no exits

the situation of the eurozone is dire, for the european union it is not any better. As national leaders assemble for yet another summit it is clear that politicians are attempting to play a game of clash of the titans with the realities of the economics, one they will most definitely lose: historically the economics has always trumped the  politics, and I don’t see this trend changing.

Leaders have three things on the agenda, Greek debt, boosting european banks capital and the leveraging the EFSF up to an amount not agreed – 2-3 trillion? – a process which looks like a Ponzi scheme and disaster waiting to happen.

David Cameron has gone along to the summit he ‘insisted’ on attending, with what intentions he has not said. Just what Cameron thinks he can provide to bringing about a solution to the crisis when he cannot even provide a solution to the growing problems of the British economy, I am not sure. But it is another photo opportunity so we shall let him have it.

The eurozone seems to have only two options push forth with ‘ever closer union’ fiscal integration with tax and  spend authority, complete with a finance ministry and minister. Or break-up of the union in some form or another be it into two; weak and strong. Or a complete dismantle of the currency union.

The summit tonight will not end with complete proposals, but this and this, give a good summary of the situation as it stands.

Ultimately it is the people of the european union will take most of the pain from the crisis. To paraphrase the great federalist WIlliam Hague; it might be a good idea to lock all EU politicians in a building with no exits and take away all the fire extinguishers.

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