Tuesday, October 07, 2008

Groping …

That has all sorts of connotations, but that was how The Guardian describes the actions of the finance ministers in Luxembourg today, "groping for a confidence-boosting response" to the financial crisis.

We now learn that the hike to the deposit guarantee scheme was it, bringing it up from €20,000 to €50,000 but, it seems, even that was not achieved without a certain amount of discord.

The meeting, apparently, began with a figure of €100,000 on the table but some ministers demurred, arguing that such a figure was too high. The Swedish minister may have been one. His country has only just upped its limit to €40,000 and was not inclined to support another hike so soon after it had already made a declaration.

As to the rest of the "confidence-boosting” all we can rely in is a statement declaring: "The liquidity of the financial system shall be ensured by all authorities in order to preserve confidence and stability."

"Groping" may indeed be the right word. It goes along with that oft' observed phenomenon in what were once the corridors of power – group bondage, the thing that happens behind closed doors when, as they tell us, their "hands are tied".

But why anyone should think that this dysfunction group (pictured) could "boost confidence" is beyond imagining. Noting, however, that the Council's main page on its website proudly announces the "European year of combating poverty," perhaps the only really constructive thing they can do is delete the word "combating".

At least then we will know where we stand.

  • Other posts on the financial crisis here.