Monday, May 10, 2010

Your £25bn Gift To The PIGS

Heading South

As you will have heard, Darling's last act as Chancellor has been to give £15bn of your hard-earned cash to prop up the PIGS.

Well, according to him, it's only £8bn, and he hasn't "given" it per se. He's simply provided an open-ended loan - the kind of "loan" the Bank of Mummy and Daddy might make to keep their card-maxxing offspring out of jail. Either way, the £8bn is in addition to our existing £7bn commitment, and we can kiss all of it goodbye.

Worse, it sounds like he had no choice. Under the terms of the Lisbon Treaty, the Reich Chancellery the European Commission was able to invoke the "exceptional occurrences" clause that stripped Britain of its veto. So we're stuffed.

And don't overlook the fact that the IMF is providing another £191bn, 5% of which is effectively down to us via our membership share. Call it £10bn, taking our total contribution to £25bn.

(Yes, I know, IMF loans have always come with tough conditions and repayment is sort of expected. But right now the IMF is headed by a French Euro-socialist, so don't hold your breath.)

At least we're not as stuffed as those seething German taxpayers. They've been forced to sign a blank cheque of unknown final magnitude. And they don't like it.

Which is why yesterday they punched Angela Merkel on the nose. Her party's defeat in regional elections means her coalition loses its majority in Germany's upper house, and makes it much harder for her to keep the show on the road.

You see, because she runs a coalition government it's very hard to hold things together when times are tough. Unpopular measures are not something any politico likes, especially when they are minority members in a coalition government. Poor Wolfgang Schaüble, the German Finance Minister, got so stressed he had to be rushed to a Brussels hospital before yesterday's EU meeting.

Oh, I've just remembered something. Haven't the BBC/Grun been telling us that coalition governments are good? Don't they reckon Germany's system is far better than our own first-past-the-post system?

It will be fascinating to hear how they explain the political mayhem that is about to explode over there.

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