Saturday, 29 October 2011

Eurozone deal starts to unravel

First a clarification on my Commons debate blog which could have been read as Trevor Colman left UKIP. I should have made it clear by adding the words 'MEP group' but as  I was writing in the context of  the European parliament I omitted to add these words. Apologies for any misunderstanding caused. If I post something you think is wrong please post a comment on my blog to that effect.

Yesterday the Italians had to pay 6.06% at their 10 year bond auction. I f you look back at my blog earlier this week you will see then the Italian 10 year was trading around 5.95%! The great deal has been counter productive for the Italians it seems. I expect more of the same for the other PIGS.

I am astounded that the EU are going cap in hand to one of the nastiest most totalitarian regimes in the world and not a squeak from our Lib Dems, Labour and other liberal apologists. Abuse of human rights is a way of government in China but where the great project's survival is concerned all moral scruples are irrelevant. The EU's emissary will have a hard time persuading the Chines to part with their cash to such a bankrupt operation. They will drive a very hard bargain the details of which will be so humiliating they will never be made public.

The whole rescue is full of holes as to where the money is coming from. There is a huge circularity. Banks lend to governments so they can recapitalise ie give money back to the banks. There will be a huge amount of money printed by the ECB and when the Germans realise what is going on Merkel will be toast.

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