“There’s a hole in your firewall, dear Geli, dear Geli….”

Just released by the EU, this is from Reuters at noon GMT today: (my italics)

‘Euro zone finance ministers agreed on Friday on a temporary increase in their financial rescue capacity to prevent a new flare-up of Europe’s sovereign debt crisis, but markets may judge it too small to be convincing.

Austrian Finance Minister Maria Fekter said the 17-nation currency area would combine two rescue funds for a year to make more money available in case of emergency. She put the total figure at some 800 billion euros, but that appeared to include money already spent to conjure up a more impressive headline number for investors.

You read it here first: Mountains & Molehills at Wednesday’s Slog


  1. I wonder if there is one economy on the planet that is not a few bricks short of something.

    The Europeans are building firewalls with holes in them, so sink their boat. Not enough flexibility. The Anglo-Saxon wing are sinking their boats by filling them up with bucketfulls of printed dollars/sterlings instead. Not enough rigidity. China will sink through a capsize of economic instability and the rest will be done for in the resulting economic tsunami when it all goes pop.

  2. @Gemz;
    “When it all goes pop.”
    Yes, indeed, when…….not sure it’s going to anymore….Super Mario seems to have found the solution, Print, Print, Print and then Print some more.
    By the time the results of this madness come home to roost, it will be somebody that has to sort out the problem..

  3. Entirely predictable. Germany morever is in the throes of executing monetary restraints internal to themselves which will restrain imports and prevent new bubbles appearing, vis a vis credit availability.

    This is bad news for the Club Med countries.

    It is quite well known that Germany is well prepared for a Euro exit, it is being held off by France for a few months more.

    Germany does not want to leave the Euro nor does it wish it to implode.
    Any implosion would take most economies in the EZ many years to recover.
    I understand from sources, Germany estimates it would mean no growth for a year or two, but strong recovery their afterwards.

    However they have a limit as to how much they will underwrite the no hopers down south.

    The UK is in an excellent position, by encouraging inward investment and looking beyond Europe for growth and stability. Just make sure the UK defence forces are in a position to wave the big stick at Germany or whoever, when they start shouting about European unity and trying to bring the UK into a demoralized failing instituion.

  4. @KFC

    that is the problem – either you sink your boat á la Anglais by filling it with water, or you do it in the German manner by pushing holes through the bits that are already under water.

    Super Mario is simply doing things that the Americans like (= trash currencies). It is no more a solution than standing firm whilst doing nothing (= Merkel).

    You are right that somebody will have to sort out the problem. More like, it will be somebody who has to sweep up after the party is over.

  5. @Prof

    nobody asked the Club Med to join an institution designed for the industrial north. Nobody asked them to run riot with cheap borrowing. Can ypu blame Germany for doing ensuring their prosperity? After all, the Club Med did so for the short term with no view to the future.

    Nobody asked Britain to trash its currency – but it is acting in a surefooted manner to do precisely that.

    As to thoughts of war, will Britain be able to afford the fuel for the warships and aircraft?

  6. The yanks will furnish fuel (and a lot more besides) the UK is probably the most reliabel ally the US has (and one of the few that actually puts it money where its mouth is when it comes to actually fighting, whether the wars are morally right is another matter altogether).

    Add in possible the largest reservoirs of oil in the waters and around the Falklands (and yes some of this will accrue to the UK for it support of the Islands) and the UK while still in trouble has more options than most of Europe. Even Obama is not that stupid to realise whatever his personal feelings about the British they are a damn site more reliable than a South American state who regularly reneges on its debt.

    All we need to do is slay the monster that is state sponsored socialism (re: the UK welfare state/public sector as it is currently configured) and we will have route out of this mess. Will not happen with our current crop of politicians maybe we need some major to destroy the current status quo.

  7. “The UK is in an excellent position”

    Now there’s something I haven’t heard anyone say for quite some time! Nice to see a bit of optimism among all the gloom.

  8. kfc
    I have it on very good/close to horse’s mouth authority that Mario has not printed a single new note. BTW, 92.7% of all euros are printed by the member States, not the ECB.
    Which is half the problem….

  9. Gemz
    ‘either you sink your boat á la Anglais by filling it with water, or you do it in the German manner by pushing holes through the bits that are already under water.’
    Don’t forget the other English methods used to sink French fleets: aerial bombing (1940) or blowing them out of the water with cannon-balls (1806).

  10. The Europeans are building firewalls with holes in them

    That’s where you use the €uro and paper over the cracks and holes in the same way as the Dutch fixed the holes in their Dyke’s .
    Problem is, sooner later the leaks appear…….print more paper .

  11. Gemz
    You went a bit Merkel for a few lines there.
    First off, Germany DID ask Italy to join, based on some bogus milk-for-cars deal.
    Second, the ECB and US banking firms lent most of the ClubMud cheap money in an entirely pro-active way – ie asking (selling).
    I agree with you about our currency; but I’m glad I’m not in yours.
    The only real culprit at the end of all this is France, which steadfastly refused to accept centralised monetary control…despite endless German insistence.

  12. The BBC doesn’t think it’s temporary or have I missed something?
    “The firewall is the permanent mechanism to bail out troubled eurozone nations.”

  13. I’m sorry but if no one invited the club med into monetary union then how did they get there? Quite clearly they were invited. And I certainly don’t remember monetary union being sold as set up for northern economies. It was billed as monetary union which would lead to ever closer union between the members, indeed it was meant to lead to convergence. Plainly it hasn’t done that, and plainly German has not meant it to, since they have made every effort to accentuate the trade imbalance to their own advantage. Had they promised this from the start I’m sure the PIIGS would have declined the invite

  14. In an excellent position vis a vis trading with the world. Internally the UK needs to shrink the state dramatically, and this will be done whoever has the reigns of power.
    Unlikely to be Cameron who is a PR PUFF. He was useless at Michael Green,s Carlton, and since then is straw in the wind.

    Germany has respect for only two countries in Europe, Russia and the UK.
    Both these countries will not put up with being pushed around by Germany.
    As for France and the French, there is not enough space here to go over old ground.
    France want to build a wall around its client states, and more importantly the EZ/EU

  15. @Shafted

    that seems the British way of things – because the Brits don’t have any dykes then they do not have the experience of what it is to paper over a crack that is letting in water. The authorities in South Holland (Provincie Zuid-Holland) spend €150 000 a year on controlling musk rats.

    With good reason.

    They understand holes!

    But filling your boat with funny munny until it sinks is no solution either. Is it?

  16. @JW

    I could be wrong here, but the printing of notes is controlled if not by the ECB then at least by common agreement? Saving of course the poor Greeks who are down to their elbows with finger-nail nibbling.

  17. U know what U babbling about.. no i don`t think you those so call “mad`Nuke`men`s in Teheran,.. wholly result of west cheat,betrayals,greed of getting others resources..just look @Libya ..etc..,Rothschild Banksters instigated Puppetshow(FUKUS)..i.e~Zarko,Camelon,Opama + Israel..= root to all mayhem on Earth..period!!
    ..Nuke`s too.. what` do U Ignorant TV-Hero know about that yes seen some “Nukes” or some Steam-Kettle`s(so call “NukePlants”)..yes on TV with lot of Talk.. no..? lol
    .. take and try Educate your thats too.. a big line with Usa`s Space-program,Moonlandings,Humble-Hubble..Naza, call bombings in Hiro-Naga..all big its beginnings when ther`wasn`t any(small) means to independently verify Truth in the elaborated applications to the billions of Funds…. & the Frauds still

  18. Ah yes, the UK is in an excellent position, but the idiots in charge haven’t the gumption to take advantage of it. I feel completely confident that Cameron and co. will manage to be dragged down with the rest of Europe once it all comes apart.

    There was a snippet on the radio this morning re the OECD declaration that they expected the UK to again contract this current quarter and thus be in recession, but it would only be a ‘technical’ recession because they were confident things can only improve from here on, the government was holding to the proper course, etc. etc. Then there was the off the cuff comment that confirmed what I have known for years, they are all mad. The comment? Words to the effect that they can’t afford to let the market dictate events. Mad, I tell you, stark, raving, looney-bin mad.

  19. Absolutely right, John. Whether the proverbial hits the fan while Obama is still there or if it is under Romney (most likely successor if O doesn’t get re-elected it would appear) it will make no difference. Don’t forget the US only supported us the first time because Reagan went against NSA advice.

    The UK may well be a friend to the US but the reality is the US is no friend to the UK, except with kind words when we make ourselves useful to them, only a fool would think anything else.

  20. OT but read the full page article on Iceland in today’s FT, page 11.

    On its way back and it debt/GDP ratio is only 65 percent compared with the UK’s 80+ , the US 100+ and most of the EU in the same ballpark with greece at 160%. The Irish should read this and weep and then round up their politicians and give them the Easter uprising 1916 treatment.

  21. Well easy solution, withdraw all troops from Afghanistan a year early, withdraw naval units from the Persian Gul (all needed to defend the Falklands) and the real stinger issue eviction notice to the US Military that Diego Garcia must be vacated (the US’s only base in the Indian Ocean).

    The Pentagon (principally US Navy) would ensure support

  22. If I understand it right, the East Europeans are commited to joining the Euro as a condition of joining the EU. I think many are looking for a way out of this.

  23. I go along with all of what you say as a matter of fact, except the Hiro-Nago bit.
    In California there are now moonlanding tours to the desert by Bakersfield.
    Gaddafer’s demise came as a planned response to his Oil for Gold Standard that he planned to implement for Africa. The fact that Iran implemented a Non US Dollar basis for Oil is the main motive with the propaganda that the putrid genetic set, driven by abject greed, are chomping to attack their fantasy current Muzzy evil axis .

  24. Now look here, Babaus, could you rewrite that little lot in English? I have read it a couple of times and frankly I dont seem to get your drift.
    I am sure what you are trying to say is most interesting, and I would really like to be able to understand it. But as it stands, it is utterly incomprehensible.

  25. Pingback: John Ward – EU Firewall : Several Bricks Short Of A Load – 30 March 2012 | Lucas 2012 Infos

  26. Who knows if it’s really a ‘hole’? Gordon Brown, say what you like, could certainly do the math and said it was a 2 – 3 trillion Euro problem. Assuming that’s in the ballpark then saying .8 trillion is insufficient is simplistic — overlooks the gradual approach necessitated by politics in the EU.

  27. John, and other commentators, could you possibly give me your thoughts as to what is going to happen in France. I have lived in France for 16 years, and have no intention of leaving…… but I am getting fearful about what the future holds in this country. Are you saying that Germany is going to dump France in the ordure? What, roughly, can the ordinary people here expect?
    I am already growing veggies like never before. I take my whole (english) pension out of the bank each month, and use cash. And my husband has bought a shotgun.
    I would be immensely grateful if SOMEONE could give me a clue as to where things are going….

  28. @babaus2: I see the socialist education system has served you well.
    You managed to find the keyboard :-)

  29. Bellevue:I only spend 4 months of the year in France and have no intention of foregoing the advantages. IMHP there will be a ‘winter of discontent’ as the public sector unions have to be taken on and tamed if any real jobs are to be created. Get yourself some bidons and fill up with heating oil (by the time you need it for the car, no fonctionnaire will care if it is legal or not). Dry breadmix might be an idea; lack of fresh bread will be the first sign of real trouble. PS. Only two inhabitants of ‘our’ village actually have permanent jobs; the rest are retired or assisted; some look pretty healthy to me.

  30. Eh bien,Madame Bellevue,nous Francais vont choisir une nouvelle gouvernment radicale, qui va imposer des mesures contre certains etrangers,origine une petite ile,qui exploite le marche noir avec leur paiements ‘cash’,source leur pays d’origine.Suite aux nouvelles lois ‘reglementation de fusils ‘enregistre dans la logement d’un etranger,il y aura une charge annuelle par fusil de 10,000 euros.Notre progamme va ,en plus,lancer une taxe sur les legumes produit, sans permit, dans les jardins de maisons appartenant aux gens ,origine cette petite ile…..

  31. Chancellor Angela Merkel arrives at passport control in Poland:

    “Nationality” asks the immigration officer.

    “German” she replied.


    ….”No, just here for a few days”…

    The old ones are the best ones……………

  32. Brit lands at Sydney goes to Immigration Officer who asks ‘do you have a criminal record?’ Brit responds ‘I didn’t know it was still necessary’.

  33. Bien dit mon brave. Mais, gardez les agobilles hein? Un pied les dedans va vous faire marcher avec difficulte..

  34. Strangely enough I know quite a lot about Iran, I even rode on my motorcycle there in 98, France, Italy ferry to Turkey an onto Iran thru Kurdistan and onto Tabriz to visit a friend. Then on the male seat on the bus to Tehran and down to Persepolis. Wonderful Country, Wonderful People, completely mad leaders alas.

  35. Can someone tell the europrats that King Canute couldn’t hold the tide back
    so will they please stop trying it with their bloody useless ‘firewall’.
    It ain’t gonna work.

  36. @JW:
    A bit confusing: isn’t ‘printing money’ these days predominantly more to do with electronic creation of credits than paper in hand? And constraints on cash payments seem to be enjoying a vogue of late.

  37. “The UK is in an excellent position”

    Like a man with a hood on his head and a rope around his neck waiting on the gallows for the trap door to open.

  38. Wow!… are you wrong on this bet John. Can I get in on it? Do you really believe that in a future conflict involving the Falklands the NSA will be giving satellite images to Argentinians allowing them to kill British sailors? In 1775 a Casso ancestor of mine starting shooting at the red coats around Boston however things have changed and now this Casso and many more like me know where are friends are located and it is NOT south of our border.

  39. These days the ‘special relationship’ is very much a one way thing. The US cares more about what Central, Latin and South America thinks than what we think.

    If the Falklands goes ‘hot’ again the US won’t be supporting us I can guarentee you.

  40. Sapristi knuckles! I think monsieur understands that a tongue in the cheek is worth more than a foot in the couilles. At least, I hope he does…

  41. Bellevue
    You were a little scant on the detail of what hubby’s shotgun is for: does he expect truculent Frogs wound up by Sarko to take their revenge?
    By all means grow your veggies, but I really don’t think the shotgun is necessary. This time next year we’ll all be skint – at which point, they will wind the clock back to zero…as they should’ve done in 2004.

  42. @Bellevue

    “I would be immensely grateful if SOMEONE could give me a clue as to where things are going….”

    It is a sad fact that if anyone could actually do this the Slog would be out of business (bad thing); william has some (extra dry) ideas but I reckon he’s giving us the old Anatolian double entendre. His advice about not investing in firearms is, however, probably sound. The safest way to look at it is that things are going nowhere.. I would say, fwiw, that hunkering down in la belle France is as good an idea as any other.

  43. They’ll back whoever promises to sell them the oil cheapest, offers the most lucrative drilling contracts to US firms and whoever provides the most political capital. 1 & 2 probably go to the Argentines, 3 is up for grabs. In the end, I think they’ll support Argentina (or at least NOT support the UK) because the last thing the US wants is the UK having access to a honking great oil reserve; we might decide that setting fire to the Middle East one country at a time is no longer so appealing.

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