Europe!

[TotallyFreaked]

Because it's now been made perfectly clear that one size blatantly can't fit all. One of the tools available to a government in times of fiscal downturns is controlling interest rates. I know the BoE officially has control of this but in reality the government can have a say as well - hence our historically low rates. In the Euro we'd be tied to a rate that best suited France and Germany not us. We would in affect have little control over our own economy. That reason alone is why we should NEVER join the Euro.

Your cynicism of politicians is rightly shared by many.

But to somehow feel that we should have an unstinting obligation to a failing economic experiment, propped up by a political process that lacks transparency and credibility is bizarre.

This is not a fair fight.

I can understand both your points and I am not advocating that we simply roll over and play ball. But surely we need to be part of those discussions, to veto seems like too easy a way out. The complexities and potential impact is huge and personally if it was me I would want to be fighting to the very end in the interest of Britain. It seems bizarre than within one night of meetings that you can come to the decision that you do not want to have any part in it.

 

[Eastleigh Seagull]

It would be cynical to believe that it is in Germany's interests to protect the Euro - only if it may be keeping German exports artificially cheap allowing them to be the worlds largest exporter by value - most estimates show that their exports would appreciate by at least 50% if they had to go back to a national currency. Still we should all act i nthe common interest says Chancellor Merkel

And then of course there is the view of the ratings agencies daily downgrading the ratings on European countries and banks - and even the Chinese and Middle East who have money to burn at the moment are refusing to get involved in Eurozone countries? People also seem to forget that we have the sixth largest economy in the world and will almost certainly move up to fifth as the French economy shrinks yet people say we should accept our role as a mid ranking European country - balls. Germany has for many years enviously looked at the City and the revenue it brings into the UK so why not use this opportunity to target them as the current bete noir of the world. A financial transaction tax kills two birds with one stone - bail out the Euro and destroy the major contributor to the UK economy making us a second class European country that has to join the Euro club to survive (have a look at the results of Sweden which tried the same tax for seven years until they realised it was destroying their economy) All of this to bail out countries who were unable to follow fiscal rules. Yes - we didnt follow them either but being out of the Euro has at least allowed Cameron and the government to take drastic action to ensure we aren't paying 7% on our govt debt like Italy and the rest.

Of course the figures released today showing a record ever export figure for the UK economy is totally unrelated to our position outside of the Euro.

 

[brunswick]

lol.....what you see in the media regarding the current EU dilemma is ALL spin. reactions in gauged then cognitive modelling and crunching is done, then more spin - continue until public meets with agenda (which is to slowly implement states of europe, with poverty drones feeding the rich - distracted by entertainment).

so funny to see people actually believing it is all real. research cognitive modelling, and the media, and this bunch of clowns in the EU........or ZZzzzzzz stay sleepy.

 

[CheeseRolls]

It would be cynical to believe that it is in Germany's interests to protect the Euro - only if it may be keeping German exports artificially cheap allowing them to be the worlds largest exporter by value - most estimates show that their exports would appreciate by at least 50% if they had to go back to a national currency. Still we should all act i nthe common interest says Chancellor Merkel

And then of course there is the view of the ratings agencies daily downgrading the ratings on European countries and banks - and even the Chinese and Middle East who have money to burn at the moment are refusing to get involved in Eurozone countries? People also seem to forget that we have the sixth largest economy in the world and will almost certainly move up to fifth as the French economy shrinks yet people say we should accept our role as a mid ranking European country - balls. Germany has for many years enviously looked at the City and the revenue it brings into the UK so why not use this opportunity to target them as the current bete noir of the world. A financial transaction tax kills two birds with one stone - bail out the Euro and destroy the major contributor to the UK economy making us a second class European country that has to join the Euro club to survive (have a look at the results of Sweden which tried the same tax for seven years until they realised it was destroying their economy) All of this to bail out countries who were unable to follow fiscal rules. Yes - we didnt follow them either but being out of the Euro has at least allowed Cameron and the government to take drastic action to ensure we aren't paying 7% on our govt debt like Italy and the rest.

Of course the figures released today showing a record ever export figure for the UK economy is totally unrelated to our position outside of the Euro.

I am not sure the government can take any credit for our relatively low interest rates. There are two factors that explain this;

1 Quantitative Easing - As suggested by that clown Gordon Brown and instigated by the Bank of England. It also partly explains why we have inflation running at over 5%
2 A large proportion of the UK's massive debt, is secured on long term loans not due to expire. Credit here goes to the Debt Management Office something else instigated by the clown who sold the gold.

 

[severnside gull]

Germany has for many years enviously looked at the City and the revenue it brings into the UK so why not use this opportunity to target them as the current bete noir of the world.

Bullseye!

 

[somerset]

Let me state a few facts:

We are no longer a manfacturing economy so our we benefit greatly from the Financial Services and market based incomes that are generated throught the City.

In fact 80% of European financial transactions are routed through the city, generating more than 10% of our GDP. (£50Billion in tax revenues for HM Treasury)

Putting a transaction tax on this traffic will effectively be saying to the UK, "you pay the most to support the Eurozone recovery plan".

What would Germany and France say if we for example suggested a punitive tax on the car industry companies around Europe, I think they may have a challenge or two dont you say?

 

[BigGully]

I am not sure the government can take any credit for our relatively low interest rates. There are two factors that explain this;

1 Quantitative Easing - As suggested by that clown Gordon Brown and instigated by the Bank of England. It also partly explains why we have inflation running at over 5%
2 A large proportion of the UK's massive debt, is secured on long term loans not due to expire. Credit here goes to the Debt Management Office something else instigated by the clown who sold the gold.

In relation to inflation, although interest rates have always been used as a tool to control inflation, it doesn't seem to be relevant at present.

It seems that the rise in inflation is as a result of increase prices of commodities and tax hikes rather than a link to the circulation of money, I am not sure that interest rates have a role to play here.

 

[Badger]

I think we all need to face up to the fact we have reached The Final Countdown...

 

[sten_super]

I am not sure the government can take any credit for our relatively low interest rates. There are two factors that explain this;

1 Quantitative Easing - As suggested by that clown Gordon Brown and instigated by the Bank of England. It also partly explains why we have inflation running at over 5%
2 A large proportion of the UK's massive debt, is secured on long term loans not due to expire. Credit here goes to the Debt Management Office something else instigated by the clown who sold the gold.

The point is that the BoE have all but abandoned their inflation mandate in favour of trying to promote growth. The QE came well after interest rates had already hit rock bottom, and was introduced precisely because interest rates had nowhere else to go. You can argue about the reasoning behind this, and whether it was a wise move, but to some degree their reputation as non-partisan has been tarnished by their decision to stop focusing on inflation, without any clear remit to do so.

 

[Eastleigh Seagull]

I am not sure the government can take any credit for our relatively low interest rates. There are two factors that explain this;

1 Quantitative Easing - As suggested by that clown Gordon Brown and instigated by the Bank of England. It also partly explains why we have inflation running at over 5%
2 A large proportion of the UK's massive debt, is secured on long term loans not due to expire. Credit here goes to the Debt Management Office something else instigated by the clown who sold the gold.

It wasnt our low interest rates i was referring to but our low borrowing rate for repayment on govt bonds - these are now lower than Germany meaning the international monetary markets see us as a better bet to lend money to than Germany. This is because we have more control over our economy than anyone in the Eurozone and are taking actions t oreduce the deficit.

 

[severnside gull]

I think we all need to face up to the fact we have reached The Final Countdown...

How appropriate - a song by Europe - that really is quite clever

 

[Spiros]

I am not sure the government can take any credit for our relatively low interest rates. There are two factors that explain this;

1 Quantitative Easing - As suggested by that clown Gordon Brown and instigated by the Bank of England. It also partly explains why we have inflation running at over 5%
2 A large proportion of the UK's massive debt, is secured on long term loans not due to expire. Credit here goes to the Debt Management Office something else instigated by the clown who sold the gold.

I think the post you are replying to was referring to interest rates paid on government debt. These are low because we have in place a proper deficit reduction plan which the government are demonstrating that they will stick to. That would not be the case if we were following the Ed Balls route of trying to borrow more money - we would then have about as much credibility as Italy/Greece and government debt costs to match

 

[CheeseRolls]

It wasnt our low interest rates i was referring to but our low borrowing rate for repayment on govt bonds - these are now lower than Germany meaning the international monetary markets see us as a better bet to lend money to than Germany. This is because we have more control over our economy than anyone in the Eurozone and are taking actions t oreduce the deficit.

See my point 2 as to why UK govt bonds are comparatively low.
The actions we are taking to reduce the deficit are currently having the exact opposite effect

 

[sten_super]

See my point 2 as to why UK govt bonds are comparatively low.

Yes, that is true, but equally the fact that that they are long term loans would not matter if the markets didn't believe in our ability to repay them - traded bond yields would still be very high. They aren't.

The actions we are taking to reduce the deficit are currently having the exact opposite effect

Sorry, are you trying to say the deficit reduction is actually causing bond yield rates to be higher than they otherwise would be? When they are already lower than Germany's? What do you base this on? How low do you think they could go?

 

[Biscuit]

It is in the UKs interest that the EU thrives as they are our biggest trade partners. However, as much as we don't want to miss out - we don't want to commit too highly and pay for the mistakes of states such as Greece and Italy. So it's a tricky tightrope, not aided by the fact that we don't have a PM that holds any clout in Europe at all. Brown would have commanded a lot more economic respect and we'd be in a much better position as a result.

 

[CheeseRolls]

I think the post you are replying to was referring to interest rates paid on government debt. These are low because we have in place a proper deficit reduction plan which the government are demonstrating that they will stick to. That would not be the case if we were following the Ed Balls route of trying to borrow more money - we would then have about as much credibility as Italy/Greece and government debt costs to match

There is no confusion on my part. Punitive rates for government debt occur when demand exceeds supply. This is not currently a problem for the UK.

1 Because the UK has a low proportion of its government debt due to mature.
2 Because the supply is artificially high due to Quantitive Easing.

If you want to believe that the markets take one look at George Osborne and say ease off lads he is one of us. Please just carry on.

 

[Gangsta]

There is no confusion on my part. Punitive rates for government debt occur when demand exceeds supply. This is not currently a problem for the UK.

1 Because the UK has a low proportion of its government debt due to mature.
2 Because the supply is artificially high due to Quantitive Easing.

If you want to believe that the markets take one look at George Osborne and say ease off lads he is one of us. Please just carry on.

None of the above makes any sense - it all appears to be the wrong way around.

If you are suggesting that any other course of action than that taken by the Government would lead to lower bond yields you are sniffing petrol. Also if you think that demand/supply is the main trigger for bond yields you are wrong as this can be easily manipulated by states. Institutional investors are probably more worried about risk at the moment. In the heady golden days of Labours "no-boom-and-bust" supply would get looked at more closely, but not as significant this week.

 

[Pavilionaire]

What a bloody mess!

So many different opinions and nobody's got a clue what gonna happen next. The bottom line is I agree with Cameron. The UK government's primary responsibility is to look after it's own citizens, not the Greeks, not the Italians but the British people.

The transaction tax will harm our financial services sector. The USA won't bring it in, so we'd be less competitive compared to them.

For all those saying Cameron lacks backbone what he did this morning was make a big call. He now has to have the courage of his convictions, stick to his guns, stick with the deficit reduction plans and focus on some imaginative policy at home to get the British economy growing, i.e. simplify taxes, support local chambers of trade, get behind the George Clarke "Empty Homes" plan.

 

[tedebear]

get behind the George Clarke "Empty Homes" plan.

Quite!

 

[Gangsta]

What a bloody mess!

So many different opinions and nobody's got a clue what gonna happen next. The bottom line is I agree with Cameron. The UK government's primary responsibility is to look after it's own citizens, not the Greeks, not the Italians but the British people.

The transaction tax will harm our financial services sector. The USA won't bring it in, so we'd be less competitive compared to them.

For all those saying Cameron lacks backbone what he did this morning was make a big call. He now has to have the courage of his convictions, stick to his guns, stick with the deficit reduction plans and focus on some imaginative policy at home to get the British economy growing, i.e. simplify taxes, support local chambers of trade, get behind the George Clarke "Empty Homes" plan.

All this.

The Financial Transactions Tax is a massive tax on the UK. Probably half of its revenue would come from the UK compared to the rest of the EU. It is France and Germany seeing a political opportunity to tax us, look good in front of their own voters whilst having to deliver bad news of their own. We would have been the fall guy in all this. The plan had nothing to do with raising neccessary taxes and certainly would do nothing to prevent another credit crunch. They wanted a patsy to parade in front of their own voters. Thats why they are pissed off this morning as they dont have one. Instead - second best will be to accuse the UK of wrecking any deal ( if it doesnt work - which it probably wont but we dont know as there is still no detail and still no idea of where the money is coming from ). This is bollocks they dont need us in any deal as we are not in the Euro. Its that simple. Had Cameron accepted our fate, we would have lost a massive part of our ecomony to US, Dubai, HK, Singapore etc etc. If I were say China looking in on events in Euroland this week, would I be prepared to invest more in the area