European Agreement vetoed by UK and Hungary, two tier Europe on the horizon

nesf

http://www.thejournal.ie/european-union-treaty-uk-hungary-veto-brussels-esm-debt-brake-300448-Dec2011/

Looks like we'll have a two tier Europe but won't be having true fiscal oversight by other EU countries just an automatic debt brake system that would force Governments to not go above a 3% deficit rate which we were going to introduce here ourselves anyway.

So no referendum people.

This part:

the annual structural deficit does not exceed 0.5% of nominal GDP.

Is a little complicated but basically there are two elements to a deficit. The cyclical and structural elements. Cyclical elements are kind of like what we have now, a huge deficit because of a drop in tax revenue due to a recession, these aren't counted as part of this rule. What's concerned is the structural deficit which is the deficit that is there even in good times.

nesf

I worry that'll it be too little to calm the markets.

OS119

does anybody really believe that anything the EU/individual national leaders say calms the markets these days?

didn't we have €land rules about national budget deficits before - quite how well observed were those rules?

very little of what is said has any credibility - how many 'final' summits have we had, how many 'this is the plan that will restore confidence in the Euro' plans have we had?

no one believes that the current crop of politico's in Europe can deliver massive, endless subsidies from Germany and deep, long-term austerity and discipline from the 'periphery' countries - so why does anyone pretend that anything that gets in the way of whatever fantasy statement Merkozy makes this week is somehow a disaster? nothing that any European politician says (with the exeption of the German government saying we will endlessly fund all european soveriegn debt) has any worth whatsoever, so why the nashing of teeth when yet another worthless statement isn't made?

Amtmann

Interesting slant on the story from EU Observer: http://euobserver.com/843/114563 claiming that Cameron overplayed his hand is now sidelined.

JustinDee

OS119 wrote: »

does anybody really believe that anything the EU/individual national leaders say calms the markets these days?

Pro-agendaic self-serving 'ratings agencies' do more damage to the markets than anyone else can.

OS119

Tremelo wrote: »

Interesting slant on the story from EU Observer: http://euobserver.com/843/114563 claiming that Cameron overplayed his hand is now sidelined.

i read it, but i'm stuggling to see why Cameron would care that he's sidelined on this issue. political wishing by the Obo perhaps?

a group of camerons friends are going to the cinema, and are trying to decide what film to watch. Cameron isn't going because he has a date, or is washing his hair, or doesn't like cinema. the friends who are going to the cinema decide to decide the issue amongst themselves - so, theoretically Cameron is sidelined from the film choosing discussion - but he's not going to the cinema, so doesn't give a mouse-sized poo what those who are going to the cinema watch, because it doesn't effect him.

JustinDee

OS119 wrote: »

i read it, but i'm stuggling to see why Cameron would care that he's sidelined on this issue. political wishing by the Obo perhaps?

a group of camerons friends are going to the cinema, and are trying to decide what film to watch. Cameron isn't going because he has a date, or is washing his hair, or doesn't like cinema. the friends who are going to the cinema decide to decide the issue amongst themselves - so, theoretically Cameron is sidelined from the film choosing discussion - but he's not going to the cinema, so doesn't give a mouse-sized poo what those who are going to the cinema watch, because it doesn't effect him.

...but Cameron's livelihood is affected by what films are watched (keeping with this cinema metaphor).
Considering the Balance of Trade effects for the UK of a weakened EU economically, you can bet your keyster Britain would still want a say in what happens.

Sierra Oscar

I dont get it - the "debt brake" system of 3% has been in place for over a decade. The first country to break it was Germany and then France.

How will this make any difference? Also our economic woes stem from a financial crisis which turned into a soverign debt crisis - and we are where we are because of inaction to deal with the original financial crisis.

The core causes of this crisis are not even on the agenda. Stupidity of the highest order - that or just an opportunistic power grab by the EU bureaucrats.

Amtmann

OS119 wrote: »

i read it, but i'm stuggling to see why Cameron would care that he's sidelined on this issue. political wishing by the Obo perhaps?

The editor-in-chief of the EU Observer is the wife of Jens Peter Bonde, an avowed Danish Eurosceptic. I don't think the EU Observer is necessarily europhile or wishing for a certain outcome.

nesf

Sierra Oscar wrote: »

I dont get it - the "debt brake" system of 3% has been in place for over a decade. The first country to break it was Germany and then France.

This is targeting structural deficits not total deficits (i.e. deficits in the good times, not deficits during recessions). It's aimed really at countries like Italy and similar. This will legally binding as opposed to the weak kind of agreement we had before.

I really don't oppose this, we really should never be running a large structural deficit so it's pretty much common sense.


I'd agree that it doesn't go far enough though. But it's some kind of start anyway.

OS119

JustinDee wrote: »

...but Cameron's livelihood is affected by what films are watched (keeping with this cinema metaphor).
Considering the Balance of Trade effects for the UK of a weakened EU economically, you can bet your keyster Britain would still want a say in what happens.

i would accept that, however i get the distinct impression that Cameron - and Hague et al - have made a political judgement that the €countries just don't have the (political?) ability to solve the €problem. effectively they see the € as all over, bar the shouting, and that therefore there is nothing whatsover to be gained (and much to be lost) by engaging in a process which otherwise they might well do if they had not made that political judgement about the inability of € to survive in the long term.

personally, i'm not a fan of Cameron - and i'm not a head-banging Euro-sceptic either, but i find it difficult to disagree with his actions on this issue.

KINGVictor

nesf wrote: »

http://www.thejournal.ie/european-union-treaty-uk-hungary-veto-brussels-esm-debt-brake-300448-Dec2011/

Looks like we'll have a two tier Europe but won't be having true fiscal oversight by other EU countries just an automatic debt brake system that would force Governments to not go above a 3% deficit rate which we were going to introduce here ourselves anyway.

So no referendum people.

This part:



Is a little complicated but basically there are two elements to a deficit. The cyclical and structural elements. Cyclical elements are kind of like what we have now, a huge deficit because of a drop in tax revenue due to a recession, these aren't counted as part of this rule. What's concerned is the structural deficit which is the deficit that is there even in good times.

I think your statement (bolded) above is a bit premature. Apparently Creighton says there is a possibility that Ireland could hold a referendum on the treaty.

http://www.rte.ie/news/2011/1209/eurozone.html

Desire2

nesf wrote: »

http://www.thejournal.ie/european-union-treaty-uk-hungary-veto-brussels-esm-debt-brake-300448-Dec2011/

Looks like we'll have a two tier Europe but won't be having true fiscal oversight by other EU countries just an automatic debt brake system that would force Governments to not go above a 3% deficit rate which we were going to introduce here ourselves anyway.

So no referendum people.

You see the glass as half full nesf but i see it as half empty and think we will need a referendum,Lucinda Creighton seems to agree with both of us!:)

http://www.rte.ie/news/2011/1209/eurozone.html

Ireland may have to hold a referendum on building a fiscal union in the eurozone, according to Minister for European Affairs Lucinda Creighton.
"I would say it's 50-50 and we will be looking at the detail over the next couple of weeks," Ms Creighton told Reuters by telephone from Brussels.
However when RTÉ's Morning Ireland asked if there was a necessity for a new treaty, Ms Creighton said: ''No, we're really not at that stage yet.''

Some mutterings from talking heads that the main tiers decisions may possibly be open to legal challenges by the UK and Hungry on Pat Kenny,also that what has been agreed is being trawled over by Irish officials to check its constitutionality.

too early too tell.

nesf wrote: »

I worry that'll it be too little to calm the markets.

I agree and i don't think it will ,we needed another fudge like a hole in the head!

in before me kingvictor computer froze

nesf

KINGVictor wrote: »

I think your statement (bolded) above is a bit premature. Apparently Creighton says there is a possibility that Ireland could hold a referendum on the treaty.

http://www.rte.ie/news/2011/1209/eurozone.html

Yeah, I should have qualified it as referring to no referendum because of this meeting, which was what I meant.

nesf

Desire2 wrote: »

You see the glass as half full nesf but i see it as half empty and think we will need a referendum,Lucinda Creighton seems to agree with both of us!:)

I'm a half full kind of guy, getting negative about this stuff leads one to despair I've found.

Desire2

nesf wrote: »

I'm a half full kind of guy, getting negative about this stuff leads one to despair I've found.

Yes i have been listening to one 'expert' after another since all this began it is difficult to get even two of them agree,it can become so confusing and depressing sometimes i just have to switch off.:(

nesf

Desire2 wrote: »

Yes i have been listening to one 'expert' after another since all this began it is difficult to get even two of them agree,it can become so confusing and depressing sometimes i just have to switch off.:(

This is very much uncharted territory. There's an awful lot of disagreement because no one has seen a currency union of this size in this kind of trouble before so there's very little historical precedent to go on.

Generally I side with the ones saying that it would just cost Germany et al too much to let the Euro collapse, so every effort will eventually be made to save it. It just might take a lot of foot dragging because of national politics making bailing out countries or forgiving debt a touchy subject.

Amtmann

nesf wrote: »

Generally I side with the ones saying that it would just cost Germany et al too much to let the Euro collapse, so every effort will eventually be made to save it. It just might take a lot of foot dragging because of national politics making bailing out countries or forgiving debt a touchy subject.

Could the very fact that we're still speculating about the euro's future mean that this summit has failed? Genuine question. Are we awaiting more detailed proposals later today, or is it all basically over for now?

nesf

Tremelo wrote: »

Could the very fact that we're still speculating about the euro's future mean that this summit has failed? Genuine question. Are we awaiting more detailed proposals later today, or is it all basically over for now?

No this was a first step towards something more formal I think. Baby steps with the EU as always.

Desire2

nesf wrote: »

Generally I side with the ones saying that it would just cost Germany et al too much to let the Euro collapse, so every effort will eventually be made to save it. It just might take a lot of foot dragging because of national politics making bailing out countries or forgiving debt a touchy subject.

well it is least of all in Germany's interest for a Euro collapse as their currency would be so strong their export market would collapse.
It may have been in the rest of Europes interest to drive that home to the German Electorate,as in the way Greece was forced to face reality.

It seems from reports that most Germans do not still fear inflation as is always used as the excuse to simply not print more money.
QE could have made all this far less painful IMO.

getz

i am glad the UK has not signed up,its never going to work, now various countries will have to have a referendum,

Manach

Given that the Constitutional referendum failed in France, it would hardly be likely that they, or similar countries, would be eager to hold votes on this technical issue -IMHO.

nesf

Desire2 wrote: »

well it is least of all in Germany's interest for a Euro collapse as their currency would be so strong their export market would collapse.

Exactly.

Desire2 wrote: »

It may have been in the rest of Europes interest to drive that home to the German Electorate,as in the way Greece was forced to face reality.

Yeah, the German politicians really need to get off their asses about this. Grand Coalitions have their problems and all that.

Kristopherus

The Beeb is now reporting that Hungary will now sign up. That leaves UK on its own. Getting intreresting.

getz

david cameron will be very popular with the people and press in the UK at this moment in time,i believe one UK MEP [liberal] is saying she is going to live in ireland and try to take out irish citizenship,[i think she has realized she may not have a job next year.]

ClareVisitor

Cameron is just playing to his political base, more Eurosceptic than Europhile, as well as going down the route that any financial taxation that is imposed by the new Eurozone agreement will have a benficial effect to the City of London by driving more business there. It is pretty short-term thinking (as is most usual with any politicians), but is designed to give him a popularity boost. I don't buy this "not in Britain's best interest" malarkey for a second, it's definitely no in his interest and not in British bankers' interest, but if it is in "Britain's" interest is much more open to question.

getz

you watch the UK referendum on leaving the european union question will raise its head again,as will that question on joining NAFTA,

Batsy

This was a great decision that Cameron made.

Whilst the Irish and the other Merkozy poodles are meekly doing what Merkozy want them to do even if it's detrimental to their economies, national interests and sovereignty, the British are standing up for their national interest, economy and sovereignty. In other words, Cameron is doing the thing that the British people pay their PMs to do.

Meanwhile, Ireland and 25 other EU countries are about to surrender a huge chunk of their sovereignty. The British aren't. I'm happy with the way things have gone.

Also, I've just seen photos in the Daily Mail of Sarkozy snubbing a handshake from Cameron. This immaturity is just what we expect from the little dwarf and the French in general.

Batsy

getz wrote: »

you watch the UK referendum on leaving the european union question will raise its head again,as will that question on joining NAFTA,

Britain should leave the EU. It also should NOT join NAFTA. But even if it does join NAFTA it's infinitely more preferable than being in the EU. The NAFTA is a very different organisation than the EU. It is a much more loose collection of states. It doesn't have its own capital city; its own currency; its own parliamentl; its own unelected president. In other words it doesn't have aspirations of being a superstate, unlike the EU.

Lemming

OS119 wrote: »

personally, i'm not a fan of Cameron - and i'm not a head-banging Euro-sceptic either, but i find it difficult to disagree with his actions on this issue.

I notice that it's Sarkozy making all the noise about Britain's asked-for concessions being 'unacceptable'. And all I can think to ask is who told Cameron it wasn't going to fly? I really hope it wasn't Sarkozy because the man is playing to the home crowd (for those trying to access Cameron of same) with an election coming up very soon. Precisely the person you don't want at the helm ...

In any case, people may say that Britain is looking out for its interests like it's a bad thing. But what exactly are France & Germany doing? Looking out for their best interests. Or in Sarkozy's case, his best interest and not that of France per-se.

getz

Batsy wrote: »

Britain should leave the EU. It also should NOT join NAFTA. But even if it does join NAFTA it's infinitely more preferable than being in the EU. The NAFTA is a very different organisation than the EU. It is a much more loose collection of states. It doesn't have its own capital city; its own currency; its own parliamentl; its own unelected president. In other words it doesn't have aspirations of being a superstate, unlike the EU.

there has been regular talks and committees moving between britain and the USA over the last 10 years,[just in case the UK opted out of the EU]

Batsy

ClareVisitor wrote: »

Cameron is just playing to his political base, more Eurosceptic than Europhile, as well as going down the route that any financial taxation that is imposed by the new Eurozone agreement will have a benficial effect to the City of London by driving more business there.

Rubbish. Any financial taxation will have a detrimental effect on the City of London, with it being the world's leading financial centre. I read the other day that Britain would have had to pay 80% of the financial transaction tax that the EU wants to introduce. German and French politicians ended up whingeing at Britain's justified outrage over such a tax. You can see why Cameron decided not to sign the agreement.

Dr Galen

Batsy wrote: »

This immaturity is just what we expect from the little dwarf and the French in general.

This sort of immature posting isn't what we expect of posters here Batsy. Refrain from it in future please

Cheers

DrG

Batsy

getz wrote: »

there has been regular talks and committees moving between britain and the USA over the last 10 years,[just in case the UK opted out of the EU]

Well I've not heard anything of it.

But, whilst being in NAFTA which be much more preferable to being in the EU, Britain should be in neither.

OS119

Lemming wrote: »

I notice that it's Sarkozy making all the noise about Britain's asked-for concessions being 'unacceptable'. And all I can think to ask is who told Cameron it wasn't going to fly? I really hope it wasn't Sarkozy because the man is playing to the home crowd (for those trying to access Cameron of same) with an election coming up very soon. Precisely the person you don't want at the helm ...

well indeed - lots of honking off at Cameron for putting his interests first, but the Germans are doing it by unsurprisingly refusing to put up the money to pay everyone elses debt or being forced by the ghosts of the 1930's to refuce to print money, as are the French, and so are the Irish - i will give £50 to any charity when someone comes on here and says that when Irish ministers ask for lower interest rates, longer terms of payment, and debt write-offs that are doing it for the wider european good, and not in Irelands naked self-interest.

would i prefer a seat at the table while all this horse-trading comes to nothing? yes - is it worth the remote chance that Sarkozy gets his grubby, entirely selt-interested mitts on the golden calf that is the City of London's 10% of UK GDP? not a chance in hell.

KeithAFC

David Cameron done the right thing. He needs to do what is best for the UK.

MagicMarker

If the UK did agree would that mean they'd have to join the Euro?

nesf

MagicMarker wrote: »

If the UK did agree would that mean they'd have to join the Euro?

No.

K-9

MagicMarker wrote: »

If the UK did agree would that mean they'd have to join the Euro?

No, working on an agreement probably including budgetary controls.

JustinDee

Batsy wrote: »

Britain should leave the EU

It can't afford to.

KindOfIrish

KeithAFC wrote: »

David Cameron done the right thing. He needs to do what is best for the UK.

Did you mean, what is best for the UK bankers?
From my experience living in continental Europe and British Isles, what's done in Europe is good for a whole society and what's done in Anglo -Saxon world is usually good for rich and very rich.

Teclo

Proud to be British neighbours

ClareVisitor

Batsy wrote: »

Rubbish. Any financial taxation will have a detrimental effect on the City of London, with it being the world's leading financial centre. I read the other day that Britain would have had to pay 80% of the financial transaction tax that the EU wants to introduce. German and French politicians ended up whingeing at Britain's justified outrage over such a tax. You can see why Cameron decided not to sign the agreement.

Yes, it would be detrimental, that's why he's stayed away from it. Any financial transaction tax will not be levied in The City. Try reading the post before ranting next time.

thebman

Desire2 wrote: »

You see the glass as half full nesf but i see it as half empty and think we will need a referendum,Lucinda Creighton seems to agree with both of us!:)

http://www.rte.ie/news/2011/1209/eurozone.html

Seems more like Lucinda can't tell. Its 50/50 or basically she is clueless ... and Minister for European Affairs, nice ...

Soldie

The British are still coming to terms with no longer being a global power.

nesf wrote: »

Is a little complicated but basically there are two elements to a deficit. The cyclical and structural elements. Cyclical elements are kind of like what we have now, a huge deficit because of a drop in tax revenue due to a recession, these aren't counted as part of this rule. What's concerned is the structural deficit which is the deficit that is there even in good times.

Our deficit is essentially structural now. Fianna Fáil shifted the tax base onto consumption taxes which meant that the only thing sustaining our level of expenditure was the VAT revenue from the property bubble. The dramatic drop in tax revenue at the onset of the financial crisis can be attributed to a plummet in VAT revenues. Our VAT revenues are probably never (or perhaps not for a very long time) going to reach bubble-era levels. Even if we were to shift the tax base back onto income taxes we would still need significant cuts in expenditure.

bmaxi

KindOfIrish wrote: »

Did you mean, what is best for the UK bankers?
From my experience living in continental Europe and British Isles, what's done in Europe is good for a whole society and what's done in Anglo -Saxon world is usually good for rich and very rich.

So, the truth is finally out, we Irish are Anglo-Saxon.:)

Desire2

JustinDee wrote: »

It can't afford to.

It will be all but untenable for the UK to stick to this long term IMO.
sitting there powerless as all the other member states carry on down a different path.
The UK possibly being the first one to leave the Eurozone as a result of this crisis is something i must admit i did not forsee.

Last week all we heard was 'eight days to save the Euro'. the do or die summit etc.
Merkel has been speaking and apparently the documents will not be ready for scrutiny by parliaments until next March as well as the extra half a Trillion to me made available to the bailout mechanisms.

The more i am hearing about this lilly livered agreement the more i think it is doomed to failure and the big crash may have been speeded up rather than slowed down or stopped.
the whole thing stinks and the markets will show their wrath within days or weeks.
Spain Italy and Greece need hugh amounts of money in January.
i think the reason each member state rolled in behind this agreement was fear of imminent collapse, if their fears are justified it is all too little too late IMO.
We have heard Wolf being called so often now,one of these times the boy who cried it will be right,i think this is that time.

The members of the Eurozone who did not put much more pressure on Germany and to a lesser degree France to allow more printing of money by the ECB may well live to rue this day.

Obama went that route and although unemployment is still very high in the US the Economy seems to have stabilised somewhat
The US's fragile state has not been helped by this either.
He must be grateful to his European'friends'.

Mr.Micro

Desire2 wrote: »

It will be all but untenable for the UK to stick to this long term IMO.
sitting there powerless as all the other member states carry on down a different path.
The UK possibly being the first one to leave the Eurozone as a result of this crisis is something i must admit i did not forsee.

I must say that the UK did/has done nothing but snipe at the Euro from the time of its inception, to its adaption as the EU currency. It was described by UK and US analysts as "toilet currency". Let it go on its own I say, unless it is in charge then it does not want to play. Not sure myself that this whole new agreement will work for the Euro as a lot of change needs to take place that would be unpalatable to most nations. It may just prove to be a stop gap.

KeithAFC

KindOfIrish wrote: »

Did you mean, what is best for the UK bankers?
From my experience living in continental Europe and British Isles, what's done in Europe is good for a whole society and what's done in Anglo -Saxon world is usually good for rich and very rich.

Money is what makes the world go around as they say.

JustinDee

Desire2 wrote: »

It will be all but untenable for the UK to stick to this long term IMO

Too much trade (imports and exports) is with the EU for Britain to be an outsider.
The current government (and subsequent of its ilk) would not even get near an EEA agreement were the UK to pull out of the EU and contrary to the deluded belief of parties like UKIP, has no capability towards any semblance of self-subsistance.

Hawkeye123

nesf wrote: »

No.

Nesf - just to let you know - my antivirus software informed me that someone was spying on me whilst I was making an invaluable contribution regarding spies. As a modulator (or some such) I thought you ought to be informed.:cool:

P.S. My invaluable contribution was called - Why we need a Politburo