Cameron kicks EU in the nuts – right decision?

Pulled off the BBC feed

Latest from the Italian markets: Stocks have jumped more than 3% in trading towards the end of Friday’s session. Shares in Italy’s biggest bank, UniCredit, led the rally.

So the markets think the deal will work

The New York Times says Prime Minister David Cameron’s “fateful decision to veto the idea of renegotiating the European Union treaty on Friday has left Britain as isolated as it has ever been in postwar Europe and effectively left out of future European decisions”.

a common theme in no UK commentators

Former Belgian prime minister Guy Verhofstadt, who is currently an MEP, tells the BBC that Britain’s David Cameron made a “tactical and at the same time a strategic mistake” in putting Britain outside the new European deal.

Asked by BBC World Service if Britain would lose power by taking the position it has, former Italian PM Romano Prodi replies: “Of course. you’ve gained freedom but you’ve lost power!”

glitchy bumpy thingy

As Madame just commented: Cameron is trying to do a Thatcher. Thatcher though was renegociating an unfair deal, Cameron is refusing to sign up to a fair one. Her other comments would get me a ban.

Sorry, double post.

Edit: I take it your first attempt didn’t appear then appeared when you reposted TJ?

TandemJeremy – Member
Pulled off the BBC feed

Latest from the Italian markets: Stocks have jumped more than 3% in trading towards the end of Friday’s session. Shares in Italy’s biggest bank, UniCredit, led the rally.

So the markets think the deal will work

That’s quite a leap you have made there.

Yeah? Italy in trouble according to teh doom mongers – shares in italian banks rise says to me the markets think italian banks are OK now. To simplistic?

shares in italian banks rise says to me the markets think italian banks are OK now.

😯

You’ll be OK TJ, Scotland will declare independence and join the Euro…

The more Cameron takes the Uk away from the EU the more likely it is that Scotland will vote for independence in europe as a part of the consensus here is internationalist and outward looking.

I’d rather be ‘in’ with the yanks than part of rapidly loosening collective of nations that had massacring each other as a national pastime until 65 years ago.

The Euro will fail (eventually) or the southern countries will be kicked out.

Whatever you think, remember Harold MacMillan’s quote when De Gaulle refused Britain EU entry after reeling us in for a couple of years – ‘the French always betray you in the end’.

So the markets think the deal will work

And of course the markets always know best 😀

If only we had deregulated the markets and allowed them to operate freely without government interference, then we wouldn’t be in this mess today 😉

Although it yet remains to be seen whether the EU has done enough to appease the “markets”.

But on the face of it, it was indeed a bold move by the EU. After experimenting with limited democracy for a 100 years, and very effectively stifling any moves to replace it, capitalism in Europe has now started to seriously roll back the burdensome process of allowing people to have a say in the policies of their government.

The EU (read global financiers) have now decided that the previous arrangement was untenable and in future all major economic and social policies affecting member states will be dictated by unelected EU commissioners.

So it seems that the threat by global financiers to undermine the creditworthiness of countries such as Germany and France has paid off. And everyone is falling into line, with Germany and France bullying the smaller states into submission.

Of course none of this will work long term, eventually global capitalism will be consigned to the dustbin of history. The only question which remains unanswered is how much misery will ordinary people have to endure before enough is enough.

And of course the markets always know best

When they move to suit!! More likely short positions merely closed over the weekend?

Please do read the details especially the bit about enforcing fiscal discipline – look at juts how this is going to be done. Then shake your head, sigh, sit down and have a drink. Its soo European (ie a complete fudge)

Uncle jez – your position on this confuses me somewhat. Your clearly an avowed democrat. Yet what’s happening in Europe is the side-lining of the democratic process. And increasingly the unelected European comision issuing dictatats from a centralised bunker! And imposing their rule on countries that refuse to adhere to their orders

It’s bankers and financiers and technocrats that will be increasingly controlling European policy. How do you square that? it’s inherently contradictory

About the only correct decision he has made so far !
We heavily really on the Banking sector for taxes and to
let that go would be more than mad.

The eluded €uro is no way out of the dumps yet and still
on borrowed time.

There is no way we should go into it and should be scrapped all together
Just make the trading between countries easier

The €uro is a bottomless pit for other countries to bleed us dry

this is an act of pure folly & fake pique by our prime minister. it would be one thing not to sign this agreement it’s complete childish stupidity to walk out of the first meeting, what a knob.

So klunk, what would you have done ?

And walk out of the meeting ? Didn’t hear/see him doing that.

So (out of interest) Klunk, do you believe that he should have voted for the EU to have the prior say on the fiscal policy of the UK, before our elected representatives?

in future all major economic and social policies affecting member states will be dictated by unelected EU commissioners.

^^This^^

The EU is moving away from any sort of democracy. This is not a good thing.

Klunk without being present at the meeting and knowing what was said, it’s unfair to judge.
So now we have a bunch of elected(well nearly!) morons running GB rather than a bunch of unelected morons. Small mercies, eh?

Mostly, I’m glad we’re not in the Euro. At least we have some semblence of control over our monetary policy. I say semblence, because we are at the mercy of the aforementioned markets and particularly the bloody credit ratings agencies.

Whisper it quietly, but this is what I think is going on here. Britain finds itself in the cart. The major cause being individual greed on an international level being fed by corporate greed on an international level – underwritten by unsustainable growth. However, years of government overspeding previously has made the situation a good 25% worse than it would have been othewise.

Now, because of the instantaneous flow of information, anything we do is factored into our credit rating. If we do nothing, we lose our rating, our interest payments go up and it doesn’t matter how many nurses we sack, we can’t get out of it. So here’s what we do. We announce a horrible short-term programme of cuts – we have to. Then we drag our heels over actually implementing them because all the time, we are praying for worse economies than ours to go under. When enough of these have happened and they have dragged their allies/trading partners down to our level, we are closer to the mean average of crapness than we otherwise would be. Then hey, we are, in real terms only marginally less crap than we used to be, but in relative terms we are better off.

Sorry to reduce our national economic policy to a game of brinksmanship, but isn’t that what we’ve always done in a crisis. Threatening to let Greece (there they are again) go communist unless the US helped us out with a loan is a good example.

And walk out of the meeting ? Didn’t hear/see him doing that.

that empty chair is not going to protect our interests is it. There be nothing to sign for months. But hey what do we care, nothing to do with us now is it.

So you would have merrily* signed up to the deal on offer ?

* artistic licence.

we are at the mercy of the aforementioned markets and particularly the bloody credit ratings agencies.

really the agencies follow the markets, not lead them.

Ratings will follow the apparent direction of the spreads.
Where they dont help is when institutions have automatic triggers based on ratings. Whilst they can hold a bond with a notionally sub-standard yield, as soon as the agencies drop the rating they have to sell that bond, compounding the problem by increasing the supply.

Automatic triggers are the most dangerous exacerbator of volatile markets.

So (out of interest) Klunk, do you believe that he should have voted for the EU to have the prior say on the fiscal policy of the UK, before our elected representatives?

Klunk without being present at the meeting and knowing what was said, it’s unfair to judge.
So now we have a bunch of elected(well nearly!) morons running GB rather than a bunch of unelected morons. Small mercies, eh?

as i said fake pique, he could have easily bided his time and said as the Czech andSwedes I need to take this back to my parliment for consideration, keep a bargaining position and a seat at the table. I say again how does the empty chair protect our national interest ?

Am I the only person who finds it amazing to watch so many people, so much time etc being spent in these discussions with the result that remains so far behind the real world and the financial markets that it beggers belief? It is quite extraordinary that so many able people can continue to misunderstand and misdiagnose the current crisis.

cant beat the hubris of politicians THM.

recommended reading.

So you would have merrily* signed up to the deal on offer ?

there was nothing to sign, how long do you think the legals would take on a reworking of the EU treaty ? bit longer than 10 hours.

THM – how do you think the end game will play out ?

you know your PM is a buffoon when Boris is cheering him on.

So you’d agree to unelected EU commissioners vetting (and potentially rejecting) UK budgets/legislation ahead of our own elected parliament ?

It is quite extraordinary that so many able people can continue to misunderstand and misdiagnose the current crisis.

Yup, but they assure us that they now have a complete understanding of what went wrong and what is required to rectify the situation.

.

dannyh – Member

Then hey, we are, in real terms only marginally less crap than we used to be, but in relative terms we are better off.

😀 I like that. For some reason it reminded me of this letter in the Guardian last week :

I note that the chancellor says that every household will “save £144 on petrol costs this year”. This is good news indeed, but surely he has missed a trick. Since this “saving” is a result of announcing and then cancelling a 3p per litre price rise on petrol, why didn’t he announce a £1 per litre rise, say, and cancel it? Then every household could “save” £4,800 this year.
Karl Sabbagh

allthepies – Member
THM – how do you think the end game will play out ?

I have no idea, but its nice to speculate. I guess three scenarios:

1. Euro crisis before end 1Q12 (25% chance): including sov defaults (Greece, Italy…?), banking failures/nationalisation, deep social unrest, deep and extended recession
2. Europe muddles thru (65% chance), sustained period of very low/negative growth, social unrest, democratic pressure for orderly restructuring of € zone, introduction of different currency blocs (2 or none at all) – within this 70% chance this is disorderly, 30% orderly
3. Europe recovers and prospers in current form (10% chance)

The big unknown is the social impact in all this. There is an almost irreconcilable gulf between the politics and the economics of the € zone with the politicians lacking the insight/foresight and ability to credibly get ahead of the financial markets and the rapidly deteriorating economies (look what is happening this week in Greece and Italy). The losers are the public and the big question is at what point do they crack and demand change. The potential for revolt among the European middle classes will be a key factor. Tensions will continue to grow between national and pooled sovereignty (with the latter being the ultimate loser)

There will be an over-reaction to the excesses of the past 10-15 years – the main losers in the Uk will be the public sector and financial services being the main losers – aggressive cuts (deficit reduction) and over-regulation and state interference (banker bashing). The financial system will continue to malfunction weighed down by over-regulation, the toxic legacy of asset quality, and inability to grow out of the crisis. Credit starvation will condemn the real economy to a sustained period of low growth. Government participation in economic life will increase in the misguided view that this was simply a failure of capitalism (while emerging economies will continue to adopt capitalism and accelerate further ahead leaving Eur in their wake). The Austrian School (Hayek and friends) will make a come back in the field of economics after lag. Hopefully this will not be accompanied with excess nationalism (but economic nationalism will be inevitable – tariffs, protectionism etc)

Enough for now!!! Look forward to others (much better) ideas!!

p.s. watch what happens to Commerzbank over next 48 hours for more clues. A possible nationalisation of Germany’s second biggest bank?

he was always onto a looser, im glad he vetoed it , we wait now to see if its the correct thing to do all they politicians will do is argue at pm question time , and we will not be any further forward anyways, oh and i suppose now we will never , ever win the eurovision song contest. 🙂

while emerging economies will continue to adopt capitalism and accelerate further ahead leaving Eur in their wake

What do you mean “adopt” ? And the emerging economies couldn’t be more varied.

In fact I don’t how many of them subscribe to your vision of capitalism.

Although it’s debatable what you class as an “emerging economy” it should be included in the list below. A fair few of those aren’t neoliberal free-market economies of the same mould as the UK and the EU.

Some in fact, including the one with the fastest growth in the world after China, are positively “tax and spend” economies.

Argentina
Bahrain
Bangladesh
Brazil
Bulgaria
Chile
China
Colombia
Czech Republic
Egypt
Estonia
Hong Kong
Hungary
India
Indonesia
Iran
Jordan
Kuwait
Latvia
Lithuania
Malaysia
Mauritius
Mexico
Morocco
Nigeria
Oman
Pakistan
Peru
Philippines
Poland
Qatar .
Romania
Russia
Saudi Arabia
Singapore
Slovakia
South Africa
Sri Lanka
South Korea
Taiwan
Thailand
Turkey
UAE
Vietnam

interesting post THM (as ever. bro-cuddle? 😉 )

toxic legacy of asset quality

Domestically I think this is key. No bank wants to lift any heavy weights for fear of shittin’ their pants.

Ive seen some ugly loan books that are a long way from being marked to market.

Id love to see some leaks of the terms of a transaction tax that was being proposed and then the analysis on how far it would reach and to which trades. And of course, how quickly trades could be navigated outside of it’s purview.

It is quite extraordinary that so many able people can continue to misunderstand and misdiagnose the current crisis.

You’re referring to the euro politicians? I suspect quite a few (if not all) of them understand it a lot better than you’d think from the “solutions” they’re coming out with. It’s all a game of brinksmanship though – who will blink first, as exemplified by all the commentary that the UK doesn’t want the Euro to fail so should do our bit (ignoring that others have far more to lose, so won’t let it fail whatever we do). That and a bit of putting off the dirty work in the hope that it will either magically solve itself or become somebody else’s problem. I do wonder how (and for how long) Angela thinks Germany will get away without doing what they’re going to have to do eventually.

What strange times we live in when I agree with everything ernie is saying (apologies if that conflicts with some of my earlier statements or what you might think my position is – in my defence binners started it).

Ernie. Very good point and sloppy (quick) writing on my part. There is no such thing as emerging economies and indeed the whole terminology is out of date. I threw that point in slightly haphazardly merely to spike some debate 😉

EM is similar to capitalism – prone to misuse!!

aracer. I really hope that you are correct and I am wrong! My concern is simply to look at the misunderstanding or outright lying about fiscal positions as one example. This is the fourth or fifth summit to save Europe and yet again the real issues are not being addressed.

Prior to today we had a euro crisis. Now we still have a euro crisis AND a political crisis in the EU. Very depressing.

I like the game of chicken idea. Is this an example of neither driver jumping?!?

There is no such thing as emerging economies and indeed the whole terminology is out of date.

Not according to the FTSE.

Apparently there are not only “emerging” economies but “Advanced Emerging”, “Secondary Emerging” and “Frontier” economies.

http://www.ftse.com/Indices/Country_Classification/Downloads/Sept%202010/FTSE_Country_Classification_Sept_2010_Update.pdf

All very complicated for a simple soul like me.

Ernie. Sorry it’s not you being simple, it’s me being sloppy. Of course the terminology exists but it is wrong to think of EM as a homogenous group. Plus as the founder of the BRICs concept point out it is extremely patronising to call many of the as emerging. Rather they should be called (high) growth economies.