Sunday, February 14, 2010

chocolate euros: prone to meltdown

Despite being away this week I have still had time to watch the compulsive viewing which is the Greek financial crisis. As the News of the World failed to mention today, there's one huge difference between the shit which we in the UK are in and the shit that Greece are in: because we stayed out of the Euro we have control over our monetary policy and they don't. They are fucked, and not in a good way.

Hind Sight, it is often said, has 20:20 vision. No one likes a smug know it all but this video is from over 12 months ago:

With reference to the comment about Greek bonds, Tim Worstall commented on it at the time:

Following today's attempt by Mr Farage to attack the EURO through provocative statements on Greece's membership to the EMU -during the plenary debate on the 10th anniversary of the EURO-, the Greek EPP-ED Delegation (Nea Demokratia) would like to inform you that today's tender of government bonds yielded a total amount of 2,550 billion Euros at an average rate of 2,51%, well below the Euribor rate of reference. The final result covers more than 6 times the amount targeted by the Greek government.
This offers a tangible response to any Member seeking to establish the truth regarding the credibility of Greece's performance as a trustworthy member of the Eurozone.
Mr Farage was really unlucky to attack Greece on the same day that markets proved their confidence to the Greek economy.

I love it when they do stuff like that:
Actually, the Greek government didn't issue bonds. They issued bills. Bonds are for more than a year, bills for less than one. Also, they didn't get "below Euribor". Euribor was 2.19% yesterday for 360 day bills. The Greeks paid 2.67%. This is known in financial circles as "more" than, not "less than" or "well below". The implication of this is that the markets think that the Greek government is a worse risk than your common or garden bank.
pointed out Young Master Worstall.

So 13 months down the line and we have the vote for the approval of the European Commission. Of course Labour and the Lib Dems were frothing at the gash to register their approval of 27 people who the poor chaps who pay their wages have no say over, but that's socialism for you. And the Tories? Well, what do you expect that fine, upstanding bunch of eurosceptics did?

Abstain, of course. Still, at least there's some opposition:

Lord Mandelson, of course, remains committed to selling this country down the river. but then the man's a wanker and what did we expect?
The Business Secretary spoke of the "remarkable success" of the beleaguered euro despite the problems which have beset the single currency in recent weeks.
The peer was speaking just as a group of key eurozone countries lined up to pledge “determined and co-ordinated action” over Greece.

I hope to dear God that you and I don't get asked to bail out this political project dreamed up by a group of twats with tiny todgers. Our economy is bad enough without Brown getting any more involved in it and handing us another huge bill. We are like Blackadder's proverbial pelican in this country.

Mandelson, of course, doesn't appear to understand that monetary flexibility is a good thing and let's have a look at what he said last June:
Britain "obviously" remains committed to joining the euro following the currency's "success" in helping its members to weather the economic crisis, Lord Mandelson said.

The newly promoted First Secretary of State, speaking in Berlin, hailed the euro as a saviour that had brought stability to the European Union during financial turmoil.

Looks it.

But then if anyone in Labour had a grasp of economics perhaps we wouldn't have such huge debts and such pitiful growth.

I wish I had faith that the next lot would be any better: I'll have to cling on to the hope that it would be nigh on impossible to be any worse.

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