Barroso Speaks

Jose Barroso (President of The European Commission) has addressed the European Semester (no, I had never heard of it either), and stated:

"I insist we have to be clear about the goal, the goal is growth."

Would he care to explain to the people of Greece how their country will grow over the next few years, on the basis of the austerity programme that has been forced down their throats by the Troika? 

He went on to say:

"national budgetary decisions are the responsibility of national parliaments and will remain so.."

Not in Greece they're not!

"..growth-boosting reforms are still lagging behind. I mean this in areas such as tax reform, pension reform, labour market reform and opening up the services and retail sectors. 

Of course the picture is mixed across the Union, but these are the areas the Commission and Council will focus on in the Country-Specific Recommendations. 
 

I know these reforms can be difficult and sensitive."

Quite!

By the way, the title of his speech was "Unity in difference, strength in convergence"; clearly derived from Orwell's "1984" "Freedom is Slavery, War is Peace" etc!

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The Abyss

Starting the week as it will most surely go on, the OECD has given an urgent warning that Europe, and by definition the global economy, is standing on the edge of the abyss.

The OECD stated that the failure of EU leaders to stem the crisis could "massively escalate economic disruption" and end in "highly devastating outcomes".

"The euro area crisis represents the key risk to the world economy at present."

Needless to say, the Eurozone seems determined to dig its (and the global economy's) own grave, and continues to sow the seeds of confusion and despair.

Die Welt reports that Germany is considering issuing joint 'elite bonds' with five fellow AAA nations. That of course means the creation of a two speed Eurozone. Needless to say the German government has issued a hasty denial of the plan.

Which, given that France may well lose its AAA rating, is doubtless welcome news for the French (assuming that is, the Germans are being truthful in their denial).

Meanwhile in Washington, Barack Obama will today meet European Council president Herman Van Rompuy and European Commission president José Manuel Barroso at the annual EU-US summit.

Good luck with that then!

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Jose Manuel Barroso - Chief Knobhead!

Jose Manuel Barroso, President of The European Commission, has gone on holiday!

Knobhead!

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It's The Politicians Stupid!

As markets throughout the world plunge, on fears of another financial crisis, the blame for this can be laid full square at the feet of the politicians.

Those in the US who used the stage of Capitol Hill for their self serving antics over the debt ceiling and the "leaders" of Europe, who have behaved and bickered with crass stupidity, are equally to blame.

José Manuel Barroso, the inept President of the European Commission, publicly warned that Eurozone countries are failing to stop the “contagion” of the debt crisis. All very well, maybe. However, by publicly stating that, he needless to say spooked the markets.

To add to the feeling of panic, Italy publicly stated that China has told it that if the European Central Bank will not buy Italian debt, why should China?

I have to ask, by making this public, what exactly were the Italians thinking?

1 It spooks the market even more

2 It shows that they themselves are desperate, as clearly they are trying to offload their debt to all and sundry.

Add into the melting pot the fact the the "leaders" of Europe recently claimed, with self inflated pride, that they had "solved" the Eurozone crisis and that they had earned their holidays and you have a recipe for disaster.

Take all of the above together, and it is self evident that the blame for the current crisis can be attributed to the politicians. Politicians who clearly do not understand that markets are driven by primal instincts (fear, greed, euphoria and a pack mentality).

Until the politicians actually "get it", the crisis will continue and worsen.

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The EU "Does a Canute"

I am more than amused to see that the EU has taken mighty umbrage at the downgrades by the ratings agencies of Greece and Portugal.

Indeed the EU is so annoyed with the ratings agencies that Jose Manuel Barroso, the European Commission president, all but declared that it was an Anglo Saxon conspiracy by all ratings agencies.

All very nice for the soundbites, maybe. However, he conveniently forgot that Fitch is in fact French.

The EU and its whinging ministers have as much chance of turning the ebbs and flows of the markets as Canute did the sea. Unless the EU understands that point, the EU experiment is doomed to fail.

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Ireland Wobbles

RBS, the people's bank, fell in value on the FTSE by approximately 5% in early trading as a result of fears over its exposure to Ireland.

Ulster Bank, part of RBS, made a loss of £176M in Q3 and there are worries that Ireland may be forced to ask for a "Greek" bailout from the European Union/IMF.

Markets have a "herd mentality" and react to certain situations with fear and greed, depending on the nature of the situation. In this particular case market sentiment towards Ireland has not been helped by European commission president, Jose Manuel Barroso, who said:

"What is important to know is that we have all the necessary instruments in place now to support Ireland if necessary."

Doubtless well intentioned, but it will exacerbate fears (found or unfounded) over Ireland's economy. The IMF was forced to deny yesterday that Ireland has asked for a bailout.

To add to the EU's woes, Greek public finances showed a deficit of Euro 17.4BN in October (a fall of 30% compared to the same period in 2009). However, the target reduction was 32%.

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