Monday, December 05, 2011

They are getting there

Catching the headlines of what passes for news on BBC television, I actually heard the girlie tell us that there were "disagreements" between Merkel and Sarkozy, which would be addressed at today's meeting. With the Economist doing its best to point up the differences, we get the same from the New York Times, which has it that "important disagreements persist" as the two primary leaders of the eurozone … to try to hammer out a joint proposal for the "summit" meeting.

Actually, if you deleted "important" and substituted "fundamental", you might be closer. It is going to be interesting to see how the two leaders paper over the cracks. For sure, they are not going to resolve their differences, which go back to the beginning of time and transcend the creation of the Union.

With that, the NYT tells us that the new "washes whiter" euro package, is being negotiated along four main lines.

The first is the promise of fiscal discipline that will be embedded in amendments to European treaties. This, we already know is moonshine, in terms of anything happening in a hurry – or at all. The sooner this canard is slaughtered and given a decent burial the better.

Then we get the magical mystery leveraging of the current bailout fund, the European Financial Stability Facility, to perhaps two or even three times its current balance. Akin to Jesus Christ turning water into wine, the "colleagues" are going to turn €400 billion (most of it already spoken for), into a trillion or or two … without going near a printing press.

On this, they have already failed, but now we have a magical "summit" coming up, where the wizards will gather and wave their wands …

Then, we are going to have a tranche of money from the International Monetary Fund to augment the bailout fund. And fourth, says the NYT, is "quiet political cover for the European Central Bank to keep buying Italian and Spanish bonds aggressively in the interim".

Quiet? With the whole world looking on? Yeah.

But that is what we got. It is about as credible as the idea that Failygraph or any other British newspaper can come up with a coherent report on what is going on. It is therefore something of a joke to see this puerile leader, alongside a gifted hack writing about the need of the "colleagues" to restore credibility.

This is the same hack, writing of Merkel and Sarkozy, that tells us: "If the pair fail to reach an accord [today], many will doubt a plausible rescue plan will be deliverable in time for Friday's summit". How about, "Even if the pair reach an accord …"?

Forgive them the "summit", Lord. They know not what they do.

Eventually though, something close to the truth will emerge – if for no other reason than a disaster of this magnitude is too big to hide. Just don't expect the MSM to make it easy to understand.