Wednesday, 14 March 2012

EU deal to save Greece and the Euro starts to unravel

Or alternatively its the usual EU salami slicing approach. Nobody seriously believed this would be Greece's last visit with the begging bowl but already stories are emerging in today's Telegraph, quote 'Greece "to miss its budget targets" despite bail out deal'. 'Politicians prepare for Athens to receive first payment in latest lifeline' Well of course they are. Most of the money will be siphoned off into rapacious politician's pockets.

This not unusual. Nigeria has huge oil revenues 40 bn$ per annum but how much appears in the Nigerian government accounts. Zilch to be precise but of course Nigeria is a byword for corruption.

There is a lovely picture in the Telegraph of Jean-Claude Juncker EU crat and PM of Luxembourg trying to strangle the Spanish PM with the Dutch finance minister looking encouragingly on. I reproduce it below from the Telegraph online..

Luxembourg's Prime Minister Jean-Claude Juncker, right, puts his hands on the neck of Spain's Economy Minister Luis de Guindos, center, during a meeting of eurozone finance ministers at which Spain was given more wiggle room in cutting its big deficit.  

The EU can bully little Greece but Spain is a big boy and they have just waved two fingers to the EU fiscal pact invoking their status as a sovereign nation. Then of course there is Portugal which can be bullied by the Prussians and Italy which like Spain is too big to buly. Salami slice that if you can! 

More seriously there seems to be much discussion of how EUKIP will ever get us out of the EU. My view is its irrelevant. What will  get us out is when the EU's insane regualtions start to hit the City. Last night on Sky Tidjane Thiam chied exec of the massive Pru did not rule out relocating and re-centring their operations somewhere East of Suez because of the lates EU capital adequacy rules. These will simply put the Pru out of business competing with the Yanks outside the EU which is where all the growth business now happens.

David Nish from  Standard Life admitted on the same programme that their increase in operating profits came from their Canadian division and their UK/EU business was virtually flat.

Pru shares rose 4.81% after their results announced whilst Standard Life rose 0.4%. after their results. That says it all.

The big one will be if HSBC re-locates. The H stands for Hong Kong and the S for Shanghai. No prizes for guessing where they might re-locate too. The other bank with a move on the cards is Standard Chartered Neither took government cash post Lehman's and are to coin a phrase their own bank. I would not rule out a move for Barclays either! Where the big beasts go the parasites follow.

The City competes with the US corporates in banking, insurance and even law. Their business is mainly outside the EU. Forcing them to comply with insane EU rules will force them out of the EU and all these high paid jobs will leave London but not for Paris or Frankfurt SarkyMerkel. No, they will go much further East where the EU's writ does not run.

That is the economic reality that will force any UK government's hand on the EU. We simply cannot stand the loss of tax revenue these moves. That's why EUKIP and the ridiculous Farage is irrelevant to the decision.

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