Last week's European summit is still hot news and I have some further comments to make, in addition to my columns earlier this week.
Eurobonds have not gone away. The document agreed upon by the 26 heads of state (although two or three have given provisional agreement while they check with their national parliaments) does not even mention the idea of eurobonds - it is clear that Nicolas Sarkozy has kept quiet because he wants to respect the compromise he made with Angela Merkel. But eurobonds have not gone away. In the final press conference, Mario Monti explained at length that the idea remains of creating a budget union is everyone's ultimate objective, and it does not make sense to simply reject such a tool for integrating the financial markets. Monti says the silence does not in any way mean that eurobonds have been abandoned, although they may be called something different (the European Commission is talking about stability bonds).
Is the United Kingdom moving towards Europe? News from London can be very odd. For many years now nobody in the media has talked of anything but strong euroscepticism that wants to leave the EU; but now that the first moves towards leaving have been made, political forces and some sections of business have changed tune and want to stay in Europe. Even in Brussels, there are people calling for the UK to remain in the EU. Sympathy and admiration for the British, their civilisation and what they contribute to Europe are strong and permanent; what is being discussed here is simply the form that mutual relations should take.
In the past, the UK refused to join the European Community, but then changed its mind. After joining Europe, however, it has continually opted out of more and more aspects and it now demanding the unacceptable, trying to veto protection of the euro, a crucial part of the Europe! Despite the problems on the markets, the EU is defending its currency and economic development, and the British attitude (through the City of London) is undermining this work. Last week, the authorities of both sides drew the logical conclusion. David Cameron demanded autonomous decision-making based on national interests and the EU decided to introduce a new treaty without the UK. Cooperation and relations will now take a new, friendly and mutually beneficial form - similar to how things were before the UK joined Europe. Free trade between the UK and the EU will continue, as will other ties, but the EU is entitled to the same autonomy as Cameron was demanding for the UK.
Abuse on the financial markets continues apace. Unsurprisingly, the first reactions of the money market to the EU summit were quite negative. Financial whizzkids were not going to let this opportunity pass by without making a mint, speculating wildly.
For the moment, we will simply have to put up with the people who claim in their wisdom that the probability of the EU falling apart is betweeen 15% and 20%. This is the result of the weak point of the summit last week, where no immediate measures were decided upon. The new face of the eurozone has been sketched out and financial discipline and scrutiny have been agreed upon; but speculators are only interested in the here and now. Hopefully, the new rules and controls of the money markets that have been set out at length by the European institutions will be rapidly brought in and made effective. Further measures are under study.
Meanwhile, rating agencies are continuing to fill speculators' pockets, but one gets the impression that the EU authorities are starting to ignore them. Led by Michel Barnier, the Commission is looking at ways of changing the rating system, and several heads of state have said they can live with having one A removed from their rating. The money markets themselves will not change an iota and lower ratings will mean higher interest rates for public borrowing. All this is one more good reason for the EU to free itself of the City of London.
I am no expert and cannot claim to understand all the technicalities, but am trying to understand the significance of the turmoil on the money markets and why the EU institutions are at such pains to introduce discipline and have more control over events in the financial world and the profits being raked in on this money markets in these troubled times.
(FR/transl.fl)