OFFICIAL SUMMIT SKETCH: It’s all melting down in an informally unofficial way

Sarko: is his nose out of joint?

Speaking through the medium of a leaky German official, Angela Merkel this morning rejected suggestions by Herman Van Rompuy, the European Council president who must not be confused with the European Commission President, that the whole eurozone rescue scam could be pulled off without any voters being involved at all.

The official, who remained anonymous so as not to become official, told a few well-chosen German reporters that “a number of actors have not understood the seriousness of the situation”, and that these essentially Belgian actors had suggested a “bad compromise” – as opposed to a complete sellout, which was what was required by the banks. He added:

“A decisive step to restructuring the eurozone is needed. We cannot achieve that with a whole collection of small steps.” But he fell short of any big steps like guaranteeing eurodebts, observing that the markets would have to make do with medium steps correctly measured in millimetres by people in Brussels who do that sort of thing, albeit not as well as the Germans would.

The informal, unofficial and binding rebuke didn’t go down well at the Elysees Palace, where Nicolas Sarkozy was meeting with the real Angela Merkel to discuss the question of loose-cannon French leaks going forward. These had, over the last few days, suggested that treble-agent Wolfgang Schauble was at work on a Superpill containing unions, guarantees, harsh punishments and forgiveness. Frau Merkel expressed her view that such fantasies had not been helpful, and President Sarkozy sympathised with the problem of having rogue advisers like what he has got some of too. Unfortunately, he felt the need to press Her Highness on the subject of some form of guarantee, on account of he wasn’t that tall and a wall of toxic Italian water was heading his way.

More meetings will be held tomorrow, and nobody will ever be let out of the Palace ever again until such time as an agreement has been reached. In the meantime, Mario Draghi awaits a go-ahead from the Fuhrerine – at which point he will spray the banks with money as part of a controlled liquidity strategy aimed at restoring fiscal discipline in the eurozone. Whatever or wherever that eurozone might be.

But somewhere offstage, Wolfie Schauble is in his lair. Where is it, and what is he hatching? Is he the thing up Angela Merkel’s sleeve? Or is that just the muscle issue she built up pulling pints in the Pferde und Hunde during 1986?

Don’t miss tomorrow’s enervating episode.

27 thoughts on “OFFICIAL SUMMIT SKETCH: It’s all melting down in an informally unofficial way

  1. Hillarious, this would make a great stage play. I would cast Joe Brand as Merkel, Rowan Atkinson as Rumpy Pump, Verne J. Troyer as Sark and anyone in the Labour party as Barosso.

  2. From Maily Torygraph

    20.25 Standard & Poor’s is on a roll. It has also put a number of large European banks on review for a possible downgrade.

    Among those listed are French banks BNP Paribas and Societe Generale, Deutsche Bank and Commerzbank of Germany, and Italy’s UniCredit. S&P said further banks would be put on notice for possible downgrade

    • Climateer Investing says it better

      Standard & Poor’s Goes Nuts, Puts Own Parent McGraw-Hill on Credit Watch: Negative; Downgrades The Pope, All of South America and Two Exo-Planets; Degrades Kim Kardashian

      Content much the same as the DT

  3. http://blogs.telegraph.co.uk/news/peteroborne/100122393/david-cameron-support-of-the-euro-is-honourable-yet-it-could-ruin-him/

    Now after the jolly hockey sticks moment, please get serious… I have just read Peter Oborne’s gratuitously sychophant “defense” of Cameron and his “heroic” effort in this EU crisis.. As I read each paragraph, I got feeling more … and more… like puking back at him onto the monitor, then I wanted to get a hammer and smash the damn thing even though it is brand-new today… Oh, Britain, with people like Oborne and Cameron, this country is well and truly sunk into the terrible abyss… not just poverty for decades but soviet-style dictatorial tyranny as well… Oh, Britain, I weep for you…
    Where oh where is our Lancelot, our Arthur???

  4. The great thing about this story is that nobody has a clue . JW has been changing his story regularly , and despite press stories about the markets forcing things , I can assure you most bond market particpants are lost too , as witnessed by the most extreme volatilty and illiquidity in bond yields for 20 years . The reliance on Fed funds is very, very dangerous , it means the USA can put Europe on the ropesanytime it wishes . Write-off Greece’s debt, take hair-cuts in Portugal , Ireland and even Italy and Spain . Let the PIIGs decide if they want to stay in and build from there .The longer the Euro exists the worse the siuation will become , it is a question of mechanics

    • Agree with most of your comments…but there is no such thing as “writing off a debt”, despite frequent casual references to it. What can happen is that the debt can be transferred to someone else. In the case of Greece and other PIIGS that is/was to be the banks/investors (or so we were told), now it looks like taxpayers etc. Perhaps the next step will be to confiscate savings of ‘the innocents’ to pay them off. Perhaps print their way out of it.

      As a taxpayer and saver, I never signed up to settle someone else’s debts. Those who fail to carry out due diligence when taking on debts, must pay the price, no ifs and no buts. Else we create social chaos.

      • @BT

        You are stating this as though all loans were written against some investment that belongs to someone.

        If you read Professor Keen’s ideas, you will find it explained that with the advent of fractional reserve banking, many debts have no basis on an actual investment. They have a counterpart which is to be paid out on, which goes to paying for the debt plus some profit.

        This is how a derivative works. In essence it is made from thin air, and the only thing that isn’t in the entire set-up is the real money that must be paid in interest charges. In essence, these can be set up off the balance sheet since very little cost is involved in making out the two contracts: and is known as shadow banking.

        This is huge business in London where regulations are notoriously lax.

  5. I would not like to be the Prime Minister, it’s a horrible job. Everyone expects him to be able to sort out the mess and its too much for any man to do. I don’t think anyone really knows what to do any more. Only God can sort out a muddle like this, but hardly anyone believes in him any more.

    • @Barbara R

      Perhaps because it is such a horrible job it seems only to attract horrible applicants. Cameron has proven himself to be a liar over very large issues often enough I think for him to deserve contemp rather than pitybut you are probably rather too nice a person to feel that way about anyone. You deserve my respect, he does not.

      As to God, if it is His hand which can be seen in the ‘solutions’ to various global problems in the past, I’m not sure that it would be realistic or comforting to expect Him to sort out this muddle. Therefore belief is probably not entirely the issue. Those who do believe, also have my respect, but I do not share their or your optimism.

    • If he’s not up to the job (and it’s pretty clear that his waffly PR background did not prepare him for greatness, shall we say), then he can always resign and call an election. The muddle is indeed great, but such things have a tendency to get easier once work is started. The question is, when will he start to do something? PM’s in the UK have a lot of power. When they act otherwise, you wonder about their calibre and motivation.

    • @Barbara Richards “its too much for any man to do”

      Quite right, it is too much for any man, but not too much for a woman perhaps – I can’t think of any who’d qualify, can you – Lady Gaga maybe ;)

    • I don’t really expect him to sort out this mess because so much of it is outside of his control. He has enough on his plate dealing with is inheritance from one Mr Brown and he’s struggling with that, having grossly underestimated the magnitude of the problems facing him.

      But I do expect him to protect Britain’s interests without submitting to pressure or threats from selfish, abusive, squirmy little Frenchmen, women from the East and unelected socialists/commies in the EU, none of whom have a clue what they’re doing and are risking (probably) the worst economic disaster in our lifetimes. It is heading towards chaos and possibly trade wars unless the citizens of Europe bring their elites to heel and get them off their fantasy dream-drugs. A period of cold turkey is in order for these addicted whacknuts.
      Reality rools!

  6. As Manchester United and Manchester City both exit the Champions League it’s time to look at the current European Leagues.
    League 1 (17 members including Greece) controlled by Germany
    League 2 (10 members including UK) controlled by Brussels
    Relegation and promotion possible between leagues, also relegation from league 2 into “others”

  7. The good ole boys from USA ride to the rescue of Europe and France in particular again,(with definitely, as always, a fair amount of self interest on behalf of the U.S. as well), De Gaulle must be spinning in his grave and I’ll bet Sarkozy will have the E.U. and Elysee Palace P.R. people working overtime to make sure the true facts about the U.S. involvement in saving the Merkozy double act from another abject failure summit does not come too much to the forefront in the European media, especially with elections in France coming up in the near future.

    http://www.marketoracle.co.uk/Article31876.html

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