Heil ....

Germany has asked a panel of top advisers to examine France's economic problems.

Finance minister Wolfgang Schaeuble (pictured, below) has asked its panel of economic advisers, known as the "wise men", to look into France's reform proposals, amid concerns that weaknesses could spread to Germany and the rest of Europe, according to Reuters. More from the newswire:  Schaeuble's request denotes growing concern in Berlin and among private economists over the health of the French economy, which is set to miss a European Union goal for reducing its public deficit next year.

"Concerns are growing given the lack of action of the French government in labour market reforms," Lars Feld, an economist who sits on the panel, told Reuters.

Although Schaeuble raised the prospect of a report on France with members of the council this week, Feld and the finance ministry made clear that the government had not submitted a formal request. The ministry declined comment on the minister's "unofficial discussions" in general.

The Single Market is like a customs union. Tax and duty paid in one member country is deemed as tax and duty paid in another member country and so goods are free to move across borders between members. Many readers eher will not remember the bad old days when trucks crossing borders had to queue and wait for a customs official to measure the amount of diesel in the fuel tank and then the driver had to pay tax on the import of that fuel into that particular country. Only passenger vehicles were exempt.

Hannah is simply playing word games. He admits the EU is internally a free trade area but, the fact that it is not free and open to the world is not unusual. Most of the world is not free and open to the EU or to many other parts of the world.

Hannah provides examples of free trade areas, Nafta (Canada, the United States and Mexico) and ASEAN (ten South East Asian states). The EU is setting up similar Free Trade Agreements, EU-Japan Free Trade Agreement, EU- Canada Comprehensive Economic and Trade Agreement, EU-US Transatlantic Economic Council, EU-India Free Trade Agreement, EU-Mercosur Free Trade Agreement.

Hannah says nothing but he does demonstrate his naivety; "The optimum deal for the United Kingdom is surely to be in a European free trade area but not in a customs union." That's like saying that the optimum deal for the United Kingdom is one where the UK is the sole winner.

We'd all like unlimted freedoms but with no attached responsibilities but you will never ever eliminate 'if you sell to him, I won't sell to you' and very quickly, 'and I'll ask my mate not to supply you at all'. Deals are struck, bargains are made. No one allows a single trader to take all the profit.

Germany's finance minister Wolfgang Schaeuble has been talking to Reuters ahead of the G20 summit in Mexico this weekend. He said he did not want the two-day meeting in Mexico City to concentrate exclusively on the eurozone crisis to the detriment of other urgent issues such as the "fiscal cliff" facing the United States and Japan's debt problems.

"The United States and Japan bear as great a responsibility for (ensuring stability) as we Europeans," he said.

"The G20 economies must decisively win back confidence with structural reforms and sustainable financial policies. This is the most important precondition for strengthening global economic conditions," Schaeuble said.

"Without consolidation and reforms we risk further loss of confidence and still less growth. No sustainable growth can be built on a mountain of debt," said the minister, known for his advocacy of fiscal rigour even in times of recession.

Schaeuble has taken a tough line on Greece and other weaker members of the eurozone during the region's three-year sovereign debt crisis, insisting they swallow austerity medicine even as their economies sink deeper into recession.

But he had warm words for Spain, saying it was on the "right path" and that there were signs - seen for example in falling wage costs and in the current account - that its economic imbalances were improving.

Schaeuble reiterated that Greece, still locked in difficult talks with its international creditors aimed at averting bankruptcy, must implement the tough measures it has promised.

The European Central Bank is in "panic" over the eurozone crisis and acting outside its mandate with its new bond-buying plans, the bank's former chief economist said in comments published Saturday. "The break came in 2010. Until then everything went well," Juergen Stark, the German who resigned from the ECB in late 2011 after criticising its earlier round of buying up of sovereign debt, told Austrian daily Die Presse in an interview. "Then the ECB began to take on a new role, to fall into panic. It gave in to outside pressure ... pressure from outside Europe." Mr Stark said the ECB's new plan to buy up unlimited amounts of eurozone states' bonds, announced on September 6, on the secondary market to bring down their borrowing rates was misguided. "Together with other central banks, the ECB is flooding the market, posing the question not only about how the ECB will get its money back, but also how the excess liquidity created can be absorbed globally," Mr Stark said. "It can't be solved by pressing a button. If the global economy stabilises, the potential for inflation has grown enormously." He added that "panic" about the eurozone breaking up was "nonsense" but that the only way to end the crisis was for member states to bring down their debts and implement structural reforms to boost economic growth. "Governments have recognised that returning to budgetary discipline is indispensable. Markets focus much more on whether states will be able to service their debts in five years' time," he said. Mr Stark quit in late 2011, following in the footsteps of former Bundesbank head Axel Weber, who stepped down earlier in the year from Germany's central bank because of unease about the ECB's policies. Mr Weber's successor Jens Weidmann was the only member of the ECB's policy-setting governing council to vote against the bank's new programme earlier this month. "Weidmann's arguments ... should not be made light of," Mr Stark told Die Presse. "The way in which his position has been publicly commented upon by the ECB leadership has crossed the line of fairness." Source: AFP

The biggest myth about current economic problems is that historical precedents have much value for understanding them. The next biggest myth is that the problems primarily have to do with difficulties in the financial system. The other big myth is that they are part of some short tem business cycle. The reality is that the post World War II era is winding down in a period of unprecedented change. Several different threads of that change that are difficult to factor are the primary agents creating global economic problems. Certainly the role of automation in ushering in post industrial society is one big factor. So is the global competition from the arrival of most of the world's population into the industrial age. Another factor is less certain, but perhaps more basic. That is the possibility that endless economic growth is not really a human priority. Japan may be the more realistic model of human behavior that is satisfied with some level of reasonable economic well being....After the goldrush: between the 1970s and now there has been almost no growth in real wages, whilst the growth in returns on capital have been almost exponential. People felt their standard of living was rising because of almost unlimited credit. That credit has gone. This has left industries, both manufacturing and service, that are in effect crack addicts. Nobody will borrow personally again until growth returns.. People need to be paid more. That way they'll spend all that money on the wonderful things the rich get richer by making and doing. Companies can either strip costs until their markets are dead, or invest in their wet skills through higher pay....

Of course we need to fix the causes of this crisis, but that is going to do bugger all in the short-medium term to fix symptoms. "The attempt to solve a crisis caused by credit with even more credit has, predictably enough, proved a failure. It has been a bit like the motorist desperately pumping air into a tyre with a slow puncture: it works for a while, but eventually the tyre goes flat again."

Nonsense. A fallacy in place of a reasoned argument.  'Debt caused the problem so debt can't solve it' is based on the fallacy that all debt is equally bad. The problem is not the amount of debt but who holds it - governments with their own currencies paying record low levels of interest vs private individuals and businesses who are depressing the economy by all de-leveraging at once. The former is absolutely sustainable at much higher levels than at present - and the use of this debt to produce stimulus the only obvious way out of this crisis that doesn't take years and condemn millions to the scrapheap. (Of course, if you're unlucky enough to be under the Euro, you are doubly screwed: not only is this path not an option - as the ECB won't back your debt sufficiently to make it sustainable - you can't even devalue.)

The Euro and the EU itself have never been about what the 'Germany' or 'Spain' or 'The UK' wants, it is only what the leaderships of those countries want, even in the face of popular votes against the EU.

"Germany" ( read Germans ) will not decide anything, the people will never be given a say, much like the rest of the peons across Europe.

Of course Germany wants to save the Euro, but will only do so if they are able to maintain their 'advantage' in the export markets to other Euro and EU states. One disadvantage for Germany would be if the Eurozone countries decided to allow the ECB to start buying the sovereign bonds of the indebted countries. Germany will never allow that to happen as it would mean that they would have to share a much bigger burden of the Eurozone "collaterized" debt than they do at present. It's called German self preservation....Unfortunately, it still appears as though Europe’s top policymakers – that is, the Germans – are trying to “muddle through”, as opposed to coming up with a good, powerful solution. To understand this situation, it is instructive to reflect on Spain’s “problems” in comparison with those of Greece and perhaps Ireland. While Spain’s widely cited problems of high unit labour costs and current account deficit are symptoms of it sitting inside a rigid currency zone, before 2007-08 these problems existed but were not highlighted. They were seen as an understandable consequence of a monetary union such as the euro area.

G8 - David Cameron has issued an ultimatum to the Greek people to accept austerity or leave the eurozone. The UK Prime Minister insisted failure to provide clarity could prove disastrous for the world economy, and told the Greek people that fresh elections must decide once and for all whether the country stays in the eurozone. The message came as his Cabinet colleague Ken Clarke said the European banking system was already "in tatters". Mr Clarke warned that Britain was "heavily exposed" to potential problems and could be among the next targets for market speculation. Deputy Prime Minister Nick Clegg also criticized the lack of leadership on the eurozone crisis, raising fears of a rise in extremism and civil unrest unless it was addressed. Mr Cameron, in America for back-to-back G8 and Nato summits, said talks with fellow world leaders had "crystallized" the problems.... Justice Secretary Mr Clarke, a former chancellor, said Greek voters had to "face up to reality". "These are hardships inflicted on them by the irresponsibility of their former politicians," he said. "But they cannot just vote for saying, 'could people just carry on giving us some money so we do not have to change anything'." Mr Clarke said the consequences would be "serious" if the Greek people elected "cranky extremists" and defaulted on their debts as a result. "No-one knows exactly what will happen in the rest of Europe. But the banking system is in tatters, it is weak in very many places," he went on. "We don't know what the knock on effects would be, they could be very serious and of course people will start barking at the door of Portugal, Ireland, Italy and here in Britain. "Our banks are heavily exposed to some of these countries, we have overcapitalized them so far... "I obviously hope the Greeks will vote responsibly and that we can avoid turmoil."

The Bank of Portugal said the use by domestic banks for the various facilities available from the ECB rose to €56.3bn in March – up from €47.5bn in February and greater than the previous record level of €49.1bn in August 2010.

Bailed out by the EU and International Monetary Fund in April 2011 for €78bn, Portugal has €12bn earmarked for bolstering its banks' capital positions if necessary in the months ahead. The plight of Portugal's banks was revealed following the cash injection by the ECB in February when the central bank lent €529bn to 800 banks across the eurozone through its long-term refinancing operation (LTRO).  Portuguese banks were among those frozen out from the wholesale funding markets – where banks borrow from each other or professional investors – during the height of the eurozone crisis and as a result are among a number in the eurozone that utilise ECB funding.  "I think it's natural and reasonable for banks to have taken advantage of these funds under the circumstances, especially after the ECB relaxed some collateral requirements before February's injection," Teresa Gil Pinheiro, chief economist at Banco BPI in Lisbon, told Reuters.  "The LTRO injection was in late February so it's natural that it is registered in March," she said.  The Portuguese continued reliance on ECB funding comes amid fresh concerns in the eurozone about the price at which the governments of Spain and Italy can borrow on the markets.  A weak auction of Spanish government bonds last week – when some €2.5bn rather than €3.5bn were sold – was regarded a sign that the initial confidence the ECB created through its injections of cheap cash was evaporating.

Paper makers must be making a fortune at these rates....

Results from Spain's bond auctions are in. The government managed to get the sales away at lower yields than last time (better value-for-money for the taxpayer). The average yield on April 2016 was 3.748% down significantly from 4.971% last time in July 2011. Overall it raised €10bn form the auction of three bonds.

I predicted that both bond auctions will go better than anticipated - not because of any improvement in economic fundamentals in Spain or Italy, but because the ECB will not and cannot permit either auction to fail.

Italy got its bonds away at half the interest rate it was paying last year. The yield on Italian 12-month bills fell to 2.735%, from the near-6% yield Italy paid to sell one-year paper at a mid-December auction. It's the lowest since June 2011. Italy sold €8.5 billion euros of 12-month BOT bills and €3.5bn of bills maturing at the end of May. The 12-month sale was covered 1.5 times, versus a bid-to-cover ratio of 1.9 at the slightly smaller sale in mid-December. The 10-year yield spread between Italian and German bonds fell below 500 basis points for the first time this year.

2012 - Expect Barroso and Rumpy Pumpy to demand more Europe, not less! Until Barroso has "total" control, he will not be satisfied. Coming from a Maoist, this is not surprising. All those, delusional who think he has moved to the center, better think again! A leopard does not change its spots!
- Expect the ECB to shell out more 100s of billions as the European Banks are hit with more funding crisis.
- Expect the ECB and the European financial fighting fund to be downgraded as we progress through the year!
- Expect most of the European Banks, including Germanys to be downgraded further as the crisis intensifies.
- Expect Germany to consider leaving the EU and the Euro as the situation spirals out of control!
- Expect Cameron to U turn on allowing a British Referendum on leaving the EU completely!...And the biggest EU news of all: "Following the collapse of the Euro, Europe's single currency, David Cameron will be forced to hold a referendum on Britain's continued membership of the EU. It is expected that the British will vote overwhelming to leave." ....Sarkozy will lose his election....Merkel will increasingly, smooze Cameron....Talk of - "a remarkable Cameron euro rise".....The new treaty will quietly die.....EU banks will have no spare money. No loans to sick member countries. Arrangements in place for Greece to leave euro - Ireland, Portugal tipped to follow soon after.
Wellllll, enogh "good" news for now ...

Europe has accepted the inevitable and the Euro is being dismantled.

On Wednesday, before the New York stock market opened, regulators invoked special powers that would have enabled them to suspend trading if share prices were to begin swinging wildly. The Federal Reserve said it was intervening even though “US financial institutions currently do not face difficulty obtaining liquidity in short-term funding”, because of fears that the euro crisis could derail markets in America and Asia. In a statement, the Bank of England said: “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing co-ordinated actions to enhance their capacity to provide liquidity support to the global financial system. “The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.” In another day of turmoil in Brussels, European finance ministers also admitted that they had failed to raise enough funds for a rescue fund to prop up the single currency. The International Monetary Fund (IMF) is expected to assist in the bail-out plan – and a senior European official warned that there were now 10 days to save the euro. Olli Rehn, the European Commission vice-president responsible for economic affairs (also known for his wrong decizions - 99% of the time), warned that a summit of Europe’s leaders on Friday Dec 9 was now crucial. MY POINT : When dismantling a currency the first step is to reassure the markets their interests will not be harmed in the process. This is achieved by a group of well respected national banks combining to provide a guarantee. The presence of that guarantee means Europe has accepted the inevitable and the Euro is being dismantled.

30 November 2011 - Coordinated central bank action to address pressures in global money markets

The Governing Council of the European Central Bank (ECB) decided in co-operation with other central banks the establishment of a temporary network of reciprocal swap lines. This action will enable the Eurosystem to provide euro to those central banks when required, as well as enabling the Eurosystem to provide liquidity operations, should they be needed, in Japanese yen, sterling, Swiss francs and Canadian dollars (in addition to the existing operations in US dollars). The ECB will regularly conduct US dollar liquidity-providing operations with a maturity of approximately one week and three months at the new pricing. The schedule for these operations, which will take the form of repurchase operations against eligible collateral and will be carried out as fixed-rate tender procedures with full allotment, will be published today on the ECB’s website. In addition, the initial margin for three-month US dollar operations will be reduced from currently 20% to 12% and weekly updates of the EUR/USD exchange rate will be introduced in order to carry out margin calls. Those changes will be effective as of the operations to be conducted on 7 December 2011. Further details about the operations will be made available in the respective modified tender procedure via the ECB’s Website. Information on the actions to be taken by other central banks is available on the following websites: ; Bank of Canada (http://www.bankofcanada.ca) ; Bank of England (http://www.bankofengland.co.uk) ; Bank of Japan (http://www.boj.or.jp/en) ; Federal Reserve (http://www.federalreserve.gov) ; Swiss National Bank (http://www.snb.ch)

Euro area finance ministers agreed on November 29 on the terms and conditions to extend EFSF's capacity by introducing sovereign bond partial risk participation and a Co-Investment approach. Ministers also adopted amended EFSF guidelines concerning intervention in the primary and secondary debt markets and precautionary credit lines in order to use leverage. Klaus Regling CEO of EFSF commented: 'Both options are designed to enlarge the capacity of the EFSF so that the new instruments available to the EFSF can be used efficiently. Under the partial risk protection, EFSF would provide a partial protection certificate to a newly issued bond of a member state. The certificate could be detached after initial issue and could be traded separately. It would give the holder an amount of fixed credit protection of 20-30 percent of the principal amount of the sovereign bond. "We agreed to rapidly explore an increase of the resources of the IMF through bilateral loans, following the mandate from the G20 Cannes summit, so that the IMF could adequately match the new firepower of the EFSF and cooperate even more closely," the chairman of the ministers, Jean-Claude Juncker, said. The ministers agreed on Tuesday on two ways to leverage the firepower of their bailout fund, the €440bn (£375bn) European Financial Stability Facility (EFSF), using both an insurance scheme and a co-investment programme. The EFSF has around €250bn of its capacity remaining and could multiply that number several times if it is able to attract outside private investors to buy bonds at primary auctions or traded on the secondary market. The IMF's lending capacity is now around £250bn.

Europe's embattled leaders gave themselves a two-week deadline to resolve the single currency debt crisis on Monday by delaying a crucial summit. The European Council president, Herman van Rompuy, announced the delay after it became clear that EU leaders were struggling to agree on proposals to expand Europe's bailout fund, and on possible changes to Greece's second bailout. With international lenders also reportedly making slow progress assessing Greece's finances, the summit has been pushed back from next Monday to Sunday, 23 October. But with Slovakia's coalition government failing to reach agreement on the existing deal to give the eurozone rescue fund stronger powers, the eurozone still appeared disunited. The postponement came as George Osborne told MPs that Europe needed to take decisive action immediately as the eurozone was now the "epicentre" of this summer's turmoil on global stock markets. "We need a comprehensive solution which ringfences vulnerable eurozone countries, recapitalises Europe's banks and resolves the uncertainty about Greece," Osborne told the House of Commons. The chancellor added his voice to those calling for the European financial stability facility (EFSF) to be expanded further. "If you're trying to protect larger countries, then €440bn is sadly not enough." Osborne also revealed that prime minister David Cameron had discussed the crisis with Barack Obama on Monday afternoon, a sign that Europe's woes continue to dominate the international agenda. World stock markets rallied again as traders welcomed the bank recapitalisation plan agreed over the weekend by the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy.

French president Nicolas Sarkozy is to hold urgent talks in Germany with chancellor Angela Merkel on speeding up the rescue plan for the euro. Sarkozy said on Friday the talks would take place within days as uncertainty about the eurozone's stability and worries about deepening recession returned to European markets. Declaring after talks with Greek premier George Papandreou that "a failure of Greece would be a failure for all of Europe", the French president praised Athens for its determination to meet its commitments and said: "There can be no question of dropping Greece." His comments came as European leaders turned up the heat on Slovakia to approve the enhanced eurozone rescue fund amid growing fears it could yet scupper the scheme. Only a day after huge relief at Germany's decision to endorse the expanded bailout fund, anxiety stalked markets and the corridors of power as eurozone inflation rose to a three-year high of 3%, shares in French banks plunged as much as 10% and Denmark's central bank offered 400bn krone (£46bn) in emergency liquidity for the country's banks. There was renewed talk of a Greek debt default and larger "haircuts" for private bondholders as Papandreou sought backing for a further €8bn (£6.8bn) lifeline to save his country's treasury from bankruptcy. Sarkozy said: "There is a moral and economic obligation of solidarity with Greece." Papandreou in turn told reporters that his nation was making all the required sacrifices and reforms. "I wish to make it perfectly clear that Greece, I myself, our government, the Greek people, are determined to make the necessary changes." Yet conflict sprang up anew over plans to set up an even bigger rescue fund for the eurozone, with leading European bankers demanding an outline agreement on a new scheme by the time G20 finance ministers meet in mid-October.

Ireland's central bank reportedly is printing Ireland's old currency in case the country leaves the eurozone. At least that's the rumor circulating in Dublin, notes Alan McQuaid, chief economist at Bloxham stockbrokers in that city. McQuaid, writing a guest commentary for The Guardian, says he's not sure if the rumor is true. But he does hope Ireland has contingency plans in case the euro disintegrates. Then again, given the record of European leaders, a lack of backup plan wouldn’t be surprising. As Greece struggles to remain solvent, the European monetary union is scrambling to stop the debt crisis from spreading. If the crisis does spread, Ireland might be next in line. Some pundits say Ireland should drop the euro. Being master of your own destiny does have appeal, McQuaid admits. If it returned to the punt, Ireland could boost exports by devaluing the currency and reduce its debt burden.

The cat is out of the bag. Eurozone leaders, in various states of denial about the need for their banks to raise more capital, now have to face some hard facts, courtesy of the International Monetary Fund. The sovereign debt risk to European banks has risen since the start of 2010 by about €200bn, with a total spillover effect of €300bn, estimates the Fund. These are staggering figures. They are not, it should be said (and as the IMF emphasises), the size of the black hole in the collective balance sheets of European banks, since there's a very significant difference between a risk and an estimated loss. All the same, €200bn, or €300bn, has to be prepared for. The IMF's analysis explains why the funding climate for many European banks has become icy. When huge losses are guaranteed, but their precise size and location is unknown, the rational response is to play safe by reining in lines of credit. And when everybody wants to retreat, the flow of money slows, thereby exaggerating the crisis by choking lending to economies. There really is only one remedy – get capital into the banks, raise the buffers and generate confidence that losses, however large they turn out to be, can be absorbed. Now that the IMF itself is recommending recapitalisation of the European banking system, there is a greater chance it might happen. That's the good news. The bad news is that there is no guarantee that the eurozone leaders will act in time to prevent an avoidable crisis turning into a catastrophe. Many flew into a funk when the IMF's new managing director, Christine Lagarde, emphasised the need for recapitalisations a few weeks ago. Some screeching U-turns are required.

Slovenian MPs can still vote on the second Greek bail-out and beefed-up euro rescue fund, the EFSF, despite the fall of the government, but getting them to vote Yes "could be a problem." Barbara Reflak, foreign policy advisor to centre-left caretaker prime minister Borut Pahor, who was defenestrated in a no-confidence vote on Tuesday, told EUobserver on Wednesday (21 September) that parliament will still vote on the measures as planned on 27 September. She added that a positive result is far from a safe bet, however. "When the finance committee met yesterday [to vote on the measures], it was very tight. They got through by seven votes pro and six against ... We already had a minority government and the whole opposition is against it," she said. Noting that Slovenia is cutting pensions in its own austerity plan, she went on: "It's very hard for MPs and ordinary people to understand why we have to make cuts in our own budget and on the other hand we are giving a second bail-out to Greece. And we keep reading in the papers that they don't conform to [austerity] programmes." "The government says we need a stable eurozone and that this is in Slovenia's interest. That's our message, but it's a difficult one to promote right now. It [the vote] could be a problem." The latest scare for markets watching whether the EU will get its act together on the financial crisis comes after Pahor lost the confidence vote by 51 to 36 over pensions reforms and corruption allegations. The development immediately saw Slovenian bonds become more pricey compared to German ones and the country's stock exchange, the Sbitop, drop almost one percent. The likely new leader, who could take over in snap elections in December, centre-right politician Janez Jansa, has in the past said the Greek bail-out "isn't fair" because Greek workers earn more than Slovenian ones. Slovenia - together with Austria, Finland, Malta and the Netherlands - is also seeking Greek collateral for any fresh loans, further complicating the ratification process, which requires all 17 eurozone members to pass the measures before they enter into life. The Slovenian scare comes on top of problems in Austria, where the parliament's finance committee has delayed the EU bail-out bill, and Slovakia, where a junior coalition partner has come out against it.

The International Monetary Fund has warned in its latest Global Economic Outlook that Europe and the US could slip back into recession next year unless they quickly tackle economic problems that could infect the rest of the world.The apparent 'boom' in living standards, property prices, pensions, benefits and consumer goods wasn't real, it was created on the back of massive personal and government borrowing. I would have thought that much at least was obvious to anyone.
The problem is not really lack of short-term growth, it's the expectation that we should have constantly have growth and that we should be 'better off'' in every way year after year. We can't return to the false boom and so we will have a period of contraction and shrinking of living standards back to just what they should have been without the debt-filled illusion of quick growth. Those shrunken living standards in the developed economy still look pretty good compared to the average African, non-oil Arab or South American state.And so living standards will have to fall, state expenditure will have to be reduced, debt payed down and we will all have to return to the real world
It isn't complicated, after all what is general 'poverty' in the Western world? Leaving aside the very real cases of the homeless and destitute. No new personal computer, no new mobile and no Sky subscription. No free gastric band operations, waiting a bit longer for a new hip or knee. No new car or telly or foreign holidays. Working longer because you're living longer and staying healthier and not expecting 50% of your best salary when you retire. Sometimes you don't need a complicated solution because the problem is simple. We were conned by politicians that all this was affordable and sustainable.. and it wasn't.

Greek Prime Minister George Papandreou has held his teleconference with German Chancellor Angela Merkel and French President Nicolas Sarkozy. We weren't expecting anything particularly dramatic, but what has emerged is going to be small consolation for investors. France and Germany came out and said that Greece's future lies in the eurozone. Greece, in turn, promised to stick to its budget program in an attempt to stop its debt crisis worsening. Aside from that, no concrete reassurances emerged. At a teleconference Greek prime minister George Papandreou told Merkel and Sarkozy his country was determined to meet all obligations agreed with international lenders in exchange for an EU/IMF bailout. Officials from the European Commission, European Central Bank and the International Monetary Fund returned to Athens to try to get the Greek rescue package back on track. All three leaders have a vested interest in playing for time over Greece despite the sense that time is running out.

Please stop pretending, Greece in insolvent, it is bankrupt, see the parrot sketch from Monty Python for what the Greek economy is really like. Just to make sure that it is dead, an ex-economy then pushing it even further down with draconian austerity should do the trick.
If I don't believe it then you can be damn sure that the markets don't believe it, and all this sticking plaster means that the problem will be here tomorrow, and the day after that....just kicking the can down the road. All this "bail out" is just free money for them and yet another loss for the taxpayers, who are throwing good money after bad.