Yay for David Cameron

David Cameron has taken a break from chillaxing, Jubileeing, and has been telling Europe decisive action is needed on their economy… The FT described that as a message which would send irritation to Berlin, which I am sure it has. And I am sure Cameron’s advisors are not upset, his name appearing alongside Obama’s, who will be thrilled to have that gullible special relationship to bolster his attempts to deflect blame to Europe for all that ails him.

Obama is fucked, the Democrats face the choice that faces those European political parties who want to survive this, but in a political system that says that democratic recovery will not be allowed. The US don’t have healthy democratic mechanisms to protect their future, and their priorities in the coming crisis will be decided by their economic and needs and the desire of those with power to retain it, regardless of the cost. Tensions have appeared at the Fed over easing of monetary policy, further monetary actions will apparently be necessary and the snappily titled QE3 is being mooted, as possibly necessary when the shit hits the fan in Europe. Our government seem happy to take the shit deserved by Obama, completely aware of the narrative emerging that we are undermining Europe’s chances of recovery. I sense decisive action is coming at some point soon. It is unlikely to be in a direction which suits either Cameron or Obama, or the Wall Street their message is created to protect.

Ms.Merkel is lashed to the mast, but not deluded enough to misunderstand who backstops risk if German backed Eurobonds are a solution, and if Germany is to take on risk they want control. She has sacrificed an underling for her election bruising and has no option but to be an ever more isolated voice, any efforts to exercise more control likely to be rebuffed. She now has to compromise with Hollande, who changes the shape of things just by existing. Her reputation as an unflabbable leader not in the question, just the thing she hinged that reputation on. The Fiscal Compact, now often described in the press as German designed.

Martin Wolf’s smack down to the German Finance Ministry today, making absolutely clear the callousness Germany have shown to their neighbours has as much merit as the blind dogma that pushed us this far into crisis, his increasingly clear warnings unlikely to be Cameron’s first choice of reading in the morning.

Do I repeat the 4 things Britain has demanded, or shall we just run through the headlines about Osborne vetoing banking reform? Ms. Merkel to give her some credit patted Cameron on the head. She understands the pressure he faces, his party long afflicted with lunacy when faced with the existence of a world across the Channel.  Mario Draghi pushes his ’10’ year vision, and says there will be no horsetrading between the ECB and European leaders as we enter the period of horsetrading, where the real battle lines will be drawn.

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