CRASH2: As the pace accelerates, the beaches fill up with those supposed to be on watch….

EU leaders…looking in the wrong direction – or just looking away?

….but the game plan of Merkel, Sarkozy and Trichet was never easier to divine

I once briefly met AJP Taylor, who remarked that the First World War wouldn’t have happened had it not been late July, when most of the important players were on holiday. He was known to be a bit of a card Taylor, and like most people who crossed his path, I wasn’t sure whether to take him seriously or not. But he did say it with a straight face, and he did have a point. It may well be that Crash 2 will wind up being both more spectacular – and earlier than advertised – because in he EU, it’s August and everyone is on holiday.

More exactly, none of the pampered wasters supposed to be sorting out the coming meltdown have seen fit to cancel their holidays. Berlusconi is due to address the nation on telly tomorrow, but immediately afterwards Italian government and political players will be heading off for their annual five-week break.

Osborne’s buggered off somewhere replete with Vodka Palaces. Parliament has gone into recess. And Cameron is on a seminar about how to tip Italians – aka, his holiday in Chiantishire.

Hackgate players like Louise Mensch (just back from Florida and frightened of missing any arrests, no doubt) and Tom Watson can be seen every day boning up on the life and times of Piers Morgan. But everyone else ain’t workin’, ’cause they gone fishin’, instead of just a-wishin’.

So we should probably take Spanish Premier Jose Luis Zapatero’s decision to postpone his holiday very seriously indeed. Because in the land of manana, holiday cancellation is an event so rare, it can only mean a family death – or national disaster.

Spain and Italy (I’ve said it before and I’ll say it again) are the EU’s 4th and 5th biggest economies. If they tumble, as they must, then start thinking beyond ‘end of Eurozone’. Start thinking, maybe, collapse of whole European monetary system, riots in streets, 24/7 armed guards for Van Rompuy and Merkel, Trichet dragged before War Crimes commission in the Hague and similar delights.

All the signs are there: the Swiss Franc is going through the roof, the major bourses are on the slide (albeit on smaller volumes in some cases) and gold is forecast to hit $2000 by the year end. More specifically, Italian and Spanish deposits are being withdrawn at a frightening rate of acceleration.

So: where is our revered European Central Bank in the midst of all this? Is its Great Steward Jean-Claude Trichet also staying on the beach of some ritzy private island somewhere? Well no, he isn’t actually. He’s at his desk, is old Tricky. M.Trichet has no need of holidays, as he is asleep for much of the time anyway. This is what he told French mag Le Point at the weekend:

“Let me say again, the euro, as a currency, is sound and credible, and is not affected by the pressures on sovereign risks.”

That’s bollocks, and JCT knows it. But as if to make the point, his ECB is doing nothing – and I mean nothing – to support Italy’s money-supply problems…described by the Telegraph’s Ambrose Evans-Pritchard this morning as ‘catastrophic’.


For all that they may seem at odds, the top bods in the EU – Merkel, Sarkozy and Trichet – have a plan so simple, even David Cameron could see it coming….if he was paying attention in London – as oppoed to not tipping waitresses in Tuscany.

The game-plan is what it has been for months: the survival of a German-based central bank, a tighter EU run centrally from Berlin, and a bailout for French banks. The Irish, Portuguese and Greeks can go hang in the end…..and Britain? Well, serves you right for not coming into the euro, and generally being bad Europeans.

The archived links below show how The Slog saw this coming. Camerlot seems to have great difficulty seeing anything coming: perhaps because some bigger boys kicked sand in their faces, and ran away.

Related: Merkel’s bluff brings the Sarajevo moment closer, The cynical spending plans of the French,