Chancellor Osborne and his worthless piece of paper

After Labour had lost the last election but before the coalition took office the then Chancellor Alistair Darling signed the UK up to participation in the EU bail-out mechanism.  It is costing us six billion pounds just for the Irish bailout.  We all know that Portugal, Spain even Belgium and Italy are all possible candidates for bailouts. Asked whether the UK will have to participate in these future bailouts George Osborne is short of straight answers, he blames Alistair Darling for our current involvement in bailing out euro countries and emphasizes that he has blocked our permanent participation in this bail-out mechanism from 2013. He is unable or unwilling to say whether the UK will be helping in future bailouts before the 2013 deadline.

Treasury officials insisted that the UK had been tied into the fund by the previous Chancellor Alistair Darling in the final hours of the last Labour Government. Treasury sources also confirmed that the deal agreed by George Osborne in Brussels on Sunday night will mean that Britain would be freed from any obligation to financial rescue measures for euro countries after 2013.

We should be in no doubt the 2013 deadline isn’t worth the paper it is written on. The question is whether we will be bailing out Portugal, Spain, Belgium and Italy in 2010 or 2011. To be quite candid I will be surprised if the euro still exists in it's current form in 2012 never mind 2013.

I sometimes think that signing worthless pieces of paper must be a trait for British politicians.
Best Wishes
Will

Dream on... Mary Honeyball takes it quite literally



Mary Honeyball


Labour MEP and author of one of the UK's top twenty left wing political blogs (currently rated at 14th) Mary Honeyball writes that the economic crisis is beginning to make her feel that the UK should be in the eurozone.  Unbelievable and without a trace of irony these are her exact words.

"The crisis of the euro has shown in very graphic terms that the UK is in Europe and cannot ignore what happens in other EU member states when it comes to their economies. Britain has ended up paying out a very considerable sum of money. I doubt if it would have been any more if Britain had been a fully signed up member of the euro zone.

The last Labour government, it is true, refused to take Britain into the Euro. I have always been in favour of joining the single currency and, I must say, am once again beginning to feel vindicated that my point of view is the best one for our country."

I know its a terrible cliché but you just couldn't make it up.
Best Wishes
Will

Dream on; it is too late to wake up now, the nightmare is about to start.

Eire a country with a population of just over four million is about to receive courtesy of the EU and the IMF an eighty billion euro bailout. That works out at €20,000 for every man, woman and child in the Republic of Ireland. How can they possibly pay it back? The UK’s contribution to the bailout is eight billion, that will mean everyone and I mean everyone living in Ireland will owe the UK taxpayers €2,000.

The UK is not doing this because we love the Irish, but because UK banks and in particular RBS and Lloyd's - which are largely owned by the UK taxpayers - are owed €140 billion by Irish banks. Unbelievable but true, every man woman and child in Ireland owes UK banks about €35,000 each! Just imagine what that figure is if instead of considering the whole population we considered only those who are economically productive: no children, no students, no retired people, no unemployed and no one on sickness or invalidity benefit; it is a depressing thought. What happens if we consider only those who work in the wealth generation part of the economy, the private sector and remove public servants? The answer is that we would probably have a nervous breakdown; as we are talking about a debt per wealth generating individual of €80-100,000.

How stupid were the UK government to take on that liability by bailing out the UK banks? How stupid are they intending to be, by throwing another eight billion euro at the problem? The answer I think is incredibly stupid. Simply put, the Irish cannot repay that size of loan.  If that wasn't bad enough UK banks have a similar level of exposure to Spanish banks.

Thanks to our UK banks and their bailout by the UK taxpayer, we have been sucked into propping up the euro currency. Today there is real concern that the euro currency will fail, it is not idle speculation; it is a very real possibility. I believe it is a real probability. What is certain is that there is more, much more, pain and hardship on the way.

I for one simply cannot understand how it is that two years after the banking crisis first started there is still no clear division between high street retail banking and the casino world of investment banking.

Best Wishes
Will