We have been through Ireland and Greece almost going to the wall and then somehow hanging on – cuts in public services and misery for all those at the bottom of the pile notwithstanding - and then came Spain, which didn’t actually need a bailout, but which came pretty damn close and is most certainly not out of the woods yet. Each time the day was saved with the liberal application of sticking plaster, financial legerdemain and, I should imagine, outright lies, as the group which is referred to as the Troika kept the wolf from the door and the euro is as yet still alive, although not exactly kicking. In economic terms, Ireland and Greece are relatively speaking tiddlers.
The bigger worry was that the situation in Spain would get out of hand, followed by Italy. Both countries have sizeable economies and trying to contain a collapse in both could well have proved nigh-on impossible. But all has been quiet on the euro front for several months, the abysmal unemployment figures in Spain, Greece and Portugal – apparently every second man and woman under 25 is unemployed - notwithstanding. Then came the complete and utterly incomprehensible cock-up in Cyprus. In euro terms Cyprus in not just a tiddler, it hardly exists at all. But its government is on the verge of bankruptcy and needs a euro bailout to the tune of €17 billion.
This is where the brains in Brussels seem to have lost the plot entirely. Cyprus is well-known as a tourist destination, but its economy, in fact, is sustained by it being something of a banking haven. I read today that around €65 billion are stashed away in saving accounts with various Cypriot banks. (What makes the matter even more ticklish, although this has not direct bearing on the problem, is that a substantial part of that €65 billion is Russian mafia money.)
Given all that money tucked away in savings account the Troika suggested to the Cypriot government that it might care to steal some of it, around €6 billion or so, and put that towards the sum it needs ensure the PM and his various ministers continue to have a sensible supply of ouzo and mezes (err, I might be mixing my cultures there, but you get the point). Another factor is that German politicians - quite rightly – are slowly waking up to the fact that not all Germans – that’s not all Germans by a long chalk – are at all keen any more in ensuring the euro survives until kingdom come if it means they have to dip their hands into their pockets every other day. So the word went out to those with money stashed away in Cypriot banks: sorry, chaps, but we’re skimming off 10 per cent of what you have there. There was, as you can imagine, uproar, especially as there is a EU-wide law protecting the first €100,000 of any savings from such a measure.
Then there was the angle that depositors can broadly be split into those with just a little tucked away for a rainy day and various thickset Russian crims who all live in undersead Mediterranen lairs with speedboats and mini-subs when they are not patrolling the streets of
Moscow at night shooting each other. Or something along those lines. Given the rather large amounts of money they are laundering, a 10 per cent haul would be quite a sizeable amount. On the other hand these are chaps who know what to do with a gun and a knuckleduster rather more than you and I, so it does seem extraordinarily silly to suggest ripping off the rip-off merchants.
The most recent response has been that a vote on the measure in the Cypriot parliament saw the idea well and truly kicked out and everything is back to square one. But that means the government is still heading for bankruptcy if it can’t get hold of the necessary readies. During all this Cyprus’s banks were not opened to avoid a run on the banks. They are due to open on Thursday morning, although there are suggestions they could well be kept shut until a deal has been struck whereby the government can get hold of the £17 billion it needs for that next round of drinks. That makes sense, of course, but it seems unlikely that it will be lent the money. And as soon as the banks open we can confidently expect that run on the bank to take place.
Certainly, there will be some short-term emergency measures that can be put in place to try to avoid the worst, such as restricting the amounts which can be withdrawn, but in the long run that would simply be pissing in the wind. But the greatest damage has been made by allowing savers in Italy and Spain to start fearing that they, too, could well see some of their savings - well, stolen isn’t too strong a word - to bail out their governments of those countries as and when. And it doesn’t matter that, perhaps, a bailout will never be needed. Slowly, but surely, savers will start withdrawing their moolah and stashing it somewhere safer, in Britain, for example, or Switzerland, or for that matter anywhere outside the Eurozone.
So there you have it: a bad situation has been made 100 times worse because some bright spark simply didn’t think it through.
. . .
Keen and regular readers of the ‘ere blog will know that my heritage is partly Teuton (one of the reasons that two of my nicknames at school were ‘Jackboots II’ and ‘Kraut II’ – ‘II’ because until my last year I had an older brother there who was known as – is there really any need to labour the point? – ‘Jackboots I’ and ‘Kraut I’. (Incidentally, another nickname was ‘Preggers’ because at 13 my body had not yet evolved into that handsome, Adonis-like exemplar it was to become, and although I was about 10/11 stone, I was, for several years, still only around 5ft 5in, so being something of a round thing, various unkind souls thought I looked pregnant.)
I have to add that by way of laying my cards on the table as I am about to make a heartfelt plea for my mother’s kinsmen and women. Why is it always the Krauts who get the stick in all matters euro fuck-up? From where I sit their only sin is a chronic lack of imagination and a rather stolid out lookout. In fact, the word stolid’ might well have been invented to describe some, though by no means all, Germans. The lack of imagination is well highlighted by the cards they produce: superbly engineered and the car of choice in any emergency but less exciting to look than the view of a suburban street on a rainy afternoon in Droitwich). But that is their only sin.
The great Simon Heffer and the great Dominic Sandbrook are, I’m bound to say, entirely wrong: there is no masterplan to dominate Europe, to finish the job the Kaiser and Hitler started. The Germans are, almost to a man and woman, more than happy for life to carry on in its comfortable and ever-so-slightly dull way, with plenty of socialising, plenty of good food, plenty of wine and beer and no hassles whatsoever. It was this attitude which, for a while at least, made them EU enthusiasts. British pub bores are simply quite wrong: the Germans are not a warlike nation forever on the lookout for more Lebensraum.
Their tragedy, if that’s not too strong a word, is geographical: their country sits slap bang in the middle of Europe. So when Napoleon – now there’s a man who was warlike, but you don’t hear the French being perpetually slagged off for being warlike – set his heart on sipping a glass of vodka in Moscow one day, they only way he could get there was through Germany. If an army wants to get from one end of Europe to another, it makes little sense to ‘by-pass’ Germany so as not to disturb them. But things are stirring in Germany: why, many are now asking themselves, should we always foot the bill? The explanation that they should ‘atone’ for their past is, by now almost 70 years after the end of World War II, looking more than a tad threadbare. It is that sentiment which is behind the proposed new party Alternative Fuer Deutschland.
It is their lack of imagination which for so long, for far too long, in fact, has kept them suggesting the same solution – austerity – to the euro crisis. Of course, it looks good on paper: if you’re going bust, stop spending so much. What they can’t grasp is that solution which is the obvious one in a domestic situation is not the obvious one on an international level, just as Newtonian physics seem to work on a certain macro level, but come apart completely at the atomic level which is where Einsteinian physics come in. And even those are now being shown to fall apart in other situations.
Yes, Germany is a prosperous country (and might I also at this point knock on the head another myth: the Germans are not hardworking or, at least, no more hardworking than other folk. They are simply better organised and like to get things done the right way the first time round). But there is equally as much private wealth in France, Italy, Spain and, yes, Greece. So, German taxpayers are asking, why us.
Why indeed? . . .
However, much I dislike British food, British attitudes, British ‘style’, the British obsession with ‘class’, the Brits attitude to sex, it is a pic like this which sums up the quintessence of being British which, almost, forgives all. Almost. For the record it is a pic of Great Train Robber Ronnie Biggs arriving at the funeral for fellow Great Train Robber Bruce Reynolds. Quite why he decided to flick a V sign and at whom I don’t know, but neither do I much care. Ronnie has given us Brits a great deal of entertainment.
He returned to Britain from Brazil when his health gave way and was immediately jailed by the usual jobsworths know what’s best for Britain. He was later diagnosed with cancer and released on compassionate grounds by the usual jobsworths who have a slighter better idea of what’s good for Britain than their less imaginative cousins. By the look of things Ronnie is not long for this world. I for one wish him a kind life for however much of it he has left.
. . .
Here are one or two items from the news you might have missed yesterday in all the excitement of whether or not Cyprus goes tits up by the beginning of next week or a few days later:
Kelly Holmes goes home in a blue shift dressafter a night out. Well!
Christina Aguilera has lost weight!
Girls Aloud split!
Khloe Kardashian towers over her sister Kourtney because she’s wearing sky-hight heels! Fancy! The minx!
Nicki Minaj suffers yet another wardrobe malfunction! (Her tits pop out of her swimsuit as she films a music video.)
Una Healy told by critics to put on a bit of weight! (Which is a welcome variation on the usual theme of ‘Just look what a fat cow XXXXX has become! And that cellulite! Shocking!)
Jessie J shaves all her hair off! Tulisa has NOT gone up two dress sizes!
Robert Pattinson and Kristen Steward haven’t split! Ellen DeGeneres has the flu! Emmy Rossum turns up at charity gala - and allows photographers to take her picture! Well!
Nicole Scherzinger carries her bulldog Roscoe out of her hotel as she goes off to dinner!
Vogue covergirl Kate Upton slaps her bottom!
Taylor Swift might have new boyfriend!
Ellie Goulding wears striped bikini top and stonewashed hotpants!
Colin Farrell goes for a brisk war!
But that’s enough crap. For more of it visit the Daily Mail’s column of shame here
. . .
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