SOVEREIGN DEBT: Darling Smoke and EU mirrors

The UK’s ‘sensible’ Budget is irresponsible, and the Greece ‘accord’ is a fudge.

Labour MPs are already talking about Alistair Darling as ‘an electoral asset’. They don’t really need one given that the Tory leadership is doing most of the hard work for them, but either way there’s a vast difference between being an electoral asset and a good Chancellor, as Tony Barber proved all those years ago. The difference is that in 1971, Britain had a fairly discerning electorate; now most voters seem to be either too frightened to switch horses – or too far into denial to take the fingers from the ears.

The FT comes into it’s own when columnists like Martin Wolf and Gillian Tett start spraying reality around. And to add fuel to that informed fusillade of criticism, the Institute of Fiscal Studies produced the kind of scarey post-2013 figures for deficit cutting that the Tory Party doesn’t want to talk about. However, Osborne is still ploughing his own furrow: his disgust at the Government’s blatantly slippery unwillingness to show outlook figures for that period gives the lie to the ‘sensible’ tag being widely offered as a descriptor for the Budget. There’s a lot of blind faith in the air at the moment.

Pretty much the same is true of those at the top of the EU political elite. Only a plunging Euro has brought any kind of agreement about Greek lending, but the flimsy 3-legged, 5-humped hairless Camel that emerged from yesterday’s summit is a bit of a joke. The IMF and the Eurozone will combine to make everything better again, averred Sarkozy. Cue lots of headlines with pictures of Nico and Geli romping together through the daffodils.

Within three hours, Merkel had stressed that Germany would have a veto about anything and everything, and Eurozone money would only be used as a last resort. At roughly the same time, first the German central bank said that the overwhelming amount of money at risk ‘must come from the IMF’. Shortly afterwards the European Central Bank said that IMF intervention on any scale would be ‘a very, very bad thing’. I imagine things were similar shortly after the 1938 Munich ‘agreement’.

As Churchill would’ve said, “It is the end of the beginning”.