What is quite clear is that the euro debt crisis is already with us, but that the EU ministers are quite incapable of grasping the reality
No sooner had Greece voted to take the economic hemlock – twice! – than an audible sigh of relief was heard in the markets around the world, as all stock markets rose in relief. That lasted for one day.
On day two, S&P opined that Greece was in selective default and it was only a matter of time before it went into total default, Moody’s knocked Portugal’s rating to near-junk status, and that was before Italy entered the race to be the next euro-shoe to fall, as markets took on board that its debt to GDP percentage was 130%, over twice the limit designated by the Maastricht Treaty. There’s nothing wrong with this aspect of the treaty, but that can’t be said of the bungling B.Eurocrats who were chosen, or not chosen, to implement it.
Mr Barroso, the EU President and who happens to be a Portugueso to boot, said it was quite wrong for the rating agencies to comment on a nation’s credit rating, that was not their business! What a dodo, as that is exactly their business, involving anyone who issues debt.
Then up pipes Mr. Schauble, the German Finance Minister, and says they must be regulated. What? So they come up with what the B.Eurocrats want them too. Besides, added the man in blinkers, they are all American. So what? as he conveniently overlooked that Fitch is owned by the French!
What is quite clear is that the euro debt crisis is already with us, but that the EU ministers are quite incapable of grasping the reality: the crisis is caused by too much debt, and piling on more debt is not the answer. All that will lead to is a bigger bust, and a bigger loss that already threatens the whole euro-zone.
Then up pops Nick Clegg in Paris, who announces that “We are all in this euro-thingie together”, and everyone claps him for being a jolly good European, and his support was exactly right because he said it in French! Well, my dear Nick, I have news for you: the UK is not, blessedly, in the eurozone; nor is Switzerland; nor is Norway, Sweden or Denmark; nor is anyone from eastern Europe, apart from the three people who live in Slovenia. Nor do any of them want to be, as they’ve got more sense than you.
The PIGS have no business in being in the Franco-German hard currency centre, and the sooner that is accepted the better. They can have their own mini-euro, which needs to be at about a 40% discount to the hard centre. Those that argued for a two-speed Europe were clearly right all along. It will come to be, because it has to. Those of us who said back in 1993 that the idea of a single currency was not workable across so many different economies and with no political union to begin with, were told to shut up and stop being Little Brits and to grow up and be good Europeans instead.
Well, we were right and they were wrong. So, Messers Herd, Clarke, Heseltine, Mandy, and the heads of BP, BT, Vodafone, Unilever et al. – why aren’t you apologising profusely, saying: “You were right all along! We were dreaming, but you were awake! How prescient you were, and how short-sighted we were! We didn’t understand what we were doing, but you knew all along!”
But all I can hear is a deafening silence, however, as the next euro-shoe to fall shatters their eardrums.