EU CRISIS EXCLUSIVE: Geithner “still unhappy” about progress – sources.

Tim describes the eurobazooka as he sees it

Although US Fed secretary Timothy Geithner told the BBC yesterday that “the world can be pleased at the progress now being made by Europe”, The Slog can exclusively reveal this morning that the influential American privately believes the situation is more precarious than it was a week ago.

I understand that, having digested the outcome of Brussels, Geithner is as ever “concerned” about the impasse between France and Germany – regarding both debt guarantees, and a lack of impressive ‘firepower’ against future ‘events’. Said a regular Washington source in the early hours GMT, “The word is that Secretary Geithner thinks [Mario] Draghi should be pumping a lot more money into the banks. He was described to me as “alarmed” by the stress test results, and not encouraged by Berlin’s continued reticence when it comes to bazooka ammunition. Tim believes the markets will want more.”

That expected market reaction has been confirmed by two eurozone credit sources this morning so far. “The UK veto got the headlines,” said one, “but it’s a nothing output.”

Within 45 minutes of the ‘deal’ being announced, ratings agency Moody’s downgraded the debt of BNP Paribas, Societe Generale, and Credit Agricole, citing ‘deteriorating liquidity and funding conditions’. Clearly, the agency shares the Geithner concerns. All this can only pile further pressure on the ECB’s Mario Draghi, who privately also agrees with the Moody’s view about ‘a worsening economic outlook in the eurozone’.

And finally so far – or rather, funnily – Herman Van Rompuy told a press conference this morning that he was “delighted by the new budget oversight”. Malaprop the Belgian strikes again.

76 thoughts on “EU CRISIS EXCLUSIVE: Geithner “still unhappy” about progress – sources.

  1. Well, as I have said several times, at some point the ECB will have to start printing money/QE – and quadzillions of it. Of course it may be done under other guises…….

    Although, as many have said, this does not solve the underlying structural issues of current account deficits and rebalancing the under performing South med countries. Maybe they could just continue to force wages down in these countries – but that does not seem viable.


  2. Geithner has good reason to be concerned. I cannot see the outcome of Brussels achieves anything that will actually improve the situation in a meaningful way. We see slightly tighter rules regarding national budgets to be policed by the monkeys in the EU Commission, who themselves are unelected and utterly corrupt and who can’t even get their own accounts signed off.
    You see John, the whole EU is a gigantic corrupt monster which deserves to be shut down. Cameron didn’t go there to do that, only to veto one new corrupt finc tax and another corrupt 27 nation treaty.


  3. I also imagine the interests TG represents wouldn’t be too happy at Dave effectively dealing himself out of game.

    Does anyone have any opinions on why the ESFS & ESM have been moved into the ECB, and what the effect of doing that will be ?

    There’s been talk of granting them banking licenses – what would it mean if they did ?

    A Central Bank operating a publicly owned “trading” bank – is that normal ?

    Too many questions – and too much alfabet soop.

    @Kit Green – Klaus Regling, he’s at a loose end.


  4. @rightpaddock
    Think I read that they’ve said (not that it means much) there’ll be no banking licence – which is sort of a German position so they cannot buy their own bonds (eat their own excrement?)


  5. Saw Sarcko on TV blaming Dave, & perfidious Albion. Never seen him look so utterly gutted.
    Legal beagles in Brussels are saying that a ‘treaty’ among 17 would be illegal, according to Der Spiegel.
    What I’d like to know, is, without QE, where will they get all the money from? Is it all just fantasy?
    On another note, It would seem that UKIP might be in with a chance, but they would have to get rid of Farage & his club of sycophants first.


  6. Cannabis is not legal in Belgium as far as I am aware. They have to produce ID cards to purchase it in a Dutch “coffee shop”.


  7. I think they only go to a referendum if its a Treaty, so far its a Pact, whether that’s legal or not, only time will tell.

    Kenny said, almost categorically, that he doesn’t want a referendum, its his EU minister who’s saying its 50/50; PMs usually get their way. The only Polish referendum suggestion I can find is 24 hours old and was based on the assumption there’d be a new Treaty; that isn’t going to happen and it never was going to happen, despite what Merkel said on Wednesday. The Finns have to fight their case inside the tent because they’re on the Euro. In the end they’ll get a smoke & mirrors face saver. The Sprouts have been doing this stuff for 60 years now, so they do know what they’re doing, even if we don’t.

    I still think Germany will exit the Euro next year. The cousins won’t want the Greeks and Cypriots et-al going feral. The EU needs to find a way to build sustainable economies in the Club Med with their ageing populations etc. That’s a big ask with a currency valued 60% higher than it would otherwise be, solution – remove the elephant.

    But, where’s the prop-up/bail-out money, maybe the Yanks will have to come to the rescue – again.


  8. Cant stop laughing really. My prediction of “nothing achieved and see you all for more shite in a month” seems to be looking pretty accurate.

    My money’s on Ireland being the one to bring the whole lot down. I live there and there’s no way in hell a referendum will succeed here, no matter how many times they ask or how they try to sweeten it.

    Whether there is enough time left for the eurozone to even ask is another matter…


  9. Thanks GEMMA!!!!

    ….”As a British person, I have never witnessed such dreadful work by such thoughtless workers – and they call themselves craftsmen. I will admit that there were a small few Dutchmen who were very good – but they were as many as there were dreadful BRITISH CRAFTSMEN….”


  10. – fanx

    Apparently Germans buy there own bonds when they’re issued, so I guess you’re talking secondary market buying?

    But why did they move the bail out funds into the central bank? Or to put it another way – why weren’t they there from the start ?

    What I don’t understand is that it wasn’t signalled – and I’ve not seen any commentary on it. I saw notice of the Greek referendum 3 weeks before it became hot, then when I posted the link in the DT, as in “excuse me, this is old news” I got abused.


  11. Farage is UKIP, so no chance. What is needed is an English Independent Party. The EIP could be founded by some disgruntled Eurosceptics in the House of Commons. Edward Leigh would be a start. Tons of other potential candidates.


  12. No one is going to bail them out…

    Not China
    Not US
    No one…

    Either Germany leaves as the main creditor (least damageing option) or the debtors leave (PIIGS) and reintroduce their original currencies.

    The more they try to keep the status quo the greater the chance of an almighty eurozone splat that will take the EU with it.


  13. It is the latest bullshit coming out of Brussels, with a half-life of a couple of hours or so before it gets shot down in flames.

    They are all on Hopium…


  14. The Brussels Crap-o-meter is doing some serious overtime today.

    And from what I can tell, when a nation says:

    “we must first consult with our parliaments on treaty change”

    it actually means:

    “f**k off”


  15. Sir,
    I’m sorry i speak too much nonsense. I take my pills but the smokey is strong as well. Me and the kommandant will be warm in the bunker together . We have schnapps and sausages and half a cabbage.


  16. @kfc1404 – ask Reuters – its datelined Beijing, its two funds, one for Europe and another for the US, modelled on the SAFE fund, it has money in Total, Aviva, BP, Shell & BritGas.

    @Mark – if your referring to the China Central Bank post, I don’t think China has taken over Brussels, they might tho’ when they’ve finished Dysoning up what’s left of London.

    @Mark – If your referring to the Hungary post – its what the Hungarian EU affairs minister Eniko Gyori said, yes, she was in Brussels, she’s an elected member of her countries Parliament, just like Cameron, who was also in Brussels when he had his say.


  17. I see now the goalposts have been moved again, now it’s March, that’s the new deadline, Oh, Sarcozy forgot to mention what year….It’s like the little boy who cried wolf…


  18. @cronshd you are perfectly correct , in addition to printing-mania they need to write-down debt , and given that lots of bust people have lent to other bust people the total impact of write-down smay be less than we expect . If they do print, and if they do tie Germay into all these other economies than you can basically say good-bye to your previous German model and get massively short of the German economy . I can’t believe Merkel does not realise how much Germany has to lose in this sorry episode .


  19. Well if JW allows it, fine. But the British people can do the slagging off better than I can.

    JW knows who you are, even if I don’t .


  20. Dear all
    Ask yourselves why Schauble has distanced himself from this.
    But in the meantime, be content to know that Cameron is in the poo, the eurocrats just dug themselves into even deeper poo, the market opinion remains very negative, and the Merkozy will be eating an enormous helping of humble pie by the Spring.
    Where, for example, are….
    1. The guarantor
    2. The bazooka monies
    3. The eurobonds
    4. The ECB splurge
    5. The eurozoner monies for the IMF
    6. The economic growth, and
    7. the no-haircuts funds
    …..going to come from?
    It’s a bigger con than the 1936 Volkswagen.


  21. I do hope so, He He.

    Their big EUSSR superstate is as doomed as the Titanic once the iceberg had been struck. The clock is ticking only a matter of time now.


  22. Latest from the BBC News Website

    German Chancellor Angela Merkel says Europe’s economic union will push forward political union


  23. @Mark
    No problem, the troll must have spent a lot of time organizing themselves. JW knows who they are though, he has issued a Slog-wide ban on Titanic analogies though ;-)


  24. I’m sorry John, we must all have missed summat…

    This Summit was billed to be the moment in time when our brave EU leaders and their crats came together, put selfish national/personal interests to one side and dealt with the e-zone crises once and for all. For the sake of Europe, I’m told. I know all this because they told us it would be so and they never lie or even get it wrong. If market opinion remains negative, then the markets are simply wrong wrong wrong. When we wake up tomorrow morning, the nightmare will be over.

    In other news…. 27 pigs were seen flying across the sky over Brussels.


  25. Yes – and I think I heard on Bloomin’eckberg today that Goldman Sacksofit are effectively saying “get out of das Dax”. So I guess they are planning for it to go down-down-down.


  26. So the new deadline is march? What are the odds that in march, the new deadline will be August?!

    And I wonder I’d Dave knows something we don’t and is about to show us that his veto was a masterful tactical manoeuvre? And that in exchange for saving the EU, the uk will own the Eiffel tower and all the hookers & bratwurst in Germany!

    A man can dream….


  27. Well bang goes Turkey’s chances of joining the EU then………..

    I can’t see Turkey (population 75m and growing fast) being allowed to join if a political union is planned. One man one vote?


  28. 1936 Volkswagen was a con? Oh My.

    I suggest we have a whip round..but then we are skint also, thanks to NL.

    It’s not like no one saw this comming, I can scarce believe even uneducated people saw this comming years back…


  29. As per Der Spiegel, at the end of the day the lawyers come in to say that the whole agreement will not be legally binding unless all 27 agree. So, if it is only a declaration of intent and any individual government can change its decision at any time.
    Oh what the heck, they have ignored all the other rules that they have made-up for themselves what is ignoring a few more going to change!


  30. Cameron plays the obvious card,Markozy pretend to be surprised,French banks get a universal downgrade,the under capitalisation of the German banks gets noticed,the PIGS are still frozen out of the debt markets,Italy needs e172 billion refinancing in 3 months,the Irish lose patience with Brussels,and the markets ,what do they think?No ‘help’from the US, China for the currency with no active central bank with its own reserves not other people’s.the best thing about this continuing farce is that it has,for now,taken the pressure off sterling and the disaster of QE.Happy Christmas,everybody.


  31. @JW

    I can’t disagree with any of that. I think Merkel has her work cut out to restore some confidence in the Eurozone.

    I would not say it was a con, but the way it was played by the markets – first the playing along with the “one economy” nonsense then the “oh, my god it isn’t one economy” nonsense ten years later has not helped matters.


  32. Please sort out this Gemz schizo nonsense. This sort of trolling undermines the whole point of intelligent comment threads.


  33. @Kit Green
    I am sorry but this is something I cannot help you with. The Troll signed in using my Gravatar (which it turns out is one of those American things that are very easy to get around). I am seriously considering dumping it!

    My apologies. Gemz (the real one, somewhere in Holland).


  34. @Richard
    I am sorry, the Troll got in underneath my Gravatar, which is easy to do. My apologies, but there is nothing I can do about the other one. Have a nice weekend.


  35. Sorry rastaman – for hundreds of years Britain was a gunboat Empire that occupied countries by force of arms – it was not a global trading nation in the 21st century sense of that term.

    I agree with your sentiments – but Britain must imagine a future for itself in today’s world, not imagine a future built on a romantic image of its past.



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