croats have a referendum, Finland votes at presidential and municipality levels, Lithuania and Romania get full parliamentary elections. “Dictatorship”? Surely you jest. Now when I were but a lad, we really knew a dictatorship when we saw ‘un.

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  32. FuturePhysicist (profile) says:

    Cameron’s ‘sinn fein’ (h/t Kate) positioning looks like a result of having no other options open to him.

    Or rather leaving no other options open to himself. He simply is unable to see the big picture beyond the City perhaps due to a lack of intelligence.

    Perhaps when the EU are still getting cheaper Russian Oil and cheaper Brazilian coffee, while the UK are paying tarifs on German pencils and Irish beef maybe then everyone will thank Cameron for the fact that at least the rich can still afford these things.

    Norway and Switzerland are heavily indebted now, I do think should the UK leave the EU, what is happening now in Ireland would be small fry in comparison to a country built around the common market for so long.

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  33. Alanbrooke (profile) says:

    the big winner from last week was Merkel, she got pretty much everything she wanted bar UK sign up.

    the short term loser is the UK and Cameron since there are on the naughty step for while until things settle down

    the long term loser is France they now have no-one to back them in a fight with Germany and must gradually give way the big beast in the centre of Europe. Timing’s awful too as the generation of germans with no war guilt is now coming in to power.

    You can now answer the old question ” if I want to speak to Europe who do i call” – Berlin

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  34. Greenflag (profile) says:

    @blues jazz,

    Indeed . I liked Robert Fisk’s comment ‘

    The protest movements are indeed against Big Business – a perfectly justified cause – and against “governments”. What they have really divined, however, albeit a bit late in the day, is that they have for decades bought into a fraudulent democracy: they dutifully vote for political parties – which then hand their democratic mandate and people’s power to the banks and the derivative traders and the rating agencies, all three backed up by the slovenly and dishonest coterie of “experts” from America’s top universities and “think tanks”, who maintain the fiction that this is a crisis of globalisation rather than a massive financial con trick foisted on the voters.

    The banks and the rating agencies have become the dictators of the West’

    And ‘our ‘dictators have now launched the world into a global currency war with the City of London ‘fraudsters’ + Wall St ‘fraudsters ‘ versus the rest of the world -with the IMF (American banking dependency ) supporting the former as always.

    Cameron Not the Defender of British interest but sadly left defending the Capital of Financial Fraud :(

    http://rt.com/news/keiser-cameron-eu-summit-471/

    Max gets a little hyper but behind the hype there are some hard facts which are not going away . The EU 10,000 tons of gold in reserves , the USA 8,000 tons , the UK 300 tons .

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  35. Cameron and the UK are the losers. In a sense, the UK has been caught between a rock and a hard place. The EU can only go in one direction to save the Euro- with closer integration and eventual political union. The UK is now a nuisance to the EU because the new treaty is out of sync with previous European treaties. They will now use whatever powers they have to make things difficult for the UK with the object of driving them out. Eventually, the UK will be forced to have a referendum on the EU to leave it altogether. I dont want that and neither do a lot of other UK citizens but the original ideal of European nations trading freely whilst retaining their national sovereignty and democracy has gone. I fear that circumstances not of my chosing are driving me towards the Eurosceptic wing.

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  36. Greenflag (profile) says:

    @ Future Physicist,

    ‘Or rather leaving no other options open to himself. He simply is unable to see the big picture beyond the City perhaps due to a lack of intelligence.’

    Not at all . The picture Mr Cameron sees is that the City of London is the locator for 75% of all financial transactions within the EU and as such any transaction tax that would be applied by the 26 ‘others’ would hit the UK’s ‘prime ‘earner i.,e 40% of all UK based corporate ‘profits’ . The fact that the City ‘banksters’ are the backers of the Tory party and Mr Cameron’s bosom buddies is neither here nor there .

    We Irish can’t blame him for that aspect of his ‘defence ‘ of his buddies interests .After all who were FF ‘protecting ‘ when they guaranteed ALL of those deposits in Anglo Irish and the other banks ? I can assure you it was not done for the interests of the Irish people but for the interests of the financial and property developer elites .

    Rather than refer to Mr Cameron as a latent Shinner it would be more correct to accuse him of following in the steps of the eh ‘ foot soldiers of destiny’ our very own Burkina Fasoed FF :(

    As for the British people ? Well I’m sure the tabloids will keep venting the usual anti EU spleen with references to square shaped tomatoes and the Sour Krauts and the Froggie menace etc etc . All good fun no doubt but not getting Britain anywhere in the 21 st century.

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  37. Greenflag (profile) says:

    Apologies for that Burkina Fasoed epithet . To save anyone the bother of looking it up Burkina Faso is a state in West Africa and the translation of it’s name is ‘The land of upright men ‘

    It appears to be ruled by the World bank

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  38. Comrade Stalin (profile) says:

    In strictly technical terms, Cameron did not veto a treaty, but he did veto an EU treaty.

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  39. Greenflag (profile) says:

    @Alan Brooke,

    ‘the big winner from last week was Merkel, she got pretty much everything she wanted bar UK sign up.’

    The consensus appears to be that the real winner was Sarkozy. Merkel favoured further write downs of sovereign debt particularly those of the debtor EU countries . As the French banks in particular Credit Agricole are the most exposed to default/insolvency should these debts be further written down and no agreement was reached that they should be -Sarkoczy can claim at least for this round to be ahead on points . But it’s a long way to March 2012 so perhaps there’s hope yet for Mr Kenny and other EU leaders that the ‘mother of the nations’ Angela Merkel’s views on this issue will prevail.

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  40. Alanbrooke (profile) says:

    GF

    Sarkozy’s strutting on stage was classic french play acting. What has Sarkozy won ? Two months ago he was pushing Cameron to pressure Germany with him to get the ECB to act as true central bank as a way of saving the Euro. Merkel held firm. Merkel has conceded nothing on her core position. The resulting austerity from which Ireland and others are suffering is a German policy.

    IMO Merkel is quite happy for Sarkozy to grandstand as it keeps her true position out of the limelight. A desperate french president who’s trailing in the polls for re-election needs all the limelight he can get. But when it’s France’s turn to face a German demand who will he turn to for help; Italy ? a governmentless Belgium ? Slovenia ? there’s nobody of any size to team up with. If UKs isolates then France is bereft of allies.

    Wrt banks Merkel’s banks aren’t in much better shape than Sarkozy’s so putting the problem off to 2013 is hardly going to be a problem for her.

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  41. Comrade Stalin (profile) says:

    What has Sarkozy won ? Two months ago he was pushing Cameron to pressure Germany with him to get the ECB to act as true central bank as a way of saving the Euro.

    Of course, two months ago Cameron was going around Europe lecturing them on the need to prioritize stability of the euro. As soon as the crunch came he ran away on a specious pretext.

    The resulting austerity from which Ireland and others are suffering is a German policy.

    Germany forced Ireland to fail to regulate its banking and property sectors properly ? That’s news to me.

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  42. Alanbrooke (profile) says:

    CS

    and two months on they still haven’t stabilised a thing because the ECB can’t act as a central bank. The UK isn’t the Euro so as the Swedes have pointed out why should they pay the price of fixing it ? The club’s members ultimately have to sort their own problem out.

    And no Germany didn’t make Ireland fail to regulate it’s banks but it baulked at the consequences since it hadn’t controlled its own banks either and wouldn’t take the hit.

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  43. FuturePhysicist (profile) says:

    Not at all . The picture Mr Cameron sees is that the City of London is the locator for 75% of all financial transactions within the EU and as such any transaction tax that would be applied by the 26 ‘others’ would hit the UK’s ‘prime ‘earner i.,e 40% of all UK based corporate ‘profits’ . The fact that the City ‘banksters’ are the backers of the Tory party and Mr Cameron’s bosom buddies is neither here nor there .

    And the fact that the UK is the most indebted of the major European nations hints that the financial sector which accounts for only 10% of UK’s GDP was just wheeling and dealing in “money on paper”.

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  44. FuturePhysicist (profile) says:

    It is a far cry from when the Tories lead by Pitt actively aided a society where paper money away from the gold standard as honest people managed to fulfil their debts for goods and services … now the UK is simply heading towards the Retenpfund through Quantitative easing, no economic growth, bad business practices and low interest rates, due to the blatant dishonesty at the top.

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  45. I’ve been clear for some time (and expressed it here, with justifications) that we have been sold a pup over FTT.

    I was, then, pleased to find my suspicions confirmed by Will Hutton:

    There might have been a case for David Cameron to veto the use of the EU treaties for the eurozone bailout if Britain’s national interests had really been threatenedk. But they were not. Much of British finance in whose name Cameron exercised his veto – routine banking, insurance and accounting – was wholly unaffected by any treaty change. The financial services industry in Britain constitutes 7.5% of GDP and employs a million people; the City represents perhaps a third of that and, in turn, that part threatened – if it was threatened at all – some fraction of that. This is a tiny economic interest. If the coalition is serious about rebalancing the British economy, it is preposterous to place a fragment of the City at the forefront of our national priorities…

    There was no threat that could not have been resisted if Britain really was committed to defending the casino dimension of the City. Our entire relationship with the member states of the EU, along with our capacity to shape policies that may influence a far higher share of our GDP, has been put at risk for nothing. At worst, a dozen foreign investment banks and a couple of dozen hedge funds, along with their bonuses, might have been affected. But now the capacity to defend them, even if we wanted to, has been thrown away. As an act of self-defeating, crass stupidity, this has rarely been equalled in British foreign policy. [My emphases]

    That is a hostile view-point, admittedly; but it needs to be answered.

    Coincidentally, those couple of dozen hedge funds are major contributors to Tory funds. Which is another matter that needs response.

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  46. FuturePhysicist (profile) says:

    With all that propaganda about “making things”, the echo of Gordon Gekko’s famous quotation rings true. “‘I don’t make anything, I own things”

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  47. FuturePhysicist (profile) says:

    Will the Irish / Czechs / Slovaks / Serbians accept that they no longer can control their state? Elect those who rule over them? Accept Franco – German hegemony?

    Serbians?

    And before you speak of Franco – German let’s remember also where the Anglo-Saxons and Normans came from?

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  48. dwatch (profile) says:

    Does not look like the SDLP are in favour of Cameron’s actions. Wonder what SF have to say? Where the shinners not against the Lisbon treaty?

    “Alex Attwood said David Cameron’s EU veto could have implications for the relationship between the devolved administrations and Europe”

    Read more: http://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/stormont-minister-criticises-veto-16089582.html#ixzz1gFc4KERN

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  49. dwatch @ 6:13 pm:

    Attwood is remarkably moderate.

    See the parallel thread started by Dewi.

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  50. dwatch (profile) says:

    dwatch @ 6:13 pm:

    “Attwood is remarkably moderate.

    See the parallel thread started by Dewi.”
    http://sluggerotoole.com/2011/12/11/scotland-its-time-why-wait/

    Malcolm Redfellow are you getting your wires crossed? Do you mean Alex Salmond SNP instead of Alex Attwood SDLP

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  51. dwatch @ 7:57 pm:

    No, I mean that the dogs have barked and the caravan has moved on.

    The SNP (and Scottish commentators) are way, way ahead in sussing out the implications of Cameron’s cock-up.

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  52. Comrade Stalin (profile) says:

    Alan:

    and two months on they still haven’t stabilised a thing because the ECB can’t act as a central bank.

    I think it is appropriate for the people who will be bankrolling any ECB bailouts to require that guarantees are in place so that they don’t lose their money.

    The UK isn’t the Euro so as the Swedes have pointed out why should they pay the price of fixing it ?

    For the same reason that the UK has always paid into the IMF – because we don’t live in a bubble and it is in everyone’s interests that these problems are solved.

    And no Germany didn’t make Ireland fail to regulate it’s banks but it baulked at the consequences since it hadn’t controlled its own banks either and wouldn’t take the hit.

    Quite right. Nobody had their eye on the ball, including the UK. SO why blame Germany ? Or the Eurozone ?

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  53. Reader (profile) says:

    Comrade Stalin: For the same reason that the UK has always paid into the IMF – because we don’t live in a bubble and it is in everyone’s interests that these problems are solved.
    Two differences – (1) you always get your money back from the IMF, whereas the Euro bailout looks like a permanent loss. (2) Even that might be worthwhile, if there was a good chance that throwing money at the Euro is likely to prevent a crash – it may well not.

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  54. Reader @ 10:54 pm:

    Now explicate what the UK is doing to avoid the €-collapse you so blithely and confidently anticipate. I don’t like “predictions”, but the latest estimate thereof (as the Treasury has been warned) is Lehman Brothers plus 50%, as much as £100 billion down the plug-hole, at least 7% of GDP, serial beggary for all concerned, and all of that mayhem inside the UK.

    But, of course, anyone who gets the “facts” from the (off-shore owned, tax-avoiding) Daily Mail has a different spin.

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  55. Reader (profile) says:

    Malcolm Redfellow: Now explicate what the UK is doing to avoid the €-collapse you so blithely and confidently anticipate.
    Since when did:”blithely and confidently” == “it may well not”?
    Anyway, at this stage I would prefer the UK to be putting on the lifejacket, not stuffing it into the ship’s hold.

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  56. Greenflag (profile) says:

    @ Alanbrooke,

    ‘Sarkozy’s strutting on stage was classic french play acting.”

    Perhaps but David Cameron will not be winning any Oscars either apart from perhaps from the Daily Mail .

    ‘Two months ago he was pushing Cameron to pressure Germany with him to get the ECB to act as true central bank as a way of saving the Euro.’

    Which in itself is probably the only way longer term to stabilise the current market uncertainty re the Euro. In the shorter term there is the matter of ‘compliance ‘ so that ALL EU governments are in synch with the ‘budgetary’ deficit targets so as to ensure that if the ECB is to become a true Central Bank it’s ‘bonds ‘will be worth the paper they’re written on.

    ‘ Merkel has conceded nothing on her core position.’

    She has the support of some 60% of the German electorate and is in a much stronger position politically than either Sarkoczy or Cameron

    ‘The resulting austerity from which Ireland and others are suffering is a German policy.’

    Indirectly .The austerity Ireland is suffering from is the result just as it is for some other countries of a combination of an international financial system gone berserk , low interest rates , financial services corporate greed and local governmental incompetence and/or ignorance and probably both .

    ‘ If UKs isolates then France is bereft of allies.’

    Its not 1939 . There are 27 countries in the EU soon to increase to closer to 30 over the next few years with Croatia in 2013 and Serbia later.

    ‘ Merkel’s banks aren’t in much better shape than Sarkozy’s so putting the problem off to 2013 is hardly going to be a problem for her.’

    True . It would of course be preferable if the USA , UK, Germany , France , China , Japan and the rest of the G20 agreed to a reform of the world monetary system .In the present climate the only world leaders who seem to have any interest in ‘reforming ‘ anarchic financial services capitalism – or to call it by it’s proper name derivatives led hedge fund dictatorship are the German and French and some other EU countries . Obama has been ‘neutered’ and Cameron ‘surrendered’ to the City before he was elected Prime Minister .

    The real question is to what extent and how effective will any financial reforms be in the EU assuming that we get that far .

    In the ‘war’ of the 99% v the 1% the only governments that can at this time be accused of even half standing up for the interests of the 99% are the Germans & French and other EU nations . Note I stated ‘even half ‘ which means that I too will only be convinced of EU good ‘intentions ‘when I see the enacted EU wide legislation which returns the ‘banking system ‘ to being a banking system and not a fig leaf cover for a world wide gambling smash and grab short term fixated casino benefiting only the 1% .

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  57. Mick Fealty (profile) says:

    Reader,

    Throwing cash at the problem is not the issue (nor the sole solution). It’s the lack of fiscal reform that’s making the markets nervous.

    The US is annoyed that they keep getting dragged back to a problem they’d presumed several times has been fixed. Dems are also pointing to economic figures that look very different to our own (ie, the stimulus package *appears* to be working).

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  58. Turgon (profile) says:

    Mick,
    I am no economist but surely both Merkosi and Cameron are proposing something similar on an economic level: austerity; one could argue the Germans are even more keen on it than Cameron. If Obama’s essentially Keynesian model does work; does that no show the utter folly of the German (and Frenach) psoition? They are proposing preventing ever adopting a Keynesian model. At least Cameron could do a U turn.

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  59. Excessive debt is a problem, but a hard deficit ceiling is not the answer. It is still an open question whether some form of Keynesianism might be useful. Countries should have the option to try different stimulus methods, so long as the debt incurred is actually paid off and doesn’t become a structural burden.

    A better way to tackle sovereign debt would be to allow flexibility on annual deficits, but require that total government debt must be paid off within (say) 5 years of the resumption of growth. This could be done through national constitutional amendments, with each country able to define its own formula for how much debt should be repaid in each financial year. In exchange, the ECB would then support existing debt through QE in the secondary markets (to provide a fig leaf for printing money). Those countries with excessive debt burdens might be given two business cycles to comply, or alternatively given a once-only free pass to default with financial support from the ECB/EFSF/IMF.

    The core of the grand bargain would be this: we’ll help you out by printing money, but we’ll make damn sure you pay it all back.

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  60. Alias (profile) says:

    The grand bargain of Fiat money in a monetary union is to trade money that was conjured out of thin air (or out of the printing presses in Frankfurt) for real assets in the states that are subject to the union. Basically, they get to own your assets and you get a bunch of thinly sliced trees for the privilege. When the currency collapse, you’re left with a bunch of worthless paper and they have some rather fine bricks and mortar.

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  61. Alias,

    “They” (which includes you) get to own your debt, not your assets. If the currency collapses you get to default on those debts. Who ends up owning the brick and mortar then? You do. You’ll have trouble getting a loan, but you won’t end up in hock.

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  62. Alias (profile) says:

    Not the case. The Minister for Finance is the sole shareholder in the Irish Central Bank. 194 billion of Euros have been loaned from that bank to the Irish-based eurosystem banks, which was borrowed from the ECB.

    In return, the ECB (which has sole executive control of the Irish Central Bank) hold the assets of the Irish-based eurosystem banks as collateral.

    It has traded paper euros for the assets of the Irish banks. Those assets are basically everything you see in this state, including the car you drive and the house you ‘own.’

    While the ECB has sole executive control of the Irish Central Bank, the Irish state has sole liability for all of its debts.

    That situation is not change.

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  63. Alias (profile) says:

    By the way, do you know how much assets you’ll own by your route? It’ll be the same percentage as your state’s shareholding in the ECB (about 2%). So, true, you’ll own 2% of what you owned 100% of before you traded it from euros, but you’ll also owe 2% of all of the other states debts.

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  64. Did you miss the bit where I said “default”? When the state defaults on its obligations, the central bank (as an arm of the state) defaults on its obligations to the ECB. Now you can complain that the ECB de jure controls the central bank all you want, but that’s only by treaty. If the currency collapses, that’s worthless paper like the banknotes.

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  65. Alanbrooke (profile) says:

    GF

    like all these issues it’s not the short term noise that counts but what happens after. This will run and run.

    Cameron had an easy ride in Parliament, atm Clegg is taking all the stick for not showing up. Miliband made a dog’s dinner of opposition by refusing to say what he would have done differently.

    The UK has been “isolated ” for 2 days; by lunchtime today Sarkozy was back tracking by saying the EU needs the UK. He’s also facing scrutiny from Hollande who is claiming he will overturn the negotiations – well good luck with that. Sarkozy is the one who is going to need friends over the bext 5 months,

    Cameron had 57% backing on the veto according to polls this a,m. Merkels backing from Germans is solid but the backing is to stop offering blank cheques to Europe to bail out Med countries. In that Germany is not different that the UK. In other polls 49% of French people are opposed to further integration ; the majority of Germans think the Euro has been a bad idea.

    On France facing Germany, well let’s see who stands by France in her hour of need when the first show down comes.

    In the 99 v 1 face-off I fail to see how merkozy are standing up for the 99 they arev standing up for 80 million Germans and 60 million French and sod the rest. The Euro is their currency, they should sort it out. but they’re more interested in passing the buck than addressing the problem.

    Pulling that all together the UK is in Ireland’s position of a few years back – it has given the EU the wrong answer so they’ll keep coming back and asking for the right one. It remains to be seen if the Cameron can do a better job of it than Cowen and Ahern.

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  66. Alanbrooke (profile) says:

    CS

    “I think it is appropriate for the people who will be bankrolling any ECB bailouts to require that guarantees are in place so that they don’t lose their money.”

    so do I, so they should get on and do it. The UK is not in the euro, they should sort themselves out.

    “For the same reason that the UK has always paid into the IMF – because we don’t live in a bubble and it is in everyone’s interests that these problems are solved.”

    as I understand it the Uk has indicated it will support any move through the IMF. To date however no formal request has been made as Christine Lagarde keeps telling everyone.

    “Quite right. Nobody had their eye on the ball, including the UK. SO why blame Germany ? Or the Eurozone ?”

    Don’t disagree that nobody had their eye on the ball the UK’s banks have as much exposure to Irish debt as Germany’s. However the eurozone problem needs to be addressed by eurozone members and Germany as the strongest member needs to lead. As Mr Sarkozy reminded Cameron he is on the sidelines and has no say in internal eurozone matters. So why the 17 want to rope in all the 27 is not logical.

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  67. Alias (profile) says:

    Andrew, your claim was the Irish people would still own their own assets in the event of the euro collapsing. That claim is not true.

    The Irish people own exactly 0.9219% of the share capital of the ECB. In other words, they own less than 1% of the assets of the Irish-based eurosystem banks that have been taken by the ECB as collateral for 194 billion in loans to the Irish Central Bank that were for provided for the express purpose of bailing-out eurosystem banks elsewhere in the eurosystem.

    You only have a claim to less than 1% of the ECB’s assets. Unfortunately, the ECB, like the rest of the backward eurosystem, is massively over-leveraged. In the event of a collapse, you’d be lucky to get 10% of that 1% or 0.1% of the value of your former assets back.

    In other words, you traded all of your state’s assets for a bunch of worthless paper and will soon enough have bugger all to show for it.

    In the case of a collapse, the legal duty of the shareholders is to make good the losses. There is no ‘we’ll just take our assets back and you keep yours too – no hard feelings, okay?’ clause. The other states will be entitled to recoup their losses from the assets of the ECB, and you’ll get zero.

    So, they own 99.1891% of your assets and you don’t.

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  68. Alias (profile) says:

    “10% of that 1% or 0.01%”

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  69. Alias,

    Your multiplication was right the first time.

    Are you talking about state debt or household debt? They’re different things.

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