In this weekend’s papers the Euro crisis rumbles on despite Cameron’s attempts to try to change the narrative. Cameron wants to leave the EU issue alone, but the EU is not going to leave him alone any time soon. Christopher Booker writes that “the project is slowly heading for very messy and prolonged disintegration” and it won’t do that quietly. Far from it.
So while Cameron and his merry band of Europlastics prattle on about ‘repatriation of powers’; a complete non-starter as the ever excellent Richard North points out, the Euro crisis continues to pull the EU down a gurgling plug hole. And the consequences of a chaotic, yet increasingly inevitable, breakup will not be good as this piece by Liam Halligan in the Telegraph argues. Liam is unconvinced by the latest ‘extend and pretend’ bailout package:
Far from making the situation clearer, allowing investors to make considered assessments, this latest announcement made Western Europe’s grotesque debt crisis even more acute, sowing further infectious spores of confusion.
By late Thursday…and certainly on Friday, the warning signs were there. Global bond markets, by character more sober and smarter than the excitable equity guys, were voting against the deal. This is alarming. For it is only by selling more bonds that the eurozone’s deeply indebted governments can roll-over their enormous liabilities and keep the show on the road.
And then comes the warning, that we are heading towards significant and serious civil unrest at the least:
Let’s be clear – if global bond markets stop lending to a number of large Western economies, we are in the realms of unpaid state wages and pensions, transport chaos and closures of schools and hospitals – sparking the prospect of serious civil unrest. Forgive my intemperate tone, but these are the dangers we face. And I’m afraid the only rational response to Thursday’s announcement is that the probability of such undesirable outcomes has just been increased.
Liam rightly argues that the only practical solution to the crisis is an orderly breakup of the Euro, but that ain’t gonna happen (my emphasis):
The eurocrats, of course, lack the guts to trim back monetary union to a more manageable size. Too much face would be lost. So “euroquake” fears, once viewed as outlandish, are gaining pace. Despite Thursday’s deal, and all the reassurances of a “durable solution”, the Italian government on Friday paid 6.06pc for 10-year money, up from just 5.86pc a month ago and a euro-era high. Such borrowing costs are disastrous, given that Rome must roll-over €300bn of its €1,900bn debt in 2012 alone. A default by Italy…would make Lehman look like a picnic.
Gulp! In truth there’s little in the piece that isn’t anything that this, and many other blogs, haven’t said for months if not years. But at least some sections of the MSM are starting to wake up, though almost certainly it’s too little, too late.
Update: Just seen that Autonomous Mind has a piece on the make up of the next European War; between the politicians and the people. Warnings are coming in thick and fast.