Thursday, October 27, 2011

Blatant deceptions in the Euro Summit Statement 26/10/11

The document referred to in this commentary is linked here.

Paragraph 1 states that the strategy in place has "an ambitious agenda for growth" it does not. It concludes "The euro continues to rest on solid fundamentals."

Paragraph 2 concludes "We fully support the ECB in its action to maintain price stability in the euro area. Non-standard ECB measures introduced by Jean-Claude Trichet will destroy EU price stability, even if they are terminated by Mario Draghi with immediate effect.

Paragraph 3 states the intention is in country specific areas of focussing public spending on growth areas. My experience in France is that this is not the case, is it even possible, in an ongoing recession that is now clearly developing into an economic depression? See the link regarding the Tours/Bordeaux TGV here - in which respect remember fonctionaires and politicians are genetically incapapable of selecting productive investments!

Paragraphs 5 and 6, relate to Spain and Italy, neither of which have yet shown the slightest sign of taking the steps so clearly necessary for any economic growth. The statement that Italy will introduce a balanced budget rule, once known as Sarkozy's Golden Rule in France, has tellingly already abandoned in that country following his UMP party's recent loss of control of the upper parliamentary house, why should any therefore expect Italy to carry it through?

Paragraph 7 commits Euro Group members to continue aid to all those countries now receiving it "until they have regained market access" given the programmes under which they are supposed to achieve that cannot possibly give that end result - is this statement not completely absurd.

Given the above flaws in the most important areas under consideration by the Euro Group in the early hours of this morning, the lack of specifics regarding sources for extra funding and the vagueness over the method of handling the long delayed Greek haircut, it would be completely pointless to consider the other woolly objectives set out in the remainder of the summit statement. Should I find an element of surprise in the other paragraphs I will note the fact in another later posting.



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