BBC BLOGS - Gavin Hewitt's Europe
IN ASSOCIATION WITH
« Previous | Main | Next »

Something is out there: Europe's banks

Gavin Hewitt | 13:33 UK time, Tuesday, 20 July 2010

Bank card in ATMFor a long time Europe's banks and officials have been haunted by the fear that something is out there. They have not been able to identify the monster alien but, like in the science fiction TV series, they are convinced it's lurking out there.

For months now they've been troubled by the spectre that there is something rotten in some of Europe's banks. It has troubled them to the point that they've been reluctant to lend. Inter-bank lending is still closed to some lenders.

So, rather belatedly, the Europeans edged towards stress-testing their banks. The Americans had done it last year and it managed to squeeze some of the suspicion out of the system. Of the 19 banks analysed, 10 failed and were told to go off and raise $75bn. But the worst was known and the banks loosened up.

Now the Europeans are looking at 91 banks. The markets have been concerned with three sectors. Firstly, the Spanish Cajas or regional banks. They were badly burnt by the collapsed real-estate market and have been scrambling to merge with each other.

Secondly, there are German Landesbanks, which were set up to promote regional development. Many of them were exposed to heavy losses in the American mortgage markets. Thirdly, suspicion has fallen on Greek banks and the debts they are holding.

So on Friday afternoon the Committee of European Banking Supervisors will deliver its verdict after the markets have closed. The prize is that a positive outcome will soothe market nerves and one more step will be taken towards managing Europe's debt crisis.

But this is a psychology test. The results have to be convincing to work.

Now already various ministers and officials are predicting happy outcomes. Twenty-seven Spanish banks are up for review. The Spanish Finance Minister, Elena Salgado, has said "when all the figures are known, we will see that the truth is that our financial system is solid and ready to face the future". She is not saying no Spanish bank will fail, but she is optimistic. The Greeks too are chirpy - the finance minister says Greece's banks will pass. Banking officials in Germany say there is no indication that any of the Landesbanks will fail. The French Finance Minister, Christine Lagarde, is not worried about French banks either.

So all looks good? Well, not exactly. Some, like Neil Mackinnon, strategist at VTB Capital, is warning of a "whitewash". Far from being stressful, he thinks it could be a stroll for the banks.

Others are asserting that some banks must fail in order for the exercise to carry conviction. "If its outcome is to be credible," says Nicolas Veron from the economic think-tank Bruegel, "it will necessarily reveal significant capital shortfalls in a number of banks". Analysts at Credit Suisse say $40bn of extra funding will be needed when the tests are done. Others put the figure closer to $100bn.

The grey area is the criteria used to assess a healthy balance sheet. "Stress-testing is a gamble," says Ken Wattret of BNP Paribas. The assessors are assuming that the EU economy will underperform. But the big dilemma is: what losses to factor in for sovereign debt? Do you reckon banks will take a 20% or even 50% hit on say Greek bonds?

So the stress test has to pass a credibility test itself.

Now if a bank fails then a plan to raise capital has to be in place by the time markets open on Monday morning. That, of course, could be difficult for governments in the midst of an austerity drive.

There have been and still are real concerns about the future of the eurozone. They may have retreated in recent weeks, but they have not gone away. But there is also perception. Those of us who have been following the eurozone crisis have watched fear morph. There was a fear that countries could default, a fear of debt, a fear of low growth and fear that the European banking system was unsound.

As the song says, "But I know there's something out there, something somewhere, I feel it all around". The test of the stress test will be whether the fear factor subsides.

Comments

or register to comment.

  • 1. At 2:38pm on 20 Jul 2010, Freeman wrote:

    Your colleague of the fifth horse has done this one to death Gavin. As noted on Mr Peston's blog, if these stress tests fail the credibility test, they are likely to kick off the crisis they are meant to defuse.

    Complain about this comment

  • 2. At 3:10pm on 20 Jul 2010, cool_brush_work wrote:

    There is nothing more stressful for a bunch of EU-Brussels' apparatchiks than to have to cobble together a whole series of Financial figures for which they have at best limited qualification and even less aptitude or inclination to understand.

    Afterall, let us be quite clear: These 'stress' tests are being conducted & presented by the same sort of EU Officials who set-up the Qualifications for the EUro-zone.
    There is nothing that is independent about them and still less is there any likelihood the final test reports will apply to actual Banking Conditions as they apply to 2010-11.

    The last time any Citizen of the EU27 looked the whole 27 Nations' Banking-Finance system was in sharp decline and needed massive injections of EU Tax-Payer Monies: Pardon me for asking, but which part of the 'Stress Test' asked these 2 VITAL QUESTIONS of the RECKLESSLY GREED-DRIVEN BUFFOONS IN-CHARGE:

    1) 'What was Your ROLE in the biggest post-WW2 Economic debacle!?'

    &,

    2) 'Why are You STILL EMPLOYED except in any capacity than a car-wash bucket-holder!?' (Apologies to that much needed fraternity)

    Similarly for the Brussels' Enquirers here is a simple question (well, it would have to be for them to cope with the 'stress'):

    As an EU EMPLOYEE when did You last do a job that did NOT PAY YOU 3 TIMES the average, Earlier RETIREMENT, INFLATION-PROOF PENSION, & significant Expenses Claims EXTRAORDINARILY ABOVE those of the ORDINARY EU CITIZEN!?

    Complain about this comment

  • 3. At 3:46pm on 20 Jul 2010, BluesBerry wrote:

    Something is out there…seems ominous.
    I believe that EU banks have identified the monster; further, they know what must be done with the monster. The monster must be caged, eliminated from the balance sheets. The monster is derivative debt wrapped up in financial bundles that are rotten at the core.
    I have said time and again: banks are afraid to lend; this fear was not alleviated in the United States by its “stress” test, which was really no test at all. This search for rot in EU banks has been mandatory; it will alleviate the reluctance to lend because, unlike the Americans, the Europeans have been open and transparent with what they are testing, how they are testing it, and what they will do to “fix” under capitalization.
    If the American stress test meant anything, why are American banks continuing to fail? As you say, of the 19 banks analysed, 10 failed and were told to go off and raise $75bn. But the worst was not known. US banks continue to fail. The number now satands close to 100. So exactly what did the American stress test measure or fix?
    An average of 15 banks are going bankrupt each & every month in the US. Recently, the Federal Deposit Insurance Corporation (FDIC), which insures deposits at over $8,000 warned of increasing failures. These failures may overrun the financial capability of the FDIC.
    Now the Europeans are courageously looking at 91 banks. Hidden debt – resultant from negative default swaps and/or bundled derivatives – are prime targets. These must be severed from bank statements in order to have an actual snapshot of capitalization needs. They must be written off.
    So on Friday afternoon the Committee of European Banking Supervisors will deliver its verdict after the markets have closed.
    Happiness seems to be the flavour right now, but that can literally turn on a dime. But dig this: if the Greeks are “chirpy” and Greece is the biggest PIIG, I’m feeling pretty "chirpy" myself.
    As for others who are asserting that some banks must fail in order for the exercise to carry conviction.
    Nope, that's simply not true.
    If the banks have done a careful job in getting American junk off their balance sheets, capital shortfalls will stand out like a red-thumb. So the capitalization need (at least) will be open and transparent, and known on Friday.
    Stop being fearful. Fear solves nothing. I have watched the eurozone crisis. Unlike yourself, I do not fear that countries will default; I do not fear that the European banking system is unsound.
    As the song says, "But I know there's something out there, something somewhere, I feel it all around". What you feel is the shudder of more American banks failing – after they were “stress-tested”!

    Complain about this comment

  • 4. At 4:16pm on 20 Jul 2010, EUprisoner209456731 wrote:



    " ... German Landesbanks, which were set up to promote regional development. Many of them were exposed to heavy losses in the American mortgage markets. ..."

    EUprisoner: Globalisation is not as great as some believe.

    Complain about this comment

  • 5. At 4:18pm on 20 Jul 2010, EUprisoner209456731 wrote:

    Re:2. At 3:10pm on 20 Jul 2010, cool_brush_work .

    EUprisoner: The "EU" stinks!

    Complain about this comment

  • 6. At 4:49pm on 20 Jul 2010, cool_brush_work wrote:

    EUpris

    re #5

    "..something is out there.." and it "..stinks" to high heaven!

    Complain about this comment

  • 7. At 4:54pm on 20 Jul 2010, Joeblo wrote:

    What a joke.

    EU bankers telling more lies.

    Have an outside audit done by a non interested third party.

    That would be to honest, as the news probably wouldn't be what they want to hear.

    Complain about this comment

  • 8. At 5:12pm on 20 Jul 2010, Chris wrote:

    "But the big dilemma is: what losses to factor in for sovereign debt? Do you reckon banks will take a 20% or even 50% hit on say Greek bonds?"

    Well what you have there is not dilemma, it sounds and looks more like hypothetical scenarios:) a dilemma is if you have to choose from one of two options.

    If the "experts" believe they are dealing with a dilemma I have serious doubts about their expertise! Can we please find some experts that know the basics at least?

    Complain about this comment

  • 9. At 5:29pm on 20 Jul 2010, Nik wrote:

    CBW, do not get tired over it, let me do the talking, then you personally attack me as usual.

    The issue is a plain joke. They come up with this "stress testing" as a brand new measure to see where we are as if it is the first time there is a need after some 300 years of modern banking. Whatever.

    The whole issue is who to end up the process that has already begun since early 90s, a merge of the merge of the merge. Mind you, I have to find the articles advertising this "merge" as the valid solution to the emminent failure of this famous "stress testing". I have even read articles writing on the Greek banks case (I know much better than other cases) mentioned above by Gavin. I will tell you what is all about and you drag the conclusions each for his own case:

    ... it is sometimes all about pathetically small or larger but totally in the red banks that magically find money raining from heavens buying up banks that are basically sound and wealthy but with over-inflated temprary issues all that while stock market prices bend and jump like frogs around the lake.

    Complain about this comment

  • 10. At 6:12pm on 20 Jul 2010, MaxSceptic wrote:

    It will, as ever, be a fudge.

    It will satisfy the EUrocrats, but the markets will see through the charade.

    The markets will respond accordingly.

    Complain about this comment

  • 11. At 6:43pm on 20 Jul 2010, cool_brush_work wrote:

    Re #9

    'I think, therefore I am', is a motto of sorts - - now if You could just attempt the former, the latter part may eventually evolve.

    Meantime keep any eye open for the CIA-hired enforcer-assassin from the anarcho-syndicalist, looney-tunes, pink-brigade wearing special issue from MI5 a pin-striped suit and polka-dot tie & socks, getting off the late-night ferry from Tirana whose coded identity-password will be the phrase, "Jeez, I'm outta here!"

    Complain about this comment

  • 12. At 7:13pm on 20 Jul 2010, threnodio_II wrote:

    #7 - Joeblo

    "Have an outside audit done by a non interested third party".

    So all we need to do then is find a hitherto undiscovered tribe deep in the rain forest, pick the one who is a chartered accountant with a degree in economics and tell him to get on with it?

    Good plan.

    Complain about this comment

  • 13. At 7:38pm on 20 Jul 2010, ghostofsichuan wrote:

    The banks and the governments working together...last time the result was a worldwide financial crisis. The large banks will see this as an oportunity to raid the treasuries again and the governments want a justification to provide the funds. What is being counted and who is counting? Since neither the governments nor the banks have any plan to expand the economies they come up with these things to distract everyone. The bankers believe they have a divine right to obscene incomes and so if the market isn't working they must have the taxpayer fund their lifestyles....a sin tax for being of the working class. The economists will be busy with power-point charts like shamen throwing dust in the air.

    Complain about this comment

  • 14. At 8:10pm on 20 Jul 2010, MarcusAureliusII wrote:

    A spectre is haunting Europe. It's the spectre of bankruptcy and obsolescence. It is built into Europe's systems, its cultures, its mentality. There is a real monster behind every door. That is why nobody wants to even try to open one more than occasionally and then only just a crack for a second so that the monster will not become aware and jump out before it can be shut tight and locked again. But the monsters are all there and they will not be put off forever. What are those monsters? Huge unsustainable government debts and deficits run up on credit to pay for social programs they couldn't possibly afford, bubble real estate markets, impossible bureaucracies with rediculous rules that send prudent businessmen running screaming into the night, demographic time bombs, lack of competition, lack of technology, inefficient agriculture, bankrupt banks, taxes galore, a worldwide recession that we may not recover from anytime soon, growng competiton from Brazil, Russia, India, and of course China, large numbers of foreign immigrants, dependence on outsiders especially Russia for energy, and the list could go on and on.

    Europe is in a state of rapid and severe decline from which it will not recover. The outlook is bleak. Some of the less vulnerable countries might have survived had they not tied their fates to a large number of others for whom it is hopeless but now they will all go down. Maybe not all at the same time but the end result will be the same nonetheless. The USA would do well to completely disengage itself from Europe and keep its distance. Europe is not a friend to America and would not be an asset to it if it were. Britain as much so as the others.

    Complain about this comment

  • 15. At 8:30pm on 20 Jul 2010, Jukka Rohila wrote:

    To BluesBerry (3):

    Just a note about banks having a fear to lend...

    The reason why banks aren't loaning money is because most of them either don't know or don't trust their employees and managers to know when to loan money and when not to...

    For example, I two persons that I know working in two different banks. One in a Finnish nationwide cooperative bank group and one working in a subsidiary of an Nordic wide bank. When the whole financial crisis began, these two banks acted totally different...

    The Nordic wide bank gave an order from the headquarters to shutdown lending thus leading into a situation where my friend was becoming crazy and desperate because he couldn't give any loans not only to new customers that were grade AAA companies, but not also to his best AAA rated customers. Even when he begged his bosses to make an exception, there was non given.

    The Finnish cooperative bank group instead continued to lend with their normal lending rules. My friend working at an regional cooperative bank actually wondered why were they getting so much new customers that were very good and credit worthy. They especially wondered on why other banks were not lending even to housing cooperatives that in Finland are in practice risk free customers.

    After having talked to both of my friends, my opinion is that the Nordic wide A) doesn't trust their Finnish subsidiary and B) they don't know how to lend. In comparison the Finnish cooperative bank group continued to lend because their independent regional parts know their customers: they know in what shape local industries and companies are; they know local entrepreneurs; they know local people; they know the assets and can appreciate them correctly; and they have the authority to give loans by their own judgment.

    In my personal opinion the problem that the banks have is that they not only fear to lend, but they don't know how to lend. The reason why we have this situation is because too many banks have in the last decade concentrated to anything else than their core business, they have totally forgotten on how to be commercial and retail banks, they have forgotten their customers.

    Complain about this comment

  • 16. At 8:38pm on 20 Jul 2010, Jukka Rohila wrote:

    To MarcusAureliusII (14):

    Baghdad Bob, is that you?
    http://www.youtube.com/watch?v=s27Oq5ot0ZI

    Complain about this comment

  • 17. At 8:42pm on 20 Jul 2010, threnodio_II wrote:

    #14 - MarcusAureliusII

    All you have to do with the above is to substitute "run up on credit to pay for to social programs they couldn't possibly afford" with "run up on credit despite not having adequate social programs they couldn't possibly afford" and you could be describing the USA.

    Complain about this comment

  • 18. At 8:58pm on 20 Jul 2010, Buzet23 wrote:

    #15. At 8:30pm on 20 Jul 2010, Jukka Rohila,

    Hi Jukka, for once you have a good point as I've also noticed how banks throughout the EU have centralised many of their activities, one of those that most affects us is that decisions on loans are now often made by faceless central committees who have no idea about the customer and local conditions. All they view is a tick box profile of the customer and compare it to a theoretical analysis of what that profile means, in just the same way as an insurance actuary uses a profile to weigh the risks.

    If your Finnish cooperative still has local branch managers who can actually manage then you are lucky.

    Complain about this comment

  • 19. At 9:19pm on 20 Jul 2010, threnodio_II wrote:

    All right, I admit the temptation to be sarcastic was irresistible but, to be serious, the problem of stress testing the banks has been rehearsed over and over in the financial press and in Peston's blog and it is this. Whatever the outcome, it will be counter productive because either many banks will be found to be under capitalised, which will further erode confidence and force them to seek additional liquidity in the equity markets and further limit their ability to lend - or - they will mainly pass the test throwing the reliability of the tests themselves into question.

    In the case of British banks and possibly some Benelux countries as well, these banks will probably stand up well because there are still large amounts of public money tied up in them. The time to stress test them would have been after they had settled the public debt and returned to self-financing.

    Complain about this comment

  • 20. At 9:37pm on 20 Jul 2010, Menedemus wrote:

    When we have the BBC Bloggers such as Gavin, Robert Peston and Stephanie Flanders all flogging the same dead parrot there is one thing you can be sure of .... the parrot is dead, deceased, no longer living - it is a dead parrot!

    For dead parrot one can read "the credibility of the Euro" and anyone with any sense can see that the Euro is dead and we are merely discussing whether EU inters, cremates or dismembers the Euro or the Eurozone nations hope for some kind of miracle of Resurrection.

    In the latter instance, the Eurozone nations must either surrender fiscal sovereignty entirely to Central control 9something I doubt that they will be allowed to get away with by their citizens) or the Eurozone begins to see its member States disengage slowly but inexorably.

    My money would be on Greece being the first nation to leave the Eurozone.

    Complain about this comment

  • 21. At 10:31pm on 20 Jul 2010, Buzet23 wrote:

    #20. At 9:37pm on 20 Jul 2010, Menedemus,

    Funny enough I have a sneaking suspicion that should several country's need bail outs and Germany be asked to pay up, we could see them deciding to revert to the DM and being the first to leave the Eurozone. The ECB can relocate to France with it's French governor, and the Euro will become yet another French disaster. Could this be the future of the Eurozone?

    Complain about this comment

  • 22. At 01:16am on 21 Jul 2010, Ellinas wrote:

    I wrote "3 Blogs ago":

    "...

    Year 2007:

    Spain is a major investment country which convinces markets to the point of capturing foreign capital amounting to almost 160% of GDP

    Year 2010:

    Spain is a country with feet of clay due to the External debt of more than 170% of GDP, which cast doubt on an early return.


    In less than three years, the distorting lens of the market has made two very similar figures reading the opposite.

    the External debt of some European countries:

    Country↓ US($)↓ Date↓ Per capita US($)↓ % of GDP↓
    ---------------------------------------------------------

    Ireland 2,287,000,000,000 30/September/2009 515,671 1004%

    NL 3,733,000,000,000 31/December/2009 226,503 470%

    UK 9,088,000,000,000 30/June/2009 147,060 416%

    Greece 552,800,000,000 30/June/2009 49,525 167%

    Spain 2,410,000,000,000 30/June/2009 52,588 165%


    Ireland, UK, Champions of External debt but the scapegoat, with your unhealthy British "PIIGS" propaganda, was Greece.

    ..."



    ...So yesterday...Ratings agency Moody's has downgraded the Irish Republic's sovereign bond rating to Aa2 from Aa1.

    The ratings agency said the move had been driven by the government's gradual but significant loss of financial strength.

    And it expects the country's economic growth to be below its historical trend in the next three to five years.

    Moody's said the banking and property sectors, which had driven the economy before the global economic downturn, would not contribute strongly to overall growth in coming years. It also pointed to the country's swelling levels of debt as a reason for the downgrade.

    "Today's downgrade is primarily driven by the Irish government's gradual but significant loss of financial strength, as reflected by its deteriorating DEBT affordability,"

    Complain about this comment

  • 23. At 01:43am on 21 Jul 2010, MarcusAureliusII wrote:

    Ellinas

    It is likely the first of many ratings cuts and not just for Ireland. As the ratings decline, interest rates the government has to pay to borrow more money increases and new debt accumulates faster. This means that social programs will have to be cut back even further to pay for it. It's a vicious downward cycle, a death spiral. The only way to come out of it is to find a way to become far more productive, that is produce more and sell it for a profit at less. To accomplish this means an across the board reduction in the standard of living. The "European lifestyle" will disappear one way or another. At this point even this drastic step may not work because the world's economy is so weak and competitors like China have so many advantages.

    Complain about this comment

  • 24. At 03:02am on 21 Jul 2010, EUprisoner209456731 wrote:

    "So on Friday afternoon the Committee of European Banking Supervisors will deliver its verdict after the markets have closed."

    EUprisoner: If it contains the word "European" or "Euro-" it is probably rubbish.

    Complain about this comment

  • 25. At 04:21am on 21 Jul 2010, Gheryando wrote:

    "There is nothing more stressful for a bunch of EU-Brussels' apparatchiks..."

    'sigh...'

    Complain about this comment

  • 26. At 05:07am on 21 Jul 2010, Huaimek wrote:

    #15 Jukka Rohila

    Very True ! Many years ago , when I opended an account at a new branch of my bank ; the Manager sent me a friendly letter inviting me for an interview . At the interview he said to me that he liked to know all his customers personally ; that if I had the slightest financial problem or worry to come and see him and talk about it , that he would help in any way he could . He said that the key to being a good bank manager was knowing your customers and having an open and trustful relationship with them .

    Today , in Britain , you never get to meet your bank manager , it can be difficult even if you insist . One is assigned to an account manager , whom one doesn't know and if one had a crisis , has no authority to help .
    I dare say in the business context it may be different ; but it is my guess that the personal knowledge and relationship aspect has gone out of banking .

    The aspect of comercial banking business has become more daring and risky . Years ago senior banking executives were trusted to do the job they were given . I have a great friend , who at the latter part of his banking career , was head of futures at a major Italian comercial bank . A year or so before he retired someone was installed to oversee and breathe down the necks of people in his department . Having been trusted for years to do his job competently , now the element of trust had gone . Of course , we now live in the age of daring uneducated smartarses and potential rogue traders . Greed the world over is the problem .

    Complain about this comment

  • 27. At 05:28am on 21 Jul 2010, Huaimek wrote:

    #18 Buzet23

    Years ago a liqueur store chain opened a branch in my small neighbouring country town . This rural town had a population of 5000 and a shopping population of 28000 . Country gents , like myself would buy cases of wine we liked which would last a month or so . After a few years the shop started discontinuing wines . The manager said it was because the company would not supply wines the didn't sell enough of in a week . The wines included those wines that I and friends were buying cases of monthly or bimonthly . We had to start shopping for wine elsewhere ; eventually the shop was closed down . Accountants at head office were not taking into account that periodically larger quantities of certain wines were sold ; the everyday figures were all that were considered , the ticks in boxes principal as you put it .

    Complain about this comment

  • 28. At 05:43am on 21 Jul 2010, MarcusAureliusII wrote:

    H;

    "Today , in Britain , you never get to meet your bank manager , it can be difficult even if you insist ."

    Maybe he's on the lam.

    Complain about this comment

  • 29. At 06:04am on 21 Jul 2010, Huaimek wrote:

    #20 #21 Menedemus and Buzet23

    I agree that confidence has been lost in the Euro ;" Confidence " being the operative word meaning life . As many as five years ago an Italian government minister was suggesting Italy return to the Lira . I think the problem is that the financially weaker countries are more afraid of the consequences of reverting to their original currencies , than to struggle on with the Euro . It is a situation similar to " Cinderella after the Ball ", when the coach becomes a Pumpkin , the white horses , rats and her beautiful dress a wragged kitchen maids dress .

    I think there is a strong possibility of Greece arriving at a default situation . " Jiggery-Pokery " of the EU will try to prevent that and leaving the Eurozone will be the easiest way out , saving the face of the Euro and EU .

    Angela Merkel's government has lost support and I am reading that Key supporters are retiring early . One can only guess that her decision to support the Euro has a major part to play in this .

    I too , would not be surprised if Germany was the first to leave the Euro and return to the Deutchmark . Germany is perhaps the strongest country to be able to do it ; I have little doubt the the German people would be jubilant .

    Complain about this comment

  • 30. At 07:22am on 21 Jul 2010, Bootyman wrote:

    Is there any proof that bankers and politicians actually know what they are doing ? Proof that they do,, as yet, has so far remained elusive.
    Look at the Eu - a more incompetant group of liars, thieves and no hopers, so crooked that their accounts have not been acceptable for over 10 years should provide an answer.

    Complain about this comment

  • 31. At 07:46am on 21 Jul 2010, Buzet23 wrote:

    #22. At 01:16am on 21 Jul 2010, Ellinas,

    You did indeed write the same thing in another blog topic but you seem not to have read a comment someone else left correcting your figures.

    I.E. "You show Gross not Net debt:

    UK Net Debt is 44.19% GDP, Ireland is 66%, Greece is 119% (2009)

    The information is easy to find on the Net, but don't let facts get in the way of a good argument."

    or as Benjamin Disraeli once put it "There are three kinds of lies: lies, damned lies, and statistics.".

    #28. At 05:43am on 21 Jul 2010, MarcusAureliusII,

    Winston Churchill once said "You can always count on Americans to do the right thing - after they've tried everything else", I'm just wondering where on that scale your banks that caused this crisis are currently, certainly far from the right answer judging by news reports.

    Complain about this comment

  • 32. At 08:51am on 21 Jul 2010, Francesca Jones wrote:

    This problem has hung around for a while Gavin. Everybody who follows the markets knows that Greek, Spanish and Portuguese banks are having to get more and more funding from the European Central Bank as interbank markets close to them. I have been reading recently about another factor in Europe's banks problems on the notayesmanseconomics web blog, the enormous number on mortgages which were taken out in Europe in Swiss Francs and the damage this is doing.

    "I have written today about the impact of these loans on economies and individuals but think of the banks which have made such loans. For example Austrias banks were heavily involved in these foreign currency loans to Eastern Europe and some of the German and Nordic banks were not far behind. If I was constructing a stress test for banks haircuts on foreign currency loans would be in it and I hope that it will be in the euro zone’s stress tests on the 23 rd July"

    The article can be found on http://notayesmanseconomics.wordpress.com

    Complain about this comment

  • 33. At 09:11am on 21 Jul 2010, Menedemus wrote:

    Huaimek @#29 and Buzet23 @#22

    I doubt that Germany will revert to the Deutschmark as they do not have to do that.

    The Germans clearly want (and originally wanted) the Euro to be the equivalent of the Deutschmark and they agreed to align their currency to the Euro in the first instance on the unequivocal stance that other participant nations would drive their economies towards the fiscal rectitude of the German economic model.

    On such dreams and high hopes was the Euro built.

    The reality was that the less well off Eurozone Nations were like children left to their own devices in a sweet shop - they had unlimited (seemingly) creditworthiness provided by being part of the Eurozone and, even if their economies had any local difficulties, the strength of the Euro was their guarantee of wealth.

    The problems of the Euro have all been discussed endlessly but intrinsically the strength of the Euro has foundered on the deception of past Greek governments, far too much borrowing to support a "European-way-of-life" that is no longer affordable and an intrinsic imbalance between the economies of the North and South of Europe.

    Germany does not have to change but the rest of the Eurozone does. If they won't change then Angela Merkel and the Germans will simply evict the defaulters - one-at-a-time if needs be - so that, ultimately, even if the Euro is solely the currency of Germany, it will be a strong international currency just like the Deutschmark used to be.

    Of course the dream of a unified Europe sharing the same economic values and a common currency will have foundered if not gone completely to the four winds.

    Complain about this comment

  • 34. At 09:12am on 21 Jul 2010, cool_brush_work wrote:

    Gheryando

    Re #25

    '..sigh' and that is it, for You!?

    91 European & UK Banks facing Financial probity stress tests organised & led by an institution that failed its own Rules & Regulations for the creation of a supra-National Currency only a decade ago!

    Keeping in mind how disastrously it now turns out was the EU-Brussels implementation of the EUro-zone I think I was being a tad too kind at #2 about the 'apparatchiks' stressful situation.

    Complain about this comment

  • 35. At 10:05am on 21 Jul 2010, jablko wrote:

    Threnodio @ 12 and the tribe from the rain forest.
    This is the best idea I have come across in a long time. only lets train them from scratch so that they may one day supervise those 'chartered, royal chartered' to be precise, from the big four.
    (Ernst and Young and Lehman Brothers comes to mind here. Ernst and Young are actually being investigated.)
    Gavin Hewitt also mentioned German Landesbanken. The audits there were given to the supervisory boards (manned with senior politicians!) The 'funny business' with the losses was kept off the balance sheet, the accounts and the audit was presented to the board without the offensive stuff. A former German Minister of Finance has told this story more than once.

    It is of course not only the big four that should be supervised better. There is a small firm in London that do business under the umbrella of auditing for a Commission in Brussels. What they provide is a whitewash when required. This story goes much further and is not over yet.

    Sending a party to the rain forest to find that elusive tribe with the necessary talent might yet be the best idea.


    Complain about this comment

  • 36. At 10:11am on 21 Jul 2010, Buzet23 wrote:

    #33. At 09:11am on 21 Jul 2010, Menedemus,

    That is indeed one scenario, but I think trying to get the various politicians of a country to agree to leave the Euro will be well nigh impossible, add to that the knowledge that once one country has gone other weak economy country's may well be forced to go as well which their politicians won't want and you will have a vast array of protectionist politicians unwilling to risk their assumed status by leaving the Euro. The Germans if they are frustrated by such resistance will come to the obvious conclusion that the easiest path is to return to their beloved, and safe, Deutschmark. We have already seen the almost religious reluctance to contemplate Greece leaving the Euro.

    Complain about this comment

  • 37. At 10:35am on 21 Jul 2010, I am not a number wrote:

    #33. "Germany does not have to change but the rest of the Eurozone does."

    Not really Germany's economic policy (better called beggar thy neighbour policy) is the real reason why the Eurozone is falling apart and in the long run it will not just force Germany to bail out BeNeLux, France, Finland and yes even Austria. It will also destroy the single market because European countries will be forced to enact tariffs against German products.

    Complain about this comment

  • 38. At 11:29am on 21 Jul 2010, Buzet23 wrote:

    #37. At 10:35am on 21 Jul 2010, I am not a number,

    Add to your scenario the fact that it is Germany that has long been calling for the harmonisation of taxes, which in code means ensuring that no other country can undercut German products since all others will need to raise taxes to the very high German level.

    What is anaemia to Germany are highly productive EU country's with low taxes and low costs because then their efficient but high cost production is uncompetitive. I think this is one reason they have long been trying to force on us a 'one size fits all' EU.

    Complain about this comment

  • 39. At 11:40am on 21 Jul 2010, Cassandra wrote:

    Re 10 above - I agree the stress test results on Friday are likely to be a fudge. I am not quite as certain that the markets will immediately see through that fudge. The EU must surely make some effort to make the tests look credible. As is so often the case they will produce a short term fix.

    Re 14 and 20 above - I agree the long term solution is economic reform to increase productivity and political reform to restrict fiscal sovreignty - at least within the eurozone.

    I have two further observations:

    1. I am amazed at the speed at which the G20 consensus has broken down since the meeting in London. After the meetings in Korea (finance ministers) and Canada (leaders) it seems there are 3 clear major blocks emerging - China/EU/US (with others - Russia/Brazil and Latin America/India etc. - floating or doing their own thing). The split between continued stimulus (US) and fiscal consolidation (EU) is one example. The stress tests are another. The stress test are another. The EU was pressured into doing them by the US and China. Now while US commentators anticipate deficient stress tests, China buys up Spainish bonds and invests heavily in Greece and last weekend Merkel is building bridges in China.

    2. What ever one's view of the EU or the euro we can surely all agree the collapse of the euro(at least in a disorderly fashion) would not be a positive development. It is for this reason the leaders of the EU need to do more than just muddle through.

    Complain about this comment

  • 40. At 11:44am on 21 Jul 2010, Leo_Naphta wrote:

    I think it's quite incredible how many people here seem to know exactly what's going to happen and what the solutions are. Also, Gavin, I seriously suggest you look up the documentaries made by your collegue Adam Curtis. You should especially check out the Pandora's Box series and the Mayfair Set series. The third episode of Pandora's Box is especially interesting for anybody viewing the situation today, because it features quite analogous economic situations in the '70s in Britain, the responses and why none of those seem to have come of the way it was desired. Economics isn't an exact science. It just is not, and it suffers from amnesia. I see so many comments that say the euro is to blame for this or that, and that Greece would be saved if only they could devaluate. Did that save the British economy in the '70s? I don't think it did. On the other hand, did monetarism save Thatcher? ... I'm not going to say what the answer is, but it turns out that we've all been through this before, and it would be nice if we could start by analysing the problem in a LONG TERM PERSPECTIVE.

    Complain about this comment

  • 41. At 12:00pm on 21 Jul 2010, jablko wrote:

    re 35 on the matter of tribes and balancing
    It suddenly occurred to me that the idea is not that new. Was it not in the very US of A that they found a tribe of Indians that were extraordinarily skillfull at 'keeping balance'? They where keeping balance high up in the sky, building those skyscrapers, the symbols of the new America. The New World! Now what better way to deal with our problems, than to listen to Antonín Dvořak's interpretation of it. Better still, if you can play it yourself.

    Complain about this comment

  • 42. At 12:44pm on 21 Jul 2010, mvr512 wrote:

    So on Friday afternoon the Committee of European Banking Supervisors will deliver its verdict after the markets have closed.

    Gavin, this 'CEBS' is an advisory body to the socalled 'European Commission'. This thing stinks to the high heaven, and in more than one way. I'm quite sure the solution that is going to be proposes will contain some element of 'more EU' and/or 'more integration'.

    21.Buzet23 wrote: Funny enough I have a sneaking suspicion that should several country's need bail outs and Germany be asked to pay up, we could see them deciding to revert to the DM and being the first to leave the Eurozone.

    You dangerously underestimate the level of psychological commitment the socalled 'EU leaders' have made to 'preserve the Eurozone at all and any cost'. I tell you now, they are perfectly willing to take 20% of our collective wealth to prop it up, even if it would mean we would all effectively become beggars.

    The EU elites just won't contemplate failure of their failed currency. However, Sarkozy is the wild card in this, he'll turn the screws on Germany and should they not give in to his demands, he might be the first to pull France out of the Euro, and it might just win him the 2012 election. Or will he take the fall for the 'team'? Don't count on it, France always thinks of its own interests first, second and third, as they have done as long as the EU exists.

    When it comes to Merkel, Sarkozy and the rest of the 'save the Euro at any price' crowd: I believe that there are pieces of lemon skin floating down the Thames that would make better 'EU leaders' than them.

    Complain about this comment

  • 43. At 12:49pm on 21 Jul 2010, MarcusAureliusII wrote:

    Buzzard;

    "I'm just wondering where on that scale your banks that caused this crisis are currently, certainly far from the right answer judging by news reports."

    We have a saying in my country that advices; "don't fix it if it ain't broke." But that is exactly what our Congress and Presidents of both major political parties did, they fixed a banking system that wasn't broken and broke it. They removed the regulations that had been put in place in the 1930s that prevented commercial banks from speculating with depositor's money. They removed the barriers to another great depression and that's what they inevitably got. Call it laissez-faire capitalism or self regulation it doesn't work. History proves it. The conservatives did it because the regulations prevented these banks from realizing substantial profits....and substantial losses. The liberals did it to make it possible for those who couldn't afford to buy a home to purhase one or more of them with money they could never realistically hope to pay back. Human nature took care of the rest.

    Will the bill that was just enacted restore the integrity of the American banking system that was a bedrock of America's and the world's financial stability? I hope so but who really knows if it went far enough. Certainly left to their own devices, bankers will take enormous long term risks with their employer's money that are bound to fail to realize short term personal profits in the form of bonuses and huge salaries when they initially appear to succeed which is exactly how they were engineered.

    Complain about this comment

  • 44. At 12:51pm on 21 Jul 2010, mvr512 wrote:

    30.Bootyman wrote: Is there any proof that bankers and politicians actually know what they are doing ?

    There is quite a lot of proof that they do NOT. Most of them anyway.

    7.Joeblo wrote: Have an outside audit done by a non interested third party.

    Can't do that, can we? An outside audit might not produce a conclusion that 'more EU' is needed.

    And I'd like to add something to my Sarkozy/France comment of #42.

    Many people do not understand that France doesn't want the EU to be challenging the USA e.a. but instead France wants France to challenge the USA, using the EU as an extention of French influence. This has always been so, since the beginning of the EU.

    Complain about this comment

  • 45. At 12:58pm on 21 Jul 2010, Nik wrote:

    Re31: Buzet, I agree with you that statistics need far more analysis than a simple reference to comprehend what they can tell us but the what Ellinas mentions about Spain only 3 years back being hailed as a super champion of international investments attractivness and today mentioned almost in the same rank as Greece, the good old last of the last in international investment attractiveness is quite indicative of what is the whole affair.

    Don't you get it? There is a whole circle of interests playing music out of their instruments of impressions and countries and people are dancing to that music.

    As I said before, I do not know more details about other countries like Spain but I know quite well my own country. Let me give to you an example:

    Open any recent financial article on Europe referring to Greece's current bank sector merge and you will find comments such as:
    "reasonable move", "well expected move", "positive move", "the best stratregy to anticipate the difficult future that lies ahead of Greece".
    On the other hand we have all those speaking on stress tests and such. I will search later the related BBC articles here.

    One reading such articles might even think that "well, this was well-expected, better late than never, it happens for the good". A more suspicious one would think tha "wait, there must be a catch: in Greece they use as pretext the crisis (why before the merge were not necessary? why did they fail doing so?) and in Britain, France or Spain they use the justification of the stress tests - whose details we really ignore (on what basis banks will be judged as "unsurvivable"?). Well... just take the following example:

    Complain about this comment

  • 46. At 1:25pm on 21 Jul 2010, Ellinas wrote:

    31. At 07:46am on 21 Jul 2010, Buzet23

    "...or as Benjamin Disraeli once put it "There are three kinds of lies: lies, damned lies, and statistics...."

    There are more than three just to mention a forth one... USA Rating agencies...a fifth one...British media and so on...

    BTW you didn't say to us about Ireland debt downgrade...

    ...it's a "Gross debt downgrade or Net debt downgrade"?

    :)

    Complain about this comment

  • 47. At 2:05pm on 21 Jul 2010, MarcusAureliusII wrote:

    mvr512

    "Many people do not understand that France doesn't want the EU to be challenging the USA e.a. but instead France wants France to challenge the USA, using the EU as an extention of French influence. This has always been so, since the beginning of the EU."

    Surprise surprise, the French want to challenge the USA. It has always been so and the French under Chirac and deVillepin made no bones about it, they stated it openly.

    If you're an American you just gotta luv it. Not only do they lose every single time but they are such sore loosers to boot. That makes beating them even more fun. BTW, we know they have industrial spies in the US, that's no secret. As with so many other countries, our government's publicly pretend to like each other. I view Sarkozy as no less a clueless snake than his predecessors and Cameron is a macaroon.

    Complain about this comment

  • 48. At 3:02pm on 21 Jul 2010, Nik wrote:

    I was really curious to see what this all stress-testing and crisis combination leading to merges meant in the Greek market and here is what I got after a 10 minutes quick search:

    The first and most prominent purchase is the following: The Bank of Pireus offers to buy in one go the Postal Bank and the Agricultural Bank:

    1) First note is that the buyer is a private bank and the banks on offer are owned at a large percentage (majority) by the state.

    2) Second note is that the buyer is a small private bank that not only is small but also has evident financial deficiencies while the banks to buy are 1 Postal Bank, quite healthy large bank mainly dealing with the average citizens money rather than playing games in the stock exchange and investments markets and 1 Agricultural Bank with known financial problems.

    It goes withoutsaying that at first sight - and ignoring the evident question of "where does a small private bank with its deficiencies finds the money to do such an offer" - the Bank of Pireus makes a joint offer to the state to take a quite healthy bank and a quite unhealthy one to make a balance and pretend to really make a nice offer to the state to get rid of having to sort out banking problems that could be dealt by a nice active private player.

    Well it is not like that: the reality is that while the Postal Bank is a bunch of nice juicy steaks to put on the plate, the Agricultural Bank has also lots of nice juicy stakes to offer only that the animal is not slaughtered yet. Apparently, the Agricultural Bank has a cash problem, not an asset problem. Its assets are a very attractive bunch of steaks for the one who is willing to invest and get occupied with butchering the animal and cutting the steaks. And there comes Bank of Pireus!

    But how Bank of Pireus finds the money to propose such an offer? There are 3 things discussed by specialists:

    3) Bank of Pireus received a surprisingly high state aid 2 years back (under the previous government's scheme to support the banking sector, what happened in all other EU countries as well), of the order of 10% of the overall aid while representing less than 5% of the market. This means that the Bank of Pireus makes an offer to buy state banks at time itself makes uses of state money to survive!!!!!!!

    4) Even more amazingly, Bank of Pireus in the last year took successive loans that amount to a huge sum from... guess whom? The Postal Bank, the bank that has cash to provide!!!!!!

    5) Even much more amazingly, this litte Bank has been chosen only last February to become the state's partner in a huge programme of "green industrial management" - where? In Greece! Green industries, where again? In Greece! Right! Now you know now where part of that money goes right now!!! (to be noted that Papandreou halted huge industrial and infrastructure projects related to gas ans ports on the basis of "green development" - you know what it is all about)!!!!!!

    6) This is not verified, but "bad tongues" (=specialists' tongues) make talk of hidden investors (just like in the Marfin group - see below) arriving behind proposing their "services".... for the good of the Greek banking sector of course. What else!

    Do the above account for Bank of Pireus buying state banks with state money and with the banks' own money? Amazing? In Greece it happens. Yet internal and international media discuss the event as a sober reaction of the Greek market towards the "oncoming difficult times", outcome of the current crisis.

    On top of the above we have this also:

    7) The whole discussion did not commence by any legal procedure with the state doing a survey, spotting a precise issue, deciding to sell 2 state banks to solve specific problems and then opening a competition. No all that takes a lot of time. Here we are "in a hurry": the minister of finance just called orally Banks to work for the "re-arrangement" and the "better management" of the internal market and called them to do a couple of merges to short out things, then the little Bank of Pireus jumping out and making proposals to the state - which is not only impossible but also out of the basic legal procedure!!!

    moreover:

    8) The money he proposes for this purchase are fractions lower than the money the State has contributed to the 2 banks in the last period of 2 years and this bears even more questions - as if one needed to have more on top of the above!!! To understand the magnitude of the mafia-dealing he proposes, compare the purchse of the 51% of the much smaller Ionian Bank in 1999 at 800M euros to the current proposal of Bank of Pireus on the each of them by far larger Postal Bank and Agricultural Bank, 33% & 77% respectively, combined at 701M!!!!!!!!!!! Apparenently even Aboriginals selling gold to buy mirrors and beads made better deals than that!!!!!

    So having read such amazing news, I wondered who is behind the bank? And there - oh what a surprise, Mr. Michael (I will avoid lots of names since BBC has the bad habbit of censoring messages with "personal" detail, though I wonder what personal is in here!).

    Complain about this comment

  • 49. At 3:02pm on 21 Jul 2010, Nik wrote:

    This comment was removed because the moderators found it broke the House Rules.

  • 50. At 3:03pm on 21 Jul 2010, Leo_Naphta wrote:

    So, the Interparliamentary Union, was that also an attempt of France & England to challenge the USA ? What about the International Arbitration Court? Poor history, so abused.

    Complain about this comment

  • 51. At 3:31pm on 21 Jul 2010, Huaimek wrote:

    #33 Menedemus

    Firstly I should say the German Government is not entirely representative of the German people . The people really have little say and just give their votes at elections .

    Had the German government of the day really thought and researched ; they should have been aware that weaker member states would not in any circumstances be able to live up to their fiscal economy .

    It may be said that the value of the Euro is set by Germany and is one of the causes of the Euro's failure .

    The reason that I think Germany might return to the Deutchmark is that if Germany finds it is endlessly having to bail out other countries , the German people won't stand for it . There has got to be a point at which Germany says NO .

    If the EU was a single federal state with one fiscal economy ; Germany would effectively be keeping the whole EU afloat . How would German people like working their butts off , to pay for the inadiquacies of most of the other EU regions .

    The Architects of the EU have fooled everybody into believing that Euroland was a level playing field , with all participants giving an equal contribution to the whole . With hindsight anyone can see that it is a nonsense and never could be as originally dreamed .

    If Germany was the only country left using the Euro currency , what would be the point , better to return to their beloved Deutchmark .

    Complain about this comment

  • 52. At 3:54pm on 21 Jul 2010, Ellinas wrote:

    45. At 12:58pm on 21 Jul 2010, Nik

    fully covered me as expected

    "...390. At 4:53pm on 20 Jul 2010, Nik:

    Can Greeks escape defaulting?..."

    Excellent points Nik! All of them...keep going with the amateurs.

    Too bad Nik that in order to sell information you need to give it away before the sale...Joking!

    Complain about this comment

  • 53. At 4:04pm on 21 Jul 2010, Nik wrote:

    49. At 3:02pm on 21 Jul 2010, you wrote:
    """This comment has been referred for further consideration. Explain"""

    After another 5 minutes quick research I had found enough interestin information on the man behind Bank of Pireus. I did not even include names but used nicknames (stating that BBC has the bad habbit if deleting any post with any name other than prime ministers and presidents), but still the message is "under consideration". 80%-20% it won't pass it.

    Anyway... you should haf already gotten the idea.

    Complain about this comment

  • 54. At 4:58pm on 21 Jul 2010, Leo_Naphta wrote:

    # 51. Germany working their butts of to keep the euro a float? Really? That's quite a simplistic vision of the euro & international finance as a whole you propose there. I should also note that it isn't just Germany 'bailing out' anybody. This is quite a prepostorous way of frasing the new monetary instruments that have been constructed. It's also a rather narrow view of finance as a whole. I do wonder how you can feel qualified to make such sweeping statements about 'Germany' about 'German politics' and the macro-economic situation of the eurozone. And all that in so few lines ...!

    Complain about this comment

  • 55. At 5:23pm on 21 Jul 2010, Nik wrote:

    52. At 3:54pm on 21 Jul 2010, Ellinas wrote:

    """""45. At 12:58pm on 21 Jul 2010, Nik
    fully covered me as expected
    "...390. At 4:53pm on 20 Jul 2010, Nik:
    Can Greeks escape defaulting?..."
    Excellent points Nik! All of them...keep going with the amateurs.
    Too bad Nik that in order to sell information you need to give it away before the sale...Joking!""""""""""

    Hehehe Ellinas! I am not even a professional in the field. Look, I pretend not to be the most knowledgeable of all. I pretend not to be a specialist in finance. But see how easily a simple guy like me can find information in some minutes about it? And you haven't even read the following message which will be probably censored (it describes the background of the people behind all that affair).

    How on earth the average(Greek and rest European) citizens sit down and discuss and have an opinion on the basis of information passed by media, not only local but also international: media that among other huge lies try in this case to make us swallow the pill of this blatantly illegal rip-off claiming that it is all about "consolidation" of the market.

    Ok, local Greek mainstream media are controlled at a fantastic rate of by the ruling party, but international ones, French, British, German? Till yesterday they complained about Greek corruption, yet today they come to congratulate Greek corruption occuring under our eyes - corruption phenomena that are the sole responsible for bringing the country on its knees and not its public sector services or aging population.

    After this, how can anyone come to you and me and claim we are responsible for the financial situation of the country when it is exactly these phenomenal acts of corruption that European mass-media (thus Eurpoean politics) congratulate that brough the country on its knees? No, I am really wondering here. Where are all those Crusaders against Greek corruption now? Well, let me tell you where all these "crusaders of anti-corruption and countries financial health" are: they are right here telling us we need... consolidation of the banking sector of the country!

    Why Germans remain so silent? Don't they know that the more the Greek state loses the more their own money are endangered? Or is there any possibility that some of the "hidden investors" are actually Germans trying to get even more money from the back door? One will ask, "is there anymore to take?"... well the answer is "yes there is always more to take". Cos money is just a measure of control it is not an end-target.

    Do not get me wrong Ellinas. I do not expect any foreigner to intervene and sort out the Greek corruption. Far from such. What I do note though is that major international media (let alone the local Greek ones) hail the process of "bank sector consolidation" under all sorts of pretexts even praising the doings of the current government when myself, not a journalist, not even a financial professional can find all the above information so openly after a 10 minutes search. And then I simply compare all that to the tons of articles written on the European level against the Greek corruption that led ot the state debts and such.

    And I am wondering. As a Greek citizen I have been accused of being responsible for the current situation. Current situation that has been cause by repeated cases like this one. What really do I have to do in order to take up my responsibility? Sue the owner of the Bank of Pireus (and risk dying in a car crash?). Go down to the street to protest (and have 3 more bank clerks murdered inside their office?). What? Call people to arms?

    As for the previous thread mes390... hehe... yes I find it amusing closing the mouths of anyone that thinks he can present a single argument on what I say on such issues. It is my hobby if you like. Nothing personal. Did not pretend to know much on Angola, Burma or Peru geopolitics but there is none that can swing and sing in front of me on geopolitical issues concerning the Eastern Mediterranean in general.

    People do not even know what is the 12-miles or the Southstream, let alone knowing the clauses of the Lauzanne treaty yet they will come up with anything that resembles in their eyes as an as-if argument.

    Take note of this: 95 out 100 people cannot properly argumentate in a serious discussion. And most of the times they are absolutely incompetent in defining things, in naming correctly the notions they talk about in understanding the basic idea of what they read in a text. However they are very versed in sophistics, in rhetorics and in parrot-like goebbelist propaganda - heritage of our modern educational systems. Best example: when you can't answer a point, attack the one who presented it in person.

    Complain about this comment

  • 56. At 5:48pm on 21 Jul 2010, democracythreat wrote:

    Hewitt wrote:
    "So on Friday afternoon the Committee of European Banking Supervisors will deliver its verdict after the markets have closed. The prize is that a positive outcome will soothe market nerves and one more step will be taken towards managing Europe's debt crisis.
    But this is a psychology test. The results have to be convincing to work."

    Hewitt makes the point that something may be rotten behind the apparently objective parade of stress tests, but nevertheless he has fallen victim to the same delusion that has arguably caused the whole crisis in the first place.

    That delusion is that markets are not fundamentally based upon real quantities of real materials and real services. The delusion, widely held by traders and pundits, is that markets are based upon nothing more than sentiment.

    Now to be sure, markets are hugely affected by sentiment. But to go further, and to accept that they are fundamentally based upon mere sentiment, is to drink the kool aid and forego any chance of understand how and why bubbles are created. Indeed, it is to reject the idea of "bubbles", and to start believing in markets that follow magical rhythms that could go anywhere, at any time. The whole concept of a bubble is that it is inflated above a REALITY.

    This is not a psychology test. No way. It is a confidence trick. The defining characteristic of both the commies and the religious freaks is that they think they are so wise they can wave their magic commie wand and fool the markets and the idiot masses into believing their claptrap.

    And who runs Europe? The Catholic democrats and the socialists. An unholy alliance of self appointed elites selling snake oil to people who have no choice about whether they buy it or not.

    Well, the markets are real, and the underlying reality is that people are not working hard enough in innovative industries in Europe, and too many people are "working" in bogus government jobs and government funded industries.

    Until being a catholic or a socialist party member in Europe becomes a term of popular derision, and until these parties and their elitist systems are treated with hostile contempt by the majority of ordinary folks, Europe will never move beyond this ridiculous fantasy where the wise men at the top of the class system are born to give salvation to the idiot sinful masses.

    This talk about market sentiment is disgusting. It is a disgusting perspective from disgusting people. To be talking about market sentiment and not market realities is worse than useless, it is culpable negligence.

    I don't mean hewitt here, i mean these fools in brussels who refuse to face the fundamental realities of the european market. They are:

    1. Taxes are far too high and choke innovation before it learns to breath. Show me the European Apple. Show me the European silicon valley.
    2. Government spending has been so high for so long that it has done long term damage to the work ethic and productivity of European industry.
    3. The anti democratic class snobbery of the european titled elite is the most destructive force on the continent, and is impoverishing everybody else but the titled elite.
    4. Western european banks and political parties have committed a gross fraud upon eastern europe, and has destroyed any chance of true european integration by committing the entire working population of eastern europe to grinding debt poverty. there will be a price to pay for that, and it is going to be ugly. The prize was short term mega profits for the european titled elite.

    But the most glaring and disgusting aspect to the mismanagement of europe is the lack of accountability. The very same people who have overseen the worst post war economic debacle still parade themselves in front of us all and lecture us about economic wisdom. The party members are safe in their highly paid "jobs", and the banking elite continue to bleed the system for incredible amounts of money. They are preaching like mad while the people slowly starve.

    Never in the history of social justice have so few stolen so much from so many. That this has happened in an age of high technology and political emancipation means that the current elite will not go down in history as ignorant despots.

    They are far, far worse than ignorant despots. They are no better than common thieves.

    Complain about this comment

  • 57. At 6:30pm on 21 Jul 2010, powermeerkat wrote:

    Gavin H. wrote: "So on Friday afternoon the Committee of European Banking Supervisors will deliver its verdict after the markets have closed. The prize is that a positive outcome will soothe market nerves and one more step will be taken towards managing Europe's debt crisis."






    The verdict has to be positive, and so it will be.


    [ "Titanic"'s orchestra also played merrily till the ship sank]

    Complain about this comment

  • 58. At 7:15pm on 21 Jul 2010, ghostofsichuan wrote:

    Glad that Germany and Japan didn't have the same attitude after WWII that the banks have today. Same process, same thinking that caused the problems, world domination. Just like those two nations were rebuilt now so are the banks but with much less restrictions on future behaviors and certainly no remorse or indication of defeat. They are busily building new arms in their computers to strike again.
    Old Chinese proverb: wholesale thieves, start a bank.

    Complain about this comment

  • 59. At 7:29pm on 21 Jul 2010, Mike Dixon Londoner in Spain wrote:

    " Firstly the Spanish Cajas ...."

    Really? - the Spanish Cajas are not "regional banks, nor are they "scrambling to merge with each other".

    The Cajas are mutual saving banks which are not allowed to raise money on the open market or buy bonds or other commercial paper by law. The are not building societies but perhaps more like the old American savings and loan clubs.

    The lend money and this has not always been wisely. One one that has got into real trouble, Cajasur, has had debts of €400m covered by the Bank of Spain. But (and it is a big but), the total holding of the Caja is some €1.4 trillion.

    In some cases most reluctantly the 47 are being merged into 12 and the rules governing them modified so that "they may better serve the needs of the 21st century. The states has put up some 13 billion to 'oil the works'.

    Mike, Barcelona, Spain

    Complain about this comment

  • 60. At 9:02pm on 21 Jul 2010, Jukka Rohila wrote:

    To democracythreat (56):

    I just had to respond and counter your points...

    "1. Taxes are far too high and choke innovation before it learns to breath. Show me the European Apple. Show me the European silicon valley."

    Taxes don't choke innovation, taxes slow down accumulation and concentration of capital into the hands of few capital holders. Less capital holders with less capital cause less personal investment, this shows especially in lack of early investments into startups.

    However due to higher taxes, European states offer something else to their citizens. With tax money we have more educated, skilled and healthier workforce, we also have more stable society and business environment. This environment favors more existing major corporations and companies growing with medium speed.

    And in case of your question on where is the European Apple, let me introduce you to this little software maker called SAP AG.


    "2. Government spending has been so high for so long that it has done long term damage to the work ethic and productivity of European industry"

    You do know that in average after 8 hours worker productivity drops very quickly and fast. People who continuously work more than 8 hours are usually very ineffective thus needing longer days to achieve same results than people working for 8 hour workdays.

    And again, if we Europeans are so ineffective, then how do explain GDP nominal per capita figures that put developed European countries into the top 20? Can you also explain how we can pull this off when we don't oil and gas production? For example US still produces domestically half of the oil and all natural gas that it consumes, thus adding a huge boost to their GDP.


    "3. The anti democratic class snobbery of the european titled elite is the most destructive force on the continent, and is impoverishing everybody else but the titled elite."

    Anti-democratic class snobbery of the European titled elite???

    First of, continental Europe is less class based than for example US and UK.

    "Using the ratio of an individual’s current income to that of their parent’s, there is no academic consensus whether the United States has less or more relative mobility than other industrialized nations. According to one study, the income of a person's parents is a great deal more predictive of their own income in the United States than other countries. France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility."

    http://en.wikipedia.org/wiki/Economic_mobility

    Secondly, European Union in average has a lower GINI coefficient than the United States: income disparities are lower in Europe than in the US.

    Thirdly, Europeans don't elect their leaders from political families and clans, i.e. George Bush Senior, George W. Bush and usually European leaders come from middle or upper middle class not from rich families.


    "4. Western european banks and political parties have committed a gross fraud upon eastern europe, and has destroyed any chance of true european integration by committing the entire working population of eastern europe to grinding debt poverty. there will be a price to pay for that, and it is going to be ugly. The prize was short term mega profits for the european titled elite."

    Western European banks loaned money to their customers in Eastern European countries, that money went largely to building and elevation of their societies that allowed their economies to grow fast. For example compare the situation of Estonia with GDP nominal per capita of 14,267USd or Poland with 11,288USd to Belarus with 5,166USd or to Ukraine with only 2,542 USd per capita.

    The statistics tell you that for Eastern European countries it has been a economical and financial success story on integrating with western Europe and allowing their citizens and corporations to have access to western capital.

    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita

    Complain about this comment

  • 61. At 9:11pm on 21 Jul 2010, Ellinas wrote:

    "...Hehehe Ellinas! I am not even a professional in the field..."

    That is in your favor...you see Nik a "professional in the field" is in most cases a guy with a salary and then a man chained by the will of its boss...you are...as most Greeks...a free will investigator

    ...As for the rest of the post, in general terms, i agree with you

    Complain about this comment

  • 62. At 00:01am on 22 Jul 2010, quietoaktree wrote:

    #56 Democracythreat

    What you do not know --do not comment on !


    Complain about this comment

  • 63. At 06:26am on 22 Jul 2010, Buzet23 wrote:

    #46. At 1:25pm on 21 Jul 2010, Ellinas,

    "BTW you didn't say to us about Ireland debt downgrade...

    ...it's a "Gross debt downgrade or Net debt downgrade"? "

    You'll have to ask the credit rating agency that slashed their rating as to what markers they use, lol. These credit rating agencies do seem to be a bit suspicious though and could come under the first of the three types of lies I mentioned i.e. lies, as I would not put it past the USA to manipulate these agencies, but there again an European credit rating agency would simply be the mouthpiece of the EU mandarins and never to be believed.

    Complain about this comment

  • 64. At 07:08am on 22 Jul 2010, Huaimek wrote:

    #51 Leo_Naphta

    You consider yourself very well qualified to criticise my comment as sweeping and incorrect . Have I touched the raw point ; that many EU , Euro members are just hangers on for the promised benefits and handouts . Is it not common knowledge that Germany and France are the moving forces in the EU , in their own interests .

    As you are so knowledgeable of the subject , perhaps you can enlighten us of the true facts .

    Complain about this comment

  • 65. At 07:32am on 22 Jul 2010, Huaimek wrote:

    #40 leo_Naphta

    Could it be that you don't know the answer ? I guess Hewitt and the rest of us commenters don't either .

    You could give a lead , by analysing the problem in A LONG TERM PERSPECTIVE .

    Complain about this comment

  • 66. At 08:05am on 22 Jul 2010, Huaimek wrote:

    #54 Leo_Naphta

    I have to come back to this comment again . You make me smile with the grandiose terminology you use .

    My references to Germany and German politics are expressed more widely than just by me .

    Germany is bearing the lions share of the bail out . If it isn't just Germany who is bailing out ; who else , the countries that are in danger of going bankrupt themselves ?

    The Huge sum that has been put aside ( promised ?)at the ECB , is just a CONSTRUCT and wouldn't last five minutes if Italy , Spain , Portugal and Ireland called upon it . We don't know that Greece may not yet default or have to be bailed out again .

    And what about the MACRO ECONOMIC situation of the Eurozone ?

    Nik suffers from verbal diarrhoea and writes us a history book to state his case . If one has read all his comments one is not much wiser at the end .

    Your comments seem to be inconclusive and criticisms of other peoples comments ; without making any contribution to the subject yourself .

    Complain about this comment

  • 67. At 08:09am on 22 Jul 2010, Huaimek wrote:

    #62 Quietoaktree

    Very Wise !

    Complain about this comment

  • 68. At 08:37am on 22 Jul 2010, powermeerkat wrote:

    "Europeans don't elect their leaders from political families and clans"


    Oh, really?


    Just ask Nik the Greek, he'll tell ya. :)

    Complain about this comment

  • 69. At 08:46am on 22 Jul 2010, Leo_Naphta wrote:

    Huaimek: Ah, I again smile at the irony of your 67 compared with the previous posts. Wittgenstein would be proud. Grandiose terminology you say? What exactly do you mean by that? English isn't my native language, so I'll use the terminology I'm familiar with for the subject, nothing more. If you feel it's too overwrought, too bad, I don't use English in everyday conversation, so I'm not sure how to write it to be more 'down to earth'. ;)

    My point was exactly that I wasn't going to propose an indepth analysis just now, because that would require actual study of the topic, which I have not done to such lengths that I would be able to make a detailed economical analysis. I can, from my limited knowledge critize your contribution, because it is a rather simplistic one. Do you even remember the exact numbers that were proposed for the bail-out? Do you remember that the bail out was basically a loan that you would see back? How much are the Germans contributing the the fund relative to the population and income of the country, percentagewise? Nevermind that there hasn't been anything like a bail-out in the popular definition of the word yet. The undue attention on 'just' Germany, is turning the debate into a caricature. We're not talking about what exactly is happening, we're turning it into a soap-opera with easily recognisable caracters. Which is not going to help anybody understand anything.

    I, by the way, didn't realize the Netherlands were in danger of going bankrupt. Oh, and about German politics, did I dispute that the German government represents everybody? Not really. They do have a parliament though, which represents more opinions than just the Government. Politicians aren't some class apart from the population, after all.

    To come back to a long term perspective, I'm not going to write it out here, check out the Adam Curtis video, it's on google video. It's quite interesting if you take the implosion of the UK at the end of the '70s and compare the problems they had then with the ones we have now. The economy is not an exact science. Kondratiev lives! ;)

    I'm not saying I've got the answers, or can analysis it that much better. I'm saying that the debate is rather uninteresting if we're all just going to state our own 'truth'. Especially with such certainty as half the contributions here. The sooner everybody admits they really don't know all that much about anything, the sooner we can all start to question everything thoroughly. :)

    Complain about this comment

  • 70. At 09:20am on 22 Jul 2010, Nik wrote:

    68. At 08:37am on 22 Jul 2010, powermeerkat wrote:

    """""Europeans don't elect their leaders from political families and clans"
    Oh, really?

    Just ask Nik the Greek, he'll tell ya. :)"""""

    Precisely powermeerkat.

    And I thought it was a mainly Greek phenomenon but having seen what is going on in France, Belgium and Holland where I move around frequently I see that it is going on visibly also there to a varying degree but very much visibly. Let alone the United States where the Bush and the Clintons are here with us for the last 20 years (and you know how many other families are there for much longer, often since prior to WWII).

    It is a problem that most countries face: sons and daughters of political leaders are inherently drawn in politics. It is not just their own ambitions (what else to do? become an employee?) but also those of the circles their parents represented in their active service.

    Complain about this comment

  • 71. At 11:19am on 22 Jul 2010, Nik wrote:

    69. At 08:46am on 22 Jul 2010, Leo_Naphta wrote:

    """The economy is not an exact science."""

    Though I am not any specilist in the field of economics (nor even indirectly involved professionaly) I have the habbit whenever I am in Paris to listen in the car BFM (radio specialised on business) due to the fantastically bad music French radio plays (French variété is lamentable) out of which Phil Collins (you have in every single radio around the world - and I ignore why) seems the best you can hear (and I hate Phil).

    In BFM supposedly you hear the specialists. Not just only financial analysts but you have industrialists, bank directors, financial ministers & secretaries and such.

    Recently I was listening to a discussion on the effors of France and Germany to find a concensus and I was reading an analysis on how everyone speaks about France going badly and how everyone ignoring the respective weaknesses of the German economy which also is at great risk.

    Now, if France has its own particular example and Germany has its own particular example example and the two examples are quite differented and if to that I add the other large EU economy, Britain, which too has its own very particular example and if at the end the three of them cover a wide range of economic policies that states of that size can follow then having all three of them at a particularly difficult financial position tell us that there must be some logical gap.

    The only common point is that all three of them belong to the EU but out of them only Britain claims to have been impaired by it with Germans and French admitting they have been profiting from it (unless anyone wants to believe that it would be preferable for France and Germany that the likes of Greece buying Japanese for the high end and Chinese for the low end and calling in Russians to collaborate in building the infrastructure or Portugal becoming a Brazilian outpost in Europe).

    Hence there is something basically wrong with every single financial analysis anyone can make. All signs show to us that this is basically not a financial issue but a political one, fundamendally a geopolitical one. European countries of the size of France and Germany suffer there precisely. Whatever they do, even if they cut the "social state", even if they slash the wages in half, they will do a hole in the water unless they solve their geopolitical deficit.

    Complain about this comment

  • 72. At 11:43am on 22 Jul 2010, mvr512 wrote:

    First of, continental Europe is less class based than for example US

    As long as some Euro countries recognize nobility and royalty this is decidedly not the case.

    When will these ridiculous and outdated concepts finally be abolished once and for all? Inheriting a title is not an accomplishment. There is no such thing as nobility and royalty anyway, just a bunch of lazy scroungers inheriting titles and then think they are special because of it (and the even more amazing thing: many people actually think that, too).

    For centuries the power in Europe was divided amongst a handful of families, who had awarded themselves titles and declared 'em hereditary (along with the privileges). And so you get your Louis XVI's and Wilhelm II's.

    Complain about this comment

  • 73. At 12:11pm on 22 Jul 2010, Kit Green wrote:

    72. At 11:43am on 22 Jul 2010, mvr512 wrote:
    First of, continental Europe is less class based than for example US
    ...For centuries the power in Europe was divided amongst a handful of families...
    -----------------------------------------
    Even republics and democracies of various flavours have their banking / political / industrial dynasties. These concentrate power and influence far more than the aristocracies of Europe where only a handful have any influence at all, generally by landowner status.
    Therefore we should be able to see that there are "aristocracies" by other names everywhere you look.

    Complain about this comment

  • 74. At 12:18pm on 22 Jul 2010, mvr512 wrote:

    Just a 'random' observation I'd like to make about the 'crisis' in general.

    I am more and more convinced that the western way of running national budgets can be at least partially compared to a ponzi scheme. It is partially dependent on perpetual population growth. And that growth happens to be slowing down. Coincidence? I think not.

    Complain about this comment

  • 75. At 1:01pm on 22 Jul 2010, powermeerkat wrote:

    Re #70 ref. to $68


    Nick, the only Roosevelt worth his salt was THEODORE.


    The last truly great U.S. president was Ronald REAGAN.


    "The rest is silence"



    Complain about this comment

  • 76. At 1:04pm on 22 Jul 2010, powermeerkat wrote:

    "First of, continental Europe is less class based than for example US"


    A class concept has been concoted by Karl Marx.


    Now, are you a marxist? Still?

    Just be honest. At least once.

    Complain about this comment

  • 77. At 1:10pm on 22 Jul 2010, powermeerkat wrote:

    French air controllers are on strike.

    Why?

    Because they reject an idea of pan-European air space (which even after a merger would be quite minute) because some of them might lose their jobs.

    Before their retirement at 55.


    So much for United States of Europe.

    -------------------------------------------------------------------------
    According to the latest reports mania grandiosa CAN be cured.

    Complain about this comment

  • 78. At 1:29pm on 22 Jul 2010, Chris wrote:

    #60, Jukka

    "Western European banks loaned money to their customers in Eastern European countries, that money went largely to building and elevation of their societies that allowed their economies to grow fast. For example compare the situation of Estonia with GDP nominal per capita of 14,267USd or Poland with 11,288USd to Belarus with 5,166USd or to Ukraine with only 2,542 USd per capita."

    I'm as pro-EU as they come, but on this point DT is more than correct. The WE banks made a huge mistake to lend so much money to have property prices in Riga, vilnius & Tallin on a par with London. with the wages the people receive there it will take several generations before they can pay back those bank loans!

    Belarus may have lower GDP nominal per capita but they can affort to buy with it! And more more people have some of it, unlike in Latvia where nearly 50% have none of the $12K??? or so that you mention in your statistics. The people there are poor and you see it in the streets in the center of Riga people are begging for money! But they are very skills they can beg in Russian, Latvian, English & German!

    Complain about this comment

  • 79. At 2:07pm on 22 Jul 2010, Ellinas wrote:

    # 63. At 06:26am on 22 Jul 2010, Buzet23

    "...These credit rating agencies do seem to be a bit suspicious though and could come under the first of the three types of lies I mentioned i.e. lies...."


    1) Seem to me that you make a reference to something that you don't quite understand.

    Let's make a small analysis of Benjamin Disraeli words and yours:

    Benjamin Disraeli: "There are three kinds of lies: lies, damned lies, and statistics...."

    by the Principle of contradiction contradictory statements cannot both at the same time be true. In other words...the two propositions A is B and A is not B are mutually exclusive and because Benjamin Disraeli see statistics as a contradictory statement of "lies and damned lies" that break this rule, in order not to be in conflict with the law, separate statistics to a third category of lies. What kind of lies are statistics?...there are the so called suspicious lies...

    So as you affirmed earlier that credit rating agencies do seem to be a bit SUSPICIOUS as well as to be a type of LIE...you immediately put them in such third type of lies i mention: the so called "suspicious lies".

    Of course because the media aren't statistics as well as the credit rating agencies (even if they make a massive use of statistics & estimations) i can easily affirm of such a fourth, fifth,...and so on type of lies or melting pot them in one category: the "suspicious lies"

    But is it true that media, credit rating agencies, statistics are only lies? No...and of course Benjamin Disraeli pointed out only the dark side of the statistics, the half of the story.

    You see like a photo of a person...you don't know if it's dead or alive unless you search for him but you know it exists...

    Parallel to this example the Entropy law is always true but on the other side statistics as a "photo" of the entropy law can be either interpreted as true or false cause it's the end result of any experiment that give a surname of true or false to statistics.

    So at the end we can easily admit that statistics is also a "suspicious truth" as well as a "suspicious lie" and once again we can easily affirm that:

    ...as Benjamin Disraeli once put it "There are three kinds of truth: truths, damned truths, and statistics...or may now say suspicious truths"



    2) "...BTW you didn't say to us about Ireland debt downgrade...it's a "Gross debt downgrade or Net debt downgrade?

    You'll have to ask the credit rating agency that slashed their rating as to what markers they use, lol..."


    Now back to Ireland downgrade:

    i played ball on debt...you played ball on debt. I scored (Ireland downgrade)!...You don't...but of course you are free to believe that the referee was bribed (credit rating agencies).

    Something that, me and Nik, often pointed out here. So as you see, you, are the one you'll have to ask the credit rating agency what markers they use not certainly me.

    Complain about this comment

  • 80. At 2:43pm on 22 Jul 2010, Nik wrote:

    75. At 1:01pm on 22 Jul 2010, powermeerkat wrote:
    """Nick, the only Roosevelt worth his salt was THEODORE.
    The last truly great U.S. president was Ronald REAGAN."""

    I am not the best one to speak on that of course especially when I tend to try to see who runs things behind the president's face too.

    76. At 1:04pm on 22 Jul 2010, powermeerkat wrote:
    """
    "First of, continental Europe is less class based than for example US"

    A class concept has been concoted by Karl Marx.
    """

    Europe on the overall is not more not less class-based than other parts of the world. People tend to... hope that their society is more fair and less class based when at best case there can be only marignal evidence.

    Evidently as mentioend above some European countries are even today officially class based, other (like Greece) are traditionally class-less but enforcing class division in practice.

    """Now, are you a marxist? Still?"""

    This question was not of course on me, but I will reply it, no of course I am not Marxist exactly because I am not either capitalist. The one stems from the other. I reject totally and down to the basics, I find Marx's "The capital" even less scientific than Hitler's "My Struggle". Without capitalistic support both Marx and Hitler would had been mediocre writers and social failures, people who would not even get the space of a little column in the 30th page of a local newspaper.

    77. At 1:10pm on 22 Jul 2010, powermeerkat wrote:

    """French air controllers are on strike.
    Why?
    Because they reject an idea of pan-European air space (which even after a merger would be quite minute) because some of them might lose their jobs.
    Before their retirement at 55."""

    It might be like you say. Might be more complicated (eg. people fearing the deletion of their jobs, and that is not really funny you know when you are working in a specialty that does not permit you finding any other job, and when you have two kids depending on you...).

    I did not inform myself on the subject. You know already my aversion to cheap syndicalists. But I do not jump on easy conclusions just to create impressions.

    Complain about this comment

  • 81. At 2:54pm on 22 Jul 2010, Wonthillian wrote:

    'The last truly great U.S. president was Ronald REAGAN.'

    It really is that bad, is it?

    Complain about this comment

  • 82. At 3:39pm on 22 Jul 2010, powermeerkat wrote:

    Nik: "Without capitalistic support both Marx and Hitler would had been mediocre writers and social failures, people who would not even get the space of a little column in the 30th page of a local newspaper."






    Largely true. Just like that without a support of German General Staff (for whom Lenin was spying) Vladimir Uliyan [Lenin's true name] would have never managed to get to Russia, let alone to stage a anti-Kerenski Bolshevik putsch - in order to take that country out of the WWI.

    So that Germans would not have to fight on 2 fronts simultaneously.

    [Lenin was loyal to his masters and fulfilled his task
    (humiliating Brest-Litovsk Treaty)]

    Complain about this comment

  • 83. At 3:41pm on 22 Jul 2010, powermeerkat wrote:

    'The last truly great U.S. president was Ronald REAGAN.'

    It really is that bad, is it?'






    What's the best YOU can offer?

    Putin or Barroso?

    Complain about this comment

  • 84. At 4:04pm on 22 Jul 2010, Chris wrote:

    #83

    Berlusconi:)

    Complain about this comment

  • 85. At 4:04pm on 22 Jul 2010, Wonthillian wrote:

    'The last truly great U.S. president was Ronald REAGAN.'

    'It really is that bad, is it?'


    'What's the best YOU can offer?

    Putin or Barroso?'


    I think we could have nominated a tin of minced beef for president and it would have had a less negative effect on the country's external image. Though maybe the US isn't so worried about its external image.

    Complain about this comment

  • 86. At 4:07pm on 22 Jul 2010, Jukka Rohila wrote:

    To ChrisArta (78):

    Western banks are not guilty for economic inequality in Baltic or in any other country. Baltic countries, especially Estonia has chosen deliberately to emphases economic liberalism and capitalism in their societies, thus not building social welfare and mechanisms to balance income inequality in their societies. We may criticize this, but in the end it is their decision to do so. It is also internal matter of the state and the people on if they want to allow personal bankruptcies or not.

    In comparison to Belarus, people of Belarus haven't had any say on how their economy and society works. You may parade the fact that they have less income inequality, but that isn't the decision of the people. That is the decision of the authoritarian regime in control of Belarus. If given freedom to vote what kind of society they would want, there is no guarantee that they too wouldn't want to embrace capitalism and accept all the ills that free market capitalism brings.

    If you want to blame somebody for the economic inequality in Baltic or in any other democratic country, you can only blame the people for it.

    Complain about this comment

  • 87. At 4:22pm on 22 Jul 2010, powermeerkat wrote:

    Kosovo independence not illegal, says UN court

    Kosovo's declaration of independence from Serbia in 2008 did not violate international law, top UN judges have ruled.

    The International Court of Justice rejected Serbian claims that secession violated its territorial integrity. [BBC News]



    "I'm sorry. I'm so sorry..."


    Complain about this comment

  • 88. At 4:29pm on 22 Jul 2010, powermeerkat wrote:

    meerkat: What's the best YOU can offer?

    Putin or Barroso?



    84. At 4:04pm on 22 Jul 2010, ChrisArta wrote:
    #83

    Berlusconi:)








    Nah? Not even that mighty EU president whatchamacallit?

    Or EU 'foreign minister' [what's her name and a title to fame?]


    Now, what's a name of the commander of the United States of Europe's unified military forces?

    Or, at least a name of the president of EU unified air traffic control?

    Complain about this comment

  • 89. At 4:30pm on 22 Jul 2010, powermeerkat wrote:

    "Though maybe the US isn't so worried about its external image."



    You're right. Why should we? Who cares?

    Complain about this comment

  • 90. At 4:33pm on 22 Jul 2010, Huaimek wrote:

    #69 Leo_Naphta

    I do appreciate your more reasoned reply ; perhaps Grandiose was a slight over statement , but never mind . I did guess that you were not British ; but your English is so good , you might have been .

    The Euro and EU are in dire crisis and I doubt that any of us can see the certain future .
    I get the impression that you view the EU on face value ; what it does and what it says is true and from that truth one might predict its future .

    As I understand a sum of around 750 Billion Euro will be available as loans to Eurozone states that are in danger of bankruptcy . I appreciate that it is said to be a loan ; but I and I suspect other commenters , would not be surprised if not a cent was ever paid back .
    From that point of view I see it as a bail out , rather than a loan .

    An in depth detailed analysis would surely show what ought to happen , as a result of the measures the EU has taken .
    I do not think that the Minutiae of EU , Eurozone macro economics matter . The EU has developed with " The cart before the horse ", with imprecise forethought and planning ; after nearly 20 years , there is not much reason to give the EU credibility .

    You say about the Netherlands being nearly bankrupt , that I didn't know , but am advised that practically every EU country has excessive loans .

    From my reading on the subject ,I understand that the German people
    are not accustomed to taking issue with their government or parliament , perhaps a throwback to Nazi times . The Italian people too , are in awe of government and politicians as in Mussolini's time .
    In my view the present situation where Germany is being asked to provide the major part of the loan , to keep the Euro afloat , for which the people will pay higher taxes , is a lot to ask of the people who would have prefered to keep the Deutchmark . Indeed Germany , France and the whole EU is a soap opera . Did you ever see the British comedy series
    " Yes Minister ", highly entertaining , just what happens in British politics and certainly in all branches of the EU .

    The UKs situation at the end of the 70s , as now , was at the end of a period of socialist government . In the late 70s there were state industries on strike . Mrs Thatcher let them stay out on strike till the Union strike fund ran out and wives told their men to go back to work . More recently Tony Blair recruited huge numbers of civil servants , sponsored social services to cover even the unimaginable . Gordon Brown has not only ran up huge debts but sold off all Britains gold reserves .
    The EU is making the same mistake of feather-bedding the people , to convince everybody that the EU is a real Utopia .

    Economics is a science , if not exact , but we are living in times when there is not even a pretence of science . Political expediency is all that matters .

    I admit to making what may seem Rash , unreasoned , sweeping statements .
    My opinion of the EU , the Commission , bureaucrats and European parliament ; is that nobody is in control , there is no thought out plan , science of economy ; just an overall big picture of the great Federal State of Europe , that is just around the corner . No amount of analysis can predict what is going to happen next .

    Complain about this comment

  • 91. At 4:37pm on 22 Jul 2010, Chris wrote:

    @86. Jukka.

    So, what you are telling is that bankruptcies and personal missery is the people's own faults!!! Economic liberalism without social welfare was not imposed on those countries by the IMF and the banks?? Really you believe that!

    Not that I care much for the leadership in Belarus, but there was an election there last year with EU observers and it was found to be OK, so it may be that the people there want that type of government. Never the less lets stick to the point that I was making, that you argument comparing the three Baltic states to Belarus were false. The people that live in Minsk Belarus are better off that the people that live in Riga Latvia! WE banks have not added one single bit of benefit to the people of Riga full stop! I was in Minsk last Sept (2009) and in Riga last May (2010). So you can use fancy words like "dynamic" Latvian economy, or "unproductive" Belarus, but the fact remains that for the people in the street people in Belarus are better off.

    Complain about this comment

  • 92. At 5:29pm on 22 Jul 2010, Leo_Naphta wrote:

    # 90

    Yes, there is a crisis, is it a full out crisis in which everything is going to go bust? I doubt it. I view the EU as a work in progress, I don't insist on it being a perfectly run, democratic institution from the start. I insist it should become so over time. I don't think it is however possible nor even desirable to model the construct on what we now call the 'nation state', as it wouldn't work. There needs to be a redefinition of how we as communities and individuals structure our interactions, and that can quite well be multilayered and re-defined where necessary. Habermas has written about this at lenght, intra-national government & all that jazz, and it's quite interesting. As did the intellectual forefathers of the European Union and the United Nations. Which I find very denegrating towards those people, when people classify it as 'just a project to take power' or a project to show up the US. It was never about that, and these people were on the whole very admirable people as far as their outlook in international relations went. It's quite moving when you see their frantic efforts to stop WWI from happening, or the French-German war of 1870. They were, by the way, not from one political grouping or outlook. Quite diverse, just as the Union turned out, but they understood that it will always be a process that's going to take a very long time, centuries even. We've become so hungry for instant gratification that a lot of people seem to want a perfect EU now, or none at all. As if either are possible or desirable at this point.

    The 750 billion that are on offer, have not yet been payed out, so in fact the bail out hasn't even happened. It's a signal. The idea that it wouldn't be payed back is really just speculation. When they put up the fund over here, our politicians seemed quite convinced (and these were, by the way, rather ardent liberals from a neo-liberal, thacher inspired group) that it would be payed back and that we even stand to gain money from it (as does Germany).

    As for the cart-before-horse analogy you make. We're in uncharted territory, that's the only way it'll ever go. Thatcher did the exact same thing with her monetarism and implementation of policy. Which is why she was shocked when it turned out she sold the controls of the economy. 1987, forgotten by most I suppose. The Netherlands aren't bankrupt by the way, my point was that Germany isn't the only nation contributing and paying. E.g. caricature if you put it like that.

    Your description of Germany is not at all what I've seen or what I read when I follow German press or talk to Germans I know. Sounds more like a WWII-caricature than anything else. Italy especially is rife with people who have no respect for their government. It's got quite the rebelious spirit. In fact, I think Britain is probably better in that aspect, if we're going to talk in caricatures :P. Also, you do realize that Yes Minister had quite an explicit political message and that it in fact AIMED at showing government that way because that was the way the makers of the series saw it. I'm quite aware that they were part of Thatcher's movement, yes.

    Thatcher, by the way, sold off profitable state industry in the UK to balance her budget, because she couldn't keep her promises otherwise. Which is of course a one-time cash injection. She basically sold the key to the house, and now you expect Blair or Brown to do anything about it? Hey, remember the shareholder democracy Maggie loved to go on about? How did that work out? I'll save you the trouble of looking it up, the number of individual shareholders plummeted and state monopolies are now corporate monopolies. New Labour had no control over the economy, and the little they had left at the beginning, they dismantled in an instant. New Labour was quite the sell-out, we all know that. Blair sold his ideals for an election, and Brown wasn't any better.

    The EU isn't automatically become a federal superstate, we don't quite know what it's going to become. The only thing we do know, is that we can't hold any leverage as a people in the world economy, if we try to organise things on a national scale. There is no such thing as the 'British economy' or the 'German economy' as far as closed systems are concerned. Economics are at best a social science, and a very unstable one at that. If your French is any good though, I'd recommend Guy Vanthemsche's Les paradoxes de l'État. State and free market in an historical perspective. It's quite interesting to see the evolution and interaction of the two, and ideology is one thing, practice quite another.

    Complain about this comment

  • 93. At 6:38pm on 22 Jul 2010, powermeerkat wrote:

    I'm glad to hear that 'kolkhoznik' Lukanshenka is doing something right.


    [Before I only heard from my Belarussian friends that he was a KGB thug who forged all elections in Belarus under his authoritarian reign.]

    Just like I am glad to hear from people who bought 1 week el cheapo vacations in Cuba that everything is hanki-dori there and everybody loves Fidel.

    [rum and girls are cheap, beaches are great, so are casinos]

    Complain about this comment

  • 94. At 7:02pm on 22 Jul 2010, quietoaktree wrote:

    #92 Leo_naptha

    A good contribution --- unfortunately likely to fall on deaf ears and blindness !

    Complain about this comment

  • 95. At 7:14pm on 22 Jul 2010, Buzet23 wrote:

    #79. At 2:07pm on 22 Jul 2010, Ellinas,

    It is you that seems to have lost an interpretation, anybody can analyse words but your analysis was to say the least bizarre, if you don't understand the English language then I suggest you return to school so that you can understand what people like Disraeli meant.

    Complain about this comment

  • 96. At 7:28pm on 22 Jul 2010, Buzet23 wrote:

    #90. At 4:33pm on 22 Jul 2010, Huaimek,

    I could not agree more with your points, it is rare here that somebody actually gives a reasoned opinion and especially like yours, I don't know where you come from but you have certainly analysed the fools that the UK had recently and why Thatcher did what she did. For those that still hate her all I can say is that for once we had a leader who in most was honest enough to say I will do this and she did, not like the Socialist imbeciles who claim to work for the workers and simply load their pockets, PS I'm talking about those paragons of virtue the union leaders.

    Complain about this comment

  • 97. At 8:02pm on 22 Jul 2010, powermeerkat wrote:

    Re #96

    What was wrong with comrade Scargill?

    And how was he worse than, say, Harold Wilson?

    Complain about this comment

  • 98. At 8:18pm on 22 Jul 2010, Leo_Naphta wrote:

    # 96.

    It's rather unfortunate that you think about 'Union Leaders' that way. Of course there are those that line their pockets, but there are plenty of people working in the Unions that actually work for their ideals and do not line their pockets the way you suggest. It's one of those paradigms that's become accepted conventional wisdom, just like the 'all politicians are just lining their pockets' paradigm. It's quite unfair to a lot of people, even if it's true for some.

    As for Thatcher being honest and doing what she promised. Ahh, that's where we see how fast people actually forget what was promised, what was delivered and in which way. Thatcher ran on quite a different platform initially from the one she ended up implementing. There was a major shift in what she promised circa 1983 and she initially did things she said she would never do. post-factum policy making is what they call it I think. Go look up the 1979 conservative manifest, it doesn't even mention privatization. Also, management buy-out is not the same thing as selling shares on a newly liberated stock market, the liberating which layed the seeds of our current economy.

    Her drive towards privatizing came because she found out her strict monetarism was a failure. It was meant to shore up the government finances she was ... well, ruining. Remember when she went on television to say she had never subscribed to Milton Friedman? When only a few years before she had called his theories indisputable facts of life? Honest, right.

    Complain about this comment

  • 99. At 8:20pm on 22 Jul 2010, Ellinas wrote:

    "...if you don't understand the English language then I suggest you return to school so that you can understand what people like Disraeli meant..."

    You care that i get educated like you did?...Thanks for your advise but primary school chairs are no longer of my size...

    :)

    Complain about this comment

  • 100. At 8:31pm on 22 Jul 2010, margaret howard wrote:

    88 powermeerkat
    The names of your US of A equivalents are just as unknown to the rest of the world.

    93 you said:
    "Just like I am glad to hear from people who bought 1 week el cheapo vacations in Cuba that everything is hanki-dori there and everybody loves Fidel."

    At least Fidel kicked out the yanks who had turned his country into their own whorehouse. The vindictive way you treated them afterwards was despicable and equally despicable the way the rest of the world followed your example (no doubt there were quite of few of your fellow Americans like Homer who would have liked to have nuked them off the face of the earth). At least they now have their pride left, Uncle Sam was kicked out with egg on his face and the rest of the world had a good laugh. Oh, and incidentally, I believe they now have one of the best health services in the world. My son went there last year and he loved it. He who laughs last.....

    Complain about this comment

  • 101. At 8:34pm on 22 Jul 2010, Buzet23 wrote:

    #97. At 8:02pm on 22 Jul 2010, powermeerkat,

    I guess you know both of them, Wilson was a former young communist who turned to labour in order to be elected, the king was an unelected communist who believes it is unnecessary to be elected. I worked in Sheffield for a while and heard the divisive disasters that he created whilst trying to create his kingdom and destroy Thatcher. Incidentally I often did not agree with Thatchers policies but at least you knew what you would get.

    Complain about this comment

  • 102. At 9:07pm on 22 Jul 2010, Buzet23 wrote:

    #99. At 8:20pm on 22 Jul 2010, Ellinas

    It sounds like you are a product of those excellent examples of Socialist schools of the 60's and 70's, i.e. the comprehensives, have a chat with Ken Livingstone who was educated in Tulse Hill comprehensive, or as it was known locally, the matchbox factory.

    Complain about this comment

  • 103. At 9:22pm on 22 Jul 2010, Buzet23 wrote:

    #98. At 8:18pm on 22 Jul 2010, Leo_Naphta,

    There is an effect in both politics and unions and that is once somebody progresses past a certain level most cease to remember the most important thing, those who put them there. In politics one tends to find that local politicians tend to remember the local voters who put them there, once they move up the internal political train they progressively forget the voters. The only difference between politics and unionism is that due to the protective laws that surround union representatives in many EU country's, a shop steward in virtually fire proof, this gives them free reign to assume airs, graces and in Scargill's case a kingdom. Also it is a lot easier to become a shop steward than a local counsellor.

    As for Thatcher, I remember both her and her predecessor Heath's promises very well and what distinguished her from him was that nothing was cast in stone. To her, if something was not working she changed direction rather than continuing on a losing track. I just wish the current EU mandarins had the same courage to admit their opinions and policies were failing and would try to change direction. As I said before, there were many things about her I did not like, but her ability to do the necessary to correct problems was irrefutable.

    Complain about this comment

  • 104. At 9:57pm on 22 Jul 2010, Andresmalo wrote:

    Once again Bluesberry uses the subject to interject and slam the U.S.A. I dare Bluesberry to post without slaming the U.S. I would say it goes against everything he and his people have in there DNA. God bless the U.S.A.

    Complain about this comment

  • 105. At 10:23pm on 22 Jul 2010, Leo_Naphta wrote:

    # 103

    I'm not quite sure if I agree with that assesment. It's fair for some, it's not fair to others. It's quite dependent on the people, but on the other hand, they are still elected, so it's also just as much on the heads of the voters that keep re-electing them. If people don't want them there, they should take steps to remove those that shouldn't be there.

    Thatcher didn't exactly admit she was wrong though, she would change course without admitting fault for the last one. Besides, even if the EU took a new road, would you really - truely - applaud it, or would it only be applauded if it was the road you wanted? As for her ability to solve problems, that depends on the assesment you make of her administration. She was certainly capable of achieving goals that she set for herself, it's another thing entirely to claim that she effectively 'solved' the 'problems'. She changed policy, but that's not exactly the same thing. It is not clear that this corrected the necessary parameters. Whether that was a succes really depends on the person assessing the situation, and in my opinion, she failed to achieve her goals such as they were, and the policies she set, while indeed changing the face of Britain and more than that, didn't accomplish what she thought they would. Hence, by the way, my reference to shareholder democracy, which was one of her major 'goals'.

    Complain about this comment

  • 106. At 10:44pm on 22 Jul 2010, Andresmalo wrote:

    100# Margaret Howard

    . No running water in 90% of the country, electricity is up and running only from 9am to if there lucky 2pm. Check the tourist web pages for cuba. They state that running water and electricity are part of the luxuarys they offer. Since the former USSSR stop funding the island, its a mess. There medical system is slow and very cumbersome. I know, I have been to parts of cuban on work. I also live part time in Mexico City and work in parts of Mexico. We have cuban immigrants washing ashore daily. Do not let your hatred of the U.S blind you. You ask who laughing now, well if you could only hear what the say about you europeans behind your backs (I speak and understand spanish) if you do not know, well let me tell you. Once they take your euro, they say you are a bunch of deviants worse then any American there before. You see Margaret much like in Mexico tourist town like Cancun, Puerto vallarta , Lxtapa Aihuatamejo and Acapulco. europeans in cuba engage in rather nefarious acts with underage cubans. My wife is cuban, she can tell you horror story about it. And as far as your son... well they say the apple does not fall far from the tree.

    Complain about this comment

  • 107. At 00:29am on 23 Jul 2010, democracythreat wrote:

    This comment was removed because the moderators found it broke the House Rules.

  • 108. At 00:57am on 23 Jul 2010, democracythreat wrote:

    This comment was removed because the moderators found it broke the House Rules.

  • 109. At 01:27am on 23 Jul 2010, MarcusAureliusII wrote:

    Bleak assessments for Europe's future from both France 24 and PBS on TV tonight.

    France24's financial analyst said Europe may be headed for the second dip of a double dip recession. At the same time government defaults are very possible. He was not particularly optomistic.

    PBS Nightly News did a piece on Spain. While government debt is only 40% GDP at the moment, private debt is 200% with much of it in housing. Over a million unsold new homes and 20% unemployment. The fear is many if not most of the loans will default especially on variable rate mortgages if interest rates go up. Then the banks (Cajas) will be in trouble absorbing the debt and finally the government will bail out the banks and it will become government debt. Not only is the potential crisis even worse than Greece's, as the world's ninth largest economy, default of the Spanish government could have far sweeping repricussions throughout Europe and around the world.

    Adios amigos. Hasta la vista BABY!

    Complain about this comment

  • 110. At 01:39am on 23 Jul 2010, MarcusAureliusII wrote:

    Andresmalo;

    "We have cuban immigrants washing ashore daily."

    What happen, the Cuban guards run out of bullets...or are they the ones making a swim for it? Just think of them as replacements for the Mexicans who illegally flee to the US.

    Complain about this comment

  • 111. At 06:57am on 23 Jul 2010, powermeerkat wrote:

    Re #100

    "My son went there last year [to Castros' Cuba] and he loved it."




    See? I told you : it's just great there.

    And never any strikes.

    [The only problem: it's not so easy for Cubans to travel to Florida Keys]

    Complain about this comment

  • 112. At 07:07am on 23 Jul 2010, powermeerkat wrote:

    Re #109, MAII

    If even France 24 and PBS are saying that it must really bad.

    Complain about this comment

  • 113. At 09:22am on 23 Jul 2010, Buzet23 wrote:

    #105. At 10:23pm on 22 Jul 2010, Leo_Naphta,

    Mostly to get on an public election list you need to be an activist and likewise an activist to become a union shop steward, don't be confused about the Belgian work council elections whereby many put their names on it not because they are activists but merely because it protects your job for two years. I have worked in two company's here where jobs were under risk and many just put their names on the list to get the two years.

    Therefore by the nature of an activist most tend to be ambitious and the higher they get the more remote from the ordinary people they are and this seems to apply to both public office and union office. As to removing them well that is in practice very difficult due primarily to the voting patterns of most people, I remember in the UK, which does not have a Belgian style list system, how many in a vote put their mark on the first name of the list or the last name as I've been a party witness at a number of counts. To remove a person from office is very hard as many just keep on with the status quo, moaning all the time, but not changing things.

    As for Thatcher you mentioned "Whether that was a success really depends on the person assessing the situation", quite so as it is impossible to please everyone. She did achieve a lot but there were some important Tory ideals that in fact got worse, she did not truly protect innovation and small businesses, and taxes went up despite low taxes being a central plank of hers. It's a bit like Reynder's and the MR, they claim to be the party of the Independents but after each election they stitch the independents even more.

    Complain about this comment

  • 114. At 09:45am on 23 Jul 2010, Ellinas wrote:

    #102. At 9:07pm on 22 Jul 2010, Buzet23

    I am a product of those excellent examples of public Greek schools of the 80's, i.e. "the all inclusive formula" education...just like my English.

    On the whole, in your desperate Sherlock Holmes research with regard to my skills and by trying to give to you some credit, i can only say that words like "public" and "socialist" are quite twins :)

    as for Ken Livingstone...never met him...but who knows...a vis a vis with him can always be possible...after all life is full of surprises...like the one that now i am talking to you.

    Complain about this comment

  • 115. At 10:16am on 23 Jul 2010, Chris wrote:

    @powermeerkat,

    I have no experience with Cuba, so I can't comment on that but on Belarus and Latvia, I have had first hand experience and I can assure you that your understanding of the situation there is as reliable as you recent statement that 1 Euro will equal 1 USD soon or that Greece, Spain, Ireland will default soon! But don't let facts worry you, your "reality" is yours to choose:)

    Complain about this comment

  • 116. At 10:32am on 23 Jul 2010, powermeerkat wrote:

    "words like "public" and "socialist" are quite twins :)"




    Not if you're talking about English public schools.


    Perhaps "public lavatory" and socialism would be a better match.


    Complain about this comment

  • 117. At 10:51am on 23 Jul 2010, Buzet23 wrote:

    #114. At 09:45am on 23 Jul 2010, Ellinas,

    I have no idea as to the quality of Greek public education in the comprehensive format but certainly in the UK the Socialist run education think tanks that control both types of school and teacher training have achieved a remarkable dumbing down of education in the last 50 years. This is why a large number of students from comprehensive public schools had little knowledge of English grammar and why there have been so many attempts recently to change that. However until the teaching methods are changed the problem will carry on, so yes socialist and public schooling are twins in that the first controls the teaching methods of the other.

    As for red Ken, you would indeed be in for a treat in a perverse sort of way, he is a dinosaur from the Socialist class struggle era who when he left Tulse hill school, became a councillor and participated in the destruction of public grammar schools (not private) to deny ordinary people a better education than the Socialists comprehensive schooling. After all we can't have the peasants being better educated than the politicians can we? PS. I have met him on a number of occasions.

    Complain about this comment

  • 118. At 11:32am on 23 Jul 2010, mvr512 wrote:

    100.margaret howard wrote: At least they now have their pride left, Uncle Sam was kicked out with egg on his face and the rest of the world had a good laugh. Oh, and incidentally, I believe they now have one of the best health services in the world. My son went there last year and he loved it. He who laughs last.....

    Sure its great in Cuba. As long as you don't ask for elections for a real parliament, or elections for political leaders. But I suppose its better now than it was in the early 60s, when asking such things would usually mean you getting shot by Guevara's death squads in one of Cuba's state prisons.

    92.Leo_Naphta wrote: I view the EU as a work in progress, I don't insist on it being a perfectly run, democratic institution from the start. I insist it should become so over time.

    And that's where you and I differ, I am not prepared to wait. Democracy has to be a prerequisite BEFORE anything is integrated on EU level. And considering the absence of an EU-demos, it's going to be difficult. Try explaining to the Germans they gonna have to put another 100 billion or so into a pension fund for Romanians, Bulgarians etc... I don't think you'd get many votes for that.

    As did the intellectual forefathers of the European Union and the United Nations. Which I find very denegrating towards those people, when people classify it as 'just a project to take power' or a project to show up the US. It was never about that

    Those that started the EU up (ECSC, EEC e.a.) would certainly disagree with you, since 'challenging the USA' was a key point they wanted to do, particularly the French members such as Monnet (a man never elected to anything and deeply suspicious of elections). Also, full federation was also the goal from day 1 onwards.

    The EU isn't automatically become a federal superstate, we don't quite know what it's going to become. The only thing we do know, is that we can't hold any leverage as a people in the world economy, if we try to organise things on a national scale.

    As I said before, I'm not prepared to accept something significantly less democratic than the national democracies, just to have some 'influence' on world level. We have quite bad experience in Europe with the wannabe superpowers of the 20th century (ie Berlin, Moscow). As long as the EU is less democratic than the national democracies it de facto replaces, it has in my viewpoint zero legitimacy.

    73.Kit Green wrote: Therefore we should be able to see that there are "aristocracies" by other names everywhere you look.

    We got one located somewhere between Amsterdam and Paris, near the dividing line in the land of the Flemish and Walloons. I think it's a supranational thingy which has all sort of advisors who look for loopholes in treaties in order to bypass the national democracies in Europe. Many of them consider themselves part of a new elite.

    Complain about this comment

  • 119. At 12:39pm on 23 Jul 2010, Nik wrote:

    117. At 10:51am on 23 Jul 2010, Buzet23 wrote:
    """I have no idea as to the quality of Greek public education in the comprehensive format but certainly in the UK the Socialist run education think tanks that control both types of school and teacher training have achieved a remarkable dumbing down of education in the last 50 years.""""

    Same in Greece. Greek people only now start to realise how far the corosion of the education by the socialist-run education has been.

    """This is why a large number of students from comprehensive public schools had little knowledge of English grammar and why there have been so many attempts recently to change that."""

    Same.

    """However until the teaching methods are changed the problem will carry on, so yes socialist and public schooling are twins in that the first controls the teaching methods of the other."""

    Same.

    """As for red Ken, you would indeed be in for a treat in a perverse sort of way, he is a dinosaur from the Socialist class struggle era who when he left Tulse hill school, became a councillor and participated in the destruction of public grammar schools (not private) to deny ordinary people a better education than the Socialists comprehensive schooling."""

    Same.

    After all we can't have the peasants being better educated than the politicians can we?

    Yes. That is the point. Not only the quality of education is imposed but also the exact teaching. In Greece it is even worse with the curriculum strongly controlled the (largely marxist and often foreign originated) nomenclature. In this, like the previous government there were people of non-Greek origins like "her" and "her" (I do not give names cos BBC controls, but they are well known among us) wishing to change language and history books with things that even quite fanatic left-wing people were not ready to accept since being blatant lies like erasing the slaughters that Albanians did in Greece in the 1770-1825 period and even erasing the term "Turk-albanian" (note: most Ottoman troops in Europe were Albanians - hence the term "army of Turks & Albanians" referred correctly as "Turkalbanians"), erasing the "genocide" term from the genocide of Minor Asia and referring it totally as an "exchange of population", deleting the number of dead, deleting the number of people that habitated Minor Asia 100 years ago etc. or refering to the liberation movement of EOKA 1 as a fascist-terrorist organisation and other such niceties.

    We are talking about a proper 1984 and more. There is not only no word such as "bad", but there is not given even the choice of "not good". Total totalitarianism.

    One wonders why they found the current timing to enforce all that. Nothing is accidental.

    """PS. I have met him on a number of occasions."""

    Oh!

    Complain about this comment

  • 120. At 12:43pm on 23 Jul 2010, Nik wrote:

    Anyway, back to the initial question:

    How about the bank merges?

    Above in my messages 48 & 55 I very much developed on the illegal and dowright scandalous affairs of the bank merges in Greece and how these are more or less positevely described by local and international press (with the international actually being more positive as internally they pass it as a "necessity" due to current pressure).

    But what happens elsewhere? If there anyone that doubts that the same will occur in Germany, France or Spain?

    I described our local affairs only to pinpoint you to the fact that all these exceptional "Stress tests" are just justifications for quite healthy banks that have lots of steaks to offer to be attacked and chopped up, to the interest of a few global players and to the detriment of the many.

    Complain about this comment

  • 121. At 1:06pm on 23 Jul 2010, Benefactor wrote:

    The way I see it (and I see it clearly) it's all an incredibly cunning plot by a group of out of touch unelected elites who are simultaneously hilarously incompentent and insidiously malevolent, to control the size of Britains carrots so that France can sell there carrots to us for less...

    And also, something about Democracy... the guy I wanted to win didn't so it's probably being eroded or something.

    Complain about this comment

  • 122. At 1:10pm on 23 Jul 2010, Leo_Naphta wrote:

    # 113, yes but that's the nature of representative democracy isn't it? The Zapatist movement in the Chiapas has some interesting experiments with other forms of participative politics, but as we all know the way we run the system now isn't going to be changed overnight, we'll have to live with the way it works now. The idea that every activist suddenly becomes remote from the people because of the way the system works, places the burden on those who are actually willing to do something, while excusing the mass of people that are just as responsible for how the system is implemented. I've got little sympathy for those who decry the system because they are unwilling to take even the smallest steps in bettering it themselves.

    # 118

    You're not prepared to wait, which is a shame. Instant gratification isn't going to work and it's going to get us nowhere. There are certain democratic aspects to the EU, now far more than 30 years ago. The idea that it could be a fully-fledged democracy from day one is utopia. It's not a reasonable request, at any level. It's also a very narrow definition of legitimacy and politics. Why, by the way, aren't you calling for the same sort of democratic insight in the major economic institutions?

    There's no such thing as the entity 'The Germans' to which I can explain anything. You get more votes by appealing to egoism, yes, is that your point?
    As did the intellectual forefathers of the European Union and the United Nations. Which I find very denegrating towards those people, when people classify it as 'just a project to take power' or a project to show up the US. It was never about that

    The intellectual forefathers of the EU are not just the ECSC and the EEC. It's a far older project. I don't blame you for never having heard of Louis Bara, Hodgson Pratt, Charles Lemonnier, Emile de Laveleye, Eugene Goblet d'Alviella, Henri La Fontaine, Paul Otlet, Charles Richet, Frédéric Passy, Louis Frank & others, but you are doing a great disservice to their memories and the projects they founded upon which the European Union was later constructed - as well as the League of Nations, the United Nations and the International Court ... -. Some of the very first writings about a United States of Europe, were by the way, done by Americans. Even Washington saw it as the eventual future of Europe.

    Lastely, I'm not talking about influence on world level in the realm of power politics, I'm talking about influence on world level on the economy & the way our daily lives are constructed. The nation state is an outdated and at this point almost useless construct that only serves a very limited purpose and is not adequatly equipped to deal with the social reality that defines our world today.

    You want a democratic order based on the order you already know from your 'nation state', instead you should be thinking about new ways to construct an international understanding of people, with a particular concept of participation. I don't think the democratic legitimacy of bi-cameral constructs like most states these days is all that great to begin with. It's more of a particracy than anything else.

    The EU is a concept that's in evolution, it's also something new and uncharted, an experiment. You can say we should just get rid of it as it doesn't yet match our expectations of how democratic it should be. Or, you can work to further European unity and enlarge the democratic foundations as we go along.

    I like your comment on how they consider themselves 'part of the new elite'. Quite a broad statement. How about the actual elite that controls most of our economy? Why aren't you clamoring for a say in what they do? Hey, who's the CEO of Blackrock? ;) How did he get that position? What's his legitimacy for some of the actions he seems to be able to undertake?

    Complain about this comment

  • 123. At 1:12pm on 23 Jul 2010, Benefactor wrote:

    As we all know, various groups that we aren't a part of are made up of a group mind of unthinking drones, I have a bunch of anecdotes to prove it!

    What we need to do is find the undemocratic nest at the heart of the EU (probably hidden underneath the EU *snigger* "Parliament") where the Queen Commissar breeds her workers and destroy it with fire... and also steal her horde of precious gems and royal jelly!!!

    If we are lucky we will catch most of her army of rapid Europhiles & MEP's while still in there cocoons!

    Complain about this comment

  • 124. At 1:14pm on 23 Jul 2010, Benefactor wrote:

    The French are alien lizards in disguise and the EU is part of there plot to take over the world... well, the best part of it anyway!

    Complain about this comment

  • 125. At 2:16pm on 23 Jul 2010, MarcusAureliusII wrote:

    Many have questioned whether the stress tests of European banks are sufficiently severe enough to actually find out which banks are vulnerable and to what degree or are a whitewash to instill false confidence by painting an unrealistically rosy picture of all but the worst cases. I don't think the markets will be fooled this time, they are too wary.

    Mergers of weak and strong banks is not always a very good idea. The dead weight of uncollectable debt could make the balance sheet of the better managed bank look much worse. It may be better to just let the weak banks die. Many Americans were outraged by the bank bailouts in the US and the way the government mismanaged the process. Personally I think the government panicked after the collapse of Lehman Brothers. There came a point where all credit even from one bank to another for an overnight loan froze up and the world looked into the abyss of a great depression. The bailout may have been a necessary evil, the least worst of all possible courses of action but rewarding bankers for incompetence and saying that if they were not paid their big salaries and bonuses some other bank would hire these incompetents was more than most Americans could stomach. President Obama was among them.

    Complain about this comment

  • 126. At 2:34pm on 23 Jul 2010, Buzet23 wrote:

    #119. At 12:39pm on 23 Jul 2010, Nik,

    It's sad to hear that you have the same politically correct thinking in Greek education, I get fed up with hearing what my UK grand children get told and they're only in primary school. At least in Belgium the curriculum is still pretty academic and my grand children in primary school here seem to be learning genuine academic subjects.

    As for school curriculum's and history, you're right about that, there is so much manipulation going on these days to appease political correctness that it's becoming a joke. In the past I think we have always known that history books to a large extent reflect the research and opinions of the author which is why it was often necessary to research multiple sources. These days one just reads the Socialist concept of history as they're are the only books chosen for use in schools by the PC mandarins.

    I did meet red Ken several times in the 70's when he was in his revolutionary hay day and with the help of others we managed to disrupt a number of his stage managed public meetings, much to his annoyance. The one thing all communist and far left Socialists cannot tolerate is opposition of any sort and even members of his own labour party were called fascist by him and his Lambeth council mates. It is this intolerance of other opinions that seems to single out far left Socialists from all others, which is one reason I'm very suspicious about the current direction of the EU and the level of intolerance that is shown to those who seek to change the current direction, and dare to say that there are fundamental problems with the EU and the Euro at the moment.

    Complain about this comment

  • 127. At 2:41pm on 23 Jul 2010, powermeerkat wrote:

    Re #115 " I have no experience with Cuba, so I can't comment on that but on Belarus and Latvia" etc.


    I, in turn, cannot comment on Latvia since I haven't been there for quite a few years, but I can on Belarus: a sorry police state with dirt poor population run a by a two bit dictator famous for saying such things (among others) as "there's no Belorussian language".




    And for exchange rate of euro...

    It'll eventually get there.

    But perhaps you're like that proverbial turkey who was thinking about Sunday, only to have his head chopped off on Saturday.

    By which I mean that perhaps you should not worry about future exchange rate of euro to US$ (and even less about wisdom or stupidity of my financial decisions) for there simply may be NO EURO yet. :)


    Now about this pan-European unified air space and traffic control system...

    When is its ingauration day? [I'd be happy to attend]

    Complain about this comment

  • 128. At 2:56pm on 23 Jul 2010, powermeerkat wrote:

    Buzet wrote:

    "we can't have the peasants being better educated than the politicians can we?"




    Nope, it would fly in the face of equality principle.



    BTW. There used to be quite a few countries in which poorly educated peasants were made politicians or even political leaders.
    With predictable results. Not so long ago.


    I'm sure you can name them yourself in the alphabetical order:
    starting with Albania and Belarus and ending with Sudan and Zimbabwe.

    [sorry Xanadu!]



    Complain about this comment

  • 129. At 2:58pm on 23 Jul 2010, cool_brush_work wrote:

    Buzet23

    Re #117

    It is easy to make this "..dumbing down.." allegation, but what does it actually mean and what is the analysis that leads You to join with others in making it about the UK/England?

    My Grandfather left school at 10 and my father at 12 (1926): Both could read, write reasonably well and use basic arithmetic. However, the idea they 'knew' much more or had 'wider' perspective on the World than today's Youth seems very far-fetched to my mind.

    My late grandfather's only experience of foreign travel was a WW1 Trench in the Ypres Salient! Similarly until WW2 my late father had no experiences outside of being a farm labourer & fairground boxer! It took WW2 to broaden his cultural-educational horizon beyond that of his dad!

    'Dumbing down' implies modern day England's school-age children don't have as much knowledge as in the past, but I just cannot see how this could possibly be the case. We read in the newspapers of the Employer who complains the 'A' Level lad/lass he has just taken on couldn't do this that, that or the other, to which I ponder, well why not look at your interview system because it clearly has weaknesses!? Surely the skills are different and to some extent incompatible between even such a short time ago as PM Thatcher's 1979 and Cameron's 2010 - - I recall a slab of metal in the corner called a Computer, another slab labelled Copy Machine & a Mobile the size of a hardback Concise Oxford Dictionary etc. - - surely, given all the technical breakthroughs of the last quarter of the 20th Century and the utilisation of Hi-Tec/Hi-Spec etc. the idea that modern youth is 'dumber' is simply unsustainable in reality.

    IMO the quality & quantity of education has changed out of all recognition in the last 30+ years: When we conveniently stereotype & label as 'dumbing down' we are ignoring how rapid has been the pace of change and how well the great majority of educators and their youthful proteges have coped with it all. I recall the UK's BT advert "..ooh, he's got an 'ology'.." and the inference modern examinations/studies were of less value than good old fashioned history, geography, chemistry etc. However, where would the prospects of combatting Global Warming etc. be without the 'ology' studies that give the present generations this new information and new perspective of how the Earth is inter-related?

    Just because naff tv 'entertainment' such as 'big brother' & even naffer concentration on 'celebrity' gives the impression of a dumber audience it is not necessarily the whole story: Those, on the whole, fine young men & women recruited to the UK Armed Forces, the Police/Emergency services, Health & other Public Services, manufacturing, transport etc. do not emerge from nowhere - - and contrary to the image the majority are of British origin though not necessarily of traditional 'white' skin - - and they were/are products of the Education system. Yet another way to look at it is to appreciate the UK/England Education process has undergone sweeping changes based around coping with ethnicity etc. and again whilst pockets of spectacular dullness & lack of ambition do exist a great many youth do go on to do as their forefathers did and function as active, productive members of UK society.

    I'm aware that like me (Finland) You live abroad (Belgium). It is my impression Finnish children are very well educated compared to the UK, but by the same instance it is Finland where gun attacks on schools emuklate the USA & in the largest cities the social issues of drugs, pornography etc. amongst teens is as prevalent as anywhere (not under-age 'pregnancy' which seems a strangely UK social malaise). Having also family & a home in Brussels it is also my impression the same teenage blemishes also occur across that society.

    IMO, we do have to be careful not to run-down everything about the UK/England simply as a knee-jerk/sloganised reaction to some particular event/group.

    Complain about this comment

  • 130. At 3:05pm on 23 Jul 2010, powermeerkat wrote:

    Benfactor wrote in #124:

    The French are alien lizards in disguise and the EU is part of there plot to take over the world... well, the best part of it anyway!






    Are you referring to some well known French leaders who wanted EU to include Algeria, Morocco and Tunesia? ;)

    Complain about this comment

  • 131. At 3:20pm on 23 Jul 2010, cool_brush_work wrote:

    Benefactor

    Re #121, 123, 124

    You'll have to forgive me I haven't followed the latest re-working of the 'V' sci-fi drama series so cannot really attest to its accuracy.

    I can however, wonder at the idea of a 'pro-EU' denigrating 'anti-EU' on the basis of a fictional television programme in place of solid, meaningful, logical argument and therefore must see this as attesting to the realisation of the inadequacy of those 'pro-EU' points of view.

    Complain about this comment

  • 132. At 3:25pm on 23 Jul 2010, cool_brush_work wrote:

    mvr512

    Re #118

    Excellent points, put succinctly and therefore likely to cause the 'pro-EU' involuntary, reflex accusation of You 'don't understand'.

    Their trouble being, we understand all too well the meaning of the term 'Democracy' and its modern-day antithesis, the EU entity.

    Complain about this comment

  • 133. At 3:33pm on 23 Jul 2010, powermeerkat wrote:

    Huns - just a test.

    Complain about this comment

  • 134. At 3:48pm on 23 Jul 2010, sean56z wrote:

    The Banks in Europe charged high rates of interest based on delusional speculation and expectations of sky-high ROI. The American Banks followed the example and bankrupted. Governments should conservatively assess interest rates. When customers do not pay, the Banks cannot make money. Banks worldwide failed to observe that rule and lost their money.

    Complain about this comment

  • 135. At 5:13pm on 23 Jul 2010, ghostofsichuan wrote:

    powermeerkat:

    you seem to forget that during the Reagan years the US went from creditor to the worlds largest debtor nation. Reagan said that deficits do not matter in short term economic growth. What Republicans paint Reagan to be and what he actually was are something to consider. It was no coincidence that immediately after leaving office he collected a 2 million dollar specaking fee from the Japanese banks. Paint your heroes how you like but the truth is always under it all.

    Complain about this comment

  • 136. At 6:10pm on 23 Jul 2010, MarcusAureliusII wrote:

    Benefactor;

    "The French are alien lizards in disguise..."

    What disguise? Looking at Chirac and deVillepin I didn't notice any disguise. Couldn't have been much of a disguise, I saw right through it. I think the forked tongues swishing in and out and back and forth were pretty much a dead giveaway.

    Complain about this comment

  • 137. At 6:14pm on 23 Jul 2010, cool_brush_work wrote:

    News is in:

    7 banks failed the Stress Tests: 5 of them Spanish, 1 German & a Greek one.

    84 Passed.

    Isn't that splendid!?

    I am quite sure EU-Brussels will pronounce it as a veritable splendid achievement by it & endorsement of it: By Monday its apparatchiks will have come up with the appropriate grounds-reasoning for aniother 'power-grab'/'interventionist' strategy by the EU and everyone will be even happier and the duplicitous circus of over-weaning, centralising political-economic ambition will roll on.

    Stirs the heart, it does!

    Complain about this comment

  • 138. At 6:16pm on 23 Jul 2010, powermeerkat wrote:

    In case someone wonders what #133 test was all about one of my earlier comments was rejected by some automated BBC program which 'thought' that the word 'Huns' I used referring to ancient Hungarians was some kind of an ehtnic slur.

    I do hope this pathetic piece of software will allow me to write 'Bulgars' when referring to ancient Bulgarians who were Turkic people with some Iranian elements that migrated to Europe from Central Asia in 4th century and later imposed themselves in the Balkans as the elite ruling class of the Danube Bulgar Khanate.[according to Wikipedia]

    Complain about this comment

  • 139. At 6:40pm on 23 Jul 2010, powermeerkat wrote:

    "you seem to forget that during the Reagan years the US went from creditor to the worlds largest debtor nation."



    No I don't, but that was a small price to pay for bankrupting and defeating Soviet Union.

    At least in my book [and yes, including even my wallet].

    Complain about this comment

  • 140. At 6:43pm on 23 Jul 2010, powermeerkat wrote:

    Re #137 CBW

    Haven't I predicted it earlier writing:

    "They have to succeed and so they will" ? :)

    Complain about this comment

  • 141. At 8:29pm on 23 Jul 2010, Joeblo wrote:

    An 8% failure rate on a BS stress test.

    Imagine how many more would have failed if the test was real.

    More lies from EU bankers.

    Complain about this comment

  • 142. At 8:42pm on 23 Jul 2010, MarcusAureliusII wrote:

    cbw;

    "News is in:

    7 banks failed the Stress Tests: 5 of them Spanish, 1 German & a Greek one.

    84 Passed.

    Isn't that splendid!?"

    It would be...if anyone in the know felt that the tests meant anything. Most don't, especially those with a big stake in the game. They're convinced it's a charade. Only some of the public are fooled by it. It's got a feel good factor for them.

    Complain about this comment

  • 143. At 9:11pm on 23 Jul 2010, Buzet23 wrote:

    #129. At 2:58pm on 23 Jul 2010, cool_brush_work ,

    It is with great sadness that I have to say you missed the point of what has happened in the UK regarding the current level of education, for me of all people to admit that is distressing, but having seen and experienced what my kids and now their kids get told and influenced by is appalling. If it was just one school or two I could admit I was maybe deceived and it was rare, but they went/go to many schools in a number of different regions so it's endemic.

    I was lucky enough to go to a free public grammar school in the 60's because horror of horrors to a Socialist I passed the 11+, it became clear in my latter years there that this was disgusting to the comrades in Lambeth as people like me were from ordinary families. What has happened since then has been a further progressive degradation of basic academic education where the 3 r's are an inconvenient distraction from the true Socialist objectives for the world or in other words the PC culture. The core subjects for education are to be ignored, assimilation is the buzz word just as osmosis was some years back, other than a committed head in the sky fluffy bunny most now realise that they don't work. Formerly it was claimed these techniques were successful in the US, but then look at MAII and Obama, enough said.

    Complain about this comment

  • 144. At 9:20pm on 23 Jul 2010, Benefactor wrote:

    131. At 3:20pm on 23 Jul 2010, cool_brush_work wrote:

    "You'll have to forgive me I haven't followed the latest re-working of the 'V' sci-fi drama series so cannot really attest to its accuracy.

    I can however, wonder at the idea of a 'pro-EU' denigrating 'anti-EU' on the basis of a fictional television programme in place of solid, meaningful, logical argument and therefore must see this as attesting to the realisation of the inadequacy of those 'pro-EU' points of view."

    Who's denigrating what now? No no no, mein eyes are opened! I now see through the Triple entente threat of the lizard people/EU alien queen/the plant Zyklon. Grab the torches and pitchforks lads, we've a nest of scum and villainy and incompetence to burn burn BURN!

    Ahem, excuse me, what I'm saying is. I agree, it is all a big conspiracy! A big conspiracy to create a dictatorship of Europe expertly pulled off in secret by morons who couldn't run a bakery...

    Complain about this comment

  • 145. At 9:24pm on 23 Jul 2010, Benefactor wrote:

    136. At 6:10pm on 23 Jul 2010, MarcusAureliusII wrote:

    "What disguise? Looking at Chirac and deVillepin I didn't notice any disguise. Couldn't have been much of a disguise, I saw right through it. I think the forked tongues swishing in and out and back and forth were pretty much a dead giveaway."

    That's obviously your American exceptionalism at work again, the majority of the meek sheeple of Europe are fooled by the cunning disguises of the laughably moronic Lizard men apparatchiks.

    Please come at once to help free our continent... again!

    Complain about this comment

  • 146. At 10:20pm on 23 Jul 2010, cool_brush_work wrote:

    Benefactor

    Re #144

    However, they are far from being "..morons.."! Would that they were!

    If it was all 'sci-fi' I'd be delighted, but the EU-Brussels entity is very much an intelligent, motivated and ultra real & present danger to Democracy. An entity for which I fear mine & others' children/grandchildren will pay a very heavy price to be rid of in the decades ahead.

    Complain about this comment

  • 147. At 11:46pm on 23 Jul 2010, MarcusAureliusII wrote:

    Malefactor, you're on your own this time. Nobody here cares what happens to Europe anymore. The Atlantic rift is getting wider. Geologist say it's about 8 feet wider every year but I think political pundits on this side of the pond would say they're getting to be worlds apart.

    Complain about this comment

  • 148. At 07:10am on 24 Jul 2010, powermeerkat wrote:

    Benefactor asks:
    Please come at once to help free our continent... again!






    T think many a ' Old European' would rather cry with joy:

    "Russians are coming, Russians are coming!"


    than scream in fear:

    "Yanks are coming! Hide your daugthers, jewelry and watches". ;)

    Complain about this comment

  • 149. At 09:50am on 24 Jul 2010, Huaimek wrote:

    #92 leo_Naphta

    Well Done ! You state your case well , even if I am not in total agreement .

    You are right the current EU of nation states cannot easily be converted into a single Federal state . In fact one might go so far as to say may never happen .
    The EEC was originally 6 adjoining European Mainland countries , who had suffered occupation and defeat during WWII . If they joined forces , first economically and then politically , they would create a unity and friendship that would prevent them ever suffering the consequences of war again . De Gaulle was quite right to try to keep Britain out ; though that may have spured Britain's determination to join . Had the 6 EEC countries formed their intended European Union , it would most likely be up and running successfully today . Apart from a free trade area on our doorstep , I cannot think why Britain thought to join . British recent history and attitudes were and still are very different to those of mainland Europe . You complain of denegration of EU founders such as Monnet . The problem is that others take the opportunity to twist the original concept ; certainly french governments have wanted to outsmart the US . Karl Marx is credited with Communism , but in his lifetime , he said it was a mistake and wouldn't work .

    Many contributors enjoy to " Rub Britain's nose in the dirt ". Mrs Thatcher is so often held up as a political icon . I personally was not a fan of Mrs Thatcher in her time ; but , in retrospect , I have grown to appreciate what she did for Britain . When you say she sold off Britain's profitable nationalised industries , you are mistaken .
    The state industries may have been productive ; but they were so heavily subsidised by the government that they were extremely costly rather than profitable . When industries are state owned , there is no limmit to the budget to keep them afloat . Factories may be employing many more personel than necessary . Nobody worries about work efficiency or days off sick . Unions can demand higher wages and call the worforce out on strike to achieve their ends ; there is no control of the company's finances .
    When a company is in private ownership it has to pay or go into liquidation or bankrupt .

    When Mussolini came to power in the early 1920s , his party and government was National Socialist , his aim was to better the lot of the working man . Italy was largely an agrarian economy ; aristocratic and rich people owned vast hectares of land ; where farmhouses and buildings were in ruins , land not always fit for production , the people uneducated , illiterate and very poor . The only way that Mussolini could see to better the lives of the poor , was to harness the aristocrats and rich to his cause . They received huge government grants to improve land buildings and care for their community . they also became Fascist leaders in their region .

    You say that Mrs Thatcher didn't say that she had made a mistake , but who is she to tell , herself . Prime Ministers don't say ," Whoopsey , I got it wrong ", to all and sundry . They just get on and try something else , if they've any sense . If you look at almost any government , the promises they made at elections never come to fruition and their big plans are a failure . What you highlight in British politics is one way or another common to ALL governments and the EU included .
    Where I didn't agree with Mrs Thatchers selling off State industries and letting others go broke ; is that it caused a huge amount of unemployment at one time . Facilities were in place for the retraining of manual workers , but not everyone availed themselves of them . I would not say that many unemployed turned to crime ; but a huge rise in the crime rate coincided with that time and an urgent need to build more prisons . I felt that perhaps it was a false economy to close unprofitable industries , then to pay huge sums in unemployment benefit , build prisons and house people in them .

    The EU is way down the tracks on the wrong line . Perhaps as another commenter said in another post ; John Majors press for enlargement , has scuppered the whole project . Twentyseven sovereign states is to many . Many of them are very poor and short of the more prosperous countries forking out to help them , they cannot compete economically . Germany might be prepared to give up it's sovereign status , but I very much doubt if France would , or for that matter any other member state . As things stand the EU single federal state is a NO NO ! The EU commission can do very little to control the economies .
    Strict rules were set to protect the Euro , which Germany and France promptly broke . Member states can probably break all the rules ; where severe censure might endanger the whole thing falling apart .

    The present EU commission , over paid bureaucrats and the parliament are the stumbling block or buffers ; through which no democracy can pass . The EU is at a Stalemate both politically and economically .

    Complain about this comment

  • 150. At 10:49am on 24 Jul 2010, cool_brush_work wrote:

    Huaimek

    Re #149

    "..When a company is in private ownership it has to pay or go into liquidation or bankrupt.."

    Seen any 'Banks' privately owned recently!?

    Complain about this comment

  • 151. At 1:02pm on 24 Jul 2010, Huaimek wrote:

    #96 Buset23

    Thank you for your kind and complementary post .
    I think we are all a little bit wide of the subject , but never mind there are some interesting posts . I am English , but have lived in Italy for a while ; I now live in Thailand with my rather younger wife , 49 to my 73 . Not exactly cradle snatching , we are boh grandparents , my wife is head teacher of an infant school .

    Comprehensive education in Britain has grieved me since it inception .
    Socially comprehensive , but not educationally so . Dumbing Down !!!
    My former American wife and I were fortunate to be able to educate our children privately at English Preparatory and Public schools .
    I was in loco parentis to children who went to a comprehensive school and was shocked by their lack of knowledge of basic English grammar and spelling . The elder daughter left school at 16 and went to the local technical college sixth form . The teachers were professionals in their own field , students worked and did their homework or they were out .
    Classes that started at 25 went down to 10 by the end . Today the same girl is a director of a major London Estate Agency .
    The Grammar Schools were very good and gave an excellent education .

    Complain about this comment

  • 152. At 2:50pm on 24 Jul 2010, Buzet23 wrote:

    #151. At 1:02pm on 24 Jul 2010, Huaimek,

    I went to a grammar school that was one of the first to be destroyed by the jealous far left who ran ILEA in the 60's and in retrospect I should have left at 16 and gone to a technical college like the girl you knew. My six form years were a disaster as all the good teachers left and we just had supply teachers, which is why I knew red ken so well as he was one of those who destroyed my school in an act of ideological envy at anything not controlled by his form of Socialism.

    PS. It's nice to have an experience of different country's and it certainly opens the mind a lot, one of my friends here in Belgium likes Thailand a lot, plus you have some very good cuisine there.

    Complain about this comment

  • 153. At 05:37am on 25 Jul 2010, Huaimek wrote:

    #152 Buzet23

    Yes , living in different countries gives one a far greater perspective on the world and world affairs . My former wife was American , so my children have dual Anglo/American nationality . My daughter is married to a most charming , knowledgeable , witty German , who works for the government . They live in Berlin , where my daughter teaches English at a bilingual infant school . My two sons live in the US ; so we are a very international family , with , I like to think a wider vision than most .

    I am critical of some contibutors to these comment whom I see as Republican and socialist and see the EU as the promised land . One in particular is 100% pro the EU/Euro ; he makes reference to different countries that he has visited , but he clearly has no concept of what it would be like to live in those countries . When you live in a country , you then start to see it for real , with all its shortcomings and political weaknesses . I used TV political debates to perfect my Italian , correct use of grammar , verbs , idioms . Short term visitors see only , the beautiful shops , sidewalk cafés , delicious food , scenery , beeches etc.

    Thai food is delicious , but you have to live in Bangkok or south of Thailand to enjoy it . We live in northeast Thailand , Isaan , which is historically and even today the poorest region of Thailand . People here eat what one might call the crumbs under the lords table . They eat anything , chicken claws , fat , gristle , freshly killed raw beaf , small field crabs , even rats . Everything is highly seasoned with garlic , chillies , fish sauce and Pa-la , a sort of fish paste . The smell is revolting as if something had died . Cooking is for a few minutes in plain water with sodium glutamate , so that meat , or popular squid are unchewably tough .
    Needless to say I do nearly all the cooking here , as do most foreign men . I recently heard of an Englishman who died of starvation because he couldn't cook or eat his wife's Isaan food . My wife sometimes complains , but her father 85 , tucks his knees under our dining table at 7:15 precisely every evening and shovels down the good food I provide , be it English , Italian or Thai .
    We sometimes go to Bangkok and stay with my wife's daughter and son-in-law who know some lovely restaurants to take us to . One of the beauties is that a family can dine out , eat a delicious meal and it doesn't cost very much .

    Complain about this comment

  • 154. At 07:22am on 25 Jul 2010, powermeerkat wrote:

    " The present EU commission , over paid bureaucrats and the parliament are the stumbling block or buffers ; through which no democracy can pass . The EU is at a Stalemate both politically and economically ."



    HEAR, HEAR! :)

    Complain about this comment

View these comments in RSS

BBC iD

Sign in

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.