Mali a New Trial for the EU

The Presidency of France is arguably the most powerful elected constitutional post in the Western world. This was strikingly illustrated by President Hollande's brief TV address to the nation yesterday afternoon, when he announced his country's forces were in action in Mali and that his Parliament could discuss it if they wished after the weekend, namely three days ahead on Monday.

Well that once was the case, but what now with the EU and the complications of the ESM Treaty now in force for about three and a half months, summary here, while a more detailed explanation here. The Mali engagement by French forces will inevitably impact the French deficit, debt, credit ratings and thereby its ability to meet its ESM Treaty obligations!

A fascinating dispute between France and Finland has only just arisen which illustrates the coming problems very well, read one report here. Essentially Finland has lost a contract to build a large Caribbean cruise liner in Turku to French competition in St Nazaire, apparently due to Finlan's reluctance to match the level of Government subsidy offered by France. How much more difficult has this dispute become as France's African venture brings ever closer the moment when France, instead of being the second largest contributor to the ESM, instead is forced to call upon it for funds and thus partly reliant on Finland's AAA credit rating for lower interest rates. 

Ironic, is it not that, such lower interest costs and higher credit rating are owed to the sanity of the Finnish Government, the sacrifices of its people given from living within their means and consequent reluctance to dish out grotesque subsidies of wasted taxpayers money for otherwise non-competitive industries?

This blog has repeatedly quoted the nonsense of the contribution percentages written into the ESM Treaty as begging belief, with both Spain and Italy being due to contribute large portions of the funds they seem to be among the most likely to need. Let me try another analogy on the ESM, think of it as a Christmas Club, where with all in full employment they all agree to cough up X% of their wages for a celebratory bash every year. How many need to become unemployed and broke before such a club folds? The ESM, of course, was only formed when several of its founders were already in a state of relying on the formation of such a Club for themselves to avoid bankruptcy!

Let us return to Mali, however, for even more absurdities of the EU will soon appear as a result of France's colonial legacy, the costs of which seem to be about to be partly defrayed by that country's Euro Group partners non-consulted members.

My Great Aunt, Margery Perham, was something of an Africa expert and in 1932 debated the contrast between French direct Colonial Rule with Britain's indirect methods with the then Governor of Chad, Jules Marcel de Coppet, who explained it partly in my Aunt's paraphrase - to the lingering dislike of local government in modern France,'a hangover from strong feudal power and an obstacle to centralization'. In addition, the French experience in Africa had been, from the start, more about military and imperial control than anything else, objectives backed up by the dominant French colonial paradigm to the north, represented by Algeria. (Into Africa, C.Brad Faught, Publisher I.B.Taurusp.80)  

Such is the situation (perhaps I should say potential quagmire) into which the EU, or at least the Euro Group has put itself this morning, complicated even further by the coming into force of the Fiscal Compact a mere eleven days ago.

I will, of course, be returning to these complex issues quite often as the date of PM Cameron's landmark speech on Britain and the EU has now been fixed at 22nd January in the Netherlands, a clear signal that Deputy Prime Minister, Nick Clegg's influence is clearly already heavily at work. The worldly maritime view from Holland and Spain will be now badly needed, rather than the dreadful EU embedded corporatism so far evident in all Clegg's actions.  The very unworldly and frankly almost naive David Cameron is going to struggle to rise to this occasion, especially with Clegg in his team and the likes of Michael Heseltine already loudly interfering from the wings, read here! 

                                                                                        

ESM Board to launch this vehicle for oppression today

As German Chancellor Merkel, travels to Athens today, to witness first hand the  squalor, human misery and destruction wrought by her policies over the past several years, the ESM, another tool for Germen domination of the European Continent will be inaugaurated in Luxembourg, in accordance with her desires and instructions, as reported here by RTE the Irish Broadcaster, whose ex-country is already entirely controlled by Germany through the same agency at work in Greece, known by the already everywhere reviled tag of "the Troika".

Those who actually control Merkel and the German Constitutional Court, which also appears to have now become their puppet, remain unkown and as yet still hidden from view.

German Constitutional Court set to delay ESM for a further 3 Months

An analysis of the German Constitutional Court statement from Karlsruhe by Pater Tenebrarum on his Acting Man blog is linked from here. That comment concludes as follows:

The upshot is that definitive ratification of the ESM could be delayed by several months.The patience of financial markets will be severely tested if this is in fact the case. Moreover, other countries will no longer deem ratification an urgent matter – which could help trip the whole project up as the contraction becomes more severe and more heads of political incumbents roll.

The times will therefore remain 'interesting' (in the Chinese curse sense) in the near to medium term. Regardless of the fact that the ESM would very likely anyway not have been of sufficient size to truly alter the course of the crisis, the markets will be a tad more nervous if its ratification is held up for so long.

The effect of the ESM is the destruction of the remaining national sovereignty of Euro Group member states which has so far yet to be abnegated in accordance with the machiavellian, and IMO pure evil, Master Plan of Monnet and Schumann

Finland, the ESM and the future of Europe

Finland is crucial to the Euro Zone group of countries as its collateral demands under the EFSF and ESM arrangements (soon to be the sole structures between EMU and its certain death) make it the only nation among the seventeen members of the common euro currency whose sovereign triple A credit rating still appears reasonably secure. Having at least one member contributing state, however small, still rated AAA, could be of profound significance to the borrowing activities of the ESM. Germany unless the ESM ratification can be successfully constitutionally challenged will soon have its credit rating at risk among the  worsening EU crash and worldwide recession so caused, Austria and Luxembourg cannot then be long behind.

Yet it is ironic beyond belief, that this very demand for Finnish collateral, results from that one country's obvious assessment that the project is certain to fail. A report from Bloomberg's Businessweek is linked here, it fails to report the earlier threat that Finland, if pushed could recall its parliament in August to halt the gaderene rush to pan-Eurozone national suicide.

ESM ratification progress towards tyranny!

There was no new firewall, no new funding nor was there any substantive progress on solving the EU's existentialist crisis during the 19th summit held to discuss this ever growing disaster held in Brussels at the dog end of this week.

Progress towards ratification of the "agreements" that will become the chosen instruments of the tyranny now being drawn up by the EU for the soon to be completely crushed and impoverished peoples of Europe, may be seen from page 10 of the EU document linked here. Germany, signed up last night, even though the version agreed had already been changed that day in Brussels, what hope for legality?

The true extent of this week's failure may be seen in this graphic from Zero Hedge, linked here.

Are the Irish about to vote "yes" for fear of their home politicians?

The following is an excerpt from an interesting comment in the Irish Independent this evening, linked here:

At the heart of their thinking is a new phenomenon which I believe is a significant factor in Yes vote support. It can be briefly stated thus: "Irish people who do not profess to understand the economic complexities of the fiscal treaty, the European Stability Mechanism, or how much further the euro has to go before it collapses, no longer want economic responsibility reverting to Irish politicians, because they can't be trusted. It is, therefore, better to vote Yes, surrender our future to the eurozone, and accept austerity government by Germany. Although this represents the ultimate surrender of Irish sovereignty, the justification for this is evident in the muddled views of your Government whose thinking is seen as being akin to last administration, if there is thinking there at all."

The writer, Bruce Arnold, raises some interesting points on the motivation about the referendum on the EU fiscal treaty, this too is worth recording here:

It is absurd to approve a fiscal treaty which would tie future Irish governments to balanced budgets and to a 'debt brake'. Doing so in order to have access to a fund which does not yet exist and which depends on an ESM treaty not yet ratified is also absurd.

I spent some time in Italy during the early days of the EEC and believed local enthusiam for the project was as much about doubts over the calibre of their domestic politicians and democratic institutions, rather than any particular enthusiasm for the EU project as it was clearly becoming.

Odd is it not, that now the Irish might be sacrificing their sovereignty and hard won independence because they put greater trust in the Germans than their home grown political classes?

Caretaker Dutch Parliament ratifies ESM Treaty - Court will rule on nullification of ratification 29th May.

The report from the WSJ is linked here. The main points:

The EUR700 billion fund, which will have a lending capital of EUR500 billion, is meant to shore up Europe's defenses against the debt crisis by providing financial aid to struggling countries. It is scheduled to take effect in July, once euro-zone countries representing 90% of the total capital have ratified it.

Tyranny in operation - putting the unratified ESM to work in July

The ESM is designed to replace the EFSF and EFSM, It has not been ratified among the Euro Group countries involved. Despite this, the effective date for putting it to work has been advanced from the originally scheduled date of early 2013 to July 2012.

In the case of Holland, their parliament has been dissolved and a caretaker government is in place. Elections have been pushed back to September. The outgoing Prime Minister Rutte signed the Treaty before parliamentary debate and the dissolution of his Government.

An opinion poll for television programme EenVandaag this Tuesday showed that six out of 10 Dutch voters think parliament should not ratify the treaty to set up a permanent European rescue fund until after the September general election.

Elsewhere across the EU other wierd manipulations are underway to push this treaty through.

Europe has, it appears, lost any care or thought for their dying democratic freedoms!

Dutch Caretaker Government prepare to cede €40 Billion spending authority to the ESM

The artcile summarising the state of play in the soon to be bankrupted country of Holland was described this morning on this link, which concluded as follows:

In the present ESM, the EFSF, a unanimous vote by all participating countries was required. For the ESM, this obtains regarding decisions that must be taken quickly, the backing of 85 percent of the participating countries is sufficient, to avoid small countries being able to cause decision-making to stagnate.
The Netherlands (with a share of just 5.7 percent) will not be able to block any ESM measures on its own. Earlier, the Council of State and government auditors were also extremely critical of the permanent emergency fund, particularly the limited opportunities for checking up.

The measures mentioned can cover spending of €4.5 billion in the case of Holland, plus another €35 billion in guarantees. Think how much cash-strapped France is giving away for the ESM which will be as doomed over Spain, Italy,  et al just as the EFSF and EFSM have proved over Greece!!

ESM ratification, machinations and manipulations - Is Twitter culpable?

In years to come the ESM Treaty looks like becoming the preferred weapon of oppression against Eurozone countries, by which the EU elite will maintain their powers and benefits at the expense of those who utilise their enterprise and efforts in order to survive.

It has already been decided that the Treaty should come into effect before it has even been ratified, read here.

Now it appears that in Holland, where no legal government presently exists, plans continue to ram the Treaty through and to facilitate this without protest Twitter accounts of those opposed to the ESM are being blocked. I quote a blog post on that topic in full from Holland, linked here:

Weirdness

Posted on 20 May, 2012

It looks like Twitter is the front in the Second Dutch Revolt. This time against the EUnion and specifically against the ESM and the cack-handed way in which our political ‘betters’ are trying to run this through parliament.
Finally, at long last, we have an issue for the Dutch to rally around, to wake them up to the danger the EUnion and out own ‘leaders’ pose. The manner in which the current care-taker government is trying to ram through ratification of the ESM is confirming to a lot of Dutch that the people occupying seats in parliament do not work for us, that they work for the EUnion. And the reaction, on Twitter at least, is fierce.
So fierce in fact that parties unknown have managed to persuade Twitter to suspend accounts openly opposed to the ESM ratification. Specifically, the accounts are @ESMNEE, @ESMnooit and @No2ESM.
This weirdness, which started earlier this evening, did not go unnoticed. The predictable reaction was not long in coming. New accounts such as @GEEN_ESM, @ESM_Nee and @esmNEE sprang up almost immediately and are still functional as of this writing.
Now, one can question the utility of social media campaigns. But evidently some parties are worried enough to try and get opposition to the Dutch ratification of the ESM silenced. As we wrote yesterday, something is going on.
And as I sit here, writing this post, the sober, contemplative part of the back of my brain sits in amazement that here I am writing about active attempts at censorship, in the second decade of this the 21st century, about a usually calm and sedate corner of the world. How the hell did we end up in a situation that I have to write about my own country as if it were a two-bit dictatorship, as if the current regime is not better then those of China, Iran or Lukashenko’s Belarus. My Lord, but have we slipped downhill in a couple of years.
Related:
ESM, a coup d’état in 17 countries!
[UPDATE001] I mean, really! The account @GEEN_ESM has been pulled off air as well. What the hell is going on?

ESM Ratification progress, ESM UK Parliamentary explanation.

EU political will cannot save Spain.

The following is a very brief extract from an article by Pater Tenebrarum on Acting Man, linked here, which is preferably best read in full:

“The headline numbers on the combined European firewall are as large as €940 billion. This includes €220 billion of funds already committed to Portugal, Ireland and Greece (note that this is the 'theoretical maximum' at the moment, ed.) Germany would guarantee a total of €401 billion, but the amount currently approved by the Bundestag is only €211 billion....Greece would guarantee €20 billion – quite a chunk for a country that has just been bailed out.... Spain would guarantee/owe €176 billion – 16% of GDP and 154% of the projected tax revenues for 2012.”

It follows from the above that if Spain really needs a bailout, the total amount available for the European 'financial firewall' will be much smaller than advertised, since Spain can hardly be expected to bail out itself (although Spain's government has recently decided to get creative with its banks, which are supposed to lend the bank bailout fund the money it needs to bail them out, so you obviously never know).
If all the 'PIIGS' mooted contributions to the ESM were to be subtracted, the total amount available to the ESM would shrink by about one third. Moreover, the ESM will start out with only €80 billion in paid in capital – the remaining €500 billion can be 'drawn upon request' – they are mere guarantees.

Tricky sums for the Euro Group on second Greek Bailout tomorrow.

Austria's Finance Minister, Maria Fekter, as if she were explaining complicated physics for a kindergarten, has put it all very simply this afternoon, when asked if Greece will get its deal, according to Reuters, linked here, replied:

"I don't think there is a majority to go a different way because a different way is enormously arduous and costs lots and lots of money."

A bold statement indeed for a country already on warning that its triple A credit rating is in danger. It appears she believes that Greek Bailout 2.0 does not itself involve huge amounts of cash, or as she quaintly phrases it "lots and lots of money"!

It is hugely complex and probably impossible to know where all the eventual liabilities might end, so let us assume the ESM is the present intention of the parties as to how any extra obligations for Greece, taken this coming week might land. (After all that agreement was supposedly only signed this month, that version is linked here).

Austria holds 194,838 shares out of 7,000,000 in this ESM disaster, which represents a mere 2.77%. Nevertheless if the reported figure now required by Greece is truly around the €145 Billion level, that is still "lots and lots" of beer money (€4 Billion) for your average Austrian. Of course mere peanuts when considering that France, already having lost one of its three A's as a result of this Euro fiasco, holds 1,427,013 shares of the total 7,000,000, almost eight times Austria's share, ( ie a whopping €29.6 Billion), making the wine drinking typical Frenchman potentially liable for crates worth of St Emilion or Gevrey Chambertin, depending upon whether his taste once was for Claret or for Burgundy!

Of course the good news all round, following dinner in Berlin on Friday of last week, is that President Sarkozy's ex-Finance Minister, who was in on the deal that began this merry go round, Mme Christine Lagarde, in her new job as MD of the IMF might chip in 10% on behalf of the rest of the world, bringing the costs to Austria to only €3.25 Billion and €23.9 Billion for the French, this calculation also assuming the money committed can be kept at the original estimate of €130 Billion.

How long can electorates be expected to believe that none of this money will ever fall due?

An interesting briefing paper from the EU dated last July, when the ESM was first proposed, is linked here, for those in need of an entertaining read and quiet Sunday afternoon chortle!

French Presidential Candidate François Hollande tells the truh!

“A treaty which isn’t yet ratified has not got any legal value”

Facts on the ESM signing from Malta

The ESM may be signed tomorrow as it has been effectively almost completely neutered, contrary to my posting of earlier this afternoon, and the reference in the linked report from Malta HERE, that it is effectively a European IMF, is clearly risible nonsense!

As I stated earlier, even though it is supposed to be in effect from July it does require parliamentary ratification from all signatories, but the toughest is already there, that being from Finland which has obtained its price in unanimity of decision making!

The signing ceremony will be at Representative level and take place tomorrow. Originally, the ESM was meant to come into effect next year, but its appearance on the markets has been hastened and it will come into effect in July.
Dr Gonzi said the treaty will have to be ratified by member state Parliaments, including Malta’s, by next year.

My original statement that it was planned to commence before it had been signed seems effectively true, though perhaps, in view of the worthless Representative signatures, I should amend that to "legal effect".

Von Rompuy States ESM signing tomorrow

If the ESM is signed tomorrow, a complete change with what we were informed after Monday's summit/informal EU Council, it still cannot have legal effect without ratification, surely that requires national parliamentary approval, as the fund as originally established can create unlimited obligations against the supposed sovereign nation signatories??????

EVR's Tweet:

euHvR Herman Van Rompuy

#ESM Treaty to be signed tomorrow so that it can take effect from July 2012.This permanent firewall will help prevent contagion in Euroarea

ESM to enter into effect before its Treaty signed

The ESM, which will take over the role of the EFSF, was agreed yesterday by the Euro Group to enter into effect in July this year, but the Treaty governing financial contributions will not be signed until some time later! Read Reuters from here.

So which member state will be able to legally allocate funds for its use, or lend to it AND if any did, which national leader would be sufficiently stupid so to do?

Only ones daft enough to describe a Treaty agreed at an informal meeting as signed or one not yet signed as binding, many things I have heard and said myself about the EU, but never that it was a place such as the Baltic Exchange, where one's word was one's bond!

No EU agreement on ESM Treaty deal!

The first significant failore of the latest EU Summit has been announced with the following coming from the Daily Telegraph rolling debt crisis page:

17.46 EU leaders have agreed to introduce the permanent eurozone bail-out mechanism from July 2012, but will sign a treaty to govern the fund later, reports Reuters. The ESM will have a lending capacity of €500bn and take over from the EFSF.
"There is a deal but the treaty will be signed at a later stage," one EU official said. Two others confirmed the news.

The ESM was originally expected to come into force in July next year, but Germany had called for it to be set up sooner.

ESM Treaty - no approval until next week!

Finland, as always with these special financing packages, has proved the sole realist among the Euro Group it seems, read here. They wanted a veto on loans and it presently looks as if they have got it. Next Monday is now the latest deadline, but never forget with credit ratings and contributing countries sliding lower, it gets ever less likely that the thing will ever get enough support to be up and running by July!

Have Ecofin Finance Ministers more cash to waste on Greece?

The Finance Ministers of the Euro Group, who have been collectively regularly gathering since May 2009, with their own agent now assisting at the head of the IMF acrossd the pond, meet today to witter about the waste they have already caused and attempt to defer proper action even further. One report is here.

Other problems than Greece also loom as this quote from the linked report makes clear:

Greek debt is not the only tough issue EU officials need to tackle with at the meeting. The Lloyds Bank Corporate Markets Research team outline the difficulties connected with the revised blueprint of the fiscal pact: “While the new fiscal proposals seek to avoid potential problems, it cannot address the current financing needs of some of the euro area’s most fiscally vulnerable countries” as well as with the ESM fund: “Standard & Poor’s downgraded the EFSF last week from AAA to AA+, which raises concerns around the potential credit rating that will be associated with the new fund and the capacity to increase its size if needed.”

Monti & Draghi propose lumping unused EFSF funds with ESM

The two Italians, whose country of birth faces a debt mountain of indescribable proportions and a system of economic governance akin to some of the worst economies of the third world, have this afternoon come up with a new cracking idea to get their hands on outside cash, according to the Telegraph, linked here. A quote:

Doubling the European Stability Mechanism's (ESM) firepower would reassure markets while driving down borrowing costs for the debt-wracked countries of the eurozone, Mr Monti is said to have argued.

Mr Monti had won backing for the proposal from European Central Bank President Mario Draghi, who proposed using unused money from the EFSF to boost the size of the new fund to about €750bn, according to reports in German weekly Der Spiegel, which cited unnamed sources.