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"...and a British prime minister who, because the UK is outside the eurozone, may find it increasingly difficult to make his voice heard when these things are discussed in Brussels."


Easy solution. Make sure the UK is outside the European Union.

Time for a referendum. The one we were promised. With a "cast iron guarantee."

German view summed up: "You don't get something for nothing." If countries in trouble want help from Berlin, they'll have to offer up a chunk of sovereignty. I don't quite agree with this. To seek help, to open one's books, does not wound sovereignty; it's simply the right thing to do when a country cannot manage its financial affairs - but wants to do the best thing for its people.

Barclays & entire banking industry have been badly damaged by the Libor & Euribor manipulation scandal. This was, as you say, a crisis of their own making...So much for the London Financial Sectors reputation - for now. The consequence of this will be an emboldening of the EZ to question the "Anglo-American" fiscal policies with a fine tooth comb; also, less of migration of financial institutions WHEN EU introduces its FTT because FTT will provide a forensic audit trail for any shenanigans.

My predictions:
1. derivative problems have only begun to surface; there are TRILLIONS of these suckers - all originated from Anglo-American banking;
2. tighter fiscal union will allow greater sharing of financial specialization throughout EZ without loss of sovereignty, and very likely promote growth with balanced budgets
3. When US Congress is forced to deal with debt ceiling = BIG TROUBLE;
When US Congress is forced to deal with deficit = BIGGER, perhaps unsolvable trouble = danger of insurrection;
4. UK will make decision to get off the fence and join EZ because FTT will provide automatic audit capability, protecting its financial system + UK will be mighty lonely during American debt/deficit struggles.

This comment was removed because the moderators found it broke the house rules. Explain.

'And as you'll have noticed, they haven't come up with a solution just yet.'
And here I was all reassured by another expert colleague...
'������̳ Newsnight ‏@������̳Newsnight
Back from the brink - EU leaders have made series of moves averting catastrophe @paulmasonnews blogs

#1 Scotch Git wrote: dangerous nonsense.

The same sort of nonsense that let directly to the 'unpleasantness' in 1939.

The UK is Europe. Europe is the UK. They are not separable. All attempts to separate them in the past have led directly to the deaths of many millions. Your suggestion is simply without merit and demonstartes just how bankrupt your philosophy has become.

Cameron's and his party's position is absurd and illogical. The UK is critically dependent of inseparably close relationships with our friend on continental Europe. We must fully join in, and remain fully joined in, for our own good and the good of Europe and be part of all the institutions of the EU, including the Euro.

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#7

John_from_Hendon,

Here's a better idea. Let's have a referendum on the subject and we'll allow the British electorate to decide.

Or is that too democratic for Europhiles to stomach?

'8. At 19:08 30th Jun 2012, Scotch Git -
Or is that too democratic for Europhiles to stomach?
Possibly, for some, democracy is, and one quotes (this time more accurately): dangerous nonsense?
Of course it can be if given absolute but unaccountable control of what is written or broadcast, so worth bearing in mind when deployed in a selective manner by our 'we know betters' who too often confuse their views with what is served as news.

8. Scotch Git wrote: "too democratic"

War is not democratic. Politicians cause wars by whipping up warped and bigoted impressions of the enemy, in your case the people of the EU.

We are in the worst Depression n our history bar none, and you want to waste huge sums of money on completely unnecessary referenda!

I remind you that it is all about economics - everything is. The EU is about establishing a level playing field in economics between the previously warlike ultra competitive states of Europe. You want to go back to a pre-war position. Just like breaking up the Roman Empire cause hundred's in not over a thousand years of economic depression you want to do the same again. In fact you want a thousand year depression! (No apologies for the similarity with that other thousand year expression of political nonsense.) Why are you so blind?

We have live with our neighbours in a friendly and mutually supportive way. To do this we need to live under the same laws and under the same economic measures of free movement of goods and people. My guess is it is the last bit that you hate. Consider who gains by preventing the free movement of people - it is the bosses, the landowners and the establishment and their bankers, not the mass of the common people.

The Eurozone problem is due to that lack of common standards equally enforced and the reverse anyone with eyes and reason needs to accept that. The UK being outside the Euro is yet another perversion of the economic level playing field and in this case one that does substantial harm the UK, its people and its small business - in the only sector that may be benefiting is our banks - I need not remind you where that has got us!

The EU needs to move to a proper and fair economic and thus political union. We cannot have an economic union (or free trade arrangement) without proper democratic control by the people of that union and the silly little jumped up popinjays of state heads bicker to the huge disadvantage of everyone - see 20, and counting, summits that have and are failing. We need a legitimate democratic centre, with as few powers as is required by the dictates of subsidiarity, but this democratic centre must exist - hence the people of Europe must vote for their president and executive. We need an EU finance minister to enforce the economic level playing field, etc etc.

Get over hating foreigners - all you are doing is hurting yourself and the people of your country.

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#10

John_from_Hendon,

You're making an awful lot of assumptions about what I feel and think. Contrary to your belief, I do not hate foreigners. People are people, and the only people with whom I have a problem are politicians and people who want to kill me.

You think I should take advice from someone who thinks the fall of the Roman Empire was a bad thing? No, John from Hendon; it is not all about economics.

I refer you to comment #6 on the previous thread.

Scotch Git

"You think I should take advice from someone who thinks the fall of the Roman Empire was a bad thing?"

--then at least listen to someone who knows both the UK and Germany well --and at least ponder.

For the following poem --substitute Germany for the ´the fool´ and Europe for ´his lady fair´



-- It is Germany´s story- from the beginnings of the Common Market to today.

Here is the text of the ´blackmailed´agreement signed.



Merkel gave little but received massive anger from German citizens -- conceding ANYTHING is now too much for them.

Cameron in the meantime is apparently appealing to the ´Scotch Gits ?

"Let us start to spell out in more detail the parts of our European engagement we want and those that we want to end. "

With the carpet pulled from under his feet by his ´beloved´City Bankers with their Libor manipulation -- is he at last reading ´the writing on the wall´--letter by letter -- or is the EU forcing Britain out --step by step with an ever increasing number of conflicting opt-outs ?

-- Or maybe WC Fields had words of wisdom ?

"I like thieves. Some of my best friends are thieves. Why, just last week we had the president of the bank over for dinner."

-and this is still the beginning.

'Cameron in the meantime is apparently appealing..

Not from where I am looking. But 'apparently' seems to be, in some hands, the new 'sources say...', 'questions are being asked..' or 'critics are saying..', namely taking what is required and packaging it in a way to suit with a degree of separation just in case that is needed.

It's a tribal thing. And inevitable. The danger comes when it is denied. Or, worse, recognised, denied anyway and then attempts made to manipulate even so.

It seldom works. Politically the consequences of failure can often be borne at the ballot, every few years. In media the penalties can range from withdrawal of ad eyeballs to not being bought any more. Trust lost is hard to recapture.

That is, if one is given the choice. Some thieves don't need to be invited in, and can never be shown the door.

Merkel's Tactical Victory
Smart Concessions from a Seasoned Negotiator



-- A breakup of Europe into 3 or even 4 tiers is likely.

#13

quietoaktree,

"Cameron in the meantime is apparently appealing to the ´Scotch Gits ?"


It's not enough. The man made a promise before he was elected. I have never voted Tory, and if this promise is reneged on I never will.

(I probably never will anyway, but it's leverage).

;o)

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#12

quietoaktree,

Mmm. I prefer the poetry of Ogden Nash. Perhaps "his lady fair" remembers Germany's story prior to 1957


Meanwhile...you might enjoy this!

������̳ Radio4, 2:15 this afternoon.

#15 Cont.

Also from ´Spiegel´

-a totally different viewpoint of Merkel´s ´success´ --long and detailed but more in line with most German ´bloggers´-- and an indication of the seriousness of growing EU splits--



-- and the end of the German-Europe ´love affair´ for which Europe wholly is to blame.

J_f_H

Robin has had made a few statements in this article --I would appreciate your comments on them --as I do not wish my opposing (or agreeing) views to become a monolog.

They are-
1. "... as presidents and prime ministers drew up their master plan for a single currency that would somehow work without either political or fiscal union."

2. "What they didn't predict was that unlimited cheap credit in countries with weak economies would lead to an epidemic of rash lending..... which in turn would lead to a spectacular bust.

3. "The German view can be summed up easily enough: "You don't get something for nothing." If countries in trouble want help from Berlin, they'll have to offer up a chunk of sovereignty. To put it crudely, if you can't run your affairs without our help, fine, we'll run them for you.



As far as I can determine the restrictions on the Financial ´Sovereignty´ of countries was kept to a minimum --3% spending and through taxation, methods to control National inflation-- and was adequate to prevent this mess.

America gets along with one interest rate --even though State and and even ´local´inflation rates vary. The argument that --".. a single currency that would somehow work without either political or fiscal union."-- has disregarded the fact that many Nations are now shown to be incapable of managing their own ´Sovereignty´-- sign treaties and attempt to stick to them.

The reported overspending by first Portugal and then France and Germany has now turned out to be that they did NOT use their ´Sovereignty´- to LIE about their own finances.

As far as the ´Property bubbles´ are concerned -- a 20% or 30% required deposit on a house -- would have stopped it in its tracts -- despite low EU interest rates some countries had no ´bubble´-- which again questions the ability of govts. to govern themselves.

If Germany (and others) takes the ´novel´approach of Finland -- and demand collateral for any further loans --

-- then the fear of Scotch Git "--and the only people with whom I have a problem are politicians and people who want to kill me." --would be one step closer when govts (and un-informed citizens) --begin searching (for) and supposedly finding ´scapegoats´for their own incompetences.

Both behavioral traits are presently again rampant.

With Greece wasting everybody´s time --yet again--

They are again promising to fulfill the previous promises on condition that more billions are given.

"Backed by his coalition partners, Samaras is expected to try and convince troika officials that Greece can proceed quickly with the sale of state assets and downsize the public sector in return for more favorable bailout terms with the chief aim to secure an extension of the deadline for the implementation of fiscal adjustment."

--nothing like blackmailing with your own promises you didn´t keep ?

-- Reminds me of the wisdom that ´Blackmailers´ should never be paid -- even once !

A Greek answer to Cameron --



--those unthankful Brits.

#17 Scotch Git

-- Apart from giving support to the student wisdom --

--´It is better to have loved and lost.´---

Is there another reason for the link --please clarify?

Have been unable to find ´his lady fair´ prior to 1957 - please also send link.

Spiegel-Online

Division in Berlin
Doubts Over Merkel's Euro Path Grow at Home



Europeans can only hope that the German Constitutional Court stops Merkel´s ´generosity´-- her ´downfall´would be far from pretty, wide reaching and likely catastrophic for some spendthrift national governments.

#quietoaktree

Single Currency

Can one ever exist without democratic control? I don't think so, not on the grounds of economics, but one of political legitimacy. I see most of the Euro's problem as stemming from a deal done behind the scenes by the 27 popinjays - without any democratic oversight.

But on the other hand I also do not see why the manager of the currency should not be elected by all Europeans on a one man one vote basis. Presently whoever is put in charge has not democratic legitimacy so actually can't do their job - hence the problems.

Buckets of free money

I am of the opinion that the Harvard school of laissez-faire economics has a lot to answer for in this. Somehow along the way they managed to ignore the commodity nature of money - money as a good in itself. Where, if the assets are finite yet money is infinite they assumed that the infinite money would not result in insane increases in asset prices which in the end preventes many businesses from being able to be profitable. This was simply crass ignorant economics and shows a disgraceful lack of economic education and study of economic history.

We are where we are but more QE (today +50bn) can only make matters worse.

The real price of bank risk must be reflected in their cost of capital or capitalism cannot correct itself. King and his cronies have either failed to understand this as they were mis-educated at Harvard or do do so but are fixated on the short term they have no ability to do what capitalism requires. One can argue that King and his cronies are just impotent or ignorant, but this situation is directly mirrored by the ineffectual regulation in the 1930s sooner or later the real risk cost of bank capital must be allowed to rise to a realistic level of not 0.5% but 5% to 10% to reflect the dire quality of the secured assets underlying the remaining credit bubble. Stopping this happening, or even lying about LIBOR/EBOR rates, makes matters worse.

We have to take the hit for the economy to recover.

I thought that Lustig made a clear summary of the situation. Kudos!

Those who would propose solutions should compose them in detail.

25. madmaxtheprof9 wrote: "propose solutions should compose them in detail"

been there done that!

In summary:

We have to deflate asset prices so that running a business can make economic sense at these present levels of economic activity.

Banks are a side issue - but major impediment. We have to let them go bust - they are not too big to fail and that is what they must do or there will be no recovery.

Start by allowing the market to properly risk price capital. Most Banks should be paying 7% or more for capital as they have dire balance sheets becasue they hold debt secured on property that will not fetch what they lent. (leaving aside the derivatives!)

The BoE should put up interest rates now by 1% and make it clear that it will be continuing to do so.

There will be economic turmoil, but far far less that everyone thinks.

Within a couple of years we will have asset prices which will allow business to make use of the assets to make or sell products and make a profit. This is really what matters as this translates into jobs.

We also have to tackle the rampant inequality so as I have been proposing for quite a long time we need to actually introduce David Cameron's idea of a maximum multiple between the bottom and the top of the pay - and to do so nationally - my National Maximum Income linked to 20 times National Minimum Wage.

Consequences for the banks will be traumatic but they are there to serve the economy not the other way round!

We have to break the UK obsession with home ownership as investment - it is somewhere to live.

My scheme will also rescue the pension funds and savers who will be once again be incentivised to invest in the new businesses.

Oh, and send Mervyn King and his mates to Rockall - or Dartmoor to break rocks.

Caring Capitalism?

#24 J_f_H

I believe bringing the word ´democracy´into any such discussions is superfluous. It is a possible important aim, but has seldom been practiced. What electorate has not found themselves faced with an elected government who has/had no intention of keeping election promises and do what they want for four long years -- even go traipsing into wars claiming full ´democratic´right is behind them.

--All elected governments in the EU have signed treaties and then returned to their parliamentarians for ratification-- and have accepted EU appointments (and the method) There is the occasional ´debate´ where ´headquarters´should be but the views of electorates are never asked --by ANY elected government.

If Europeans say they want ´democracy´much has to change and the scrapping of Monarchial Parliamentary systems is the most obvious beginning. Even in the EU parliament there are coalitions of some very strange bedfellows where national or local interests are pursued and those put up for election or appointed -- are ´one of the boys or girls´( as in most national and local elections)

Single currency (Euro)

Can one ever exist without Dictatorial control ?

Governments and banks have failed (AND also populaces-- if one claims to have a functioning democratic system). If ´political legitimacy´also implies and embraces political responsibility --then most elected European governments should have lost their ´legitimacy´years ago -- when even only mentioning the Euro, their massive spending incompetence and their lack of banking supervision-- is nothing to boast about.

We tend to forget -- but the head of the ECB has ONLY the duty to control inflation --the present wishes and dreams of national governments for it to change are illegal -- Why should it change --only because national governments broke all the ´democratic´restrictions they gladly accepted ?

I agree with you that too much money is chasing too few assets - and again I put the blame on national governments -- to hear them continually blaming ´the guy down the street´-- has reached unacceptable levels and expected responses.

At least the ´Eurozonians´ can take solace that a currency is independent of the idiots that destroy its value and throw many millions of innocents into poverty

--the ´hit´will come -- but how severe ?

-- and will cannon-fodder be once again the ´normal European´outcome?

--the flags are already proudly waving -- with or without the Euro.

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#22

quietoaktree,

No, no other reason than I thought you might enjoy it.


The Germany/Europe pre-1957 thing was just me being silly.










Again.

It is unfortunate that many Brits who voted in favor of the ´Common Market´admit (by their present and past opposition to Europe) not to have knowing what they voted for. This accusation can also be presented at the doorstep of various British governments who in spite of many opt-outs -- are pleading ´insanity´ to uphold its Feudal System.

For Scotch Git I offer this link--

/news/uk-scotland-edinburgh-east-fife-18713500

------------------------



"A BRIEF HISTORY OF THE EU TREATIES
The European Economic Community (EEC) was established by the Treaty of Rome in 1957. The purpose behind the EEC was to create a union of European States which had common economic goals. By joining together in this way, the Member States sought to achieve:

1. the development of economic activities
2. economic expansion
3. a rise the standard of living

Whilst the " Common Market" or EEC is often portrayed as being an economic club with no political agenda, this is in fact incorrect. One of the primary motivations behind both the EEC and the European Coal and Steel Community, was to bind together the Member States through trade, so that the carnage that had occurred from 1939-1945 could not be repeated. At that time, many countries were struggling to recover economically from 6 years of war, and this is reflected in the objectives of the original Treaty.

However, by 1986, all of the countries that had suffered economically in the 2nd World War had recovered, and the next Treaty, the Single European Act (SEA), marked a shift away from dealing with the effects of the past, to driving "Europe" in a particular direction. The SEA was signed in 1986, and its primary purpose was the creation of the Single Market, an area without frontiers, in which the free movement of goods, persons, services and capital could occur. This was radical, and a major policy shift away from the crisis management objectives of the Treaty of Rome."

Europe can only move forward with its ideals if the flotsam is discarded and later (if possible) the ´shipwrecked´collected.

As J_f_H has stated, products must be made (that the world wants) -- If the EU must consist of ´industrial´ countries willing to ´pull their own weight´--then so be it. With Globalization and the banking mess, the ´willing Europeans ´ need no ´heal biting´ distractions.

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#29

Yes, our belovéd Queen is in Scotland for a wee while.

God bless her!

#30 SG

"Ye see yon birkie, ca'd a lord,
Wha struts, an' stares, an' a' that;
Tho' hundreds worship at his word,
He's but a coof for a' that:
For a' that, an' a' that,
His ribband, star, an' a' that:
The man o' independent mind
He looks an' laughs at a' that.

A prince can mak a belted knight,
A marquis, duke, an' a' that;
But an honest man's abon his might,
Gude faith, he maunna fa' that!
For a' that, an' a' that,
Their dignities an' a' that;
The pith o' sense, an' pride o' worth,
Are higher rank than a' that. "

��
Regardless of one's views on constitutional monarchy, Queen Elizabeth is the finest Head of State any nation could wish for. She belongs to her people, in a way that no politician ever could.

A President is just another politician.

#32 SG

-- I again believe you missed the point(s).

--rather habitual.

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#33

quietoaktree,

I did? I shall be sure to consult someone who understands Burns.









rather habitual git