"I'm Mad"

Despite the EU's overtly anti-democratic manoeuvres last week to tell Italy and Greece what Government they should have, it hasn't worked - the Euro crisis continues unabated, contagion has hit Spain, France and Belgium. It's getting to the point where it's easier to list the Eurozone countries that aren't in trouble.

It's clear that the EU or member states cannot take the necessary measures to stem the crisis - they are sleepwalking into Euro meltdown where the consequences will be massive but are largely unpredictable.

I should be magnanimous in these times, but I'm afraid I can't be. I don't for one minute enjoy the consequences of the chaos on the impact on jobs and the economy but what is amusing is the ever desperate rhetoric from those that have always supported the Euro - Nick Clegg (my emphasis):

It means absolutely nothing to millions of people across the EU who are worried about economic security. They are worried about prospects for their children. The only people who will benefit will be populists, chauvinists and demagogues, who will exploit that lack of political leadership."

Oh here we go - more labels, more insults. This is why, after decades of abuse for trying to argue against a flawed system of government and currency thus being inundated with abuse I have little sympathy. The battle against the EU has largely been a lonely and hostile one - those in favour refusing to engage in debate but instead chuck insults about like cheap confetti at a wedding.

So it is with some amusement that I read this post from the Europhile blog EU Weekly:

I am mad and disappointed.

I am mad at an half finished euro, which has been created without any sort of exit close in the treaty – Not that I ever wish for such a close to be used, just that it is a good sign of a well thought project to have an end-point ready, just in case.

I am mad at an over-optimistic eurozone that accepted Greece despite its lag in matching the growth and stability criteria and continued to ignore the obvious reality as long as things were looking OK and the illusion could be held.

I am mad because the euro is not just a great project or a nice dream. It has become a reality, it has been built upon and brought successful growth and integration among the european states. The euro add solid results and consequences making it impossible to be dismantled or even weaken. It has to be saved, rebuild, made stronger… there is no other options.

That’s why more than anything I am mad and disappointed at the European leaders who fail again and again to tackle the problem and do what is needed to make the euro as strong as it is supposed to be. Every major actor of the financial world agrees to say that the best option is to go forward into a federalist union with eurobonds as the core of the public debt for member states, but all that Merkozy et al. are doing is finding workarounds to the issue, half-fixing the problem for a few months.

It reads like a perestroika advocate within the Soviet Union - believing that the system is fine; it just needs a little retuning.

No. The EU is flawed, it's conception was flawed, the Euro is flawed, everything about it is flawed. In years to come, when the EU and the Euro has collapsed, historians will wonder with bemusement how earth did we fall for this trick for so long?

It Didn't Even Last 2 Days

The latest EU 'deal', which agreed basically nothing, has succumbed to the law of diminishing returns. Designed to reassure the markets, it has failed to even last 2 days. Italy's bonds are still rising to dangerous levels - in short the markets are unconvinced by the EU package.

In a masterpiece of understatement, Annalisa Piazza, a fixed-income strategist at Newedge Group in London said:

“All in all, today’s [Italian bond] auction was not very satisfying,”

Then in a further twist:

A new obstacle to solving Europe's debt problems - already!

Germany's constitutional court has suspended the right of a small parliamentary committee to approve urgent actions required by the eurozone bail-out fund.

The court said it will investiagte whether using the small committee to decide EFSF matters infringed the rights of other politicians.

The nine-member group was set up to get decisions passed more quickly - however there is growing anger among German politicians and voters that they are being dragged into bailing out other nations with little or no consultation.

Reuters reports that the court's suspension of the smalll committee means the EFSF won't be able to start buying bonds in the secondary market because purchases must be agreed in secret, and the full German parliament can't meet in secret.

That leaves the ECB carrying the responsibility for buying Spanish and Italian bonds for a bit longer...

Oh and Portugal's buggered as well:

Monetary contraction in Portugal has intensified at an alarming pace and is mimicking the pattern seen in Greece before its economy spiralled out of control, raising concerns that the EU summit deal may soon washed over by fast-moving events.

Oh and Belgium:

Belgium’s economic expansion stalled in the third quarter as European leaders struggled to contain a worsening debt crisis amid signs the region is heading toward a recession.

And so on...

Belgium To Form A Government...

In an absolutely wonderful example of irony, as the EU and the Euro begins collapsing, I see via Your Freedom And Ours that Belgium is to form a Government after having gone 459 days without one:

The Belgian coalition are close to finalising a deal to form a government having gone 459 days without one.

Politicians made the breakthrough today and a look set to form an administration, ending a paralysis which began after a general election in June last year.

There's more ironies in that story than I care to cope with.

All Inclusive - EU Style

It appears via Wikileaks that the Belgians are whinging have expressed concerns to the US about a G20 "super group" within the EU:

Our[US] Dutch interlocutors have also noted some tension between EU members that are G20 participants and those that are not; the Belgians, for example, have expressed concern about a G20 "super group" within the EU that consults on the issues first before bringing the discussion to the larger EU community. As guests in the G20, the Dutch are trying to walk a fine line between wanting to punch above their weight with the big EU economies in the G20 and foster their usual spirit of inclusiveness and consultation with all EU member states.

Bless the Belgians feel a little left out. Though it would help their cause greatly if they could perform the relatively basic task of forming a Government first - 14 months and counting (leaving aside the fact that their real Government resides in Brussels anyway).