Friday 9 December 2011

Odds on collapse of Euro

William Hill is now offering odds of 3/1 that the Euro will cease to exist as a currency by the end of 2012, and 2/9 that it will survive.

The book-keeper have also slashed odds for the UK pulling out of the European Union before the next General Election from 33/1 to 20/1.

But it has also seen money for a 2012 General Election as punters speculate that the Coalition could split over Europe. Hills have cut odds on a 2012 election from 5/1 to 4/1.

How will Cam be treated back in the UK?

A couple of days ago the main story of the EU summit was how the nations would save the Euro, but this morning it has changed to Britain’s veto and the future of the EU.

That is even more so since our erstwhile allies in rejecting a deal, Hungary, the Czech Rep, and Sweden are all now looking to sign the “inter-governmental accord” leaving us in our very own group of one.

That has suited France and Germany who have removed the UK as a potential barrier from blocking their goals. One Labour MP also suggested to me this morning that Cameron had been deliberately hostile to a deal in order to paint himself as a blueblooded eurosceptic before a potential election.

Either way both Labour and Tory MPs that I’ve chatted with, both anti and pro EU, appear off-the-record to be agreeing on one thing – whatever deal the other 26 nations come up with, it won’t be enough to save the Euro.

Many also agree that even if there had been a treaty – which would have needed to be ratified through nation states’ parliaments and referenda – the Euro may well have gone down anyway, because any treaty would not have been enough to calm the markets.

That’s all speculation of course, but also a view of events “that might have been” which could shape the way Cameron is treated on his arrival back in the UK – one that moves away from seeing him as an isolated wrecker and towards a defender of the national interest in the face if an inevitable catastrophe.

Thursday 8 December 2011

Clegg on the eurozone

These are the latest quotes from Clegg on the eurozone crisis. Despite him saying he is "hand in glove" with David Cameron - which sounds a bit creepy by the way - on the issue of financial regulation, it doesn't quite feel that way. He points out that he is not asking for "exceptional" treatment for the City.

Deputy Prime Minister, what do you hope will come out of tomorrow’s meeting on the Eurozone?

Well, what I want to see, and what this whole Coalition Government wants to see, on all sides of the Coalition, is that we do the right thing for the country as a whole, in the national interest. What does that mean? It means firstly that we of course must play our bit in making sure that the Eurozone sorts itself out, because that’s good for our economy, it’s good for jobs and growth in Britain. And secondly, we must do everything we can to avoid a great big split in the European Union. Because if you split, you fragment the single market, which, after all, is the world’s largest borderless single market. That’s bad for jobs and growth in this country. Three million people are dependent for their jobs on our access to the single market. I have been speaking to a large number of European leaders over the last several days and weeks and, you know, that British perspective is one that is widely heard and widely shared by many other countries in the European Union.

What do you expect the Prime Minister to be asking for at that meeting?

The Prime Minister has been quite clear, and this is something that we all share in this Coalition Government, I mean I work in lockstep, hand in glove, with the Prime Minister on these issues, and as we are supportive to the Eurozone so they can sort their problems out, in return they introduce safeguards to ensure precisely what I said: that the single market is not fragmented and that important industries like the financial services industry are treated fairly. Not exceptional treatment, but are just simply treated fairly, on a level playing field within Europe.

You’ve said twice now that you’ve got to ensure there is no fragmentation of the market. Is there a danger that could happen?

There is always a danger at a moment of crisis, when some countries are part of the Eurozone and others are not, that you get, in the rush to create an instant solution, that you get momentum towards different solutions for different parts of the European Union. I think that might be tempting in the short term, but could be damaging in the long term. We have to remain, as we always have been as a country, absolutely part of our European backyard, our neighbourhood, and we’ve got to be able to continue to sell our goods and services, and create growth and jobs in this country, because of our place in the single market.

European charades

When I spoke to senior people at the Department for Transport earlier this year there was complete befuddlement over how the French and Germans managed to give almost all their major train-manufacture contracts to firms in their home countries without breaking EU rules to prevent protectionism.

As far as the British could see they were following exactly the same procurement process yet they were helpless to stop big deals often going to foreign firms – causing consternation and political problems at home when industries dependent on Government work lost contracts. Remember Thameslink?

Anyway the Government spent the summer studying how the French and Germans get away with it and this article based on Government documents not seen elsewhere lays out some of the things ministers have learnt.

The beauty of the whole thing is that when British officials didn’t understand how to “fix” contracts so they went to home-based firms, they complained the French and Germans weren’t sharing their secrets and even said they were a victim of a “conspiracy of silence”.

Now that they appear to be getting it, officials aren’t so willing to discuss the issue anymore, i.e. they have worked their way into the conspiracy.

What we are left with is three big European governments all shamelessly pretending they operate in an open market, and yet all giving their contracts to home industries. Satire at its best.