Friday, October 28, 2011

All leaders could manage was a pathetic peashooter to try and 'save the euro' - 28th Oct 2011

Europe’s leaders never miss an opportunity to miss an opportunity. The Brussels summit on Wednesday night was their 14th combined attempt to ‘save the euro’ in just 20 months.

But instead of firing a ‘big bazooka’ to slay the beast of Greek national debt as George Osborne demanded last month at an IMF meeting in Washington the leaders popped off a pathetic peashooter.

True, stock markets around the world were up dramatically after the Brussels accord.

But this is likely to be a temporary respite leading business and City economists suggest the accord is not worth the paper it’s written on. One economist, Stuart Thomson of Ignis Asset Management, went as far as to declare it ‘a massive confidence trick’. Read More

Euro summit: Smoke and mirrors to calm the markets

In politics and economics, experience tells us that when something looks too good to be true, it usually is. And the so-called deal to 'save' the euro last night appears to be no exception.

One trillion euros – the sum pledged to help bail out Greece and convince the markets the eurozone is serious about making things work – sounds an awful lot of money. However, it is precisely half what experts said would be necessary to do the job. And, as I write, there is still no confirmation that the European Central Bank will use its own money for this rescue.

So it seems to depend largely on governments – Germany mainly – promising the money to create confidence in the system. It also depends on private investors. But why should private investors feel confident about pouring more of their money into a bottomless pit? Read More