The joke that made the rounds in recent days: Cameron makes trip up to Manchester to learn how to exit Europe.

Good for Europe, get rid of that bloody anchor.

Some Europeans are threatening to "throw Britain out".

Good. Let's leave. We've already put far more into the EU than we have ever got out, every year since the day we joined in fact, and we've put up billions to help Ireland, Greece etc after they crashed.

This is the first time I have ever thought Cameron did a good job. The EU have taken Britain for a ride for decades and we've played the good team player and been screwed every time. Finally we have said "No. Screw you."

The EU and the Euro got themselves into this mess. The UK has already spend billions helping bail them out. It is not our fault if the Euro fails because we didn't agree to further integration as a desperate panic measure.

Why should Britain feel obligated to help out?

You didn't make it a legal necessity for EU members to be in the Euro and now you want a legal requirement they help out? shiat like this is the exact same reason Britain didn't join in the first place.

That said, for the countries in the Eurozone you better lube up because France and Germany have been more than generous bailing your dumb asses out and it's their turn to make the rules.

If I were Britain, I'd want to stay as far away from the Euro as possible.

Apparently, this is causing a fuhrer. I did nazi that coming, honestly. The whole world is goering mad.

Lunchlady: You didn't make it a legal necessity for EU members to be in the Euro

The only reason they didn't do that was that the UK wanted an exemption for themselves, so long as the Pound was strong, and the French and Germans realized they needed the UK to present a strong front conta the US.

The Franco-German Bloc is trying to use EU mechanisms and institutions to administer what won't technically be an EU treaty, and evidently intend to ram it through also without much in the way of referenda in the countries that have agreed. Italy and Greece are now administered basically by unelected governments appointed by Brussels. Meanwhile, this new treaty looks to be inadequate to the task of actually solving the bad debt crisis in the EZ.

We'll see if global financial markets are impressed in the coming days. If not, things will continue to deteriorate there. The whole EU could slip into recession or worse very quickly.

Looks like the 2008 financial crisis is far from over. Even China is starting to bog down. This dithering in Europe won't help, to say the least. Can't say as I blame the British. This might really be calculated preemptive damage control on their part. I thank my lucky stars I live in the Western Hemisphere.

t3knomanser: Apparently, this is causing a fuhrer. I did nazi that coming, honestly. The whole world is goering mad.

facepalmlol.jpg

Why is the UK even involved? Or any of the other countries with their own currencies?

Arkanaut: Why is the UK even involved? Or any of the other countries with their own currencies?

See two posts above.

Basically the heavy hitters are trying to us EU bueracracy to solve a problem that is legally seperate from EU political agreements. Probably as a way to keep everyone honest and more trustworthy. This type of shiat is why Britain didn't join the Eurozone in the first place, there weren't structural connections to the greater EU political apparatus but if problems arouse it became quickly apparent that political methods would be used to solve unconnected (at least nominally) financial problems.

Hope that made sense. Short form; Germany and France want the great EU to get together on a problem that doesn't effect every member because only the EU has the teeth to be binding.

Arkanaut: Why is the UK even involved? Or any of the other countries with their own currencies?

because even though they're not in the eurozone, they're still part of the EU

MrEricSir: If I were Britain, I'd want to stay as far away from the Euro as possible.

Yup.

So its the US under the Articles of Confederation but with 27-odd states who have 2000 years of fighting with each other and 100,000 bureaucrats.

Back when the EU formed I gave it 30 years, looks like its on track.

The Bestest / Lunchlady:

I guess what I was thinking was, was there a way that they could have resolved issues with the ECB and the euro zone, thus requiring on the consent of 17 member countries who are directly affected, without involving the other EU members who would only feel the peripheral effects?

...requiring *only* the consent...

Arkanaut: I guess what I was thinking was, was there a way that they could have resolved issues with the ECB and the euro zone, thus requiring on the consent of 17 member countries who are directly affected, without involving the other EU members who would only feel the peripheral effects?

They could, in theory. But nothing in the existing EU treaties allows the steps that really need to be taken. They're trying to slip this in as a new treaty among 26 of the 27 EU members (now that Britain has vetoed their attempt to do it under existing EU law), with no national referenda or plebiscites to validate it. What the EU needs to be is a true federation with a central government, a centralized federal budget, central bank, and treasury. Needless to say they've been incrementally moving that way but the result is a dog's breakfast and a dysfunctional currency union among only 17 of the 27 EU states. Don't think the 10 non-EZ states will only feel "peripheral effects." The EU is a common market and the economies are largely integrated - if the EZ falls apart, every EU member state will fall into recession or depression (some analyses showing drops in GDP across Europe of multiple percentage points), and cascading defaults could gut their economies for years. The effects would be severe and would be felt around the world.

So far, the political response has been behind the curve and inadequate - and the British veto today is historic. It reverses the trend of integration - for the first time a major EU economy has stepped back. It's probably even-odds that the EZ breaks up or shrinks by several countries in the coming year, because they are running out of places to raise money, and they have no real central bank of their own to do quantitative easing. Even the EU itself could conceivably fragment, as today's developments demonstrate. If that happens, hold onto your butt.

The UK learns a lesson taught once before. Those fools on the other side of the channel are idiots and the only people they can really trust are the ones who came from there originally and did a bit of revolution bidness, sry bout that, but still like to drink tea and watch a bit of footie and eat some fish n chips.

/usa

This is why the EU is destined to fail. No Lincoln to get the squeamish member states to fall in line. No coordination, just a donnybrook. Whoever compared it to the U.S. while under the Articles of Confederation had it right.

Sir Humphrey: Minister, Britain has had the same foreign policy objective for at least the last five hundred years: to create a disunited Europe. In that cause we have fought with the Dutch against the Spanish, with the Germans against the French, with the French and Italians against the Germans, and with the French against the Germans and Italians. Divide and rule, you see. Why should we change now, when it's worked so well?

Hacker: That's all ancient history, surely?

Sir Humphrey: Yes, and current policy. We had to break the whole thing [the EEC] up, so we had to get inside. We tried to break it up from the outside, but that wouldn't work. Now that we're inside we can make a complete pig's breakfast of the whole thing: set the Germans against the French, the French against the Italians, the Italians against the Dutch. The Foreign Office is terribly pleased; it's just like old times.

Hacker: But surely we're all committed to the European ideal?

Sir Humphrey: [chuckles] Really, Minister.

Hacker: If not, why are we pushing for an increase in the membership?

Sir Humphrey: Well, for the same reason. It's just like the United Nations, in fact; the more members it has, the more arguments it can stir up, the more futile and impotent it becomes.

Hacker: What appalling cynicism.

Sir Humphrey: Yes... We call it diplomacy, Minister.

poor Britain, if the EU collapses now it will be blamed on them

Screw the EU!!

Canada's got your back Britain

Dwight_Yeast: Lunchlady: You didn't make it a legal necessity for EU members to be in the Euro

The only reason they didn't do that was that the UK wanted an exemption for themselves, so long as the Pound was strong, and the French and Germans realized they needed the UK to present a strong front conta the US.

The City (10% of British GDP) wanted to still be able to screw with other countries.

Thank goodness the Euro is going to collapse soon. It has created a 10 year imbalance on the world financial markets. Thanks to the rising Euro, gas prices went up as the dollar fell along with creating the housing bubble. No more Euro, means lower gas prices for the American consumer.

Meanwhile everyone's currency will go to shiat except for Germany's who had a reserved currency hovering around 15% when it went to the Euro. Now with the Euro, it stands at 32%. Germany's reserved currency won't be at 32% when the Euro dies. France will suffer dearly.

Pumpernickel bread: This is why the EU is destined to fail. No Lincoln to get the squeamish member states to fall in line. No coordination, just a donnybrook. Whoever compared it to the U.S. while under the Articles of Confederation had it right.

I don't know. The Germans might step up and pick up that Lincoln mantel. Another chance to invade, plunder and subjugate their "squeamish member states".

Subtard"This is not a repeat from 1940"

No subby, it's not.

It's a repeat from 1993 actually, as the agreements the union came to today are nothing more than a reversion to the fiscal requirements that were put in place with the Maastricht Treaty...the deal that established the European Union under its current name in the first place.

It too called for countries to be limited by law to budget deficits of no more than 3% of GDP and put a debt ceiling of 60% of annual economic output. The original treaty also provided for penalties to countries that violated these precepts...much as today's agreement promises to do.

Those provisions for penalties didn't last long back then of course as France and Germany themselves were in violation within five years and the fines for non compliance were quietly discarded.

They kept the 3%-60% regulations but pulled all the teeth and we all know how that turned out.

So here we are again. Same regulations but with the sanctions put back in.

Well they're not actually in place yet of course. They'll be put in place at some unknown time in the future after more months of political maneuvering and arm twisting as the individual countries try to get this proposal past their respective parliaments and citizenry.

Meanwhile, Greece gets 8 Billion with a B euros this month and will need another 80 B tranche in the spring all in the face of a withering recession.

Italy is finding out what happened to Spain when a sudden slowdown in growth makes a previously sustainable debt load rapidly become unsustainable.

Ireland and Portugal are thankful to be out of the news lately as they eagerly await to find out whether they're going to get their 100's of Billions in bailout from the European Financial Stability Facility, the International Monetary Fund or the European Stability Mechanism.

The French and German central banks themselves are going to actually kick in (for the first time in this whole mess) some bailout goodness too, contributing the majority of about 150 Billion euros that is going to be channeled through the IMF to bolster the rescue fund. This despite the fact that the capitalization of these banks is already so suspect that the ratings companies were previously contemplating downgrades.

There's also provision to enact a permanent fund...the European Stability Mechanism that will have a 500 B euro total by June 2012...presuming all the technocrats can scurry back home and convince their governments and citizens to pass the thing. No mention so far of exactly where they're gonna find a cool half trillion euros between now and then either. From all those newly downgraded central and commercial banks that are already begging for capital from China and BRIC? hehe...good one.

Maybe from the already existing European Financial Stability Facility although there seems to be some confusion whether it will end in June when the ESM begins or whether they'll run in tandem. That fund had about 440 B euros at one point (but they've been dipping into it to prop up Greece, Ireland and Portugal for the last six months) and their hopes to leverage it up to a Trillion euros has been dashed by the recent flight of capital from the continent and the looming downgrade for the fund itself by the rating companies.

Maybe they'll get the funds from the penalties! That's it! A stroke of genius!

Think of how large the fines will be the instant the 60% of debt to GDP legislation is enacted. The Italian sanctions alone will be staggering. Italy's debt to GDP ratio is north of 120%! Presumably fines have to be equal to the offense...you know...or else there's no real deterrent. Italy's GDP is just upwards of two T euros, divided by 120-60=60% of 2.1 T euros is like...OVER A TRILLION EUROS MAN!

Italy can bail out Europe! Brilliant!!

Facepalm. In all seriousness now...really? The debt to GDP ratio of the eurozone as a whole is 85%. France and Germany themselves are up in that neighborhood too and they intend to legislate the zone as a whole down to 60%? Who do these people think they're kidding? Oh wait...the equity markets went up on this "good news" today...I forgot. They're kiddin' the kidders.

So at the end of the day...even optimistically...whatta we got?

The central banks of the world managed to stem the bleeding last week but Europe is still in the midst of a bank run, a big one. There's absolutely no interest in eurozone debt by the worlds hedge funds, money market funds, pension funds, commercial banks or individual investors.

There was lots of talk and bluster and promises today in Brussels but as usual, only nebulous promises of future rules that we know Europe already had in place once and discarded as unworkable and the extent of the unity is far from clear.

The rumblings of recession and downgrade were already stalking Europe and now inflation in China and BRIC has slowed alarmingly catching some financial regulators on the wrong foot. China loosened fiscal policy somewhat but they've got problems too. A shame as there is some nascent rumblings in America's economy, although unemployment and house prices remain at historically terrible levels.

Best case scenario Europe can scrape up half a trillion in the new fund, they might have 2 or 300 Billion left in the old fund, the IMF might match the 150 Billion from the central banks and who knows...Mr Bernanke might even kick in a couple hundred billion. 1.3 Trillion euros! Let's even say they manage to leverage it up a little...surely some fools will wanna get in on that sweet high interest, moral hazard downgraded toxic euro debt...and we'll call it a cool 1.5 Trillion euros.

According to Bloomberg, Euro zone governments have to repay more than 1.2 trillion euros of long- and short-term debt in 2012, with about 519 billion euros, or $695 billion, of Italian, French and German debt maturing in the first half alone.

Oops. The fantasy1.5 Trillion euro fund that is mostly smoke and mirrors at the moment is already pretty much wiped out.

This is just rollover debt. This does not include any new debt...you know...debt acquired paying the newly legislated penalties to the European Union for being in debt and stuff, not to mention the the reduction in revenues due to that pesky little continent wide depression next year.

All this in the face of austerity being hardwired right into the framework of the Union.

This is clearly not sustainable. Even if the Europeans do manage to raise a trillion or two in this, so far fictional, bailout fund it clearly won't stem the tide.

Wow. This post is getting bourboner and bourboner. Sorry about that but I got my ass kicked in the VIX today and I'm bitter and in need of a rant. Guy could go broke waiting for the market to agree with him dammit.

So faithful fark reader, if you're still with me I'll try and sum up.

We are apparently in the end game of debt.

Personally I'd assumed they would print this away. That the deflationary abyss staring politicians in the face would prompt them to kick the can down the road. They've always, always, always done it in the past in every currency and every culture and every era.

It's apparently taken a female Iron Chancellor and a Federal Reserve Chairman cowed by a tea party to put a stop to the money printing, for better or for worse.

I assume when things get tough for American equity markets Mr. Bernanke will revive from his vapors and get on with QE3 but for the moment...it looks to me like they are going to let this vast deleveraging happen...Ms. Merkel and the ECB seem adamant and the Federal Reserve are keeping their powder dry.

I let my VIX roll of the dice ride.

/might have to get out of paper precious metals tho
//sobs drunkenly

'Twas a cold day in that meeting room...

Slaxl: ontariolightning: poor Britain, if the EU collapses now it will be blamed on them

Screw the EU!!

Canada's got your back Britain

It's already being blamed on us, when the EU fragments every European will have been told it was Britain's fault. They're using Britain stepping back as a great way to cover the facts, and the reasons why Britain stepped back. Blame Britain and get everyone worked up with anti-British sentiment, and thus completely hide the fact that the proposed agreement would have been completely useless in dealing with the problems, and only been a huge step towards greater integration to give more power to the EU bodies.

Also I think France wants the UK out no matter what. Sarkozy is a prick. The UK isn't even in the Eurozone, yet was willing to contribute £200b to support it, all they wanted was a few more measures to be sure the EU wasn't going to continue trying to cripple the LSE to benefit other European trading centres. Sarkozy apparently was so angry he had to be physically restrained. That's not the actions of a reasonable man.

When it all kicks off can I move to Canada then? Where's nicest?

If it kicks off there's no where you can go that won't be effected. The best you can hope for is that Britain's exports don't dry up with no European buyers and Britain then swiftly following the rest down the rabbit hole. You may not have the same currency but you do have the same markets and people aren't jumping over themselves to hold any European currency in reserve.

Also, thanks for making it not the US's fault for once, this is nice.

Lunchlady: Arkanaut: Why is the UK even involved? Or any of the other countries with their own currencies?

See two posts above.

Basically the heavy hitters are trying to us EU bueracracy to solve a problem that is legally seperate from EU political agreements. Probably as a way to keep everyone honest and more trustworthy. This type of shiat is why Britain didn't join the Eurozone in the first place, there weren't structural connections to the greater EU political apparatus but if problems arouse it became quickly apparent that political methods would be used to solve unconnected (at least nominally) financial problems.

Hope that made sense. Short form; Germany and France want the great EU to get together on a problem that doesn't effect every member because only the EU has the teeth to be binding.

They're not Schengen, they're not Eurozone, hell they're not even on the damned metric system. What have they had to give up that their people are so pissed off about? I think the Union would be much better off saying you can be a part of the common market but you don't get to make the rules, that seems to be all they want is access to sell their shiat. I hate seeing the UK get exemptions for everything, if they don't want to be a part of it...fine. But then they put themselves in a Swiss situation where they get no say in making the rules, they just have to adhere to whatever it takes to be part of the common market.

Ironically, their intransigence may make them way more subservient to Brussels, since losing the common market would basically mean an end to relevance of the UK.

Lupine Chemist: Lunchlady: Arkanaut: Why is the UK even involved? Or any of the other countries with their own currencies?

See two posts above.

Basically the heavy hitters are trying to us EU bueracracy to solve a problem that is legally seperate from EU political agreements. Probably as a way to keep everyone honest and more trustworthy. This type of shiat is why Britain didn't join the Eurozone in the first place, there weren't structural connections to the greater EU political apparatus but if problems arouse it became quickly apparent that political methods would be used to solve unconnected (at least nominally) financial problems.

Hope that made sense. Short form; Germany and France want the great EU to get together on a problem that doesn't effect every member because only the EU has the teeth to be binding.

They're not Schengen, they're not Eurozone, hell they're not even on the damned metric system. What have they had to give up that their people are so pissed off about? I think the Union would be much better off saying you can be a part of the common market but you don't get to make the rules, that seems to be all they want is access to sell their shiat. I hate seeing the UK get exemptions for everything, if they don't want to be a part of it...fine. But then they put themselves in a Swiss situation where they get no say in making the rules, they just have to adhere to whatever it takes to be part of the common market.

Ironically, their intransigence may make them way more subservient to Brussels, since losing the common market would basically mean an end to relevance of the UK.

The UK has "given up" billions of pounds every year since joining, for one.
And had to follow EU regulations like legally not being allowed to sell bananas in pounds, to take one of the most petty examples. When the UK had a BSE outbreak the EU banned the UK from exporting beef not just to the EU but anywhere in the world. The UK was banned from exporting by the EU and the UK had to obey the EU.

There is constant talk, and gradual movement, towards having one EU foreign minister, for example, meaning the UK would no longer be represented in international discussions by a UK representative but by a EU representative. A common EU armed forces command is mooted, as is removing the British permanent seat on the UN security council.

So yes, the British have given up a lot. Money and independence.

We, the people, agreed to a free trade area. Years later we found ourselves having only "influence" over laws and policy in our own country. We, the people, never agreed to that.

As an analogy, the US is in NAFTA. How would you feel if NAFTA suddenly started having a President, a national anthem, a flag, it's own (huge) civil service and started telling the US what laws it can and cannot follow and then started talking about putting the US military under NAFTA control and having to follow the orders of the majority of US, Canadian and Mexican wishes? Telling the US it can only have "influence" over what decisions it made and imposed onto the US? How would you feel about a NAFTA Official representing the US in negotiations around the world, and the US having to accept that and not be able to have their own representative? And having to follow the NAFTA decisions no matter if they were in the US interest or not?
How do you think Americans would feel about that? On top of having to give NAFTA billions of dollars a year more than it got back?

Become just a member of the free trade area? Yes please! That is what we agreed to!

Plus of course, the EU is now talking about being able to set tax rates in all member countries and having all countries submit their budgets for EU "approval".

How do you think Americans would think if NAFTA started demanding to set US tax rates and having the right to "approve" the US budget?

GaryPDX: but some countries including Britain refused to back a broader treaty change.

Good for Britain. Does anyone know the whole list of who else told Frau Fuhrer to bugger off? I think Hungary is one of them.

The socialist in Europe and the Total Fark left used to mock the UK for not getting fully in bed with the EU and the Euro.

I know I'm late to the party, but here I was aiming for some Mark Styen-level snark.

relcec: they can roll it over, at higher rates.

Oh silly me. Everything is alright then!

No dumbass, they can't. This is the problem. Italy is rollin' it over like there's no tomorrow and the rates were heading north of 7%...rocketing towards Greek levels...and it was becoming obviously unsustainable. Hence the panic.

Jeeebus...you had that whole drunken rant to pick from and that's the part you take exception to?

Doh

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