Following a “row” with Germany over the UK’s involvement in a new rescue package for Greece, Cameron has declared something of a victory. The EU bail-out mechanism through which the UK would have been partly liable, the European Financial Stabilisation Mechanism (EFSM), won’t be activated and the UK will only contribute €1bn or so to a fresh Greek aid package via its IMF commitments.
Then we go on to argue what you've heard us argue many times before - that the bail-outs aren't working. As the group of 14 Tory MPs from the new intake argued in yesterday's FT, nodding through a failing eurozone strategy will leave the UK exposed to future meltdowns in euroland. It should instead be pushing for a restructuring - and plan for it to be achieved in an orderly manner. Read the full piece here.Not that it was much of a row in the first place – it was primarily the Guardian that got a bit over-excited, quoting one German official, which made No 10 look pretty good in the end. A proposal for activating the EFSM was never really on the table. However, since the UK actually doesn’t have a veto over its own participation in this fund (bizarrely, the activation of the EFSM is decided by a majority vote amongst EU leaders) there was still a theoretical risk that the UK could be outvoted. Indeed, the fund could again be called upon in future bail-outs. So this game isn’t exactly over.
But in fact, this is not the most relevant discussion. Yesterday Cameron stated that “when the eurozone suffers, the UK suffers”. In pretty strong language, he has stated that it is very much in the UK’s interest that the eurozone returns to health. But if this is so, why isn’t the UK participating in a second Greek bail-out?
4 comments:
the bail-outs aren't working?
Who cares?
The bastards confirmed that the euro is based on sound fundamentals and
that they are satisfied with its track record of price stability since its inception.
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/123075.pdf
How come?
Here’s how:
Go to the ECB website and then to ECB’s "International reserves - External reserve"s and realise that the foreign currency reserves (in convertible foreign currencies) had at the end of April 2011 an approximate market value of 141,184,
whereas Gold (including gold deposits and gold swapped)’s value was more than double the foreign currency reserves and valued at 358,546?
http://www.ecb.int/stats/external/reserves/html/index.en.html
What’s that? Isn’t "gold" a four-letter word? No, "gold" is an eight-letter word "Freegold".
FreeGold means that the currency has a gold component and a paper component, and puts a “firewall” between the two so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of circulating currencies. It is the (quarterly) marking to market (MTM) of the gold reserves of the European System of Central banks , not to the model of $42.2 like the USA central bank (originally $35), by the ESCB which provides that wall.
Cameron is using the now time honoured MP's expenses scam routine, "not got enough money ?, put it on your expenses" Only in this case it's the IMF account. Having now given illogically a 88% increase in the UK's contribution IMF is taking the money for Greece by the back door, and we're not supposed to notice.
The UK has its own currency, which has already suffered devaluation against the Euro. Surely this means any UK bail out money, when paid in Euros will cost us more in sterling. So we have a double penalty.
The UK has its own currency, which has already suffered devaluation against the Euro. Surely this means any UK bail out money, when paid in Euros will cost us more in sterling. So we have a double penalty.
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