If you thought that beyond Bunker Brussels 1, the European Union might be slowly facing up to reality, think again: it is as barking, yomping mad as it ever was.
‘Klaus Regling, the head of the euro- area bailout facility, is confident that the fund’s reach can be increased as much as fourfold even after it was downgraded by Standard & Poor’s, his spokesman said.
Regling, who heads the 440 billion-euro ($567 billion) European Financial Stability Facility, “still expects that the EFSF’s funds can be leveraged between three and four times,” Christof Roche said today by phone from Luxembourg, where the EFSF is based. Options to leverage the fund will be in place “soon.”
It’s one of those words ‘soon’, isn’t it? Could mean next week, could mean within the next five years. Given Regling’s form, it probably means ‘presently’ in the Devonian sense: ‘manana’, only without the sense of urgency.
If you spot Klaus in Walsall trying to buy bazooka ammo from the West Dithering Building Society, don’t be surprised. But if you see him emerging with some, be astonished: most of the cash seems to be going in the opposite direction at the minute. Italy’s banks, led by UniCredit, just ripped out €50 bn of loans to pay Peter so he could pay Paul (see yesterday’s Slog) using the special three-year funding mechanism launched by the European Central Bank in December. This is to be added to the part time mechanism from member States, the eventual next mechanism after Fiskalnacht has been completed, and whatever mechanisms or facilities the IMF has left after Leatherwoman has been out drumming up her new $500bn bazooka-belt of blanks.
A tiny amount of Italian and Spanish bonds were got away two days ago, all and some of which will be swamped by the extra Greece is going to have to pay on its new bond coupon once the Hedgies have finished nailing every Greek testicle they can find to any walls still standing there. Those who decry this sort of Hedge-bashing should remember that over 90% of the bonds bought by Hedge Funds were purchased second-hand long after the Greek doom was obvious. These guys are not in the room to help, but to walk away with as much money stuffed into their carpetbags as they can carry. Morally, the Greeks don’t owe them any loyalty at all.
They don’t owe a helluva lot of loyalty to Brussels either. Some eurocrats shoot themselves in the foot, but most don’t: they prefer the head as a target, it being much closer and thus near-impossible to miss. Then they miss anyway, and shoot a neighbour. Next Monday, the EU Council of Foreign Ministers is set to issue an oil embargo against Iran. Great idea, if it wasn’t for the fact that the EU is trying to get out of a recession….and Greece (trying to emerge from a black hole of austerity) buys 35% of its oil from Iran…it being down that way an’ all.
“Everybody wants to find a solution to the Greek problem and we do not want to add to the financial burden of the country,” said Brussels sources close to the meeting agenda. Then don’t do it, you dorks: just send a couple of operatives to rub out the Russian barons selling Iran fissile material. Much cheaper – and far more effective. Or better still, get Herman van Rompuy to give a recital of his poetry in Tehran. The Mullahs will be begging for mercy by the first interval.
But for today’s prize entry, we must return to the core of EU activity: protecting its dysfunctional currency and corrupt banking system by using the very braising method of human sacrifice. This is the same method as that used to kill lobster humanely, in that one keeps slowly turning up the water temperature – so that very few people people notice they’re dying, and by the time they do it’s too late to ask for the thermostat to be turned down.
So as not to sanctify the first (Greek) recipients of this EUthanasia too much, I will point out that there can be few more nefarious negotiating sessions than those involving a three-way battle between people who don’t pay their taxes, others who don’t recognise the law as an obstacle to achievement, and pols who don’t give a sh*t about the poor folks. In that context, possibly the daftest thing one might do is wind the non-law abiding sector up by threatening to legislate them into submission, but that’s what Greek PM Lucas Papademos tried on Wednesday afternoon last.
However, even dafter was the offer made by Luke’s helpers the eurocrats in suggesting a back-loaded rate of interest, just in time to cripple the Greek economy some time during 2015. By the end of the show, the party representing we the taxpayers (the ECB) had caved in on just about everything, and the party who should’ve been banned from buying the bonds in the first place (aka the Hedge Funds) had got the best deal of the lot.
Worst of all, the patient was dead before the discussions started. But Papademos thinks that turning up the tank temperature just a smidgin more might yet bring him back to life.
don’t have to be mad to work in the EU, but it helps it is absolutely obligatory. Well-balanced empiricists need not apply.