Over on his work blog, the Voice’s Mark Pack has a post looking at three important stories which have been largely overshadowed by the domestic political ramifications of the prime minister’s veto.
Here’s the first issue Mark identifies:
The actual significance of the summit was the latest, most extensive and more desperate attempt to save the Euro. Judging from initial reactions by economists and the financial markets, this time a Euro summit may just have pulled it off. It has not already been written off as a failure which, compared to other summits on the same theme, already makes it more successful than most.
And the second:
Ironically, at the same time as the Euro-summit divisions, in Durban a British minister – Chris Huhne – successfully worked with European colleagues to present a united face to the world and successfully see through a deal. A weak and limited deal, but not the complete failure which looked likely for long periods of time.
For Mark’s take on the third, equally important, event – Syria – head over to the post here.
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2 Comments
Mark’s comments are several days old and events have moved on. In the last three days:
The yield on Italian bonds has gone back over 7%
The Euro has fallen below $1.30
Christian Noyer (chief exec of the Bank Of France) has broken the rule that central bankers don’t comment on each others affairs by suggesting that Britain should be stripped of its AAA sovereign debt rating http://www.reuters.com/article/2011/12/15/us-noyer-ratings-idUSTRE7BE05I20111215
The French are imminently (possibly today) about to lose their AAA sovereign rating
PMI in the Eurozone is at 46.9 for December (below 50 means manufacturing is contracting – it was 46.4 in November).
Various major Eurozone banks (particularly Commerzbank and Credit Agricole) are on the verge of bailouts.
What was actually agreed at the summit? Firstly, that they would have another meeting in March. And secondly, that they would choose to write an ideological commitment to the disastrous, discredited economics of Herbert Hoover into the Lisbon Treaty.
The Eurozone governments are now committed to endless austerity, deflation and depression for the periphery with no offsetting fiscal transfer.
In my opinion, Cameron did the right thing for the wrong reason. There is every justification for introducing a Transaction/Tobin Tax. It would kill the blight of High Frequency/Algorithmic Proprietary Trading by the investment banks, which delivers no value to society but enriches a few wealthy bankers at the expense of everyone else. However Cameron has prevented Merkel and Sarkozy from baking permanent penury of the periphery into EU law.
“The yield on Italian bonds has gone back over 7%”
Or still less than Britain has been paying throughout most of my lifetime..
“The Euro has fallen below $1.30”
Or still far more than it was originally worth…