Del Young pointed out to me why the LibDem flame haired chair person of the MEP economic committee was so miffed on Monday's Daily Politics.

In cricket terms the Tories are way behind on the scorecard. They are on a difficult difficult wicket, held back by the LibDems who often seem to be batting for the other side.

The Single Market  (SEA)  has become the sacred cow of the Europhiles, big business and our politicians. An unholy alliance that I would describe as a conspiracy against the British people. The Common Market was founded on free movement of capital and labour, a principle more honoured in the breach than the observance.

The FUD attack on leaving the EU will be three pronged, political, business/economic and media /celeb but the most important of all will be the enemy within led by Dave and his army of civil servants led by OberGruppenFuerher Jeremy, it was not in my remit, Heywood.

These will be the main weapons deployed by the EU lovers to undermine the outers. The origin of this acronym lie in the marketing tactics of IBM in the 1964-1984 period to undermine those selling cheaper and better mainframe computers notably Gene Amdahl who left IBM to found Amdahl and compete with IBM.

The BIS, Bank of International Settlements, announced a dramatic easing of its previously proposed bank liquidity rules. This is short term cash or quickly realisable assets that can be sold for cash to cover a run on the bank. All this was achieved without the control of the EU or the ECB but worldwide covering US, Japanese, UK, Swiss and other non-EU banks as well as EU banks.

“William, please, join the banking union, don’t sit on the fence – we need you,” Finland’s Europe Minister, Alexander Stubb, told UK Foreign Secretary William Hague at a recent conference.

As EU finance ministers and heads of state this week try to hammer out the details of an EU banking union, Mr. Stubb, and others like him, should beware what they wish for.

There’s a trade-off for the UK in not joining the banking union. With Britain outside the new construction, there’s a risk of EU banking rules being written by the eurozone-17 for all 27 member states. There could also be increased pressure for euro-denominated business – for example City-based clearing houses dealing with contracts in euros – to be supervised by eurozone authorities and therefore forced to migrate inside the eurozone. Those risks are real, and would make the City far less attractive as an entry point to the single market (while severely undermining the case for the UK's continued membership of the EU). The fundamental problem is that the City is a trading hub for a single currency of which the UK isn't a member.

However, the alternative – Britain actually joining the banking union (or even the euro) – is unthinkable. The media narrative might be that the UK is throwing its toys out of the pram, but in fact, the UK joining a banking union and following it to its logical end point, a joint backstop for the bloc’s financial firms, would be unacceptable to both sides, the UK and the rest of the eurozone.

For Britain: as we all know, UK domestic politics just won’t allow Britain to join. Transferring such supervision powers to the EU would most certainly trigger the UK government’s “referendum lock” and a No in the subsequent vote.

But beyond politics, UK banks are different beasts to the majority of large European banks. As the Liikanen report for the Commission alluded to, UK banks are global – unlike, say, Santander or the French banks that are more EU focused. For the UK, therefore, joint protection and coverage at the EU level falls inconveniently between domestic protection against bank losses and a global system of dealing with bank failures. It is telling that it was US and UK authorities (not the European Commission) that yesterday published a report on winding down international systemically important financial institutions.

However, the joke is on the eurozone as well. If the eurozone ever achieves a joint backstop for its banks, Helsinki (Stubb’s hood), Berlin and even Paris will almost certainly not want Britain anywhere near it. Generally speaking, the bigger the banking sector, the more a country could ‘benefit’ from a safety-net, and the City is the biggest of them all, by far. In other words, the UK could end up a “net beneficiary” in a banking crisis.

In a hypothetical scenario, the UK may actually like that, but I doubt Angela Merkel is looking forward to explaining to her taxpayers that not only do they have to underwrite Greece, Portugal and others but also €10.2 trillion worth of UK banking assets – four times the size of the German economy. It ain’t gonna happen.

My point? Instead of moaning about the UK not taking part, EU leaders should start thinking about how best to create a space in Europe for those countries that have no intention of joining the euro. Given the size of the City, any EU banking union that doesn’t allow for peaceful coexistence between the UK and the eurozone will fail (for proposals for how to achieve such coexistence, see here and here).

The complaints about Britain being an obstructionist voice are simply a convenient political sideshow.

Mats Persson, Telegraph online here

I watched Nads from the jungle give a great performance on the Andrew Neil show on Sunday in a film shot of her talking to her constituents in Mid Beds and replusing the redoubtable Mr Neil in a Skype interview. The latter was all the more impressive as it came after a lack lustre performance from my former oppo BoE Matthew, call me Matt, Hancock now a Business Dept minister in a studio grilling from AN.

The difference was plain to see. It was Nads who had the balls, wit and humour and Matt who was  destined for the eunuchs who guard Dave's harem in Downing Street. Nads is clearly well liked in her constituency and communicates easily with them in terms they understand. She is a working class lass from Liverpool and the comparison with PPE posh boys like Matt Hancock showed just why the Tories are going to be out of power for another 15 years after the next election.

The man from Witney posted a great link on his blog over the weekend to a radio discussion between Powell and Foot that must have been recorded in late 73 early 74. I advise you to click on link and listen for the full 45 minutes. It shows how far the standards of political debate have slipped in the last 38 years.

I was very interested as I worked in the Civil Service 71 to 73 and well remember the passage of the European Communities Bill in November 72  that sold us lock stock and barrel to the EU. I wish I had gone into the house that night to see the sordid scene with political pygmies such as Jeffrey Archer selling us down the river  Foot said he was ashamed to be a member of a parliament that had given so many of our hard won freedoms away. These two put the argument better than I ever could so please take the time to listen to them. People sometimes ask me what went on in government in 72. I usually reply that all that has happened since was largely forseen in Civil service briefing papers of the time but the politicians and the FO were gung ho for the EU for why?

Well the reason came out in the background snippets in the discussion with talk of prices and incomes board, strikes and corporate malpractice, Lonrho etc. That was where the real impetus came to join. There was a feeling we were not up to running our own country, a national loss of confidence or call it what you will. So the political class abdicated as cravenly as Edward VIII and handed us over the the 4th Reich. Its the old military adage, there are no bad men only bad officers and certainly in Heath, Jenkins and Shirl we certainly had that!

It seems the Greeks are still short 4 bn bonds so they have kept their auction offer open for another 2 days. They say there is no problem because if Johny Foreigner does not cough up his bonds the Greek banks will. But of course the latter does not get Greece anywhere its just robbing Stellios to pay Stellios!

Dr.Eric Edmond

Athens announced the above today. It was just sufficient to keep the IMF on board so I guess a few arms were twisted as it was privately held bonds that were tendered which includes Greek pension funds, a case of robbing Stellios to pay Stellios you might say. The price was set by what price gave the hedge funds a decent profit. They had bought the bonds when they were junk rated and yielding 25% or so. The hedgies exited with a nice profit but the Greek pension funds took a big hit.

There will be a formal announcement on Monday confirm bonds with a total face value of 30 bn € were bought in for 10 bn € i.e. a write down of 65%. IMF funds were being witheld until this deal was done.

Athens has received 148.6 billion euros in EU/IMF funds since May 2010. It stands to get almost 90 billion euros more by the end of 2014.

It will all go the same way. Its called chucking good money after bad. The Greeks have paid a terrible price. Their economy has shrunk by 24% in the last 5 years and unemployment is nearing 30%.

Greek banks also tendered their bonds but then they will receive the EU/IMF funds so it was naked self interest on their part.

The can will roll on and on down the road to Euro exit.

Dr. Eric Edmond

A report via Bloomberg business week, lightly skips over the fact that the ECB is considering introducing negative interest rates for depositors. This is a massive peice of news, and stories like this have been teetering beneath the surface for around a week now.

Alex Jones, of InfoWars.com reported last week that Switzerland had introduced negative rates, in a bid to slow down the rate of inflow of currency to swiss banks, as depositors flee the failing EuroZone economy.

In a nutshell the introduction of a negative interest rate would see depositors being charged a fee for holding their cash on deposit in European Banks.

I have included the complete article from Bloomberg Business week, but have highlighted the key point which is glossed over at the bottom of the page. The original Bloomberg article can be found using this link

http://www.businessweek.com/news/2012-12-07/majority-of-ecb-governing-council-support-rate-cut

Majority of ECB Governing Council Said to Back Rate Cut

A majority of European Central Bank policy makers were open to cutting the benchmark rate yesterday and there is a possibility of a reduction early next year if the economy doesn’t pick up, three officials with knowledge of the Governing Council’s deliberations said.

Rates were kept on hold because of concerns about the negative signal a cut might send in conjunction with the significant downward revisions to the ECB’s growth and inflation forecasts, the officials said on condition of anonymity. Lowering rates will be considered again next month, one of the officials said. An ECB spokesman declined to comment on what is discussed in council meetings, which are private.

The euro fell a quarter of a cent on the report to $1.2903.

ECB President Mario Draghi said yesterday that while there was a “wide discussion” about interest rates, “the prevailing consensus was to leave the rates unchanged.” The ECB held its benchmark at a record low of 0.75 percent and kept the deposit rate at zero.

“If the situation doesn’t improve -- and there is a relatively small chance there will be a significant improvement -- it’s possible to expect a move in interest rates next year,” ECB council member Jozef Makuch told reporters in Bratislava today.

‘Principle of Consensus’

Julian Callow, chief international economist at Barclays Plc in London, said the comments support his view that the ECB will cut its benchmark rate in the first quarter of 2013 and increase the chance of it happening as soon as January.

“While the legal situation is that the Governing Council is required to decide on matters by a simple majority, in practice it adheres to the principle of consensus, which means the members try to achieve a common view that reflects their different positions,” Callow wrote in a note to clients. “In this sense, it is possible for a minority to block, or at least delay, a decision in the interest of maintaining a public consensus.”

Market News International later reported that a rate cut was blocked by Draghi, ECB board members Benoit Coeure and Joerg Asmussen and Bundesbank President Jens Weidmann. The remaining ECB council members either favoured easing rates or refrained from actively opposing such a move, MNI cited an unidentified official as saying.

The sovereign debt crisis, which has pushed at least six of the 17 euro nations into recession, is now curbing growth in its largest economies. The Bundesbank today slashed its forecast for German expansion next year to 0.4 percent from 1.6 percent.

Forecasts Cut

The ECB yesterday forecast that the euro economy will contract 0.3 percent next year, cutting its estimate from 0.5 percent growth projected in September. The central bank also estimated that inflation will slow to 1.6 percent next year and 1.4 percent in 2014, well below its 2 percent limit.

“There are clearly problematic developments in the realm of the real economy,” ECB council member Ewald Nowotny said in Vienna today. The ECB’s forecasts underwent “a dramatic deterioration, a significant downward revision to an extent we rarely see,” he said. “There is a multitude countries that will shrink” this year and next and “that’s a significant challenge.”

Two officials said that because the ECB has not finished analysing the impact of a negative deposit rate, a cut yesterday would have affected only the benchmark.

“Even those who want to cut will have been given some pause for thought by the prospect of a negative deposit rate,” said Christian Schulz, an economist at Berenberg Bank in London. “They are happy to signal that they are ready to cut, but hoping they won’t have to.”