Is the Euro well and truly buggered?

LATEST.....

http://www.bbc.co.uk/news/uk-16104275

David Cameron vetoes EU-wide treaty change.....

(extract)...
"David Cameron has vetoed EU-wide treaty changes to tackle with the eurozone crisis, saying they were not in the UK's interests.

A new "accord" setting out tougher budget rules will now be drawn up by eurozone countries. As well as the UK, Hungary looks set to stay outside it.

Sweden and the Czech Republic will consult on it the deal.

UK Foreign Secretary William Hague said the move was "very sensible" and would not leave the UK isolated.

He said signing up would have meant a loss of national sovereignty.

'Unacceptable'

Nearly 10 hours of overnight talks could not produce an agreement involving all member states. A full accord "wasn't possible, given the position of our British friends", French President Nicolas Sarkozy said, in the early hours of Friday morning.

Mr Sarkozy said Mr Cameron had made "unacceptable" demands for exemptions for the UK over financial services.


The BBC's political editor Nick Robinson said the consequences "could scarcely be greater for Europe and for Britain's relationship with Europe".

He said there was no denying now that a two-speed Europe - those inside the new deal and those outside - was inevitable, but the practical implications of that would take time to become clear.

He predicted a series of rows and legal challenges about what the new euro "club within a club" could discuss, and whether it should be allowed to use EU resources and officials.

Key interests

Mr Cameron told a news conference after the discussion that the deal on the table was not in Britain's interest "so I didn't sign up to it".

"We want the eurozone countries to come together and solve their problems. But we should only allow that to happen within the EU treaties if there are proper protections for the single market, for other key British interests" he said.
"Without those safeguards it is better not to have a treaty within a treaty, but have those countries make their arrangements separately. It was a tough decision but the right one."

Nicolas Sarkozy..."We were not able to accept [the British demands] ”

Mr Sarkozy said the eurozone countries would sign an intergovernmental accord aimed at stabilising the currency in the face of the debt crisis, along with any other EU members that wanted to join.

He said the sticking point had been Mr Cameron's insistence on a protocol allowing London to opt out of proposed change on financial services.

"We were not able to accept [the British demands] because we consider quite the contrary - that a very large and substantial amount of the problems we are facing around the world are a result of lack of regulation of financial services and therefore can't have a waiver for the United Kingdom," he said.
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No doubt the mud slinging will now begin, led by Sarkozy who has already adopted his usual patronising attitude in various interviews, referring to "our British friends" and almost relishing the fact that Britain would not get anything it asked for, and inferring that it is Britain alone who is trying to scupper the whole thing by using the veto.
The sticking point (the main one anyway) concerns the financial transactions tax (1% I think) that Germany and France want to impose on the rest of Europe as part of the new deal.
As this would hit Britain by far the hardest (most of these financial transactions are carried out in the City of London) it would basically mean that London would no longer be seen as a viable place to do such business, and a large portion of that trade would go overseas.
Cameron has already stated that such a tax would only work if it were to be introduced on a global basis, so that the level playing field of these financial trading centres could be maintained.
Even IF such a global tax was put in place, this new tax raised from London would amount to billions of pounds, which would go straight into the eurozone coffers......basically meaning that a non Eurozone country was being forced to disproportionately (big time) help bail out the Eurozone, despite Britain not being a part of the Eurozone debacle in the first place.

To look at this from another angle, I wonder how France would have reacted if it was Britain who wanted to push through an agricultural tax to help save the Euro? Say.....2 Euros on every bottle of wine or ton of cereal? This would have little or no impact on Britain, but France would have to stump up a pretty penny indeed.
Or if we'd tried to impose a manufacturing tax? How would Germany have reacted if faced with a 100 Euro tax on every BMW, Audi, Mercedes, Volkswagon etc, 20 euros on every Bosch product (and many other well known German makers of white goods)?

They would probably (certainly, more like) have used THEIR vetoes.....oh wait, as far as Sarkozy is concerned, it's only the "little Englanders" that play dirty like that!


Or is it........?



GERMANY'S VISION FOR EUROPE (8th dec)

(extract).....

"Mrs Merkel HAS VETOED most of the options suggested by France and other countries like Spain and Italy, which have passed unprecedented austerity reforms.

That leaves everyone else in the eurozone financially desperate, politically weak and looking to Berlin to be told what to do.

And so Mrs Merkel concluded her speech with: "The future of the euro is inseparable from European unity."

"The path ahead is long and it is difficult but it is the right path for the joint good of a strong Germany in a strong European Union, for the benefit of people in Germany and in Europe."

And then she was done, to polite applause.

"If you look at the future, one thing is now we all know what the flaws of the eurozone are," Mr van Vliet says. "The question is whatever they do, will it be enough.

"One thing is that it will never be like what you have in the US - a political union."

In that case, someone has to take charge. For the rest of Europe, this might mean years of being told what to do by the Germans".

Article.....
http://www.bbc.co.uk/news/business-16030374

It still doesn't compute; the Eurozone economies are weakening, and the weak countries ability to pay back on their debt becomes more difficult. Who's running this comedy of errors?

There's hardly a sense of triumph in London today - rather the opposite, in fact. This from The Economist

In New York we hear mumbling that perhaps, as the treaties are renegotiated over the coming months, the UK may reconsider - the French aren't too keen on that, but Germany (also very pro-free-market rather than dirigiste) is said to have left the door open. What do you think?

I agree! The Guardian writes this:

Saw following in a letter to the editor in a Danish Paper

Because of the French German friendship, Kohl and Mitterand wanted a united EU with the Euro.
Because of the French German friendship, Merkel and Sarkozy wanted to save Euro. Now EU is split.

Here is an excerpt of a BBC commentary

I'm not so sure Cameron is wrong.

The structural problems that have brought the Eurozone nations (and, in different degrees, the UK and the USA as well) to their current state of fiscal duress have not yet been fully addressed by any of the parties. Moreover, as we have all seen the political challenges involved in dealing with the economic consequences of ageing populations and a no-longer-sustainable social welfare system are very great indeed - for all nations so affected.

The Eurozone nations have the added challenge of getting simultaneous assent from all members in a situation in which the degree of cost and benefit vary greatly among the members - some paying more, others getting more. The so far untested notion that a new agreement will suddenly create uniform fiscal discipline stands in stark contrast to the fate of the former Funancial Stability Pact that promised to do the same thing - until it was abandoned by all the parties.

The proposed taxes on financial transactions in the EU are merely a so far unresolved component of the larger issue of government costs facing all the major nations of the world. How it will play out is something none of us know for sure. However, history is generally unkind to over-taxed over-regulated economic systems. Indeed that is precisely the poision that got the Eurozone into its current difficulties. It may well be the Eurozone that isolates its own financial markets from the world - not the UK.

The UK may well come to value the independence from the Eurozone which in some quarters appears to be a disadvantage now.

I see the greatest difficulty as the imposition of austerity to each country's budgets that will impact their spending and reduce tax revenues that's supposed to pay off their bonds.

Everybody's home budgets cannot be controlled by a central government to retain capitalism's ability to fund all the necessary needs of its citizens. What we are seeing are cuts in government spending that takes away from maintaining our infrastructure, government services, libraries, parks, police and fire protections, and education.

All are short-sighted goals that continues to exacerbate an already bad and worsening economy around the world.

The near term economy is secondary in importance to building to a better tomorrow. The pain needs to be equally shared though, which in our corrupt society is not currently possible, so economic pain will lead to social unrest.

We have to fix the political system first, and we are a long way away from taking on that task. Obama says good words when he talks about the need to deal with inequality, but there is nothing in his history that indicates that he is the man to do it. The Europeans are talking even less about the subject.

I am wondering about the rationality of expecting austerity to happen...we got into this mess because states did not think that the citizens would accept fiscally responsible budgets, so now we can presume that the citizens are willing to accept them??!!

Maybe, but when you raise an entire generation on financial fantasy it is rather hard to change course on a dime without driving a revolution , especially when there are huge debts that need to be paid.

It could be, George. When the UK elected to keep their currency instead of adapting to the Euro, they've seen a steady decline of the British Pound and in all probability will decline at a much faster rate now, aside from the economic extend. Although the majority of Brits are still against the Euro, I am not so sure that it was an economical smart move.

On an emotional level, the Brits never bonded with the mainland Europe as they are connected to the United States (after their dreams of an empire faded) Probably also a reason that Toni Blair sided with Bush and against Europe when invading Iraq. The Brits paid reduced contributions to the EU while benefiting fully from the EU, not to mention throwing sand into the
cog wheel every time there was a contract or treaty to be signed. All in all, I believe, Britain never saw a necessity to have a unified Europe and acted accordingly. Prime example are keeping their currency and still checking their borders whereas the rest of Europe enjoys border-free traveling.
Their heart was never in the EU, to draw the consequences is probably the right thing for Britain emotionally, economically they'll suffer from it.

I generally agree. Since the 100 year's war the general political posture of Britain has been to oppose whatever continental power was dominant in Europe at the time. This started with the Hababurgs, went on to Spain, Bourbon France and later Revolutionary & Napoleonic France and still later Germany.

However, here I think the core issue surrounds whether the continuental EU nations will truly create a political union sufficiently strong and united to enforce a self-consistent fiscal policy over time, or will the present political & governance ambiguity continue. I believe that aspect of the issue remains in serious doubt. Do you believe yet another "Unity Treaty" negotiated by EU bureaucrats and existing national governments, but not ratified by the people themselves will do the job? I don't.

I am more confident that the major Eurozone nations will find a way to get through the current financial crisis than I am that they will be able to create an enduring political union. They certainly have made great and unprecedented strides in that direction with the evolving European Community, but the lasat step still remains a very tall order.

Letter in The Guardian today, one of the briefer ones:

"Fog in Cameron's brain. Europe cut off."

"When the UK elected to keep their currency instead of adapting to the Euro, they've seen a steady decline of the British Pound"

Rather than putting it that way, I think that in the real world, the markets have seen the Euro RISE against the Pound.
The Pound is floating at about its correct level at the moment, and has been for years. Can you say the same for the Euro?
Which currency out of the two is more likely to be forced back into the real world in the near future?
Personally, I have no problem with a weak Pound, as it is helping greatly with exports around the world at this present time of global hardship.

BTW, Later on this week, Italy and France are holding bond auctions. Following Germany's disastrous attempts at trying to sell THEIR bonds a week or so ago, it will be interesting to see how the world's banks react this time around.
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"On an emotional level, the Brits never bonded with the mainland Europe as they are connected to the United States (after their dreams of an empire faded)"

I was determined not to go back over history in all of this, thinking that I would be slated for dredging up times gone by, as British people often tend to get slated for quoting history, but seeing as several here have opened up the whole can of worms and are making judgement, far be it for me to let it pass.

Britain seriously latched onto the USA (the so called "special relationship")
in the years following WW2.
After having (finally) cajoled the USA into helping us out back then, when we were totally on our own in the European part of that war against Germany and her allies, and facing starvation (it very nearly happened) and/or imminent invasion, the USA were good enough to sell/lease us food and equipment at a fair market price, which we only finished paying for some 55 years or so later!

Pearl Harbour then brought the USA into the war properly, and Europe was (thank god) included in this action because Hitler made the big mistake of declaring war against the USA at about the same time that the Japanese fleet was turning around and heading back to Japan for a heroes welcome.

With the sheer manufacturing might of the USA, and the sheer numbers of soldiers (good ones at that) that they sent over to help with D-Day and more, Britain would have probably just about hung on to its territory, and watched helpless as the Russians swept right across the European mainland, being the only effective army against the Germans.

The USA, combined with British and Commonwealth forces, stopped Russia in its tracks, about halfway.
We would NEVER have done it without the Yanks...... so not only Britain, but modern Europe as a whole should be eternally grateful to America for stopping Stalin from achieving territorial gains beyond his wildest dreams.

In the cold war that followed, did we latch on to the Yanks and give major support to the cause of this hard fought Western freedom?

Damn right we did!

If we hadn't fought on our own, with our backs against the wall for so long, and brought about Yank involvement, your Germany (and France, and Holland, and god knows who else) would have been TOTALLY behind the Iron curtain.
Imagine if the Russians had gained such a foothold. Do you think that they would have just packed up and gone home after a few years? Bollocks would they! Europe today would be totally different and probably still behind the Iron Curtain if it wasn't for the very same British bloody mindedness that you so easily belittle!

So....the "choosing America over Europe at that time was, to put it mildly, a f**king no brainer.

Years followed with Britain giving over airbases to America, having their Nuclear Missiles based here in big numbers, showing our (genuine) friendship towards them through the fifties and sixties, allying ourselves to the mutual "deterrant" cause and being not only proud to do so, but secretly grateful that such a powerful ally was on board to stop the Russians from advancing any further into Europe.
During that time........ we (who had also been bombed to buggery and had a massive collective overdraft in the bank.....almost bankrupt in fact), received little or no help with rebuilding work/finance (as W. Germany received....in bucketloads), and France.....well, she almost found her feet straight away, having NOT been bombed to buggery (apart from Caen)..... due to their governmental heroes surrendering before it got too nasty on their infrastructure (did one single bomb ever fall on Paris?).

Britain therefore , for a very long time, was seen as the desperately poor man of Europe, purely as a direct result of saving a lot of European arses and having thousands of their young killed in the process. The very same arses that were saved are the parents and grandparents of those now so very quick to pull the rug out from under our feet, purely for political gain!

Still....as Judge Judy often says.....no good turn ever goes unpunished.

Our leaning towards America had nothing to do with the cultural differences between the European mainland and us, nor was it the "fading Empire", as we had, at that time, excellent trading relations with the entire British Commonwealth, who we had to turn our back on (to our eternal shame) IN ORDER to join the European Economic Community, after a fair bit of grovelling to DeGaulle, who's arse we saved only a few years earlier, and THEN let him have the unearned honour (it should have been the Yanks and Brits) of being at the head of a Free French contingent as they led the ceremonial drive into Paris, to "liberate" them personally.

Magnanimous or what? And how did he repay us?

"We'd like to join Europe pretty please"

"Non" came the initial reply. .......Scheming ,pompous bastard.


In fact, if you researched it you would find that it was Churchill who proposed the idea of a British/French "Union" to the French in the first place, and it actually started to take shape up until the British cocked it all up during the Suez crisis, by failing to inform the French that we were ceasing hostilities in that region, thereby leaving them high and dry (not a proud moment in British history, but given the way DeGaulle treated Churchill with contempt, it was probably not the highest priority to appease the French at that time).



"Probably also a reason that Toni Blair sided with Bush and against Europe when invading Iraq."

Nothing to do with our relationship at all. It was Blair who dragged us into Iraq. The man should be facing war crimes today, rather than being lauded from on high in certain parts of the U.S.
Take a straw poll of British people about Iraq and the VAST majority would say it was wrong.


"The Brits paid reduced contributions to the EU while benefiting fully from the EU, not to mention throwing sand into the
cog wheel every time there was a contract or treaty to be signed."

I was going to say "What utter bollocks", but I will tone it down and ask...

Where do you get off, inferring that we haven't paid our way from day one? The funny pages?

From day one, and every year since, right up until the present day, Britain has been a "net contributor" to the EU...ie we pay more (much more) IN than we get OUT.
As does Germany.
We would have paid STAGGERINGLY MORE IN if it wasn't for Thatcher exposing the grossly unfair C.A.P (Common Agricultural Policy) for what it was.....a wildly unfair payment demanded from us, that primarily went straight into the pockets of "Baron" French farmers.
She stood her ground (or put sand into the cogs, as you say) and quite rightly so.
The "reduced payment" that you mention, trying to infer that we were getting a preferential deal over other EU members, is no doubt referring to the rebate that she made them agree to....but even after this rebate was taken into account, we were still a MAJOR net contributor. Still are.

I challenge you to produce a document to back up your argument on this matter.
We put in MUCH more (every year) than we get out.

If you worked out our average contribution per head of population with France (similar population) since we have been a member, I would place a bet that we pay in more per head than they do, even if you take the rebate out of our payments.


"All in all, I believe, Britain never saw a necessity to have a unified Europe and acted accordingly. Prime example are keeping their currency and still checking their borders whereas the rest of Europe enjoys border-free traveling."

What do you mean by a "Unified Europe"? And have you read up on what is happening to the shengen situation recently.....it appears that we were right on THAT one as well! (outsiders just google news on "shengen treaty" and you'll see)

So....answer me this....a unified Europe, is it:

One where everyone is nice to each other and allows free trade/labour/residence across borders? Because that is what nearly every Brit thought they were signing up to, when we voted in the 1975 "in or out" EEC referendum.

......Or one where every country is tied down by Euro red tape by a Brussels bureacratic machine that would put the Soviet Bloc to shame and cost us all an absolute fortune in the process?
And where it also now seems obligatory (or f**k off) to have a single currency, despite that project driving (as we predicted at the time) several countries to the verge of bankruptcy, but being saved at the last minute by those same countries having to cede all financial sovereignty over to unelected supervisors in the aforementioned bureaucratic machine for approval (which we also predicted).
Because it it IS, then that's one Titanic I would rather let sail past.

It wasn't the deregulation of British finance (as Sarkozy tried to scapegoat us with) that caused the Eurozone to blow a gasket, and he knows it.
How can I put this, just to be clear......it was the constant bending of the rules, the repeated turning of a blind eye, and the rudderless panic that set in when it went wrong that caused the Euro to end up hanging by the skin of its teeth.

The Merkozy twins are in the grip of a dogma. They have finally found out the hard way that the economic facts do not fit the grand theory. So what do they do? They ignore the facts and carry on as before, because nothing is as important as the end goal of their Grand Scheme.

They now have to come clean and rather than trying to blame the Brits, they have to admit that (I know this will hurt anyone from Europe who is not British) they got it wrong, and that our predictions caem to pass.


To maintain a credible Euro, they now show their hand and admit that they have to impose a total fiscal union (the initials are quite apt actually.....F.U).

To achieve this, they have to get agreement from the other 15 (democratic) countries to go and hand their financial homework in to unelelected eurocrats at least once a year, for approval.......or REVISION.

How can any of these countries then say that they are truly democratic?


"Their heart was never in the EU, to draw the consequences is probably the right thing for Britain emotionally, economically they'll suffer from it. "

The problem with Britain is that we are almost exactly the same as Germany when it comes to adhering to rules. If a rule or a law is brought into existence by the EU, we doggedly adhere to it at all times, sometimes with farcical consequences.
The majority of our fellow members merely glance at these rules and either give a shrug and pay lip service, or ignore them altogether. France, Greece and Italy being prime shruggers.

THAT is precisely why we study each and every new proposal with a microscope and try to prevent or change a new rule or law if we see something that could either cause a major problem down the road, or remove a level playing field with the EU or the rest of the world (as in Sarkozy's blatant attempt to shaft us with the financial transaction tax.....try to see this from our side for once and research what implications that holds for us, while it would have little or no adverse effect on France).

Because once a rule or law is on the books, we adhere like buggery.

Where we draw an absolute line is when it comes to handing over SERIOUS sovereign powers to a non British, unelected, bureaucratic body.

I am seriously amazed that any other rightminded European citizen should be happy to go along with it, personallly.
Just you try that on with an American, or Aussie, or a Canadian.....or even a RUSSIAN.
The middle finger would be waved in your direction on every occasion!

Truly bamboozling, that one........still, it's far easier just blaming those nasty Brits again.

Carry on...we'll be fine, and probably end up being a bit smug on the sidelines as we watch it all fall apart pretty soon.

Power to the people......as long as someone in Brussels allows it!

I like the one....

"Sir, what does a country have to do in order to be expelled from the EU?

.....and when can we start?

SARKOZY'S PUSH FOR POWER POSES "BIGGEST THREAT TO EU UNITY"

"France is the biggest threat to the unity of the European Union, a former Belgian prime minister has warned, after Nicolas Sarkozy succeeded in his mission of splitting Britain from Europe to cement French power.

Guy Verhofstadt, the leader of European liberals in the European Parliament, said the French president’s long-standing intention to reduce the size of the EU, allowing France to punch above its weight, was the main threat to the EU as Britain’s influence waned.

Mr Sarkozy has frequently lamented the size of the EU and declared his preference for building a smaller breakaway “avant garde” to achieve fiscal union without disruption from economically liberal Britain and its allies in eastern European member states.

Mr Sarkozy celebrated as other European leaders expressed dismay in Brussels after David Cameron used the British veto in Brussels to block eurozone treaty change. Mr Cameron’s move came after France and Germany opposed “safeguards” to protect Britain’s economy.

The French president regards the decision by the majority of the eurozone and European countries to form a “fiscal compact” outside the EU’s legal framework as a triumph, rather than a setback. “This has been a historic summit because the decisions we have taken have been mighty decisions that change radically the way the eurozone and Europe in general functions. It is heartening,” Mr Sarkozy said.

Mr Verhofstadt expressed his concern, echoed by many European diplomats, that Britain’s decision in Brussels to veto treaty change among all 27 EU countries could allow France to “hijack” Europe.
France has long pushed for an “intergovernmental” organisation that could reshape Europe around the kind of protectionist model that has traditionally been opposed by Britain and a coalition of free-trade nations.
“The fear is not the possibility of an intergovernmental treaty between 26 EU countries. We have to remember and beware Sarkozy and his speeches calling for a smaller union,” said Mr Verhofstadt. “Everyone knows that is the big risk now.”
In speech in Marseilles yesterday, Mr Sarkozy called for a “real European industrial policy”, a revision of the EU’s single market competition policy and the imposition of trade barriers on Asian countries, such as China, with lower social standards. “I would like to see Europe stop allowing products to enter its territory that respect none of the rules we impose on our producers, our farmers and our stockbreeders,” he said.
The French leader successfully rallied Germany to oppose a request from the Prime Minister for a legal “protocol” to protect the City of London and to preserve the EU single market to be inserted in any new treaty.
The draft text, seen by The Daily Telegraph, did not create any new opt-outs but sought to protect Britain’s financial sector from a tide of EU legislation that has been tabled by Michel Barnier, the French internal commissioner.
If passed, the protocol would have given Britain a veto if the EU tried to give European financial supervisors powers to overrule national authorities such as the FSA. This follows constant attempts by Mr Barnier to chip away at Britain’s regulatory sovereignty over the City through piecemeal legislation, recently on derivatives and hedge funds. “We consider that a part of the world’s woes stem from the deregulation of the financial sector,” said Mr Sarkozy.

http://www.telegraph.co.uk/finance/financialcrisis/8946790/EU-Treaty-Nicolas-Sarkozys-push-for-power-poses-biggest-threat-to-EU-unity.html

Please re-arrange these words as required.......Chickens roost to home are merkozy's unfortunately coming .

EUROZONE BANKING SYSTEM ON THE EDGE OF COLLAPSE.

"The eurozone banking system is on the edge of collapse as major lenders begin to run out of the assets they need to keep vital funding lines open.


Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.


The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming.


"If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank.
Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.
"The system is creaking. There is a large amount of stress," said Anthony Peters, a strategist at Swissinvest, pointing to soaring interbank lending rates.
CreditSights' weekly funding report said the ECB had effectively become the central clearer for the region's banks as lenders are increasingly distrustful about funding one another.

Bank deposits with the ECB now stand at their highest level since June 2010 at €905bn (£772bn) as lenders withdraw deposits held with their peers and put them into the central bank. At the same time, banks in major eurozone countries such as France and Italy have become increasingly reliant on central bank funding. This follows the trend seen in smaller countries like Ireland where lenders have effectively becomes taxpayer-funded "zombie" banks.

Alastair Ryan, a banks analyst at UBS, said there would be "no Lehman moment" – or single catastrophic event – for the European banking sytem, but added that without a full backstop of bank liabilities by governments the system would "struggle to finance itself in the next year in a durable way".

"The system at the moment hasn't got funding of a duration that allows it to function, so it's failing," he said.

Others think the eurozone banks are heading for a catastrophe and the worry is growing that a major bank could collapse within weeks.

The results of the fourth round of European Banking Authority (EBA) stress tests conducted in just under 18 months pointed to a €115bn capital shortfall in the eurozone financial system, with German banks showing the most notable deterioration in their core capital ratios.

Moody's on Friday downgraded France's three largest banks, BNP Paribas, Credit Agricole and Societe Generale in light of what the US rating agency said were "liquidity and funding constraints". The banks' downgrade came despite Moody's acknowledging the three lenders could depend on a higher level of French taxpayer support in future.

Two weeks ago, rumours abounded that it was the near failure of a major French lender that had been the trigger for a massive co-ordinated intervention by the world's largest central banks to shore up the banking system.

The fear is the European authorities do not have the financial firepower to deal with the banks' problems. Analysts at BarCap say that even if the European rescue funds were able to raise €1 trillion of funding this would only meet the needs of the Italian and Spanish government and banks.

The European banking sector's problems are being exacerbated by a wave of asset sales as lenders look to dramatically shrink their balance sheets. UBS estimates eurozone banks could sell off between €3.7 trillion and €4.5 trillion of assets in the next three years

http://www.telegraph.co.uk/finance/financialcrisis/8947470/Eurozone-banking-system-on-the-edge-of-collapse.html

Old Goat, for a Brit, you appear to have some important redeeming qualities.

Great reporting of history and the current Euro crisis. Thanks for sharing your insights and the why's, when's and how's the Brits and the US became like blood brothers.

I've always admired the Brits for staying with your own currency when the Euro became the rave of the world, and that once-upon-a-time when many financial experts believed the Euro would take over as the universal currency over the US dollar.

The only regret I have is that my journeys to the UK have been reduced by the currency exchange loss of the US dollar against the pound.

Another good point you have made is the loss of value of the pound that will make your products and services more competitive in the world marketplace - especially in this economic environment.

Thanks again for taking the time to write your excellent commentary.

Thank you so much for your informativ and well written post.