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Portugal and the bail-out enigma

Gavin Hewitt | 11:22 UK time, Wednesday, 4 May 2011

Gradually the details are emerging of the EU's third bail-out deal. Portugal will be offered 78bn euros (£70bn) over three years. It is a substantial loan and higher than some expected.

A total of 12bn euros will be set aside to recapitalise the banks.

The most crucial detail missing is the interest rate that the IMF and EU will impose. The Republic of Ireland, among others, will be watching closely. That is likely to be set when Europe's finance ministers meet on 16 May.

Nor has it been revealed what reforms will be required. According to reports from Portugal, caretaker Prime Minister Jose Socrates has said there will be no cuts in public sector wages or the minimum wage. The most significant change may well be with structural reforms, shaking up a rigid and archaic system for hiring and firing.

There are other unknowns. Portugal's political parties, who are in the midst of an election, have yet to approve the plan, but they are expected to sign off on the agreement. However, if the reforms are seen as too severe Portugal's unions may take to the streets.

Finland's parliament may still put some obstacles in the road, after its voters registered strong resistance to financing bail-outs.

But the biggest question is the same one that remains unanswered with Greece and Ireland. A Portuguese official says the economy is likely to contract 2% in 2011 and in 2012. So when the loan period ends how will Portugal have reduced its overall debt?

Where will the growth come from that over the long term will take Portugal off the endangered list? While that question remains unanswered the talk of restructuring debt will not disappear.

The bail-out plan envisages 5.3bn euros in revenues from privatisations. Greece too is looking to raise a large tranche of money from privatisations. They have not yet happened and very much remain on the to-do list.

Interestingly the target for reducing the deficit this year is 5.9% of GDP. That is slightly easier than the current plan.

Comments

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  • Comment number 1.

    One key element is the interest rate to be charged. Anything over 4% will mean increasing hardship for Portugal and looking at the current rates for Greece and Ireland, I cannot see any salvation for the country! Secondly, as Mr. Socrates is a care-taker, does he have the authority for this level of commitment? Finally his "will not do" list is far more comprehensive than his "will do" list. Bond-holders, prepare for a severe haircut!

  • Comment number 2.

    Borrowing money to pay a debt cant and wont work. These bailouts all assume a return to economic growth but the chances of that in a economy which is subject to austerity measures and cutback is nill. The future that lies ahead for Portugal is seen in Greece and Ireland; the death spiral to their economy. Only through debt destruction can these countries be saved. If this doesn’t happen the IMF will asset strip these countries and turn them into the third world. The worrying thing is that the USA is in even worse shape, a walking economic Zombie, and our situation is not much better. We are all heading for an economic crunch of a severity not seen since the 1930s.

  • Comment number 3.

    The deficit figure that you quote Gavin is part of what Portugal's Premier Jose Socrates has called "a good deal". It did seem to be too good to be true andso I looked it up and found this on the subject.

    "If we recall that Eurostat had looked at Portugal’s fiscal defict figures and re-written them the fact is that the original plan was now unviable. So yes Mr.Socrates is trying to misleadingly take the credit for a sequence of numbers which may look better to the uninitiated but in fact show that Portugal’s position has deteriorated yet again.

    For the year just ended Mr. Socrates’s government had originally declared a fiscal deficit of 6.8% of GDP and declared it a great success as this number beat its target of 7.3% of GDP. Unfortunately for his numerical fantasies Eurostat then looked at the numbers and decided that the true number was 8.6% and then upon a closer examination decided it was 9.1%. Some might call this an attempt at misrepresentation whereas Mr.Socrates’s government calls it a “methodological dialogue."
    http://t.co/4SF4Fln

    So what is called "a good deal" is in fact a sign of failure.


  • Comment number 4.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 5.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 6.

    "There are other unknowns."
    The biggest unknown is not IF but WHEN the American dollar will utterly collapse. There are no more American reserves; China and Russia re refusing to buy anymore American debt and the Fed is now monetizing itself (buying its own bonds).
    One has to think that the beneficiaries of this ultimate American collapse will be European countries, and yes, the EURO. China - sadly - has too much American garbage to unload and this will hit them rather badly, but China will recover.
    The biggest question is the same one that remains unanswered with Greece and Ireland. A Portuguese official says the economy is likely to contract 2% in 2011 and in 2012, but where will the united States be in 2012, or even by the end of 2011, where will the common currency be and what will it be? Surely not the American dollar!
    If I were a European leader, I would make sure that I was tight with the EU...and not be overly anxious to bail or commit to austerity.
    There is still the decision to come on a Financial Activities Tax in June; there is still a major investigation underway re the effect of CDS and derivative trading on the European markets, and this ultimately could include major, MAJOR fines against very prominent investment banks...There is just too much going on while everyday, the American dollar inches closer to the brink.
    When it plunges, then what?
    None of the PIGGS will be as endangered as the American economy.
    Just look at your own statement: Interestingly the target for reducing the deficit this year is 5.9% of GDP. That is slightly easier than the current plan.
    Now sit back and let it fully sink in that the American debt is $14,326,990,841,793.19! Boggles the mind, doesn't it?
    The estimated population of the United States is 310,504,722
    so each citizen's share of this debt is $46,140.98.
    The National Debt has continued to increase an average of $4.05 BILLION per day since September 28, 2007.
    So, perhaps we ought to pay more attention to the #1 PIG as it waddles towards the brink, and contemplate those consequences.



  • Comment number 7.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 8.

    #1 - Peripatetic_Scribe

    Completely agree. Quite where this word 'haircut' came from, I know not but we all understand recovering a full head of hair from a trim is a lot quicker than from a crew cut. The fear in Greece is that it was not so much a haircut as a shave. Very little was left including any basis for recovery. Default or restructuring now seem inevitable. The new government in Ireland seems to be looking to renegotiating terms and the Portuguese may have done a deal but in the hands of a caretaker with an election pending. There is only so much hairdressing the people are willing to take and these bailouts are beginning like band aids applied to gaping wounds. The patient may be comforted but may yet bleed to death.

  • Comment number 9.

    #4 - quietoaktree

    Take it up with the moderators. This thread is a bout Portugal.

  • Comment number 10.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 11.

    Re: all comments from "quietoaktree":

    PLEASE live up to your name - and BE QUIET. There are several concerned member-bloggers having an excellent discussion on important topic (Portugal and debt) who have NO desire to be bothered with your rubbish. As "threnodio_II" suggests - take it up elsewhere. Thank you

  • Comment number 12.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 13.

    And, not one government has brought a single charge against the bankers and financial firms that caused it all. We will all be taxed to maintain the wealth of the wealthy. Until governments get banks under control and dispatch the banking lobbyist from the halls of government, nothing will change. Also, people might want to take a stand with their elected officials and not listen to what they say but more about how they vote. This continued nonsense of they had to bail out the banks is based on nothing more than a "what if." The West and the governments are corrupt as equal to anything in Asia or Africa....just with a different style and less direct brutality....they just take your money, livelihood and future. The governments have decided to re-institute serfdom for the middle-class as they transfer the wealth upwards...portions of what you make will be given to the wealthy...simply because they are wealthy and have power...your representative government does not represent you....I believe the line is "everyone is equal, but some are more equal than others." Another shake-down for the thugs in suits.

  • Comment number 14.

    This is yet another "rescue" package that makes no economic sense. There is no way that Portugal will be able to grow the economy to pay back the debt, especially as the economy is expected to contract in the next two years.

    Does anyone actually believe these rescue plans can possibly work?

  • Comment number 15.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 16.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 17.

    QOT,

    A number of us have already had extensive discussions about this and a complaint has been made on all our behalves. You are not the only ones affected and not the only ones who are very angry but there is a complaints procedure which you can find here - http://www.bbc.co.uk/blogs/contact.shtml

    Now can we please continue with the business at hand?

  • Comment number 18.

    @16 Notsoquietoaktree.
    Let sleeping dogs lie old chap, let sleeping dogs lie.

  • Comment number 19.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 20.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 21.

    #18 Kane

    "Let sleeping dogs lie old chap, let sleeping dogs lie."

    --- they are NOT sleeping !

    ---or do you support bloggers being silenced -- ?

  • Comment number 22.

    It would be nice if the ´referrer (s)´withdrew his ´complaint´

    ---- It is hoped the Mods will assist in the corrections.

  • Comment number 23.

    #17 Threnodio

    --- The ´complainers´ appear to be participating --as a smoke screen !

    ---take today as the example !

  • Comment number 24.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 25.

    This isn't really a deal at all because the price, ie the interest rate, has not been set and neither have the terms and conditions. Furthermore, how can an interim Govt agree to a deal ahead of the General Election? Why couldn't a new Govt could simply say no to the deal?

    Most of the funding is coming from the European Financial Stability Facility, worth up to 440bn euros (£385.7bn; $629bn), which is funded by members of the eurozone. Does that mean the rescue package for Portugal is being partly funded by Greece, Ireland and Portugal?

    The second part of the funding comes from the European Financial Stabilisation Mechanism, which is funded by a wider group of European nations, including the UK. It has 37.5bn euros left in it after the Irish bail-out. How much is our share and can we say no? It is not in our interest or the interest of Portugal for them to rack up up more debt that they cannot afford to repay.

    I see the Euro has been gaining ground against sterling and the dollar in recent times. This means of course that the uncompetitivness of Portugal has been further damaged, so making the task of cutting the deficit that much more impossible!

    The "rescue" plan is like the Emperor's new clothes. The EU establishment hopes nobody will question the economics and show it to be what it is - a "rescue" plan that cannot possibly "rescue" Portugal!




  • Comment number 26.

    No bail out will stop the current problems .
    Only new regulations to the bank and a new type of capitalism will save the west world.
    More close to the EU we need now a central fiscal system to cover all the EU Euro Zone members and the rest.
    John.

  • Comment number 27.

    @21.
    You know I do not.
    Not unless they do it to themselves.
    Just because you can hijack and derail the thread, doesnt mean that you have to.
    But its your point to prove, dont let me stop you.

  • Comment number 28.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 29.

    @2 Averagejoe

    "Borrowing money to pay a debt cant and wont work."

    It does.
    The bailout fund, which is about to be turned into a permanent transfer union (which will bring down the EMU, mark my words), is much more than that.
    It is a means of redistribution of wealth. Tax payers and future generations of tax payers in the more healthy nations are made paying the bill in order to bail out big investors, banks, funds, you name it.
    Those who are wealthy are bailed out at the expense of ordinary citizens and future generations all over Europe. The amounts of money handled recklessly these days are staggering. Forget about the days when a billion was considered a lot of money.

  • Comment number 30.

    I sem to find more questions than answers on this...
    On Portugal, it sounds as if Ireland and Greece are holding their breath for the full details. If Portugal receives more favorable terms, the threat of Greek and Irish default will carry that much more weight. If Portugal receives terms detrimental to its own stability, would Portugal threaten default to leverage lower rates? Would IReland and Greece back a Portugese default to aid thier own issues? How would the other EU countries react?

  • Comment number 31.

    #25 - busby2

    "This isn't really a deal at all because the price, ie the interest rate . . "

    I agree but maybe the Irish experience has tempered the ECB. They are already in a situation where they may have to renegotiate with Ireland. The last thing they need now is to strike a deal with the caretaker government only to find it going up in flames following the election.

    Anyway, as I said before, this looks a bit like a band aid. Don't you think it is time they addressed the fundamental structural problems of the Euro zone rather than just patching it up?

    PS - Mods - I am getting really fed up with this message:

    "We're having some problems posting your comment at the moment. Sorry. We're doing our best to fix it".

    Whatever our issues with moderation, this technical problem is not acceptable. Why on earth should I have to restart my browser because you cannot manage a simple bit of notice board software?

  • Comment number 32.

    #29 - DurstigerMann

    Yes and this is exactly what I mean about structural problems within the Euro zone. It simply was not thought through properly. The pain that the peripheral nations are taking now will simply be transfered back to the productive and stable economies via this mechanism. Everyone will suffer, it will stifle growth and the miserable bunch of speculators who created the problem in the first place will be the only ones to profit - again.

    The issue now is that the ordinary electors throughout Europe have seen through this flimsy charade and are going to severely punish those responsible at the next available opportunity. The Euro zone members have to address this issue now because the political cost of not doing so will be huge.

  • Comment number 33.

    #30 - The_Black_Knight_Strikes_Again

    They will do exactly what they have done before and what they appear to be doing with Schengen. They will rewrite the rulebook to suit each and every eventuality.

    What they will not do is admit how badly wrong they got it in the first place.

  • Comment number 34.

    Germany is key. Its exports are keeping the Euro afloat.
    Watch oil prices this winter. The average German worker certainly will.
    Being ripped off is one thing, but being cold and ripped off is a whole new kettle of fish.

  • Comment number 35.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 36.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 37.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 38.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 39.

    Your comment has been referred for further consideration. Explain

    --- and ALL referrals have been SILENCED !

    There was a time when moderators could make their own decisions whether a request for removal (referral) could be justified.

    ---- ´intelligent´ bloggers have figured our the present weakness --and are using it !

  • Comment number 40.

    When are the authorities going to stop taking the people for a ride and declare that the euro is dead?

    When are they going to declare that the eu project is dead?

    People, why do you think that many companies are advertising thatthey want to buy your old gold and silver?

    Because the euro and also the US dollar are on the way out and nothing can save them.

    Gold, silver and other precious metals will be the only things that will keep their value and actually increase.

    People, get ready to become poorer than you presently are because all the money that you have especially the euro will be worth absolutely nothing, not even the paper it is printed on same as happened before WWII to the Deutschmark.

    The money lent to Greece, Ireland and Portugal to be followed by Spain and others is money down the drain and you can forget that you will ever get it back.

    Time to stand up against the eu dictatorship like those in North Africa and the Middle East have been doing lately.

  • Comment number 41.

    This may be slightly off topic but I cannot help but notice that, from 17 posts made by QOT on this thread, 15 posts have been "referred for further consideration" and only 2 remain in place. I am not QOT's biggest fan but this is either moderation gone mad or somebody is being over-zealous with the 'complaints' button. How on earth are we supposed to have an intelligent discussion of the topic with this ridiculous side show going on?

  • Comment number 42.

    @ #34

    "Watch oil prices this winter. The average German worker certainly will. Being ripped off is one thing, but being cold and ripped off is a whole new kettle of fish"

    We are already watching gasoline prices here in the states. This summer is going to hit hard and the heating fuel prices won't be far behind.

    Some fellow students and I attempted to live a winter without using heating oil. It was interesting. Before then, we never fully realized nor appreciated how much heat can be generated from a series of computer and server towers. It really brought the house together.

  • Comment number 43.

    I was reading the compiled version of the EU Treaty (with Lisbon) this morning, and I was struck by the purpose of the document.

    Most constitutions for states have been written by committees of rivals, and in haste. Given the historical turmoil that often accompanies new states, this is inevitable.

    The EU Treaty, by contrast, is very deliberate in its construction, and it is clearly written by a group of people with a specifically common agenda.

    I recommend everyone to read it carefully, and to think about what the drafters must have been thinking about the world at the time.

    The speed with which the treaty moves from vague and poetic platitudes concerning human rights and democracy towards opaque details concerning who shall control money supply is quite astonishing.

    It is very difficult to read the opening statement of common values with a straight face, given the way the EU is currently run. The EU was supposed to be a public and democratic discussion of human rights. Instead, it has become obsessed with and defined by private back room deals concerning lost money.

    It was once a joke to describe the EU as the EUSSR. The constant economic disasters and bungling, combined with the secretive party based autocracy, that has been the trademark of the EU institutions and figureheads for the past five years, however, which show no signs of abatement, begin to make the caricature unnervingly accurate.

    If Europe invades north Africa as the soviets invaded Afghanistan, the circle will have closed.

  • Comment number 44.

    What outside viewers must remember is that, Great Britain acts under European law, we carry European passports, our border is open to European passport holders, our country has always been of the continent Europe.
    Wake up! We are European. Saying you dont see how GB fits into Europe is like us telling you we dont see how Alaska fits into the USA.
    The UK & USA are not as hated as one person might like to think that they are, and it is this lack in his clarity of thought that prevents his posts from being of much further use....temporarily.

  • Comment number 45.

    #43 - democracythreat

    Extraordinary that, on this thread, people who frequently disagree are coming together. I agree with every word. I find it terribly ironic that what is finally focusing attention on the fundamental flaws of Lisbon should be taking place in Portugal.

    The whole process ever since the original constitution was formulated then rejected by the Dutch and the French was flawed. You cannot re-brand a faulty product, market it anew and expect to get away with it. You certainly will not get away with it if you seek to impose it on them. In the past decade, the successors to the architects of the grand scheme have taken their collective eyes off the ball and are fumbling around on the field making the rules up as they go along.

    I would not be too concerned about Lisbon if I were you. The moment the rulebook was torn up to facilitate a bailout for Greece, it ceased to be worth the paper it was written on. I have said before that the authors of this disaster will pay the price at the ballot box. My fear is a lurch of public opinion towards the extremes.

  • Comment number 46.

    Hi All

    Portugal is in difficulties.

    Something must be done.

    A bail-out is something.

    Therefore we will have a bail out.....

    The bail-outs will not stop until there is widespread economic collapse or someone figures out a smart way of reversing what was supposed to be the one way process of currency union.

  • Comment number 47.

    #44 - kane

    "- we carry European passports, our border is open to European passport holders -"

    But NO, it is not. OK, I realize I can walk through the blue channel and have never been challenged but that is not really the point. Providing I have ID, I can meander around continental Europe at will. I can shop in Slovakia, buy petrol in Austria, have dinner in Slovenia and whatever else I want to without interference. The only place I have been in the past five years which requires me to have a passport is the country that issued it.

  • Comment number 48.

    #41 Threnodio

    ----- Believe me --there is more than meets the eye occurring -- possibly by a non-contributor (among others?)

    The removal of my information to Margaret Howard (#4 and#5) for her to save her contributions ---I find particularly disturbing.

    --- this is a ´freedom of speech´ issue --that I am unwilling to loose my already sunken dentures on.

  • Comment number 49.

    @Ulkamalainen
    "The bail-outs will not stop until there is widespread economic collapse or someone figures out a smart way of reversing what was supposed to be the one way process of currency union."

    Your imagination is not really up to scratch to solve a problem like this.

    There is a multitude of things the EU could do to solve the problem. They are on the case already, if the impose 10% turnover fines for the banks who sold credit default swaps, that will give us a fair lot of money to transfer directly to Portugal. A decent insurance tax on these CDS insurances, of about 20% per annum would give us additional funds from the rich speculators and hedge funds who thought these countries are easy pickings.

    Then, there should be an investigation into the reporting about CDS, and why nobody is told who can benefit from it. Whether it has not had an undue influence on market prices of bonds and CDS in this alleged "Eurocrisis". Because that would clearly be fraud. Market manipulation. Individuals coudl benefit from that lack of openness unduely. They could be fined heavily, and so could the media organisations whose job it is to inform, not misinform us.

    Portugal is not worse off than the UK. It has just fallen victim to speculators. Without CDS that could not have happened. Hence they have to be banned.

    In fact, Britains are all 30% worse off than the Portuguese, due to their currency being devalued. That should be born in mind. We are 30% worse off than the Portuguese, thanks to us not being in the Euro. If you do not believe me, spent your summerholiday in the Euroarea and report back!

  • Comment number 50.

    @40 DestroytheEU

    "People, get ready to become poorer than you presently are because all the money that you have especially the euro will be worth absolutely nothing, not even the paper it is printed on same as happened before WWII to the Deutschmark."

    The memory of the hyperinflation of 1922/23 in the Weimar Republic and the fear of losing all savings is present to this day in Germany and it is the driving force behind the usually quite restrictive monetary policy of the ECB.

    Don't get the wrong idea. Just because Germans are still in support of the European project and didn't revolt against the euro despite being asked about it, they will be among the first to pull the rip cord should their savings be in danger.


    btw: the Deutsche Mark was released only after WWII and is the currency most Germans still link with the economic miracle, stability and prosperity. That's why 2/3+ of the German population still wants the DM back.
    The currency of the hyperinflation was the Papiermark, replaced by the Rentenmark.

  • Comment number 51.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 52.

    @47 threnodio_II

    "The only place I have been in the past five years which requires me to have a passport is the country that issued it."

    From what I've seen on airports, you just miss out not needing to show any ID whatsoever in the arrivals area of a Schengen-airport (a matter of seconds for EU-citizens, even on intercontinental flights arriving in Europe).

    What a loss ;(

  • Comment number 53.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 54.

    @47.
    I understand your frustration, but my statement still holds good. You have to show the European passport, yes, but its then open.
    I dont believe our European counterparts begrudge us this privilege, and less so, during the last month or so.
    I dont see any sensible alternative.

  • Comment number 55.

    MODERATOR

    Complaining and a plea --breaks the house rules ?

    ---please explain.

  • Comment number 56.

    Moderator

    --- You have put yourself into a bind.

    --- It would be better if you gave our interaction to your superior -- this and the previous Hewitt´s blogs would be sufficient.

  • Comment number 57.

    Quietoaktree

    As I read , you are your own worst enemy .

    You give the impression , that you only respond to these bogs to make damning remarks against Britain , her Queen , Royal family , Aristocracy , Government or BBC . You rarely if ever make a seriously thought contribution to the discussion on hand .
    You just like to make snide and irrelevant remarks about other peoples comments .

    It is no surprise that your posts are refered , or considered to break the house rules . If you carry on the way you are , you may risk being banned from participation altogether .

  • Comment number 58.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 59.

    Fellow Bloggers ,

    If I do not make a contribution to this interesting discussion , it is because many of you have already said it all . I believe it is only a matter of time before the EU has no further recourse to prevent its inevitable demise .

    I feel it is such a shame that the EU executive has so rigidly , with lack of foresight , held the European Union project on its original intended course . I should add that PMs and governments of member states are equally to blame . Unfortunately the EU executive has a blackmail system , that member states must agree or they are letting down all the others . Consequently , hasty , ill thought out decisions are being made .

    I am sure that even the most unswerving Eurosceptics are not opposed to a Europe where we are all friends and can move easily in one another's country . A confederation of European Sovereign States as a much looser union and free trade area ; but without the centralised laws and monetary system would , I believe , have worked .

    The determined singular vision of a Federal State of Europe and single monetary system , will be the EU's undoing .
    I have a saying ," Friends who become bedfellows often fall apart ".

  • Comment number 60.

    Posting:
    #44 Kane

    Most British people consider their passport to be " British ". I have been tempted to scrub out the European Union addition , but one might risk problems entering Europe . Many British people consider that Europe begins across the English Channel . My Italian friends have frequently remarked to me , that I always refered to Europe as a different place to Britain . I do it unconsciously and many British people similarly do not see themselves as being European . The British government may have made Britain a member of the European Union , but to many British people , that does not make us European . The passport is just a handy little booklet , when passing frontiers . When people say they don't see how Britain fits into Europe ; it is the attitude of mind that counts , not the treaties or the bitterly resented EU lawmaking .

  • Comment number 61.

    Moderators you are indeed having problems withe the posting and not succeeding in fixing it .

  • Comment number 62.

    threnodio_II wrote:
    "#43 - democracythreat
    The whole process ever since the original constitution was formulated then rejected by the Dutch and the French was flawed. You cannot re-brand a faulty product, market it anew and expect to get away with it. You certainly will not get away with it if you seek to impose it on them. In the past decade, the successors to the architects of the grand scheme have taken their collective eyes off the ball and are fumbling around on the field making the rules up as they go along.

    I would not be too concerned about Lisbon if I were you. The moment the rulebook was torn up to facilitate a bailout for Greece, it ceased to be worth the paper it was written on. I have said before that the authors of this disaster will pay the price at the ballot box. My fear is a lurch of public opinion towards the extremes."

    I would not say that the Lisbon part of the treaty has been undermined. I wouldn't say any part of the treaty has been undermined. The whole thing is a conspicuous attempt to dress autocracy as democracy, and I think it betrays this purpose in the very deliberate way it treats the subjects of political participation and financial power.

    I challenge anyone to read the first five articles of the compiled treaty and then argue that they know what they have read. It isn't possible. The language is so vague, so full of subjective terminology and meaningless grammar that it is inconceivable that any lawyer ever intended for these provisions regarding human rights to be implimented as law. (ie "We all value goodness a lot." Who are "we"? What is "goodness"? How much is "a lot"? And what is the definition of "value"? Vote for? Sympathize with?)

    And so it has come to pass that the EU has no democracy, and it's human rights record is a bad joke.

    But when you move onwards to the sections of the treaty which deal with financial power and the redistribution of money supply and tax revenue from elected governments to secretive party based autocracies, all of a sudden you are reading a highly structured legal document. Words become so precise that their meaning can only be known by referencing extensive supporting documents or case law, not all of which are publicly available for reference.

    It is this savage and deliberate shift in language that betrays the corruption at the heart of the EU, for my taste.

    At its very heart, the EU is run by people who believe that common people cannot be trusted with the truth.

    Maybe that is right, I don't know.

    But it is the unmistakable impression i gather from the people who drafted the EU Treaty. They think people are stupid, and not to be trusted with the truth. They are little more than farm animals.

  • Comment number 63.

    56. At 00:12am 5th May 2011, quietoaktree wrote:

    "Moderator

    --- You have put yourself into a bind.

    --- It would be better if you gave our interaction to your superior -- this and the previous Hewitt´s blogs would be sufficient."

    My feelings on this have already been communicated to the BBC in the last topic when I also got hit, ostensibly for being off topic and for replying to an off-topic inaccurate attack on the UK, I have no idea what you have been saying here as I've only just spotted this new topic but like Threnodio has said it begs a question about what is going on.

    As for European passports, I have to say there are few I know here in Belgium who have a passport, the very cheap ID card is sufficient for the travel most here do, and I seem to recall even the US accept it.

    As for Portugal, this is a country that is in political turmoil with a left wing caretaker government and which was even communist not so long ago. Any concept that a deal (read fudge) can be brokered that will hold water once the new round of elections have been completed has got to be a joke on the people of the EU. Yet I'm sure the usual EU mandarins will be trumpeting the deal as an example of their good management and solidarity, whilst omitting when it predictably goes wrong to admit it was their management that has caused the problems.

    Matt_us #49, such a shame you only ever look at CDS as it is merely one tree (albeit large) in the wood that caused this mess.

  • Comment number 64.

    62. At 07:33am 5th May 2011, democracythreat,

    I could not agree more about your analysis off the Lisbon Treaty, I tried to read the first version with its frequent cross referencing designed to make it illegible and gave up, the consolidated version was just readable and exactly as you say. The fact that one of the strict tenets regarding finance, namely bail-outs are forbidden apart from one criteria only, has been ignored and that already the mandarins say a new treaty is urgently needed prove what you have said.

    The excuse for Lisbon was that it was urgent and would resolve countless problems for years to come, the fact that has not shows how poor the EU managers actually are, and how they consider the EU populace to be illiterate and unintelligent. The EU has re-invented fiefdom and we are expected to be content to be serfs, no chance!

  • Comment number 65.

    21. At 17:21pm 4th May 2011, quietoaktree wrote:
    #18 Kane


    ---or do you support irreverant xenophobes being silenced -- ? (Fixed that for you)

    In your case...? Yes.

  • Comment number 66.

    What I do not understand is where is all this bailout money coming from? Is this like insurance where the many supply one and it is easy to find money or is this money coming from from drying sources?

    Or China? Its ok if its from China ...it just seems that a majority of nations in the EU being bailed out is not good for the few better off economies whom are providing the engine of growth.

    Why do they just not pay the bills of these nations and prosecute the unjust people who have frittered away the money in these nations....far from being dictatorial..

    .it seems that the individual nations are dictating terms and getting away with illegal and disgusting embezzlement crimes.

  • Comment number 67.

    Absolutely Brilliant, the new next thread says this blog is moving to a new home and to "follow me here", so I clicked and guess what, "page not found". You couldn't write a farce this funny!

  • Comment number 68.

    @60 Huaimek.
    Then you should know that you fall into the category marked "sceptic".
    You can consider your passport to be English or Scottish or anything you like, that is your right, but IT IS a European passport, it does what it says on the tin.
    Whats in the mind is far more important, I grant you, our experiences may be different, but most of the younger generation that I know, dont have as big a problem with it as those who had grandiose ideas of GBs position in the world after the fall of the big "E".
    My view is, like British Rail, we,re getting there. Sloooowly.

  • Comment number 69.

    @57. Huaimek.
    Unfair comment, quietoaktree is equally damning of his own government and the US, on the US pages.

    However, the BBC is not the First Amendment, the rules are different, sadly or otherwise.






  • Comment number 70.

    67. At 11:17am 5th May 2011, Buzet23 wrote:
    Absolutely Brilliant, the new next thread says this blog is moving to a new home and to "follow me here", so I clicked and guess what, "page not found". You couldn't write a farce this funny!
    --------------------------------------------------------

    This has happened with other blogs that have moved. It will be there in a few hours.

    Unfortunately the new format is a mess so nothing to look forward to!

  • Comment number 71.

    @67.Buzet23
    Quote "you couldnt write a farce this funny".
    I suggest youre easily pleased.

  • Comment number 72.

    This thread seems more pre-occupied with itself, rather than the topic, very strangely, in my experience. Although born and educated in the northeast of the US, I had lived for 38 years in the Republic of Ireland before leaving for France a year ago. The problem of the periphery versus the centre in economic integration and the balance of benefits and costs, is of course more ancient than the Roman empire. No one describes the originating intentions of the so called European project initiated after the second terrible war within 21 years, in the first half of the twentieth century. In the larger scale of history, we are only dealing with money, not war here. When elected representatives in democracies are unable to act other than in immediate and local interests, and when it has been demonstrated relentlessly that this is completely inadequate to provide prudent long term management in the general interest of a region of countries, the delegation of this management to an accountable authority, unelected by mass ballot, is inevitable. The alternative is a federal Europe, which is clearly beyond the capability either of local politicians or nationalistic parties. The costs to the euro for the management of these three peripheral economies is manageable, and will be achieved, but it is a process that has demonstrated the deficiencies of financial regulation from an effective central authority to which sovereign governments would be answerable. The problem is that governments have not exercised control or acted with transparency, and their electorate have gone along with the incompetence because it suited them. The European project will succeed because it must succeed, despite Anglo-American attempts to control financial markets and retain the dollar as the reserve currency, rather than see the euro become part of a basket of currencies denominating value.

  • Comment number 73.

    @72 Gadfly55

    Are you suggesting that Europe, unlike the USA, is unable to learn from history, thus unable to maintain peace without a supranational institution which keeps national democracies and their interest politics in check?

    And are you also suggesting that money and wealth has not been one of the major reasons for war throughout human history?

  • Comment number 74.

    Ive always seen Europes problems to be more concentrated on influence rather than money, I must be missing the point.

  • Comment number 75.

    @73, The differences between the lessons of history imposed upon Europe after WWII, and the attempt by the United States to control history after the collapse of the Soviet Union categorically refute your premise. Precisely because Europe has learned that it cannot control its nationalistic impulses within its own populations from various profound motivations, far beyond the mere economic interests, the development of the European Union has progressed, incredibly, with the necessity for unanimity until now. Clearly, there has been tremendous progress in the consensus achieved, and the benefits to the people of Europe, and to the millions who have immigrated into Europe. Personally, it is a tremendous benefit that I can use euro, earned in Ireland, to own a modest house at a modest cost in France, where I am entitled to live and work. I also have tremendous respect and appreciation for the way things are done in France, by comparison with the USA, or Ireland, but most Americans would consider the way things are done in France to be so far to the left, that it may as well be communism. There has been a relentless attack by the neo-liberals on social economies in Europe, as there is now an attack on the provision of social security, Medicare and Medicaid, in the USA, from a right wing which would dismantle the government except for the lucrative military-industrial-oil complex supports and contracts. I refer to this, because the financial markets would like nothing better than to see the disintegration of the euro into competing currencies, etc. because there would be far more opportunities to make markets, financial instruments, etc. There are much greater forces at work, than is apparent on a fragmentary basis, day to day, working against the euro, but if you look at the value of the euro against the dollar or the pound, in the last few months, you will see that it has risen from 1.294 on 7/1/11 to 1.486 today, 5/5/11. My confidence is in Europe, it has been in Europe, and will remain in Europe. I departed from the USA, to live a life, to raise a family in Europe. I have never regretted a moment, and am now delighted to live in more sunshine than ever was possible in Ireland. To me, this is progress, since 1972, when I emigrated to Ireland despite all the chorus from friends and family telling me I was throwing my life away, wasting my talents, etc. etc. Europe has a wisdom from such complex history, as does China and India. It is in the interest of Europe that there is greater integration, with Russia

  • Comment number 76.

    It is in the interest of Europe that there is greater integration, with Russia and Turkey, and the north African countries. The United States fears this and it is in their interest to place impediments in the way of its achievement but it cannot be stopped because only further integration at regional levels will provide sustainable means of providing people with lives worthy of the values agreed by reasonable Europeans of all persuasions, as subjective as those values might appear to some.

  • Comment number 77.

    @75 Gadfly55

    "The differences between the lessons of history imposed upon Europe after WWII, and the attempt by the United States to control history after the collapse of the Soviet Union categorically refute your premise. Precisely because Europe has learned that it cannot control its nationalistic impulses within its own populations from various profound motivations, far beyond the mere economic interests, the development of the European Union has progressed, incredibly, with the necessity for unanimity until now. "

    Let me rephrase: Are you suggesting that the European people are unable to learn from history and need(ed) a European project of this size and magnitude in order to guarantee peace?


    Don't take it personally, but it kind of reminds me of the US-video "Your Job in Germany":
    oh these industrious, friendly people in their beautiful country. Trust none of them.
    Someday they might be cured of their disease. Until that day, we stand guard.
    Or something like that.


    On the other hand, you seem to embrace Europe quite a lot. That's what makes me wonder.

  • Comment number 78.

    #68 Kane

    Thanks , I am well aware that I'm sceptic , " Hypersceptic " in fact .

    I have lived some years in Italy and am fluent in Italian language , my daughter is married to a German and lives in Berlin , I have friends in almost every European country . I am in favour of European people being friendly and moving freely in each other's countries . My relationship with Europe precedes and has nothing to do with the EU . Whatever it says on my passport does not mean that I owe any allegence to the EU ; I am the enemy within .
    My views of the EU and those of many like me , are not in any way influenced by the fall of the British Empire . The EU is way down the tracks in the wrong direction and is managed by people who are both incompetent and lacking foresight .

    I smile at your last sentence , " My view is , that like British Rail we're getting there . Sloooowly ". Actually , my experience is that it is cheaper and faster for one person to rent a car , than to travel by British Rail .

  • Comment number 79.

    @76 gadfly55

    "It is in the interest of Europe that there is greater integration, with Russia and Turkey, and the north African countries"

    As for Russia, I agree. The USA have an interest in keeping Europe from a more intimate relationship with Russia.
    But as you live in Europe, you cannot have missed recent developments such as a stark rise in sentiments against Islam and muslims as well as the reacion to Tunisians landing on Lampedusa.

    Watch Denmark denmark closely. The Danish government even released data on how much the country saved by shutting borders. That is Europe's not too distant future. Closed borders to immigration from North Africa and the Middle East.

    As for Turkey. The USA might be in support of Turkey joining the EU. Austria and Germany, however, will never allow this to happen. No matter what political leaders might say in public.

  • Comment number 80.

    @DurstingerMann, I am not suggesting, very simply, refer to the history of the development of European integration after WWII at beginning with coal and steel between France and West Germany, led by Jean Monnet. Of course, European nations understood perfectly well that integration was the only way to avoid war, we simply have become so complacent in the years of peace and stability that we consider peace as a permanent condition. It is not, and never has been, and must constantly be sustained, as anyone in any single human relationship knows full well. We are constantly in conflict, with our own minds, with other persons, with other groups, classes, regions, nations, peoples, the environment, and natural conditions and catastrophes. With the world population having increased by 1000 million in 14 years, and expected by the U.N. to increase by at least 3000 million in the next 89, at the very least, it is obvious that humanity must organize itself in a reasonable and sustainable manner, according to agreed principles as in the Universal Declaration of Human Rights, also agreed after WWII, or otherwise, catastrophes beyond the imaginable will devastate countless persons. Enlightened self-interest and the free markets are completely inadequate to provide the means to survive as a species at this time, in any way regarded as civilised and humane.

  • Comment number 81.

    @72 The European project will succeed because it must succeed

    That statement sums up the totally fixated viewpoint of those supporting the "European Project". Never mind the fact that the Euro makes no economic sense for Euro countries on the periphery or that Germany will forever be having to make huge transfer payments to them. And never mind the cost of forcing those Eurozone countries on the periphery into a long term permanent recession in a hopeless attempt for them to regain competitiveness within the Eurozone.

    I don't think there is any price the fixated European project supporters will not demand the citizens of Euro Zone countries to pay in a vain attempt to keep the "European Project" afloat. They are bound to fail and the only unknown is how much that failure is going to cost us all

  • Comment number 82.

    71. At 12:47pm 5th May 2011, kane wrote:

    "@67.Buzet23
    Quote "you couldnt write a farce this funny".
    I suggest youre easily pleased."

    No, just sarcastic or to put it another way, yet another disaster pulled from the jaws of victory, or incapable of organising a 'drink' in a brewery.

  • Comment number 83.

    gadfly55
    It takes an 'outsider' (although after nearly 40 years in our midst you can no longer be regarded as such), to make the most worthwhile contributions concerning Europe and its future on these pages.

  • Comment number 84.

    at #75

    "as there is now an attack on the provision of social security, Medicare and Medicaid, in the USA,"

    Social security and medicare/aid have been routinely underfunded and at times even used as open funds to pay for other projects that "ran over budget". It should not be surprising that these provisions are coming under attack. The overall fishyness of the status quo has brought confidence in the governement's ability to handle the domestic economy to a resounding low... not like that is actually having an effect on how things are run... yet...

  • Comment number 85.

    at 75 again... because the system apparantly cannot handle long posts...

    "from a right wing which would dismantle the government except for the lucrative military-industrial-oil complex supports and contracts."

    Most small govt. types that I have come across want to dismantle BOTH the federal social systems and the "military-industrial-oil complex" (aka revolving door of lobbyists turned governement official turned lobbyist...; aka Corporate Welfare) as they see both as sources of corruption and theft. The ones who truely are anarcho-capitalists are considered of the same fringe cloth as the anarcho-socialists. I will fully admit however, it is at times quite difficult to tell where our representatives actually stand thanks to the continuous campaign season; eveyone now has to keeps their "game face" on 24/7.

  • Comment number 86.

    80. At 16:29pm 5th May 2011, gadfly55 wrote:

    "it is obvious that humanity must organize itself in a reasonable and sustainable manner, according to agreed principles as in the Universal Declaration of Human Rights, also agreed after WWII, or otherwise, catastrophes beyond the imaginable will devastate countless persons."

    Once society, as you put it, organises itself that means wannabe empire builders and/or ideological fanatics, I'm not surprised MH supports you in #83 as that's par for the course, but are you truly believing that regulations, conventions, international law etc will do anything more than drop us deeper into the mire. The bigger the project the deeper the mire for ordinary people as the leaders throughout the world are power mad, giving them a larger audience simply panders to their ambitions.

    In other words keep it small and simple and it usually works, or the bigger you are the harder you fall.

  • Comment number 87.

    Clearly, I am extraneous to this group, but the topic for discussion is the third occasion of support of a country in distress financially in the euro-zone. This crisis of the euro at this moment does not represent, as some would contend in all seriousness as professional economic commentators versed in the mechanisms of the bond markets, a severe risk to the sustainability of the euro. Why, because there is the political will in the countries at the core of the eurozone area who can sustain the fundamental value of the euro, to continue to do so, primarily because it is in their long-term interest to sustain stability and expand this stability. Within the eurozone there is an immense human capital capable of functioning efficiently and equitably. Europe knows for its terrible experience that society cannot be organised on the basis of winner takes all, and losers are a living lesson to those who don't work hard enough and long enough.

    As regards the globalisation of corporate cultures and finance under a world government, with the masses simply slaves and consumers, we cannot comprehend or anticipate the effects of exponential developments in education, training,and communication provided through the systems now available, never mind possible. However, it is reasonable to expect convergence of values and expectations, including the nature of human fulfillment during a life-time. We will gain a much better understanding of how to achieve much more sustainable satisfaction in our lives, at far less cost, or investment. The pursuit of wealth as the primary reward, and primary proof of a good life will be seen as inadequate and anachronistic.

  • Comment number 88.

    87. At 18:36pm 5th May 2011, gadfly55

    Sadly you talk like a liberal left University economist of the style we used to hear about in the LSE in London, like them you harbour notions of the greater good and that mankind can be changed if only this, that and something else is done. Your comment about the Euro and the eurozone states "Why, because there is the political will in the countries at the core of the eurozone area who can sustain the fundamental value of the euro, to continue to do so, primarily because it is in their long-term interest to sustain stability and expand this stability.". Have you not considered that funds are finite and quantitative easing by printing virtual money has a limited life, your core countries will eventually not be able to distribute their hard earnt money elsewhere since it is unsustainable. It might be a great socialist dream to redistribute resources but it is just that a dream and one that will eventually rebound on the likes of yourself who support it so vociferously.

    I would suggest you remember the teachings of the human animal rather than imaginary concepts that we are somehow better than animals and can be 'conditioned'. Education in reality has many failings and the worst is that it largely reflects the views of the teacher and education authorities, thus your exponential developments could well be the negative passing down of attitudes that are already reprehensible.

  • Comment number 89.

    at #76,80,87

    "Precisely because Europe has learned that it cannot control its nationalistic impulses within its own populations from various profound motivations, far beyond the mere economic interests, the development of the European Union has progressed, incredibly, with the necessity for unanimity until now."

    This implies that the EU governance does not trust it's own people. Such a system is inherintly divisive and undemocratic. And you wonder why people in the USA find it distasteful and reminicent of the Red Communists. Everyone is equal under the self-justifying Universal Declaration of Human Rights... except that some are more equal than others because they know with certainty how to keep the rest of the population in line.

    Continued...

  • Comment number 90.

    Continuing...

    In a past age, the population explosion would bring about an era of expansion and innovation. However, all the land is currently claimed and the fear of war prevents most countries and peoples from expanding... see China and "the Islamic world" for examples of peoples who are attempting to expand their territory regardless.

    What makes globalization such an effective alternative for the betterment of humanity? Global integration coupled with centralized organization, this mantra of we must save ourselves from ourselves by divesting ourselves from our own ideals submittiing to a central control authority is just slavery to the state and is no better than the much decried slavery to consumerism.

  • Comment number 91.

    87 gadfly55 writes:
    "The pursuit of wealth as the primary reward, and primary proof of a good life will be seen as inadequate and anachronistic."
    ----------------------------------
    It seems to me that this feeling is already taking hold in many sections of society. That dreaded phrase 'Greed is good' sounds already horribly dated. I was astonished at the distaste that greeted the villains who brought our banking systems to the abyss and beggared so many countries and of course hardworking people. I dread to think what would have happened to countries like Greece, Ireland and Portugal if they had stood alone and not been part of the EU to give a helping hand.

  • Comment number 92.

    The European Project must succeed, I submit, because it has been defined as the parts of Europe which prove to be successful.

    So when NATO (read American military and industrial power) protects Europe and instigates the rule of law and occupies the continent with military bases, and when the soviet union reaches a detente with the USA, Europe enjoyed unprecedented peace. So that is the EU's good work, by definition.

    And any economic success story in Europe is inevitably written down as a consequence of the EU economic policy. Hence the EU is successful. Poor or catastrophic economic performance is inevitably ascribed to the consequence of poor governance on the level of the member state. This is true even when the facts scream out the contrary conclusion, such as the co-incidence of EU membership and skyrocketing national debt due to Euro policy and the shading lending deals between EU member states. Or the fact that Norway and Switzerland are the shining lights of European economic performance, and both stayed out of the EU.

    Likewise, any wholesome application of human rights law, anywhere in Europe, is attributable to the glorious body of EU human rights law, and any abuse of human rights is evidence that the EU needs more power, and more revenue. This is also true regardless of the facts, such as with regard to the significant advance in jurisprudence in the European Court of Human Rights, which the ECJ disregarded and would not apply until it was forced to do so, and even then it claimed the right to set precedent. And it is true regardless of whether countries like Latvia, the darling of the new EU, deny vast numbers of native born human beings fundamental human rights due to historic cultural variations in the population.

    By claiming Europe as its own creation and ward, the architects of the European Union set themselves to take credit for the west wind, and the right to blame others for the east wind. Meanwhile they pillaged the tax revenue of ordinary Europeans, without offering any democratic means of enforcing accountability to the poor suckers footing the bill.

    This lesson in theatre inspires me to take to the streets, proclaiming that I am the true representative of all lawyers, and that I represent the Freedom and Kindness to Small Puppies Society, which esteemed organization just happens to be the supreme regulator of law practice in Europe. And Russia. i mean, why not? In for a penny, in for a pound. Or a rouble.

    And as the titular head of the FKSPS, by virtue divine blessing, supposed tradition, good taste and general common sense, I hereby claim to make binding law upon all legal practitioners on the European continent. And in Russia.

    Of course, the lawyers would never stand for it. They'd laugh or scoff at the very idea.

    And yet, this is what the lawyers of the major political parties in Europe have done to every other profession.

    I remember reading the set text on European law, back in the day, and the author made a rare direct appeal to his audience, which was very much out of character with the rest of the book, and asked people to contemplate the truly monumental decision in Costa vs ENEL. the author postulated that this was almost a revolutionary moment.

    In retrospect, it was indeed a revolutionary moment. It was a revolution of the most fundamental law making power for 500 million people.

    the revolutionaries were all lawyers whose careers were fostered and made in the dominant political parties of Europe.

    And how they have prospered, as a group, since then!

  • Comment number 93.

    Stevenson wrote:
    "What I do not understand is where is all this bailout money coming from? Is this like insurance where the many supply one and it is easy to find money or is this money coming from from drying sources?"

    Niall Ferguson knows about these things, and you have the happy good fortune that he likes the USA more than Europe, and has moved there to work.

    I gather from his opinions and understanding of state finance that the ECB and EU are acting as a buffer mechanism for the "market forces", which European leaders characterize as a conspiracy theory, that threaten the political future of the Eurozone. So what happens is that Germany and France and everyone else act as the lender in fact, which means they pledge the security for the loans. So they benefit by achieving lower rates in the market than the crisis states can obtain.

    In theory, the crisis states pay back the loans with interest, and so the non crisis (HAHAHAHAHAHA!!) states DO NOT LOSE. Everyone wins. A lesson was learned by all, is the happy outcome.

    In theory.

    In practice, it all depends on how stupid the market really is.

    It's a shell game, plain and simple. Not really a ponzai scheme, unless you count the whole of Europe as a potential disaster zone. i don't think that is reasonable. If and when Germany cuts and runs, they take a hit, but they will do alright. Whatever happens to their currency, the fundamentals of their economy is sound. They have high value exports with high margins, and so they will keep a skilled labour base and high levels of industrial employment.

    If the markets decide that they are really lending to germany, they will likely keep rates low. Ish. But once the political mood in germany worsens, if it worsens, then the market may have reason to believe that germany may cut and run before the euro bonds being issued at that time are scheduled to fall due for repayment. So for ten year bonds (y'all call em treasuries), if the market sees germany cutting and running within ten years, then the bond price will climb.

    And the way the thing is built, that will put more pressure on the current crisis states. And the political mood in germany will worsen faster, as they are exposed to more and more debt that they don't own.

    So there is this lurking negative feedback amplifier built into the game, and the theory of "happy lessons learned by all and merry ever after" is therefore resting on very shaking foundations indeed.

    The clincher, for me, is that there is no time limit on the game. Each issue of bonds is another throw of the dice. What will the market decide? Given the level of debt, and the projected rate of getting it under control, and projected market conditions, the game could go on for a hundred years or more. There is no end to the debt in sight.

    With so many throws of the dice, and with that horrible negative feedback modifier built into the system, Europe's economic future resembles a game of Russian roulette.

    Maybe the russians and the chinese will play? Who knows?

    But it is what it is.

  • Comment number 94.

    http://www.bbc.co.uk/news/business-13293706

    Got any more fluffy bunny socialist rhetoric?

    Margarethoward - you ask what countries like Portugal would do if it wasnt for the EU. Same as they did under the IMF...suffer.

  • Comment number 95.

    @80 gadfly55

    "@DurstingerMann, I am not suggesting, very simply, refer to the history of the development of European integration after WWII at beginning with coal and steel between France and West Germany, led by Jean Monnet. Of course, European nations understood perfectly well that integration was the only way to avoid war, we simply have become so complacent in the years of peace and stability that we consider peace as a permanent condition. It is not, and never has been, and must constantly be sustained, as anyone in any single human relationship knows full well. We are constantly in conflict, with our own minds, with other persons, with other groups, classes, regions, nations, peoples, the environment, and natural conditions and catastrophes."

    Question is: what does the EU contribute to this time of peace in Europe and how much integration do we need in order to ensure future peace?
    Do we need a euro, a project to break de-facto predominance of the Deutschmark on the continent?
    Do we need a common foreign policy? If so, what for exactly?


    "With the world population having increased by 1000 million in 14 years, and expected by the U.N. to increase by at least 3000 million in the next 89, at the very least, it is obvious that humanity must organize itself in a reasonable and sustainable manner, according to agreed principles as in the Universal Declaration of Human Rights, also agreed after WWII, or otherwise, catastrophes beyond the imaginable will devastate countless persons.
    "Enlightened self-interest and the free markets are completely inadequate to provide the means to survive as a species at this time, in any way regarded as civilised and humane."

    Sounds nice. But could you go more into detail? It's not like socialism or central planning haven't been tried countless times.
    And they failed each and every time. It simply contradicts human nature.

    Maybe humanity will overcome the concept of self-interest someday and achieve a society of universal fraternity, but not in the fresseable future.


    I am afraid that a scenario where Europe will have to defend borders with lethal force against massive waves of illegal economic migration from Africa is much more likely to become a reality.

  • Comment number 96.

    "Niall Ferguson knows about these things, and you have the happy good fortune that he likes the USA more than Europe, and has moved there to work."
    ----------------------
    I thought he moved there because he left his wife and three children last year and moved in with his new mistress. And surely ponzi schemes were an American, not European affliction. Your dislike of Europe is evident, so why don't your follow Mr Ferguson?

  • Comment number 97.

    93. At 19:56pm 5th May 2011, democracythreat,

    I wonder if you heard some news from the UK that maybe gives a clue as to the future regarding bail-outs. Today LloydsTSB Bank has announced a 3 billion pound loss due to the 'new' management team deciding to pay out on miss-sold payment protection insurance policies (no, not CDS) that were seen as a nice little earner by the previous management.

    Now this is the same bank that bailed out Northern Rock at the behest of Gordon Brown since NR is based in Labour party heartlands, LLoyds because they were sold a pup (the figures given them were incorrect it is claimed) then need a bail-out themselves and the UK government now own most of it.

    What is my point you may ask, the new management team have effectively dropped the value of UK PLC's shares in LLoyds by several billion saying it was all the fault of the previous management. The previous management are probably pensioned off with golden handshakes and no culpability for the mess they make by buying the pup called Northern Rock. Plus it makes it unlikely that UK PLC can recoup its bail-out money for some while since the bank has made a loss, plus the exchequer loses the tax revenue it would of earnt on a profit.

    Now does this truly not give one a sense of deja vu when it comes to Greece, Ireland and Portugal's ability to pay their loans off and that just as in the Lloyds case it is the serfs (taxpayers) who have been sold a pup.

  • Comment number 98.

    The assumptions of the neo-liberals are emerging clearly here, that human nature will prevail in the conduct of society, that is just the way it is, that there are winners and losers, and as a Randian corrollary, the capitalist masters of the universe deserve their gargantuan rewards for managing the masses. An acolyte of Ayn Rand, Alan Greenspan, the hierophant of this notion, at least has admitted that he was wrong in some fundamental assumptions about the operation of the free market as the best mechanism for controlling excess. By reducing human history to evolutionary psychology of adaptation and survival, the neo-liberals prevailed over anyone who attempted to live according to proven ethical principles, with integrity and compassion, in a reasonable and equitable way. Socio-pathic personalities, who are self-obsessed, and simply cannot project themselves into the condition of another human being, with capability of feeling the same feeling as the other person, have been elevated through their obsessive utility to a system driven by numbers, and guarded by lawyers. These people are not normal by any standard, yet it is the normal people who are paying endlessly for their parasitic extraction of interest, fees, charges, penalties, consultancy, insurance, brokerage and commissions just to mention a few means of daily extraction, and then when there is a massive collapse, the normal people must pay again, through their governments. Yet despite this crisis, now in Portugal, the neo-liberal assumptions continue unabated, and they offer no contrition, they consider no alternative, when clearly there must be an alternative. They are expecting this cycle to rise again, and that nothing really has happened to the fundamental reality of economic function and order as they have learned it from the LSE, or Chicago, or whatever school of training in the economic arts serving the masters of the universe and the Fed governors. Listening to them renders me hopeless, because they are not capable of reform, or reconstruction, or revision, or certainly not redemption, without any reference to any religious notion. Clearly, the neo-liberal is not interested in knowing, or learning, or understanding any of civilising elements of human culture, whether it is the study of the liberal arts, or profound engagement with any of the faith traditions, or appreciation and practice of the arts, because any of these would moderate the view that we are really only animals acting in our own self-interest, because society does not really exist, and progress in an illusion.

  • Comment number 99.

    Gadfly55

    You write in what I consider veiled smoothtalk , seemingly from another world , completely removed from the real world we are living in .

    Dream on , you and Margaret together . The world we live in , human nature , politics , banking , you name it , are not the stuff that dreams are made of .

    You write of their being the political will to succeed with the Federal European project . They say where there's a will there's away . The EU executive has tremendous determination and seeks every underhand way to succeed ; even ensuring that the citizens of sovereign states have no say , as in the Lisbon treaty . National leaders and politicians have to watch their backs a little . The problem is the growing lack of will among ordinary people .
    Your Europe is about an Idealism , not reality . the Germans and other north european people are not going to work their butts off to keep southern european countries living to the same standard . Your dreams may not include an EUSSR , but that is in practical terms what you seem to be seeking .

    Margaret Howard writes
    " I dread to think what would have happened to countries like Greece, Ireland and Portugal if they had stood alone and not been part of the EU to give a helping hand ".

    The low interest rate of the Euro allowed them to borrow indiscriminately . Had they still their own currencies , their financial situation would have been very different and they might not have run up such huge debts .

    The EU is only looking after its own interests , to prevent a collapse of the Euro , which might lead to a demise of the EU . The EU provides secure and overpaid jobs for I believe 700,000 people , "The Gravy Train"; heaven forbid that it should hit the buffers and they all should be out of a job .


  • Comment number 100.

    Huaimek,
    Of course I am from another world than you, but if we were to talk for several hours, the areas of agreement between us would far exceed the differences. The problem of "reality" as human beings have perceived it for the last 100,000 years is a continuous challenge to every single consciousness seeing the light of day and the darkness of moonless nights. The struggle for each person to arrive at a sense of objective reality in relation to the operation of the society in which they struggle to not only survive, but live with respect from others, and self-respect, has expanded to the global domain, where we are now all connected under a very thin atmosphere. This is unprecedented and perhaps too much for most people to comprehend. Not only do we need to know as much as possible about the past, but the present information is now completely overwhelming, apart from the necessity to have a structure within the mind to arrange this information coherently. We are not information systems, and we rely upon intuition which necessarily is driven by primary emotions. I have many concerns about the way things are going, because of course, the world as we know it, say 100 years ago, before the Great War, was utterly different in its realities. I would recommend to you, Karen Armstrong's book, The Great Transformation. The World in the time of Buddha, Socrates, Confucius and Jeremian. She examines the period from 1600BCE to 300BCE. The 300 years from 600BCE to 300BCE are to most important period in human consciousness because of the insight into the human condition. These insights are still applicable because we are not evolved, or our consciousness has not evolved as individuals, despite mass education and mass information. We have developed systems of management, but these systems operate upon conditions, such as cheap oil and constant supply of electricity to cite minimal structural requirements, apart from assumptions about minimal human needs, including a meaningful life within the system. The real issues of human existence are beyond the mere requirements of survival, and it is this reality that I have studied and tried to embody in the choices I have made in my life. At this point, I can say that everything has gone well, and could list the most important benefits to others of my existence, beginning with my four adult sons, and daughter who are scattered across the globe. What really matters in the long run, during an entire life-time, and through several generations which spans more than a century is the basis for any perspective wor

 

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