France's Tax Threats Against Belgium Signal Extreme Danger

The quite extraordinarily aggressive attitude of the President of France and his delegation against his neighbouring country of Belgium was the only truly significant factor of substance to emerge from this week's European Council meeting.

Belgium has been on the verge of falling apart for two years and survives mostly because it hosts the evil EU. The French speaking portion of the country Wallonia is therefore already looking towards France with considerably more interest than that of mere close neighbour.

One report on the substance and nature of the threats is best gleaned from this report that appeared yesterday in Zero Hedge, linked here.

The present attitude of the French Government is reminiscent of that of Cardinal Richelieu towards La Rochelle during the siege of 1627. La Rochelle was rich from trade with the new world, Richelieu fortified Brouage down the coast to contain the wealth he later expected to accrue, but when the siege was done with some 75% of its inhabitants slaughtered, the wealth and trade had disappeared with it. Arguably France struggled to ever recover from that folly of jealous greed disguised as a religious theological difference.

The village in Belgium, complete with socialist mayor (apparently an almost equal affront in President Hollande's eye) is home to other wealthy families from France, including the owners of the Auchan Hypermarket chain whose aisles across France seem brim full this Christmas season compared to those of some of their struggling competitors when noted by this infrquent shopper.

This blog has constantly warned that fragmentation of the old nation states could be the most dangerous means of the EU's inevitable demise. In this age of austerity I had never imagined that tax equalization could prove the spark in the tinder box for such disputes.

Belgium is in a poor situation to offer resistance against this French assault, were I a rich film star or owner of a prospering supermarket chain, I believe I would now be seeking another, home beyond the EU itself.

Belgium, Dexia and beyond...

Please read the posting linked here for further all the gruesome details. Note also that Italy is also now trying to convince its citizens to buy its bonds! Wow and waiving commission! (1403 GMT Update WSJ on Belgium bond sale today read here).

Scene at the Place de l’Hôtel de Ville in Brussels in September 1830, on occasion of the Belgian revolution (painting by Gustave Wappers). It was all for nothing, you're going to be submerged in the EUSSR now.

(Image via Wikimedia Commons)

The Belgium keystone to Europe's peace & Germany's thwarted 1901 British invasion.

Belgium today stands at the edge of separation, Flanders from Wallonia. An independent Belgium was the creation of England's Lord Palmerston. The 1839 Treaty giving it perpetual neutrality was guaranteed by England, France, Russia, Prussia and Austria. Belgium's coast became England's secure frontier.

On Film4 this afternoon at 2:45 pm (Sky 315 and one hour later on Sky 316) British viewers can watch a film adaptation, Riddle of the Sands, of a true story of the planned invasion of England by Germany's Kaiser Wilhelm II, which was thwarted in 1901. Centuries long German plans for domination of Europe, still on track to this day, thereafter required that the neutrality of Belgium had to be smashed to allow the invasion and defeat of first France, thereafter Russia to be finally followed by the defeat of Britain. (See yesterday morning's post below).

Belgium's democracy has been in suspension for over 530 days and is even more dangerously surrounded by, and host to, the EU chaos, its very existence must now be in doubt. A thoughful piece on the present strategic balance of economic power in Western Europe, appeared in the blog The Slog, yesterday morning, and I recommend it to my readers. It is linked from here.

S&P downgrades Belgium

One report is here.

Worst Thankksgiving week for Dow since 1932 here

Is Von Rompuy's bemusement shifting attention to Belgium's bonds?

Von Rompuy's widely reported asinine comments on the latest developments surrounding the doomed euro currency are perhap focussing market attention on the nation that produced, and allowed to clamber to the top, such a clearly clueless individual. Reuters highlights the widening gap between Belgium (and indeed France) versus the real core EU country Germany, in a report just in and linked here. The following is the particular quote:

Ten-year Belgian and French spreads over Bunds hit fresh euro era highs at 209 bps and 81 bps respectively, in a sign that Italy's underperformance has raised fears the euro zone crisis could hit core economies as well.
"Equities everywhere seem to be under a lot of pressure. (Belgium) is probably the next weaker nation after Italy. It is not surprising to me that they are struggling," a trader said.

If Von Rompuy becomes Euro Zone President - Can the non-Euro 10 get shot of him?

Another example of how the EU is never content to stay within the already ratified EU Treaties, again raises its head today. This time EurActiv reports, that EU Council President Herman Von Rompuy, may take on the "undefined role" of Euro Zone President or even Euro Group Head of State!

No facility exists within the existing Treaties for either such positions, so would the remaining ten, non-eurozone ex-states have to continue to pay his salary as EU Council President, if so let's be rid of him NOW once and for all!

As I posted regarding the abuses of the EFSM, this time yesterday, the conflicts between the Euro and non-Euro members are all ready becoming severe enough as it is! Any individual would therefore find it impossible to remain independent and equitably fill both posts, never mind the lacklustre Von Rompuy.

As the list of bailout applicants slowly rises, Spain and Italy are now clearly also waiting in the wings, should the Euro Group not have a President for both the bailed-out and the dwindling band of "so-far-not yet bailed-outers"?  As Von Rompuy is a Belgian Citizen (should such continue to be anything other than a versyshort term entity,) and given the economic state of Belgium, which of two such roles should Rompuy most realistically fill?

Although, as far as I know at least as I type this, Cyprus has yet to officially hold out the begging bowl to the EFSF, although it must now be getting very close, as reported in the Vancouver Sun, read here there are  3 defaulters vs 14 non-defaulters as we count today.  After Austria, Belgium, Cyprus,  Italy and Spain, go for bailouts that would quickly become 8 vs 9, surely Finland would then pick up its ball and go home, leaving a potential stand-off?

Cyprus next Euro Group Country for the Knackers Yard?

The PM of Cyprus has asked his entire Cabinet to hand in their resignations. With its power supply station blown up in a munitions dump explosion, see here, billions loaned to Greece, linked here - AND a downgrade by Moody's from A2 to Baa1, things are almost as ghastly as in London, where the citizens of that overcrowded, once upon a time centre of excellence,  have, this evening, been forcibly reminded that it is now only one year before the Olympic Games come to add to their daily misery of movement and increase in taxation!

We must hope that Cyprus is not the key to the extra support for the EFSF when bonds of Italy and Spain start to be purchased in the secondary markets as agreed last week, I guess Belgium will just have to stump up the extra, they may well agree - having no Government!

Belgium split threatens Europe not just the EU and the Lisbon Treaty!

We watch in amazement as events unfold which cry out for a statesman of stature to step forward and cry "ENOUGH" Look at this poll from Belgium as reported in EU Observer, linked here. Consider these statements: 1. Forty nine percent of people in the south-lying Belgian region of Wallonia said they would support "rattachment" - a re-joining - with France in the event of a break-up with the northern Dutch-speaking region of Flanders. 2. On the French side, 60 percent of respondents would like to join-up with their Belgian neighbours, up from 54 percent in previous surveys. The majority in favour is even higher in bordering regions such as Pas-de-Calais. A re-negotiation of the Lisbon Treaty is surely the least significant result of any such break-up. Touch one border within Europe and a dreadful precedent will have been established. The results will be internal as well as external. France, for example, will be impacted as the balance of the country will have been altered, reducing the weight of the South and West in favour of the North and East, as clearly already understood in the quoted paragraph numbered 2 above. Within the EU the balance of MEP seats and EU Council weighting votes will be a matter of concern to all. The relative balance of power between France and Germany will shift and relief might be sought elsewhere such as in the Alsace. What will be the result for the Belgian monarchy? Queen Elizabeth II of Britain would do well to reflect on possible outcomes as the United Kingdom now looks likely to follow the fracturing example set by Belgium. The loss of a national currency must be one sure cause of this disaster. No state could have drifted into this situation over so many months had its currency reflected the growing crisis. Britain's totally incompetent governance gives no confidence that the continuance of the pound sterling will prove a barrier to a similar split given the dreadful indebtedness incurred by Gordon Brown. How can this collapse into chaos be halted? One solution would be to unanimously and immediately abandon the Lisbon Treaty and propose an urgent preparation of a constitution based upon a pillar of direct (possibly IT based technology) and subject to a simultaneous pan-EU referendum. Each day that passes with yet more dodgy ploys appearing to get the Lisbon Treaty approved costs ever more in the reputation and authority of the EU's present political leaders, particularly those of the present rotating President and his Commission counterpart.