Germany – the one remaining eurozone country in the black – faced bad news as exports fell in July for the first time in three months. This confirmed the growing evidence that Europe’s largest economy may lose momentum as the global economy cools. Professor Hankel – one of the five prominent German scholars challenging the legality of the eurobailouts – said yesterday that the chances were very good for the German Constitutional Court to rule the rescues illegal under German constitutional law. This would of course cause an EU constitutional crisis in turn.
Jose Manuel Barroso the revolving EU President (not to be confused with Van Rompuy the Belgian whirlwind) gave a State of the Union address to the Brussels Parliament. It was met in a silence which occasionally spilled over into polite applause. Jose told those present that rock-solid EU unanimity had enabled the region to emerge from a crisis which is only just getting into its stride. But it was not time for the hugely successful EU to rest on its laurels: the Portuguese leader urged widespread economic and financial reforms, declaring “We must use the next 12 months to accelerate our reform agenda. Now is the time to modernise our social market economy so that it can compete globally.”
As yet, there is not a scintilla of evidence that the EU could compete with Zimbabwe, let alone the global market. In fact we still await evidence that the ClubMed countries can repay their debts….or that the Franco-German banks who provided the lottery money can repay their gambling debts.
In that sense, while things look dire in Spain, they’re not so hot in Portugal either, where yesteday’s bond sale raised the necessary refinancing cash – but at a frightening price that suggests they too will never be able to repay it. Sovereign debt lenders Pimco meanwhile confirmed its view that Greece will inevitably default; and the Irish Government announced its decision to close down the Bad Bank part of Anglo-Irish. As this represents about 99.9% of that bank, this is will require a massive write-off by the Dublin Government….and thus make them too virtual pariahs in the lending markets of the world.
But France is determined not to go down the same chemin a Rouen: the President having already declared that the country is ready to pay any price and face any pain, the Government in Paris is pressing ahead with its root-and-branch changes to the dilatory activity otherwise known as the national economy. President Nicolas Sarkozy outlined concessions worth €1bn a year to his flagship pension reform, in an effort to try and avert an escalation of trade union-led demonstrations against his plans to raise the retirement age from 60 to 62.
This represented Sarko’s unyielding response to yesterday’s mass union demos and strikes involving around two million French workers. The President averred today that the Government was prepared to broaden the categories of employees who would still be able to retire at 60, including those who started work before the age of 18 and those who suffered physical hardship during their working lives.
Although this is a gigantic and expensive concession, Socialist party spokesman Benoit Hamon dismissed it as “meagre improvements”, and the massive UNSA union said it was “clearly insufficient”. Well, obviously zut alors.
Those already following the Slog’s account of unchanging French life will be bemused (and amused) to learn that the Elysee government has still not made a single public sector worker involuntarily redundant, and that public projects continue apace. A deputy mayor who presides over a commune near to us here in South West France cheerfully provided confirmation of the general opinion in Slogger’s Roost – that the French are making hay while the sun shines – by saying that “The bastards in Paris will take it all off us unless we show a need to invest”, adding with an air of acute personal injury, “and the Brussels crooks will then try to bleed France dry. There is no justice”.
In truth my friends, there is no living with this madness. We are so obviously with the wrong trading partners that, with every day that passes, I wonder why the Tory Party is not winding the country up to an EU exit….with all the ructions that would imply.
But then I remember that this would offend their Liberal Democrat allies….and everything falls into place.
The Slog 