01 October 2010 4:30 PM
Austerity, Euro Parliament style: 85 percent more champagne and oysters
Except the party isn't for the taxpayers. It's for the MEPs.
This week at the European Parliament budget committee an amendment to the 2011 budget was passed which increased the entertainment budget for the parliament by 85 percent.
That means the Champagne and oysters, beefsteak and Burgundy, canape and Montrachet budget will jump next year from €1,105,200 to €2,047,450. That is a jump from just under a million quid to £1.8m.
One of the few people in Brussels or Strasbourg who would rather pack her own sandwiches than revel in this kind of gluttony is Marta Andreasen, one of the UKIP members of the parliament. She was fuming about it yesterday: 'I am appalled. This cannot continue. I cannot accept that this goes on.'
Oh, but it does go on, and the MEPs are going to make sure it goes on, and on, and on...
Where the euro leads: Zimbabwe
Yesterday of course EU-poodle Ireland was hitting the world headlines for all the worst reasons: its membership of the euro and a series of cretinous EU-loving governments have led it to a banking wipe-out and a national deficit that will hit 32 percent of GDP this year. (At its worst, Britain's will hit barely more than ten percent.)
In other words, the Finance Minister, Brian Lenihan, deserves a monument for the greatest screw-up in history short of Zimbabwe.
The reason it all went global yesterday was that Lenihan announced what he said were the final figures for just how much the banking disaster will cost. You can see details in my piece in the main part of the paper today, but international investors were supposed to believe the total figure of €50bn (£43.3bn).
And this in a country with just 1.8m people employed who are supposed to find the tax revenue to pay off all this debt. As the Lex column in the Financial Times puts it this morning, for the Irish just one thing is certain: 'Irish people who will die will go straight to heaven from now on, because right now they are caught between hell and purgatory.'
Mr Lenihan is trying to tell the country that now the truth is out, bad as it is. But is the whole truth out? What struck me yesterday are the voices to which the State-monopoly broadcasting system and ruling-class newspapers are willing to listen. They were rather too much on message about the truth being out at last.
I'd say its because the highly-skilled Gurdgiev had earlier told them that his calculations for the final bail-out costs will be €67-70bn, not the €50bn the Government was trying to make the markets believe.
Forget purgatory. Ireland is going straight to hell.
23 September 2010 2:54 PM
The £640bn ECB/IMF bail-out fails, of course: you can't buck the market.
You will remember that vast and panicked eurozone bail-out fund announced in Brussels earlier this year. In the turmoil of the crisis in Greece, the EU and IMF announced a joint package worth €750bn -- about £640bn. It was a rig-up, of course, thoroughly against the spirit and letter of European law which said one member of the eurozone could not bail-out another.
It was meant to be a shock-and-awe defence against financial market 'speculators' -- ie, investors who knew Greece was going belly-up, despite being in the single currency -- a sort of 'see you and raise you' poker play by the EU. I was there at the press centre at the European Council when it was announced (at 2.30 on a Monday morning, don't say I don't earn my money) with a flourish that was very nearly, 'Ah, ha! Gotcha!' The amount was meant to be so vast it would shut down any idea in the financial markets that a eurozone country could default on its debts.
So, how that shock-and-awe 'stability facility' going for the near-insolvent countries clinging to the periphery of the eurozone? Not so stable. Here is an assessment out today from the analysts at Hobart Capital Markets in London:
'Most commentators were in pure ecstasy when the ECB and IMF announced the EUR 750bn bail-out package."Shock and awe, ! "PIIGS saved" etc etc were the platitudes so freely given.'
'It is incredible how much noise is out there! While we were very sceptical then, current PIIGS sovereign yield spreads over Bunds are at a record and have clearly proven us correct.'
'Absolute rates are at a high in Ireland, and near crisis highs for Portugal and Greece. The most optimistic interpretation would be that without the bail-out, rates and spreads would be higher still. But looking from the perspective of stressed and non-stressed rate levels, the bail-out package has been a HUGE FAILURE!'
'To add insult to injury, the three biggest rating agencies, Moody's, S&P and Fitch (whose super-duper ratings have proven sooo very helpful in preventing of this crisis) have just rated the ECB/IMF bail-out fund AAA, the highest possible rating.'
'This is funny, as the supporting members of the ECB (and its bail-out package) do not all have an AAA rating. So how can they as a group be rated AAA? This reeks of the same mistakes made in the CDO (Collateralized Debt Obligations) space.'
'And don't get us started about dwindling EU member support for the bail-out.'
Mrs Thatcher told the eurocrats decades ago, but they just refuse to learn: you can't buck the markets. Not even with a stack of poker chips worth £640bn.
22 September 2010 6:59 PM
Sinister stuff, even without the Stasi accent
So you might want to listen to what he has to say about the right of any EU member state to control its own taxes and finance. Short version of what he has to say: 'No right at all.'
Giegold was talking to the Irish State broadcaster, RTE, this morning. Asked how alarmed he was at the moment about bond spreads, he said: 'I am very alarmed because it is not only an Irish phenomenon. [Irish spreads are second only to Greek spreads]. We have the same size in Greece and we have several other countries where speculators might come next.'
Just a note: usually people and institutions who buy bonds are called 'investors' but for the Greens there are only speculators. Wait until they get to 'capitalist parasites.' It'll come.
He says the existence of these spreads 'shows there is something wrong with the regulation of the economy in the eurozone. In a common currency zone bond spreads should normally not exist or be very small.'
Note again: in fact, the thing that drove the borrowing frenzy and subsequent property bubble in the now-desperate peripheral economies in the eurozone was that after the single currency was launched, the markets were lulled into believing exactly that -- that Greek or Irish or Portuguese debt was as safe as German or Dutch debt because their economies all shared the euro.
Yet the Green goes on: 'That this is not the case shows the necessity that we really come to a common economic policy where the different privileges which we see in the different member states are basically reduced.'
So, watch how that slides: what were once considered the sovereign powers of Parliament to control Britain's economic policy have now slided in Strasbourg to 'privileges.' Which can be reduced...
And what national 'privileges' would he have in mind to reduce?
'In southern Europe there was excessive indebtedness, which is not acceptable.' Actually, Herr Giegold, Italy has the highest rate of private savings in Europe. But do carry on:
'In Ireland as in Luxembourg, you are keeping taxes low and refusing European cooperation and therefore basically taking away legitimate tax base of countries such as France, Germany and others. And I think what we need in the eurozone is that all countries give up their illegitimate preferences' -- in plain English, that means is give up the determination by a Government to act in the best interests of it's own citizens -- 'in order to have economic and monetary stability as a common good.'
What about a struggling country such as Ireland turning to the eurozone special stabilisation fund?
'I think if Ireland would do this, this is legitimate. But of course we would ask questions first, whether there is more cooperation to harmonise certain tax measures in Europe, for instance, to agree with the common consolidated tax base where I think Ireland is following a more egoistic approach which I regard not as legitimate.'
Bingo. Ireland loses the right to control its own low rate of corporation tax. Which is tricky, since the only growth in the Irish economy is coming from the multinationals who settle there for the tax breaks.
'All of us in the European Union have to learn to think in the terms of the common good, not in short-term national vested interest.'
So, what this German MEP is saying is, 'European interests good, British interests bad.'
He is saying so-called national 'illegitimate privileges' must be abolished as the means to the end of building an ever closer union, a union with a 'legal personality' as it is expressed in the Lisbon Treaty -- or a country called Europe among those of us who like to talk straight.
And when this no-borders, no 'egoistic' interests, no national interests, supreme Brussels-Strasbourg Soviet Union is built? It will be such a paradise, not doubt, that men such as Herr Giegold will have to build a wall to keep the most dynamic peoples of the world out. Or would that be, keep them in? That's what happened last time. And I can remember when the German border guards would shoot dead anyone who tried to escape from the 'non-egoistic' paradise built in East Germany by such lefties as the forerunners of this Green MEP.
Give 'em hell, Nigel
This video clip of Nigel Farage tearing into the European Commission's President Barroso after the eurocrat's pompous 'State of the Union' message to the European Parliament was sent to me by a City of London analyst.
Apparently it is making the rounds as a 'must watch.'
How heartening to think this is what gets the blood pumping among the pin-striped chaps
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