Death throes of the Troika - But what next?

El Pais last evening,reported the coming end of the Troika of the EU, IMF and ECB linked here.

The austerity overseeing grouping which solely exists to pointlessly try to save the always doomed EU Common Currency, the now detested Euro, is still busily about its business as may be seen from these reports of this morning, on Portugal here, Greece here and Ireland last weekend, here.

Throughout May 2010 it was obvious to most thinking people that the Euro was doomed, read the multiple posts from the archives of this blog by clicking for that month on this blog's side bar or from here.

So what should be done with those utter incompetents, so negligently responsible. That is for each sovereign nation, bankrupted by these wildly irresponsible errors, to decide in my opinion. All EU Member States are now effectively bankrupt as a consequence of these nincompoops stupidity!

In Britain's case, as a change of Government occurred in the midst of the relevant Ecofin meetings which to remind readers delivered the EFSM among subsequent woes, all three main political party leaders and financial bigwigs were directly involved, so hopefully we can rid ourselves of the lot of them!

Proof Positive that ECOFIN and G7 are Completely Clueless

Britain's Chancellor of the Exchequer George Osborne (2nd L) speaks, as he sits next to the German Federal Minister of Finance Wolfgang Schauble (L), the Managing Director of the International Monetary fund, Christine Lagarde (2nd R), and Canada's Minister of Finance Jim Flaherty, at the Global Investment Conference 2013 in London May 9, 2013. (Photo: REUTERS)

Picture & caption copied from linked IB Times report also linked below

ECOFIN Chairman and Irish Finance Minister on 12th April ahead of next day's ECOFIN which he chaired, stating Cyprus was stabilised, was not a crisis issue and would merely be mentioned in the normal way.



IBTimes report of this morning, linked here, on the G7 Finance Ministers meeting which opens with the quoted spot on paragraph, proving that when Mr Noonan was making that statement in the video above, Cyprus was in fact facing "near economic meltdown":

Members of the G7 will home in on ways to speed up banking reforms in light of Cyprus' near economic meltdown during today's meeting in Buckinghamshire.

In fact, the measures taken by the EuroGroup Ecofin, it is daily becoming clearer,  will eventually and inevitably mark the end of the West's financial structures.

No default Noonan - A new episode in Euro Lalaland!

"We don’t have default even in our vocabulary,” Ireland's Finance Minister,  Mr Noonan is quoted in this morning's Irish Times as declaring, linked here, when informed by the outgoing chief of the Euro Group Jean-Claude Juncker, that neither Portugal nor Greece could presently expect similar largesse as that being applied to Greece.

Elsewhere in the same newspaper, we find this quote in a report on Ireland's latest austerity budget slated to hit the oppressed and EU impoverished nation tomorrow:

The new property tax to be announced in tomorrow’s budget will be reduced slightly as a result of the late addition of the so-called mansion tax for properties worth over €1 million.

So what are thinking people to make of such obvious complete contradictions, well one way to consider it is this, all the debts that caused the banking crisis in Ireland, mass unemployment and emigration of the nation's youth, collapse of the property market and effective ritual slaughter of the Celtic Tiger, have been miraculously solved by the Euro Group, without their members incurring a euro centime of financial loss, neither now, nor at any foreseeable point in the future!

So that's all alright then, is it not?

Do EUsceptics condemn Europeans to Divisions?

Ten years ago to counter unbelievable pro EU bias in the writings and reports of the Financial Times newspaper, I spent many hours arguing the case against the non-democratic and already obviously potentially tyrannical federalist EU monster. The following images are of a post in respone to a query put to me:

 "What options do you offer to  Europeans other than a return to a divided past"

Google News UK illustrates "Just Who or What?" rules us!

The Sun

Tory MPs join Labour to push for EU budget cuts

The Independent - ‎4 hours ago‎

Downing Street made clear that he was not going to bow to their demands - which it regards as unrealistic - to support a reduction in spending by Brussels between 2014 and 2020.

Are Greece, Ireland and Portugal prepared to default to the EFSF?

The posting beneath this links to the "Lenihan Letter" which supposedly legitimises "RULE BY TROIKA" in Ireland. It appears to have been constructed on some very shifting sands.

One presumes that as ever amounts advanced by the IMF are secured, but can the same be said for sums advanced and due to the EFSF and the ECB. Can even money advanced by the EFSM, to which the UK is party, also really be considered as being of any worth, if not what percentage still is?

Should the three countries now barely surviving under the boot of the Troika decide that the game is no longer worth the candle, which given the comment below is quite clearly the case for Ireland, the EFSF commitments will then become due from the Sovereign State Guarantors.

Such a default would be particularly nasty timing for France, which has just pledged billions for Peugeot to continue making cars few wish to purchase!

How "Europe" is stealing the savings of the poorest and stupidest in its society

If one had thought the EU stood for anything, then surely it would be to protect those least well equipped to care for themselves. My view is that this is best achieved by giving the brightest the best opportunities to utilise and profit from their individual talents. I always knew the latter was a forlorn hope but today it appears the very opposite of the former is being applied by the EU, perhaps through the ECB, on the poorest of its citizens in Spain.

The evidence of the huge operation to steal the savings and few remaining private citizen assets of the Spanish people is everywhere across the internet so may not be denied.

The ultimate culprits are the 27 Heads of State of the member states who will wine and dine together in the European Council between now and the weekend. Collectively the lowest vermin that Europe has perhaps ever produced, gathered together in one place, during most of our lifetimes.

Here is the proof from a report by Reuters, published yesterday, and linked here, from which the following quote is the most pertinent passage:

Many of the banks which issued these products swapped them for shares and bonds. The main state-owned banks such as NGB did not. NGB has apologized and some banks have offered compensation for the worst cases. But now the banks are negotiating with Europe for capital as part of an international bailout, the terms of which will include inflicting a loss on people who in many cases handed over their life-savings.

Note how the term "Europe" has here been used to describe the odious EU, ECB and Euro Group collectively, the three structures which have presently sunk beneath that which should normally be attainable by any functioning moral human being!

Europe, all of us, are here accused of arm-twisting small Spanish savers to convert their savings into bank preference shares, not just in the apparently criminally run Bankia, but also in State owned banks such as NGB,  then Europe (ie all of us collectively,) is compelling such state banks, who so far lacked the balls (or had sufficient conscience to refrain from such theft) to steal that money, in amounts which have to be comparatively insignicant, given the massive manipulation of trillions of Euros in the complicated con-trick EU leaders have been playing with our money for decades!

Background and proof of all this is not just available from my blog, eg here, but Reuters earlier described the dreadful confidence trick played on Spanish small savings account investors in a detailed report at the end of last July, linked here.

More on the mis-selling of bank preference shares, this time from Canada, also of last July is linked here.

So what are the unprincipled, despicable and desperate scumbags who will sit around the table at the European Council in the next few days going to do to stop these obscene practises; all being undertaken in the names of all we Europeans, merely to breathe a few more moments of life into the sick and ever doomed project that is EMU, better signified by its now deeply sickening emblem - the euro currency.

Portuguese Parliament Demonstrations dramatise next step in EU Torment

The mad efforts to save the foul and useless Euro currency by ruthless imposition of budget cuts and swingeing tax increase took another step last evening in Portugal; sparking demonstrations in front of the National Parliament which in turn provided an AFP copyright image that may come to signify the pointlessness of the misery of the  EU cisis, just as the My Lai massacre image did for Vietnam's agony, see it here.

The two criminal incompetents who created the Euro crisis; debate on the BBC

In Tokyo, on the fringes of the IMF meeting, the BBC has hosted a truly mind-boggling debate between the two prime perpetrators of this present, now near terminal phase of the Euro Crisis.

Read the archive from May 2010 of this blog, when these two characters put in place the structures designed to deliver Economic Governance to Germany of the entire EU, just as I stated in the last posting of that month from which comes the following:

Monday, May 31, 2010

Economic Governance was always the EU objective!

There is a rather startling article in the Market Watch section of the Wall Street Journal this morning. It is written by David Marsh, linked here, titled "Germans to the front in Europe"and includes this assertion: The irrefutable message being relayed at home and abroad is that Germany is seeking gradually to take control of the European economy -- in a last-ditch response to what Berlin sees as other countries' widespread failure to put their house in order. Regular readers of this blog and its forerunner cannot help but be aware that non-democratic economic governance and its consequent tyranny of corporatist totalitarianism (once called national socialism now mutated to become an intra-national version of economic fascism) has been the objective for years as the progress towards this end has been clearly recorded and commented upon on an almost daily basis right here over many years. Given these blogs archives the following facts can thus not now be convincingly disputed: The common currency had to fail without fiscal union and social harmonisation. Greece never met the currency criteria and its present crisis was not only foreseeable but therefore became a desired objective. The emergency measures designed to save Greece were never going to succeed and were thus implemented to destroy the Treaties and therefore the rule of law within the EU. The silence of all governments, both within the Eurogroup and those outside the Eurogroup but within the EU since 10th May speaks for itself. If I, as a non-economist and merely interested commentator, have been able to chronicle and foretell these events down the years, how come the Wall Street Journal columnist and author of the linked article remains so blind?

Labels: Euro collapse

posted by Martin at 8:34 AM

Britain Euro-free, but Lame Duck PM and Brain Dead Chancellor cancels gains

The Euro plunged in Far Eastern markets as Europe slept this morning but the deepening crisis in Spain, Greece ,Italy and the entire euro group of countries sucked into the tyrannical tragedy that the Euro has ever been, long before entering its terminal sickness stage some four years ago, is this week set to worsen.

In spite of the calls from this blog, repeated several times daily throughout the past weekend on Twitter, nothing whatso ever appears to have been done and there remain no signs that proper provisions are being made for the financial hurricane that is about to hit us all.

The UK could by now have diversified and maximised our trading positions from sterling's independence to actually be benefitting as the EU Continentals flounder through the consequences of their own inaction during the recent years of denial and drift. Instead we are part of the tragedy - incapacitated by our politicians incompetence.

As I called for last week, the first step is to install a new team at the Treasury, they will bear the burden of the nation's future prosperity as the debacle unfolds, heaven forbid Cameron or Clegg be given any operational executive authority.

AFP has one report on Asia's markets, linked here.

French hypermarket chain sells its Greek interests for €1

Carrefour have sold their half share in the supermarket chain in Greece, to their local partner for a reported price of one euro, see here. Whatever the election result of the voting today, Greek shoppers will be suffering for many years to come!

As Greece was the first Euro Zone country into the mess, which is the same everywhere in Euroland, except so far in Finland, Germany and the Netherlands; might they not have done better to wait and see how many drachma that could have been? At least that revived currency might have some sort of longer term future?

Look after the €uros and the world economy can take care of itself, has been the attitude of Europe's Eurozone leaders for decades, they should be shunned at the G20 in Mexico tomorrow, their stupidity and incompetence has been breathtaking for years, but during the past twenty-five months it has become totally shameless and completely unforgiveable!

Eurosceptics are not gloating!

The following is from a must read article from Der Spiegel, linked here.

Those of us who repeatedly warned in the 1990s that the experiment of monetary union would end badly would be gloating now -- if we were not so troubled by the prospect of history repeating itself.

One of the authors of the article found via the above link, Niall Ferguson in another article which I linked in a tweet earlier today also wrote in an article on how Obama could be defeated by the euro crisis see here, a conclusion with the following on a supreme irony, apt for quoting here on this blog:

The law of unintended consequences is the only real law of history. If the disintegration of Europe kills the reelection hopes of a president Europeans fell in love with four years ago, it will be one of the supreme ironies of our time.

Both articles point to a solution of the euro crisis involving a non-democratic, German dominated Euro Zone block of ex-sovereign states. Saving Obama cannot justify plunging the world towards such a disaster, even if it happens to the the one this blogger always feared as the certain end result.

Allowing the euro and the entire fabric of the EU around which it was built and which itself has become rotten to the core to self-destruct, must be preferable to such a result.

Germans insisting on a return to the Deutsche Mark would IMO now seem to best achieve such an end!

This longstanding and daily blogging eurosceptic is not gloating, he is scared for all the people of Europe!

Will this be seen as the week Germany's AAA credit rating became at risk?

If the press pronouncements of the past weekend on the subject of the payments agreed to be made to Spain by other countries in the Euro Group are to be believed, then Germany has effectively now given an open-ended commitment to bailout Spain's banking sector which cannot be quantifiable while the extent of the fall in property prices remains unknown.

There are no other countries within the Euro Group with the capability of backing their commitments with hard cash, given the Finnish opposition's declaration that they will require effective collateral, thus increasing the burden on Germany and France. The latter given the results in the first round of the parliamentary elections of yesterday seem to indicate the socialists will have complete control of the country after next Sunday, hastening their own rush towards bankruptcy. The Netherlands remains without a legitimate government until September!

The EFSF and ESM have their own question marks hanging above them, not least the lack of proper ratification of the latter Treaty!

It is of course not just Spain's banks that have cash flow problems. The very autonomous Spanish regions will also soon require huge amounts of German backed and denominated euros, then will come Italy.

Meantime the absence of conditionality for the Spanish rescue seems likely to virtually assure victory for the anti-Troika parties in Greece next Sunday. Cyprus could require its own bailout as early as this week moving yet one more nation from EFSF guarantor to cash recipent.

If Germany wished to destroy the EU it seems to me that they could not have chosen a more certain course than that of the past weekend to achieve that end.

Germany is taking a huge risk, that much is certain, but for what end? It is up to the rest of the EU to now ensure they do not succeed. The euro has become the instrument for the destruction of our democracies, now it is turning on our liberties, only our inner decencies can now be used to restore what has been lost.

Indignados  demonstrating against the Spanish bailouts in Madrid yesterday had their identification documents confiscated, which in this despicable European Union renders them effectively non-people. Is that not evidence enough of where we are heading?

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!!

Santander downgrade another exposure for Britain to the Euro

The reports coming in on the downgrade by S and P by two notches of the huge Spanish bank Santander, must surely be of great concern to HM Treasury!

According to some such reports our sloppy politicians, civil servants, Bank of England officials and other financial regulators have permitted some 26.7 million British comsumers to run accounts with this bank, most of which acquisitions were made even when it was increasingly obvious that the Spanish economy and indeed the sovereign itself was in deep, deep trouble.

Now of course these accounts might still be quite secure and the assets they represent perfectly intact and available to Britiain's guarantors against any further difficulties or even possible eventual default. On the other hand seeing how everything else connected with banks, governments and the EU has gone over recent years, then perhaps things might not end up quite so clear cut!

Europe's markets reopen today - Euro crisis could be set to re-appear

The following are the final paragraphs and chart from a posting on Acting Man, linked here. Note the four different coloured scales when viwing the chart., which is best viewed when zoomed in upon!

10 year government bond yields of Italy, Greece, Portugal and Spain – suddenly yields are shooting higher in unison again, with the other weak euro-land sovereigns following Spain's yields higher - click chart for better resolution.

 

---

 

Conclusion:

We must be alert to the possibility that the pause in the euro area crisis may be over. If that is the indeed the case, then a rocky period for 'risk assets' may lie directly ahead. Of course we can not guarantee that this is what is happening – the markets may yet pull back again and reveal these recent moves to be merely corrective in nature.

However, the economic situation Spain finds itself in is well known for being quite grim at this stage. As we have chronicled in these pages, the banking system is in dire straits, notwithstanding ample liquidity provisions by the ECB. Unless something happens fairly quickly that convinces market participants that the danger is once again postponed, this is a situation that could very quickly get out of hand again. In fact, if we were to bet, this is what we would be inclined to expect. 

My reply to John Redwood MP this morning on saving the euro.

Martin Cole

Posted April 7, 2012 at 6:47 am | Permalink

Your comment is awaiting moderation.

Mr Redwood, you state the following, which to my mind places you beyond the pale as a representative or spokesperson for those of us who see the objective of the EU as being to destroy its founding nation states together with all democratic representation for their citizens or subjects:
This will, in the view of the Heads of Government, leave a strong and united Euro zone with a group of countries whose economies have come closely together and who can live with the tough budgetary and inflation discipline which was always designed to be central characteristics of the single currency.
The collapse of the Euro Currency is a necessary prerequisite for the restoration of democracy or proper representative government within Europe; those aiding or bending the(ir) efforts to saving the euro, while (perhaps) avoiding potential short term economic discomfit are (they nevertheless not) in fact advancing tyranny? I fear you have demonstrated your true colours and finally that of the supposed members of the EU-critical wing of the Conservative Party.

My reply to John Redwood's post today on Euro exits.

Martin Cole

Posted April 6, 2012 at 6:44 am | Permalink

Your comment is awaiting moderation.

I look forward to your follow-up postings. Perhaps you would also consider addressing the intensification of the crisis in the stronger Euro member states, France in light of the upcoming elections, Holland and Finland with their fracturing coalitions and Germany itself with the newly re-empowered Bundestag having a growing say over the disbursement of funds.
Even more importantly perhaps, as a member of the UK Governing Coaltion Government back benches, perhaps you could suggest some policy directions for the aimless UK administration, which acts as though none of these events is any concern of theirs!

Draghi of the ECB says Euro Zone inflation will average 2.0%

The headline is direct from the ECB press conference I listened to with my own ears and watched with own eyes on TV this afternoon. No kidding - such is the target and while inflation is presently 2.6% in the Euro Zone, Draghi asserts it will moderate to the price stability target, the ECB's number one mission in life, of 2.0% next year.

OK so far so good, it is still merely a target after all, but now comes the real lulu - none of the Euro Group countries, according to Signor Draghi, will vary from 2.0% at all. In other words it is not an average - more an absolute.

Now look at this chart on present Euro Group inflation from Acting Man, linked here:

If the ECB can apply standard inflation of 2% across the Euro Group from next year, you might think they would exercise their apparently magical powers to ease the unemployment crisis represented in the chart above, actually happening this very day - where in Greece a 77 year old pensioner committed suicide in front of the Parliament controlled by an EU appointed puppet PM, himself a VP of the ECB!

The Wolfson Question on leaving the Euro

Any who watched Jeff Randall Live on Sky News this evening and saw the discussion of the Wolfson question regarding how the collapse of the euro currency might best be handled, may be curious to explore the subject further.

I recommend this paper from Edward Hugh, in response to that prize offer, provided via Acting Man, linked here.