Spain’s centre-right government has fessed up (belatedly) to this year’s budget deficit being likely to reach 8% of gdp. The overshoot is €20bn above the target agreed with Brussels, but Deputy PM Soraya Sáenz de Santamaría declared that the government would “face the problem head-on” by raising 9bn euros in taxes, and a further 6bn euros in savings. She didn’t explain how Madrid would fund the 5bn euros gap that would still be left.
Meanwhile, as the year ends and financial sites try to put 2011 into perspective, the euro’s architects remain steadfast in their desire to blame everyone and everything but the fundamental idea itself.
Former French President Valery Giscard d’Estaing said in an interview this week that a key factor in the EU debt crisis was the enlargement in 2004, when 10 countries – mostly former East Bloc nations – joined the European Union. “By the time the euro was introduced, the group was no longer homogeneous,” he opined. Hmm. Never knew that Spain, Italy, Portugal, Ireland and Greece used to be in the USSR, but then it’s all a long time ago and Val D’Oonican is getting on a bit.
“One thing was evident to me from the beginning,” says Guy Verhofstadt, Belgian prime minister from 1999 to 2008, and one of Europe’s most federalist politicians. “A state can exist without a currency, but a currency cannot exist without a state.” Nice sound-bite, but Guy maintains that the national politicians undermined the unelected Commission. Ah, so that’s where it all went wrong. Er, but if you thought that ‘from the beginning’ Guy, then why did you go ahead old fruit?
Still, these old woodentops need not fear, for the new crop of eurozealots are continuing in the same vein. Berlin clearly means to go into 2012 force-feeding the EU with more of the Brussels bollocks that landed everyone with the euro.
Wolfie Schauble yesterday predicted confidently that that crisis will be over by the end of the year, which served only to attract a storm of ridicule during the day. If the markets were going to believe Schaublespeak, they’d have started to do so by now. But at least the old fox is being notably silent these days on the inevitability of Britain joining the euro; perhaps even he recognise a soundbite too far. On the whole, however, the German finance minister seems to me to be a student of sub-atomic physics, and thus beleefs he can change ze kvantum future by ze triumph of ze vill.
Brunhilde Merkel will tell the German people (in a New Year’s address tomorrow) that more cooperation will one day make the whole of Europe just like Germany, at which point all will be well.
“A common currency can only really be successful if we in Europe cooperate more than we have done,” Geli will say, “Europe is growing together in the crisis. The path to overcoming this remains long and won’t be free from setbacks, but at the end of it, Europe will emerge stronger from the crisis than it went into it.”
Yes, well – jolly good show. Keep right on to the end of the road….and over the cliff. I loff to go a wanderung, alonk ze mountain track, und ass I go I loff to sink mit Italians on my back….val der ree, val der raaaaaarg.