Europe!

[CheeseRolls]

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.



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?

What I am saying is that the deficit is not reducing it is increasing and at a rate that the government has had to adjust their own forecasts.

 

[sten_super]

What I am saying is that the deficit is not reducing it is increasing and at a rate that the government has had to adjust their own forecasts.

Ah okay, sorry I misread what you posted. However it's not true to say that the deficit is increasing, assuming you are talking about the current account deficit. The Autumn Statement puts public sector net borrowing at 8.4% of GDP in 2010/11 falling to 7.6% in 11/12 and 6% in 12/13 (and compared to 11.2% in 2009/10 and 9.3% in 2010/11). Net debt is still increasing but this was forecast to continue until the end of the current parliament - it's now forecast to continue for one year afterwards.

To be honest, this comparison of forecasts stuff isn't particularly useful because the counterfactual is never known - for example if Labour's spending plans had been introduced we've no idea how the economy would be doing and what the debt forecasts would now be.

 

[sten_super]

Just reading the article about the decision on the Guardian (hardly the most right-wing of papers!) and this is what Cameron wanted;

• Any transfer of power from a national regulator to an EU regulator on financial services would be subject to a veto.
• Banks should face a higher capital requirement.
• The European Banking Authority should remain in London. There were suggestions that it might be consolidated in the European Security and Markets Authority in Paris.
• The European Central Bank be rebuffed in its attempts to rule that euro-denominated transactions take place within the eurozone.

I don't think any of that is in any way unreasonable.

 

[Gangsta]

Just reading the article about the decision on the Guardian (hardly the most right-wing of papers!) and this is what Cameron wanted;

• Any transfer of power from a national regulator to an EU regulator on financial services would be subject to a veto.
• Banks should face a higher capital requirement.
• The European Banking Authority should remain in London. There were suggestions that it might be consolidated in the European Security and Markets Authority in Paris.
• The European Central Bank be rebuffed in its attempts to rule that euro-denominated transactions take place within the eurozone.

I don't think any of that is in any way unreasonable.

Yes, some items vital or we could be back to the Wild West. The reality is that we do not have pan-European financial markets. Its been banged on about by Europhiles since the 1980s but just hasnt happened ( mainly due to wide differences in tax regimes but also due to wide differences in consumer behaviour ). Therefore although the FSA are a bunch of moronic dickheads still eating the shit the banks give them, they have actually done a lot of good in trying to clean up the UK retail sector. Many of their ideas are stupid and counter-productive and do little to help the consumer in the UK, however they are trying hard. They however, are in the position of having such a wide remit of activities to now regulate, that its a massive job. Any attempt to centralise this would multiply ( or maybe cube! ) the work and complexity of it. And for what purpose? Give me one good reason for doing it? You would only do it when real pan-euro markets spring up in the wake of economic union tied to a pan-european tax regime.

Once again terrible ideas from Europe, for one purpose - to further grow the Euro project at the expense of everything else.

 

[Westdene Seagull]

Just reading the article about the decision on the Guardian (hardly the most right-wing of papers!) and this is what Cameron wanted;

• Any transfer of power from a national regulator to an EU regulator on financial services would be subject to a veto.
• Banks should face a higher capital requirement.
• The European Banking Authority should remain in London. There were suggestions that it might be consolidated in the European Security and Markets Authority in Paris.
• The European Central Bank be rebuffed in its attempts to rule that euro-denominated transactions take place within the eurozone.

I don't think any of that is in any way unreasonable.

Especially point 2 ! Kind of shows what the German and French plan really was.

 

[looney]

This from someone who styles themselves "looney" ...

Well Mongolia,Russia and Japan all had empires and didn't feel the need to be absorbed in the next new shiny empire that came along. Theres a lot of spurious rubbish posted on here like that deterministic claptrap. imo the dye is cast, just a question of when we leave the EU imo.

 

[vegster]

Ah okay, sorry I misread what you posted. However it's not true to say that the deficit is increasing, assuming you are talking about the current account deficit. The Autumn Statement puts public sector net borrowing at 8.4% of GDP in 2010/11 falling to 7.6% in 11/12 and 6% in 12/13 (and compared to 11.2% in 2009/10 and 9.3% in 2010/11). Net debt is still increasing but this was forecast to continue until the end of the current parliament - it's now forecast to continue for one year afterwards.

To be honest, this comparison of forecasts stuff isn't particularly useful because the counterfactual is never known - for example if Labour's spending plans had been introduced we've no idea how the economy would be doing and what the debt forecasts would now be.

Well done Sten, I was wondering who would spot that first .....

 

[Storer 68]

We are now resigned to playing in the political equivalent of the Europa League.

 

[sir albion]

The death of the Euro will be an economic disaster for the UK. the biggest European trade partner is the EU, if that goes we all become a pack of have- nothing states. In the a world dominated by China Russia and the US we have NO bargaining power alone. Therefore it is better for the Uk to work from the inside, not the outside. The EU needs to change and one way it has to change is to get rid of the veto. This will take power not only away from Merkel, Sarkozy AND Cameron but also the little countries that veto anything that doesnt fit their own unrelated agenda (eg Northern Cyprus vetoing Turkey's involvement in EU discussions with Syria which practically destroyed said discussions).

Not sure how you work that out but i totally disagee with your first point.
How would it be a disaster?
5th biggest economy in the world and surely one of the biggest importers in the world,everything was fine before the euro zone and everything will be fine if we left the euro zone.Its not rocket science to work out that a combination of rich countrys and poorish countrys are goner cause big problems and seriously drain the wealthier countrys resources.

Also the fact that since the euro places like greece and spain are paying double the prices of many things and tourism will be seriously dented by these inflated prices.

Cameron did the right thing and now we just need france and germany to aventually do the same thing.

 

[Storer 68]

Especially point 2 ! Kind of shows what the German and French plan really was.

It is to grab the ECB for themselves (esp the French) as their economy is one of the next ones forcast to go tits up, thus leaving the us holding all the bad debt.......

 

[Storer 68]

Britain’s exposure to eurozone debt
By Ben Chu
Eagle Eye - Breaking views from Independent commentators -, Econoblog
Wednesday, 14 September 2011 at 11:16 am

The market focus at the moment is on the exposure of French banks to Greece. But be in no doubt how exposed British banks are to eurozone sovereigns and corporations.

I’ve written about the figures before.

But this chart (courtesy of a report by the Ernst and Young ITEM club) tells the story visually.

Germany gets gold, France silver. And then it’s us. The report estimates that the overall exposure of British banks to the economies of Greece, Ireland, Portugal and Spain is around $430bn, or 19 per cent of our GDP. If the eurozone unravels and those debts fall dramatically in value (or even go into default), the fact that we’re not members of the single currency will not protect us.

Incidentally, you might wonder what British banks were doing buying up all that eurozone debt in the first place. The Vickers commission, implicitly, wondered the same thing. That’s why it recommended that only British retail and corporate lending should be inside its ring fence. If bankers want to speculate by buying eurozone securities, they should surely do it without an implicit UK government backstop

 

[larus]

This analysis shows a complete misunderstanding of the EU and not one just shared by this poster. The point was that if a country gets into trouble its the responsibiilty of the whole EU to get it sorted out... its the Three Musketeers all for one and for all adage. Saying its not our problem or its someone else's fault misses the point of the EU.

Unfortunately many leaders in the EU also suffer from this misunderstanding.

I'm sure the problem is more like a marriage; the Germans are the 'man' and the Greeks/Spanish are the 'women'.
Womans view "What's yours is ours and what's mine is mine".

The problem is that for the Euro to work, there will have to be an on-going transfer of wealth from Northerns countries to Southern. Ain't gonna happen. The problems within the Euro are not liquidit (cash flow), but solvency (profit/loss). The solutions being proposed are to borrow money (EFSF), and then leverage by 3-4 times to buy failing government bonds.

Another issue is that the EFSF can't borrow long-term at present as no-one wants to lend them money (there is no such thing as 'the market', all you have is pension funds, wealthy countries/individuals wanting to invest their heuge excess wealth). The EFSF is borrowing on 6-12 months, but having to lend for 10-20 years. This is the model which worked so well for Northern Rock - yeah, right.

The EURO is a failed idea; it's a political game, and the fundamentals don't support it. If you're so confident it's viable, I suggest that you invest in 1 year Greek bonds which are offering over 300%. So, ask yourself why?

 

[larus]

As I read it Cameron vetoed the changes because he says regulation of the financial sector would be bad for Britain.

What utter cobblers. Regulation would only be bad for top bankers and the ruling elite. Deregulation is the root cause of making the markets and financial systems so unstable, not just now but over the past two decades, and the reason the whole world is in such a monetary mess. But that's all right because the top 1% who run things (including Cameron and his cronies) are doing very nicely out of it, while the rest of us 99% suffer.

Reports say that he wanted to be able to apply HARSHER conditions than that being proposed by the Euro countries. Kind of rubishes your theory.

 

[seagullsovergrimsby]

We are now resigned to playing in the political equivalent of the Europa League.

and Dodgy Dave has turned the UK into Crystal Palace struggling to avoid relegation

 

[larus]

and Dodgy Dave has turned the UK into Crystal Palace struggling to avoid relegation

Suggest you understand what he has done and why, before you make silly statements. Do you know what was being requested of the UK and what DCs counter stance was? Suggest you do a bit of research first and then put forward a reasoned response.

 

[The Rivet]

Been reading about this stuff all day and my head hurts! I am not going to profess to be well educated in economics and politics. On the other hand I don't think I am too stupid either.....what I see

Some Lib Dems and some others (most notably Dave & Ed Miliband) are moaning about not having a seat at the 'European top table'. My question: How much would it have cost this country in Jobs, money and sovereinty if Cameron had signed the treaty?

The 17+6 want a new treaty which will effectively bring much closer fiscal union. One of the points in this agreement is that Eurozone budgets should be balanced or in surplus annually. I find that ironic and not a little hypocritical bearing in mind Brussels have not acheived that in 17rs of the 'Union'!

The Germans and the French want a financial transaction tax across Europe which they know would mean the city of London paying an awful lot of money into the 'union' and yet at the same time Merkel is also insisting that a bail out fund should only be implemented through the IMF (which will aditionally cost the UK) and not through the ECB (which would not).

Additionally it would appear that sarkozy ( I refuse to use a capital) is blaming most of this whole mess on the city of London regarding 'reckless' finance and lending. sarkozy would do well to examine the borrowing that all governments engaged in during the boom, do they not also have some fault lying at their doors?(sarkozy should examine the books of French banks) And what of the oh so clever Germans?
ie...

'Stupid Germans in Düsseldorf'

it would appear that we (the UK) have upset the apple cart by not agreeing to be the unions fall guy.

 

[CheeseRolls]

Ah okay, sorry I misread what you posted. However it's not true to say that the deficit is increasing, assuming you are talking about the current account deficit. The Autumn Statement puts public sector net borrowing at 8.4% of GDP in 2010/11 falling to 7.6% in 11/12 and 6% in 12/13 (and compared to 11.2% in 2009/10 and 9.3% in 2010/11). Net debt is still increasing but this was forecast to continue until the end of the current parliament - it's now forecast to continue for one year afterwards.

To be honest, this comparison of forecasts stuff isn't particularly useful because the counterfactual is never known - for example if Labour's spending plans had been introduced we've no idea how the economy would be doing and what the debt forecasts would now be.

Not trying to be disingenuous here and I don't dispute your figures, but the graph below, illustrates my point. Like everyone else I have no idea what the impact of a Labour government could have been. I do know that unless there is some growth in the economy, cuts followed by more cuts are not going to improve the situation.

 

[Westdene Seagull]

and Dodgy Dave has turned the UK into Crystal Palace struggling to avoid relegation

Because the UK demand that banks hold more capital is such a stupid idea

 

[Questions]

There seems a paranoia about his Financial Transaction Tax being put in place and its aims to cripple Britain. The city of London and its institutions was instrumental in the state we and Europe are in now. Of course new legislation needs to be implemented and I wish we were there helping to write it.
Cameron is aiming to protect the very people who are responsible for the mess we are in........ ie the city and the bankers........ so no change there then from a tory government.

 

[sten_super]

Not trying to be disingenuous here and I don't dispute your figures, but the graph below, illustrates my point. Like everyone else I have no idea what the impact of a Labour government could have been. I do know that unless there is some growth in the economy, cuts followed by more cuts are not going to improve the situation.

That is cumulative net debt, and as I stated that is going to increase to the end of the parliament. If you look back at my figures, in 2010/11 (let's take that as the point at which the coalition came in to power) borrowing, just for the current year, was 9.3% of GDP. If you immediately looked to cut that back to zero (which is what would be required to stop the net debt increasing, given the lack of growth in GDP) you'd be looking at cuts EIGHT times deeper than those that were introduced (which will shrink the deficit by an estimated 0.9% of GDP in 2011/12).