OK, insert standard comment about more bad news from Europe here. Although this one’s more of the Ed Wood, so-bad-it’s-funny variety.
One of the centrepieces of the December 9 Brussels summit — the one where David Cameron picked up his toys and went home, only for the rest of the kids to politely ignore him — was European leaders’ announcement that they were topping up the bailout funds via the IMF to the tune of €200 billion. Moreover, other countries were invited to chip in as well.
As the fabled “bazooka” — a fund big enough to assure markets that even if everything goes wrong, there’s enough money to stabilise what needs stabilising — the European Financial Stability Facility, and its replacement (after a transitional period), the European Stability Mechanism, hasn’t exactly impressed markets. Europe needs a trillion-plus weapon. So bumping the €500 billion EFSF/ESM up by another €200 billion was inadequate in the first place, in the absence of someone else — the Chinese, most particularly — opening their chequebooks in a big way.
Problem is, overnight European finance ministers met and knocked a quarter off the €200 billion anyway.
The main problem was that the €200 billion was only ever €150 billion from the eurozone plus a hope that non-eurozone countries and most particularly the British would chip in the other €50 billion.
No can do, the British confirmed overnight. They’d already flagged a reluctance to give more of their increased IMF allocation specifically for bailing out the eurozone. The Cameron government can go up to £40 billion in IMF contributions without having to go back to parliament for further approval, and flagged at the recent G20 its willingness to contribute more to the IMF (unlike Tony Abbott and Joe Hockey here). But at last night’s meeting, UK Chancellor George Osborne told his European colleagues they wouldn’t be chipping in any more directly for the eurozone bailout, leaving ministers to produce a statement with the downward-revised figure tucked away in the third paragraph.
“The United Kingdom has indicated that it will define its contribution early in the new year in the framework of the G20,” the statement said, by way of explanation.
On the plus side, Sweden, Denmark, Poland and the Czech Republic all said they’d chip in. But it’s not enough.
Other countries’ hands have stayed in their pockets, too. The Russians confirmed they’d chip in €10 billion. But the Chinese have yet to express interest in helping out.
Like previous summits, the Brussels outcome is unravelling as the weeks pass and it becomes clear the communique was cooked up from equal parts hope, good intentions and expectations someone else will help sort out Europe’s mess.
OK, insert standard comment about more bad news from Europe here.
Excellent, well done, another invariably catchy gloom and doom OZ MSM headline.
Everyone knows bad news sells. Alright, I am done!
Just need S.B to blame Labor for it.
Umm. Lets thrash and pullulate on the carpet while the monopoly set explodes and the worthless paper and baubles set down daintily upon a shivering arses.
As I said at a dear friend’s blog the other day, in 2012 the falcon while not hear anything but in three or four years the next boom will be on and it will makes the ones that went before seem the very souls of probity.
And since It’s christmas may i say somewhat tangentially that I repent of the horrible things I said ’bout Uncle Rupert and the veteran journalist whose name escapes me for the moment.
Merry Christmas to GOCMSYS! I sometimes go off like that, the raddled tic on the mouse and my chubby fingers plunging into–admittedly brilliant–depths of my keyboard.
Ahh, that feels better.
One more:
Europe, which has sighted the iceberg, struck it, and is going down. Europe, where long before the modern era, it all began, culturally and economically, and hopefully where it will not all end.
Although I’m not old enough to remember the credit squeeze of the early 1960s, I know it knocked my parents over, and my siblings and I were thrown into a spiral of chaos from which we did not exit unscathed, many decades later: And this is an example of the human cost of recessions and economic slumps: Marriage breakups, traumatized children, despair and suicide and so on. We are, it is true, so lucky to live in Australia–so far, touch wood…
Bazooka = fully operational printing press. It’s not fabled, it exists, just ask Ben Bernanke or the Bank of England. But the Germans don’t want to get it out just yet.