Eurocrash: more complications Wednesday 13 June 2012  The upshot is that, if the "colleagues" want their banking union, they are going to have to provide cover for it with a full-blown treaty. Then, Merkel (or her replacement) is going to have to go for a change in the German constitution – which is by no means assured. As it stands, it looks as if the EU plans are grounded, although we must wait for the next episode to see where we are going with this. With one bound, they may be free, in the style of Dick Barton. Some of the contortions of the commission would put Houdini to shame. On the other hand, all good things – and some bad – come to an end. One senses that Barroso is going to need a pretty creative scriptwriter to get out of this. COMMENT: "BANKING UNION" THREAD Richard North 13/06/2012 |
Climate change: getting it spectacularly wrong Tuesday 12 June 2012  Floods, heatwaves and drought could cause a virtual collapse of the capital unless action is taken to address climate change, Boris Johnson warned on 29 August 2008. Then, he was launching London's Climate Change Adaptation Strategy, parroting the phrasing of the warmists, telling us that global warming would affect all Londoners. "For London, scientists currently forecast warmer, wetter winters and hotter drier summers, coupled with an increase in the frequency of extreme weather and rising sea levels", he said.  Four years later, we have had the exact opposite … a cold, dry winter and a cool summer, with torrential rain. The forecasters could not be more wrong if they tried … which makes Boris Johnson and all the other fellow travellers dead wrong. You will, however, get no apologies from Johnson and his ilk – still less the WWF which issued its own Thames Vulnerability Assessment Report report in July 2008, showing "that climate change is likely to result in hotter, drier summers and warmer, wetter winters". It must be really nice being a politicians or a greenie. It means never having to say you are sorry. COMMENT THREAD Richard North 12/06/2012 |
Eurocrash: banking union complications Tuesday 12 June 2012  Mind you, it really does help if you are vice-president of the Bundesbank, - which Farage isn't. Then, without being in the same room as Barroso, you can tell him (or imply politely) that he is talking a load of tosh when he claims to be able to fast-track a banking union, having it in place as soon as next year. Raining on this particular parade, the languid Lautenschläger casually notes that a banking union could only be implemented in tandem with fiscal union, otherwise it would be tantamount to a back-door pooling of sovereign debt. "In a banking union, a crisis in one country's banking system may require the use of taxpayer money from other countries," says the Bundesbank vice president. "Whoever is footing the bill must also have a right of control, particularly when it comes to the large sums that are seen in banking crises". Nevertheless, back-door operations are very much the speciality of Barroso's commission, but with the Bundesbank pulling the plug, the "colleagues" might find this a little difficult to run it past Frau Merkel. Her pursuing this line too earnestly might end up with federal lawyers spending an awful long time in Karlsruhe. Even without that, Barroso is still being a tad optimistic. As Lautenschläger observes, there is currently no "concrete concept" nor formal proposal tabled for a bankers union. Just to work these up and knock them into shape might take longer than the period allocated for his entire programme. Furthermore, Lautenschläger has absolutely no doubts that a banking union will require "comprehensive EU treaty changes", which further sets back any timetable, adding a couple more years – at the very least – if a round of ratification referendums is needed. And, as if this was not enough, the very idea of a bankers union has sparked a turf war over who will supervise it. Some think the European Banking Authority is the natural home but critics say it lacks the resources and the ECB should get the powers. In the event of the EBA taking over, this may raise further complications, as it is hard to see it remaining in London if its main activities lie in the eurozone. Its location in London, though, was regarded as a real prize by the British government, and noses will be seriously out of joint if the operation is pulled. With all these complications building up, the idea of institutional changes providing even a "slow fix" is beginning to look wildly optimistic. If the plan was to reassure the markets that there was a long-stop in the making, to put a lid on the recurring crises, this too may backfire. With neither short, medium nor long-term plans, of any degree of credibility, the cupboard is looking exceedingly bare. The word "unravelling" comes to mind. COMMENT THREAD Richard North 12/06/2012 |
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