He is warning that the EU faces a "survival crisis", with the risk of contagion spreading from Ireland across the continent.Frau Merkel is equally glum.
Unfortunately, I don't have the time to do a full post, trying to tie all strands together in a neat narrative. I can, however, give some linkage for you. Some of the highlights I came across today.
First, of course, there's Ireland. As Taoiseach Cowen is still refusing to accept EUnion 'aid', Market Ticker notices a peculiar sentence (emphasis mine).
The European Commission acknowledged that Ireland has come under pressure to accept a bailout.Market Ticker "Who's Ready For A Sedition Charge?", while advocating the reinstitution of an antiquated penal device. If you are wondering who that 'other player' might be, Vox Day gives you a clue:
However, a spokesman for Commissioner for Economic and Monetary Affairs Olli Rehn said the pressure was not coming from the European Commission but another player.
Notice that the bailout is not, as it is improperly characterized, a bailout of Ireland per se. It is actually a bailout of the banks that invested in Irish government debt and it is intended to put the people of Ireland on the hook for it in much the same way that Americans were put on the hook for the cost of the TARP bailouts.Ambrose Evans-Pritchard describes the contagion the Irish new-found character threatens to cause, while the horrible truth starts to dawn on Europe's leaders. Evans-Pritchard is now openly calling the EUnion a 'proto-Fascist organization'. But hew warns for too much glee:
It will be hard to resist the temptation of opening a bottle of Connemara whisky and enjoying the moment. But resist one must. The cataclysm will not be pretty.Just to give you an idea: Geenstijl links to a couple of charts indicating that the Netherlands holds 244 billion euros in PIIGS junk bonds, equal to 31% of GDP. Or, to put it in other terms: the position in PIIGS paper equals 60% of the annual budget of Dutch government (in toto!) for 2010. Makes those eye-watering budget-cuts of 18 billion seem a piddling amount, doesn't it?
Elsewhere, the urgent advise is for Ireland and Greece to ditch the euro, noting that:
The euro elite is utterly ruthless. In its mission to save the euro, it is ready to throw tens of millions out of work and in the process destroy businesses, lives and whole economies.In the Eurozone, solidarity is running a bit thin. Frankly, it is a mess. Tired of the promises made by Greece that consistently come up empty, today Austria became the second country (after Slovakia) to withhold funds intended for the EUnions Bailout Package for Greece. Even the Estonians are turning away from the single currency. And Croatia is rethinking accession to The Project altogether (via).
For a nice overview of how we got into this mess, I refer you to Brussels Journal: The Euro: Chronicle Of The Currency Crisis Milton Friedman Foretold.
And to put insult to injury, the new EUnion budget is a non-starter, thanks to the insistence by the toy parliament, that an increase of more then 2.9% is necessary, and that the EP has a greater say in the budget, including setting 'own resources', by which they mean taxes levied by the EUnion directly. Resistance to these dreadful ideas came from the UK (good for you, Dave!), Sweden and, I am happy to say, the Netherlands. Barosso today went around squarely blaming the UK and the Netherlands for the fiasco, accusing both country for lacking 'European spirit', but our own FinMin, Jan-Kees de Jager, is thoroughly unimpressed.
We have been a generous partner but there are limits. It was very important for the Netherlands that the EU budget did not keep on going up. If we have to tighten our belts here, then they have to do it in Europe as well.
[UPDATE001] Dr North of EURef has an inkling that the story to watch is the Battle over the Budget, rather then the Irish Crisis. The latter may be trumped up to distract from the real issue.
It isn't Ireland that is in big trouble so much as the euro and its institutions. But with Rompuy trying to dump on the Irish, one can only suspect the colleagues' motives and intentions. (...)
The point about the EU budget, of course, is that it is pointing up a tension between the Council and the Commission which we have seen building since the Lisbon Treaty