Otherwise, all normal: EU doing nothing, markets rising.

Starting no doubt as they mean to go on, the European banks exposed to the coming Greek insolvency have been underestimating how badly it will hit them – or so says the international auditors’ union, the IASB. As banks have never told the truth before, it’s a tad optimistic to expect them to start now when their backs are against the wall.

In fact, precisely the same can be said of politicos when facing the possibility of ejection from power. So we shouldn’t be surprised that Frau Merkel said this yesterday:

“Many are worried, but they don’t need to be because the currency is stable. It’s our aim to come out of this stronger than we went into it, as we did during the banking crisis. I said that in 2009, and look at where the economy is in 2011. This can be achieved again.”

Yes Geli dear, but as every Enron investor could attest, the past is no guide to the future. And your economy just slowed by half. And the euro is stable in the same way that rice pudding has the consistency of reinforced concrete.

So it’s good to see that at the MEP level, our representatives are on the ball. During yesterday’s European Parliament session about the eurozone debt crisis, Jean-Charles Juncker, the president of the Eurogroup, allegedly told his audience, “We shouldn’t believe the markets”. His reward for this encouragement for everyone to stick fingers in their ears was, I’m reliably informed, a standing ovation.

In this confident mood, the EU’s senior officials all rejected Christine Lagarde’s call for banking recapitalisation. While it was a daft idea anyway (it’s not what they need right now) it’s been rejected because of Not Invented Here syndrome: in a general sense, her observation that the eurobanks haven’t got enough money is a 180 degree U-turn from three months ago….but it is obviously true.

Buoyed in turn by this steely determination to ignore and reject, the FTSE leapt 3% in early trading. Two sources on the London markets seemed almost embarrassed as they told The Slog that good US consumer spending data and the desperate Greek bank merger had ‘allayed fears’ of a euro debt crisis.

Morals of this piece: (1) The banks are lying to Brussels. (2) Merkel is lying to the German electorate. (3) The EU still sees the entire mess as a plot cooked up by the markets. (4) EU officials are lying about the cashflow condition of their banks. (5) Traders on the FTSE must have a collective IQ only just in double figures.

Or put another way – in the spirit of this site’s mission – it’s all bollocks.

Related: Blamestorming in readiness for Crash 2 ; The shifting sands of Lagarde’s arid mind ; Impotence v Importance in political decision-making





  1. ” . . . rice pudding has the consistency of reinforced concrete . . . ”

    . . . so, you’ve had my wife’s rice pudding then!


  2. Andrew Lilco at the DT had a good take on the Forced Recap idea, which is odd for him.
    Recaping the bad banks is pointless, they’ll fail without £ several trillions of recapping, and the good banks dont need it.


  3. Always good to see Jean-Claude Juncker in action. A top politician drawn from Luxembourg, population tiny, ideal place for international experience!

    Personally I think one of the councillors from a small to medium British city would have more nous, and to think that this chap is determining Eurozone policy!

    So to add to your list: (6) the EZ is led by inexperienced, dogma-driven fools who have no idea what to do next, but are sure that the taxpayers in their zone must be punished for their own political misdeeds in the creation of the EZ.


  4. This all reminds me of Wile E Coyote who runs off the edge of a cliff but doesn’t fall until he looks down and realizes he’s suspended in thin air.


  5. “Always good to see Jean-Claude Juncker in action.”
    Ah yes, good old Jean-Claude, one of the great mediocrities of our time, who gets huge PR mileage out of wearing specs, being seen in a crumpled raincoat, looking permanently harrassed, and carting around a big bulging briefcase. “An old soldier” is how one of my former bosses would have sardonically described him. Every office has its Jean-Claude Juncker, just as every office has its Herman Van Rompuy (usually in charge of office supplies and filing cabinets). It’s a great tragedy, and also sadly educative, that in the EU, gentlemen such as these rise to dizzying heights of greatness.


  6. Quite. You forgot to mention Mr Barroso, described by some as “Portugal’s most hated Prime Minister”.

    And you still think the EU can be reformed with these corrupt socialist cretins running it?.


  7. Whernever GB has got or rather persuaded to get involved in european adventures it ends in tears. Entente Cordiale in 1900’s; French intransigence at Geneva Disarmament Conference talks in 1931/32 – see B.H. Liddell Hart Vol. 1 Chapter 8 starting page 183.
    Thirdly our entry into the so called Commeon Market when British politicos lied to us an we became increasing stitched up by the euro trash with British FCO connivance. Better out than in.


  8. “This all reminds me of Wile E Coyote who runs off the edge of a cliff but doesn’t fall until he looks down and realizes he’s suspended in thin air.”

    Oh not at all.
    I had a friend growing up. Well, I had several, but this story relates only to one.
    Whilst playing any sort of game, he would simply lie through his teeth.

    From calling “overs” or “wides” on goals that were ground level in the dead centre of the jumpers being used as nets, to claiming you did “tick” him and he was not it, even after you had ran him down and sat on him, to in one instance, quite literaly closing his eyes, putting his hands over his ears and repeating “you havent found me you havent found me”.

    Wile E Coyote runs off a cliff and is not affected by gravity until he looks down and believes he should be pulled down.

    The EUrozoners have ran off the cliff, are falling fast, are picking up speed, but are still screaming that they are not falling, they are infact shooting off into space.


  9. Pingback: CRASH 2: Next time, I recommend we keep the bankers in the attic. | The Slog

  10. I don’t know why anyone is surprised, we have allowed a political class rammed full of gobshites who try and control everything they come into contact with because they know control = power = remuneration and there is absolutely no reference to performance in that equation!
    There are no original thoughts, no representation, no innovative game plan only a reliance on failed polices because that’s all they know.
    The UK should be rolling out its own projects designed to insulate us from the worst excesses of what is likely to come and I too believe they should have mutuality built into delivery. We don’t need permission to start this stuff only some people with a bit of vision at the helm.


  11. @Bankrupt Taxpayer
    August 30, 2011 at 12:03 pm

    “And you still think the EU can be reformed with these corrupt socialist cretins running it?.”
    No, of course not – and other than being opportunists, they aren’t really “ists” of any kind, I fear – they haven’t got the intellectual capacity to be an “ist”. No, appointments such as theirs illustrate the alarming deterioration that set in after Lisbon, and what I would do is to sweep them away (and the self important but lightweight Barroso, too) and introduce a constitution that would entirely replace the Lisbon Treaty and that would give the European people far more say in making and filling senior-level EU appointments.


  12. Wile.E: Surely we are at the point where vertical speed lines appear from his legs and ears…

    or are they strings?


  13. Trust me, they are socialists. If their mentors AH & JS hadn’t given fascism & communism a bad name, they’d still be wearing jackboots.
    There are very few people anywhere near the EU who aren’t socialist because it’s primarily a socialist slush-fund party and the lack of intellectual capacity is exactly socialist. The Little Hitler syndrome prevails. That’s why New/Same Old Old Labour like the EU so much.

    But I entirely agree with your suggestion about sweeping them away, dumping the Lisbon Treaty and replacing it with a proper constitution.
    But it’ll never happen voluntarily…they’ll have to be dragged out and dealt with…


  14. I’m not so sure about the link between the Eurocrats and AH & JS. The old EEC was genuinely based on the aim of achieving lasting peace in Europe in our time, but was designed so that it would make progress by stealth, ensuring that the elitists would remain firmly in charge while the European people would be treated like the proverbial mushrooms – kept in the dark and fed on BS.

    The formation of the EEC was not so much an exercise in socialism or fascism (and you somehow seem to confuse the two) as an experiment in elitism, and the essentially elitist nature of the EU, which for a while worked very well in purely pragmatic terms, is responsible for most of the union’s intractable problems today.

    AH and JS were murderous tyrants, who casually and cold bloodedly killed millions of innocent people. In my city, there is a carefully preserved concentration camp, now a museum, which stands as a grim monument to the kind of everyday terror that British people never experienced on their own soil during the Second World War.

    To compare the Eurocrats with AH and JS is completely absurd, and in my view trivializes the horrendous magnitude of the crimes of the dictators – it’s bit like unthinkingly attaching the label Hitler to rude bus drivers and jobsworth ticket collectors. Hitler was a monster, not a mediocre bureaucrat who who gave himself airs.

    As one who lives in the eurozone, I have not been the subject of Gestapo surveillance, I have not been interrogated by thought police, and I have not seen my fellow citizens dragged off kicking and screaming to torture chambers and gulags. Fun is fun, but do let’s try and keep things in perspective.


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