Wednesday, 16 February 2011

The Euro Problems Still Haven't Gone Away

Whilst attention is focused elsewhere, the euroland problems continue to stack up. Last week almost unnoticed a further 15 billion euros was given to Greece:
The experts were on their third mission to the country prior to releasing the fourth 15b-euro tranche of the 110b-euro bailout loan Greece received last May.
And today:
The European Central Bank is being forced to print money to bolster banks in bailed-out Greece and Ireland, leaving the region’s taxpayers on the hook as the final guarantors of those nations’ debts.
And this bit must really delight German taxpayers:
“What you have here is micro-quantitative easing, or money printing,” said Cathal O’Leary, head of fixed-income sales at NCB Stockbrokers in Dublin. “The banks are issuing unsecured loans to themselves.”
And now the problems with Portugal have resurfaced; it is heading for a double-dip recession and a bailout now looks ever more likely amongst the political blame game (my emphasis):
A solution to the euro debt crisis has to be reached at the European level and does not just depend on Portugal, Treasury Secretary Carlos Pina said on Wednesday, adding that Europe has been dragging its feet. " Portugal is continuing to do its work," Pina told Reuters in an emailed response to questions. "Europe has fallen short."
And the consequences are:

The cost of insuring Portuguese sovereign debt against default rose again Wednesday after an auction of 12-month treasury bills and a €250 million debt buyback earlier in the day. Ten-year Portuguese bond yields were trading at 7.304%, well above the benchmark German bund yield of 3.225%.

Some analysts said the sale was lackluster, noting the cost of funding for the Portuguese was higher than in a previous auction.

The Euro is so obviously doomed, sadly though it is a political project not an economic one, therefore it is vital for the EU that they prop it up at all costs even at the disastrous economic costs to the peoples of Europe. In the words of Dr Richard North:
I have found that there is one constant in life: a bureaucracy is a means by which good men do evil.
Amen to that.

1 comment:

    The” No to AV Campaign” started this week.
    The Sun says no, The Mail says no, both say it’s too expensive. Labour mostly say no, conservatives say no and Clegg says he really wanted PR.
    The point is that the machinery is in place for a referendum and the Irish “about turn” is proof that an EU referendum can be rigged.
    To rig a referendum, first create a problem, or reinvent an old one.
    THE VOTES FOR PRISONER’S BILL. An issue abhorrent to the British Public.
    The idea of murderers and rapists being able to vote uses extreme examples to make the point, no mention of the prisoner who didn’t pay their TV license.
    This issue was around when Cameron lost what should have been a walkover election. He had broken his cast iron promise and knew at this point that the EU membership issue would not go away without a referendum.
    An assault on the Court of human rights is underway. Add in the sex offenders register issue to stir it up. I believe Cameron will manipulate anti EU feeling enough to justify adding an EU referendum onto the AV one, at the last moment.
    Once the EU referendum is in place, Cameron will win his battle with the Court of Human rights, and fight to keep EU membership.
    Cameron needs a snap referendum. Lord Pearson recently asked for a cost analysis of EU membership. It was refused. When they were in power, Labour repeatedly refused such requests. The sums will not add up. The arguments for staying in will not bear lengthy scrutiny.