But they’re all away with the fairies in Brussels

Enda Kenny’s new Administration in Ireland has wasted little time in telling the EU that it can’t afford the repayment interest rates to which the previous lot agreed. This reality appears thus far to have bounced back off the silo-walls of Brussels and Frankfurt: but right or wrong, the eurocrats cannot as easily ignore the Men from Moody’s. And the Men from Moody’s, they say ‘no’.

Moody’s cut Spain’s sovereign debt rating one notch yesterday, warning of further cuts due to fears that bank restructuring may well cost more than twice what the government expects: the ratings agency said the overall cost of recapitalizing struggling banks was likely to be nearer to 40 billion euros. The intervention of other realities might, Moody’s added, cause recapitalisation needs to rise to around 110 to 120 billion euros.

That’s Moody-speak for “this is what’s gonna happen”. And as if anyone might still be in doubt, the agency added for good measure that nine out of seventeen of the country’s regional areas have already breached their expenditure allowances.

Investors could still be reassured by strong indications from those alleged to be grown up in Brussels. But with a pre-Summit meeting coming up, even at this stage things are still looking pretty childish.

There isn’t even agreement on boosting the bailout fund’s effective lending capacity to its originally intended €440 billion, and the scheduled permanent rescue fund of around €500 billion isn’t set to begin until 2013. By then, only an unpleasant, melted residue might remain of what was once the EU. Those who think that fanciful should look towards the previous Moody’s downgrade of  Portugal.

Portugal raised €1 billion on Wednesday, but the country had to pay nearly 50% more in interest. The Portuguese are running seriously low on cash, and they must repay €3.3 billion in maturing Treasury bills next week – as well as a €4.3 billion long-term bond in mid-April.

Frankly, there is no way they can manage both. Lisbon might fall at the first fence, never mind the second. And all that assumes there will be no rise in rates for borrowing, let alone bond yields.

Meanwhile, in the cradle of mega-debt Greece, 10-year bond yields and credit-default swaps surged to record levels as borrowing costs increased. Every credit manager and currency dealer I know now believes Greece will default this year.

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The EU Parliament today discussed how economic growth could resolve the fiscal crisis in the Union. This was the output:

‘With the Europe 2020 Strategy and the Communication on an Integrated EU Industrial Policy, the Commission is finally acknowledging the importance of a thriving industrial, and in particular manufacturing, base for sustainable growth and employment in Europe and committing itself to an integrated industrial policy based on the principle of a social market economy.

The proposal for Integrated Industrial policy proposed by the Commission has its focus on restoring EU industry’s competitiveness, and stresses in this respect that, in the face of the global challenges, it is essential that energy and resources efficiency are at the basis of the European industrial renewal if European industry intends to maintain its competitiveness in the future.

But the various measures put forward by the Commission need to remain affordable for consumers, especially at a time when the European economy, particularly in the new Member States, is still recovering from its worst crisis for decades. Our approach highlights the fact that sustainable development, as defined by the Johannesburg Conference in 2002, is to be based on three pillars: economic, social and environmental, and that, in order to have the most competitive economy, industrial policy needs to be sustained by finding a balanced mix of these factors.

We call on the Commission and on the Member States to develop an ambitious, eco-efficient and green EU industrial Strategy in order to recreate manufacturing capacity across the EU territory and to generate highly qualified and well paid jobs within the EU.’

There’s actually another seven pages of this, but I couldn’t face any more fine words.

It represents the marriage between meaningless bureaucratic drivel and management consultancy jargon. Billions of euros are disappearing in the cause of electing, feeding and watering the folks who draft this bollocks, as well as making provision for their pensions.

As a student in the 1960s, I once spent a fortnight studying Russian reports on the progress of Five Year Plans. Compared to the above, those reports were succinct, lucid and really quite believable.

It’s frightening to think that each year, £118 billion of our money (a whole NHS, complete with medication) goes to funding the antics of these people. And yet, the BBC thinks that those of us who want to secede from the EU are mentally disturbed.

One wonders what that makes Robert Peston.