Europe agrees rescue package for Greece bleats the BBC this morning. Well not quite, the IMF are to be crucially involved but as always the press are long on rhetoric and vanishingly small on what exactly is proposed. The IMF will only disgorge the funds if it is running the show and there will have to be EU funds as well to get up to the €30 bn Greece needs in the next six months to stave off bankruptcy. It is also trailed as a last resort or as the Dr Frau put it a cold corpse job.
The attractive thing to EU politicians about having the IMF involved is when the Greek public sector unions revolt and strike over the austerity cuts effect on their members the nasty Anglo Saxon IMF can be blamed not them. The IMF know this so it will be interesting to see how they handle this to protect there good reputation. The IMF only deals with individual sovereign states so will it gratify the Eurofanatics dreams and treat the EU as a single state? I think not.
The unattractive angle is that it shows that the ECB cannot put its own house in order. JC Trichet, governor of the ECB is quoted as saying it was "a very,very bad idea" to let the IMF into the Eurozone. The IMF as I wrote yesterday will come in and kick ass and the first bum to be kicked will be JCT's!
The big unknown is how the Chinese will react. They have large holdings of Euro denominated debt and are understandably unhappy about the Euro's steady decline. Their central bank deputy governor, Zhu Min, said yesterday, "Greece is only one case but its only the tip of the iceberg. The main concern today is obviously Spain and Italy". Just what the Eurocrats did not want to hear.
There will be lots of hot air from Brussels but if you want to know how things are going watch the markets, the Euro Dollar rate and the PIGS credit spreads will tell the truth.
You have to admire the French they really know how to capitalise on a cock up, make a bigger one! So now they are bidding to draw up a single economic government to police financial policy across the EU - that includes us by the way. Its another power grab to go along with pushing aside the pathetic former PCT chair Baroness Ashton so the French can run EU diplomacy and have a French run EU army to back it up. The spirit of Napoleon is alive and well in the Quai d'Orsay. This will all require another Treaty. Lisbon was billed as the last Treaty needed. A lie like the Great War was billed as the war to end wars!
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