Tag Archives: David Cameron


Guest post. Translated from the French by Tim Gupwell.

The case has been heard: Barack Obama and David Cameron demanded immediate action from the Euro zone leaders, frightened by the prospect of the Spanish and Greek crises occurring at the same time, and Angela Merkel responded by announcing that no miracles should be expected from the Summit at the end of June. She continues to insist on a gradual long-term evolution towards budgetary and political union (within the next 5 to 10 years according to Mario Draghi) and to dig her heels in with regard to any measures which would ease off on this preliminary restoration to order of public finances, according to the timetable and criteria which she has already had adopted.

Implementing this has become more and more like passing through the eye of a needle. A renegotiation of the terms of the Greek bail-out is inescapable (without forcing a Euro zone exit with all the unknowns that this would entail), as is the elaboration of the details of a plan for Spain. In both cases, the opposition parties or the government in place, are looking for new sources of economic synergies so they do not have to impose any new additional austerity measures. If we are to believe Antonis Samaras, the leader of the Greek New Democracy party, the answer is to be found through taking measures against fiscal fraud and waste. Let’s have a bet on it! In both cases, it will be necessary to stagger the debt reduction over time if the initial timetable is to be compatible with this new state of affairs, and there will be no greater guarantee of success. Negotiations are likely to be strained, and the atmosphere created is likely to spread the contagion to other countries in acute crisis.

Continue reading KEEP KICKING THE CAN DOWN THE ROAD…, by François Leclerc

DIFFERING DELUSIONS, by François Leclerc

Guest post. Translated from the French by Tim Gupwell.

Worried by the sight of the Europeans entrenched in their respective positions, Barack Obama reached for his telephone. The day after the G7 videoconference between the Finance ministers and the central bankers, of which nothing came, he successively called David Cameron, Angela Merkel and Mario Monti. With this latter, the strengthening of the discussions centered on the Euro zone and growth. With David Cameron, who is going to meet Angela Merkel in Berlin, it was about the need for an “immediate plan”. Of the conversation with Angela Merkel no details have emerged. All promised to keep in contact with Barack Obama over the coming days, before meeting up on the 18th and 19th June at the G20 in Mexico, a sign that there is still plenty of work to be done before an agreement is found between them.

Expecting nothing from the governments, tensions on the stock and bond markets eased off all the same, bearing witness to their hopes of a renewal of central bank interventions. A meeting of the Bank of England is due on Thursday, as well as the expected appearance of Ben Bernanke, the chairman of the Fed. While the ECB, which met today, is keeping its cards close to its chest in order to force European leaders to assume their responsibilities, the Bank of England may well reactivate its debt purchasing programme, which has only been temporarily suspended. Looking further ahead, the possibility of a reduction in the key ECB interest rate, and an eventual third wave of massive loans to banks, continue to raise hopes, though Mario Draghi clearly stated that they are not ready to take these steps at the current time. By opting to not renew his purchases of Spanish debt on the secondary market, he sent a clear signal that the ball is in the court of the governments.

Continue reading DIFFERING DELUSIONS, by François Leclerc