THINGS THAT MAKE YOU GO
23 OctOber 2011
Being in a situaon where you lose unless you can pull something o against odds of mulple-thou
sands to one and pitch a ‘perfect game’ is a ridiculous spot in which to nd yourself, but as this monthhas rolled by, it has become ever-more apparent that that is precisely where the Brussels Eurocratsnow nd themselves. It appears as though, as the pressure has ratcheted up this week, we are nowin the ninth inning.Personally, my own belief (as regular readers are by now well aware) is that the very best the Euro
crats can hope for is to extend the game by an inning or two, but their arms are red, their bullpen isempty and, at some point, we are going to see an absolute avalanche of runs scored against them asthe whole thing nally topples under its own weight.This past week has been nothing short of farcical as the tension has built towards a crescendo thatseemed at rst to be willfully engendered in order to generate just enough sense of impending crisisto enable a resoluon to be forced through in a similar fashion to that which preceded Henry Paulsonand Ben Bernanke’s now-infamous closed-doors fright-fest (hyphenaon alert!) that led to the pass
ing of the TARP in late 2008.
any and all capitulaon towards outright bailouts (or ‘QEU’) must at least beseen to be against the will of the Germans and that proviso goes a long way towards explain
ing the ra of headlines that have ooded the reuters and Bloomberg screens of investors all aroundthe world this week. We have seen misdirecon, scaremongering, u-turns and abject incompetenceas well as the kinds of ‘leaks’ that are, frankly, laughable – the prime example being the ‘leaked’ dracopy of the Euro Summit statement which was printed, in its enrety, in the Daily Telegraph on Thurs
day – coincidentally at the precise moment when things were starng to come unglued as it becameclear that this Sunday’s Summit would NOT produce the magic bullet required.The statement itself is priceless. It begins with a bit of back-slapping for the passing of the EFSF (aerno less than six months of wrangling and an eleventh-hour drama in Slovakia):
The strategy we have put into place encompasses determined eorts to ensure scal consolidaonas well as growth, support to countries in diculty, and a strengthening of euro area governance. At our 21 July meeng we took a set of major decisions. The racaon by all 17 Member Statesof the euro area of the measures related to the EFSF signicantly strengthen our capacity to react to the crisis.The agreement on a strong legislave package within the EU structures on beer economic gov
ernance represents another major achievement. The euro connues to rest on solid fundamentals
It then moves on to more familiar ground; an agreement to display their strong determinaon to xthings. Nothing concrete, of course, but they sure as hell are determined:
The crisis is, however, far from over, as shown by the volality of sovereign and corporate debt markets. Further acon is needed to restore condence. That is why today we agree on addional measures reecng our strong determinaon to do whatever is required to overcome the present dicules.
The rest of the text, should you want to read it, is
, but allow me to summarise it through a fewselect phrases that will save you the trouble of doing so:
“blah, blah, blah… All Member States are determined, blah, blah, blah… We want to reiterate our determinaon, blah, blah, blah… We rearm clearly our unequivocal commitment that, blah,