A draft summit statement obtained by telegraph.co.uk on Thursday revealed plans for a revised European Stability Mechanism (ESM) treaty by the end of November which will be brought into force as soon as possible before June 2013. The ESM has been designed as the permanent replacement of the EFSF. Opposition to the bail-out plans was reinforced when Germany's growth forecast for next year was cut to 1pc down from a previous 1.8pc. The first summit starts on Friday afternoon with a meeting of finance ministers. Stephen King, chief economist at HSBC, said: "Keeping the eurozone together will involve huge financial resources and considerable ingenuity. The alternative would be worse. We argue that a break-up of the euro would be a disaster, and in a worst-case scenario could trigger another Great Depression." Meanwhile, former Prime Minister Gordon Brown has said that failure by European leaders to quickly resolve a growing financial crisis risks sparking “havoc” as Europe’s troubled banks tip the continental economy into recession. “The truth is that European banks are in a worse state than American banks, that they never really recapitalized even though they said they would,” Mr Brown said. “They didn’t write off their toxic assets. They’re not lending, and they’ve been trying to disguise the extent of the problems they face.”
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Friday, October 21, 2011
A draft summit statement obtained by telegraph.co.uk on Thursday revealed plans for a revised European Stability Mechanism (ESM) treaty by the end of November which will be brought into force as soon as possible before June 2013. The ESM has been designed as the permanent replacement of the EFSF. Opposition to the bail-out plans was reinforced when Germany's growth forecast for next year was cut to 1pc down from a previous 1.8pc. The first summit starts on Friday afternoon with a meeting of finance ministers. Stephen King, chief economist at HSBC, said: "Keeping the eurozone together will involve huge financial resources and considerable ingenuity. The alternative would be worse. We argue that a break-up of the euro would be a disaster, and in a worst-case scenario could trigger another Great Depression." Meanwhile, former Prime Minister Gordon Brown has said that failure by European leaders to quickly resolve a growing financial crisis risks sparking “havoc” as Europe’s troubled banks tip the continental economy into recession. “The truth is that European banks are in a worse state than American banks, that they never really recapitalized even though they said they would,” Mr Brown said. “They didn’t write off their toxic assets. They’re not lending, and they’ve been trying to disguise the extent of the problems they face.”
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7 comments:
Politicians prepared to be honest, even if only with themselves, already know the EU experiment has engaged its death throes. The motivation of Europe's political leadership is now driven by a fear of becoming the straw the breaks the camels back. They worry that particular chill hand of history might be seen to rest upon THEIR shoulder.
Isn't that right Mr Cameron?
Three line whip anyone?
Seems that the only thing Merkel can possibly agree to is a smoke-and-mirrors arrangement. However, it also seems that neither German politicians nor the German public will allow even that.
The 'Titanic' that is the EU/Euro vanity project has already hit the iceberg and been holed below the waterline. The consequences are inevitable, no matter how much smoke and how many mirrors are deployed.
Even our own diehard eu believer, cameron, must see that it is a clowns circus.
Every day the pendulum swings from one extreme to the other, with no one having any idea of what to do.
And yet our 'man' clings to his almost religious ferver for his beloved eu.
How much are they paying him? One would have thought that he would be above bribery with his own vast fortune. Maybe not.
Maybe he is threatened with a sticky end if he does not toe the line.
Maybe he is just totally out of his depth, and cannot face running the UK by himself. Yep. That could be it.
The sooner Sarkozy accepts the inevitable - he and the rest of Europe are a pawn in the hands of Germany and will have to do their bidding - the better.
This is what Maggie said about Germany in May 1992 -
"... If I were a German today, I would be proud, proud but worried. I would be proud of the magnificent achievement of re-building my country, entrenching democracy and assuming the undoubtedly preponderant position in Europe. BUT a united Germany can't and won't subordinate its national interests in economic or in foreign policy to those of the Community indefinitely. Germany's new pre-eminence is a fact.... and its power is a problem - as much for Germans as for the rest of Europe..."
It seems to me that we have reached the point where Germany has to decide whether it will continue to subordinate its national interest to the rest of Europe.
If the decision is NO then the Euro and probably the also EU are dead. If the decision is YES then Germany will have to abide with the majority decision, led by France
Thank you for the link to the FP article, interesting but, like Gram64 below, I do not think it is correct in its view in that it is clearly written by a supporter of the Euro and EU.
You refer to "the elites and big corporations', but those that are now making their political clout felt are the ordinary members of the public. They have worked and saved hard only to see those of other nations borrow heavily and spend wastefully and run up huge debts.
It is these ordinary members of the public, not just in Germany but many other countries too, who do not want a bail out. Do it once today and how many times does the begging bowl return to be replenished tomorrow?
Lets face it that is all it is from the penniless countries - a begging bowl! And what does one do for the beggars? You give them a little to keep them from starving and nothing else, certainly not enough to finance a new lifestyle.
Push is coming to shove in the Western democracies as the average citizen has seen enough of "the elites and big corporations" and is now demanding to be heard by their governments in order for positions and decisions be taken which benefit them and not some amalgam of government and corporate leaders who apparently inhabit a different world.
ou couldn't make it up. Several weeks ago the Germans called the idea of a two trillion bailout fund "silly" and "stupid" (and by implication all those calling for it, including Sarko, Boringoso and sundry Italians desperate to get their hands on German funds) so where the surprise comes in all this is a total mystery.
Unless Merkel, Schaeble and the German Constitutional Court do a volte-farce over the weekend it ain't gonna happen .....
... while will bring a much-needed reality check to Europe and in particular to Sarko.
France is looking very dicey .... vast debt, banks up to their eyebrows, no growth and the socialists about to take over and no doubt introduce the 10 hour working week to create jobs. How they still have an AAA rating (= couldn't be better) is just another of those unfathomable mysteries of the universe.
"all those calling for it, including Sarko, Boringoso and sundry Italians"
You left out Geithner, Cameron & Obama - they're yelling far louder than the continentals. They're into Angie in daily conference calls begging her not to pull the plug.
If French/German banks crumble then trading in US & UK domiciled CDS derivatives will send Wall Street, Main Street, City & High Street into Meltdown - game over, game set & match to NoOne.
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