SHIFTING SANDS

Isn't it always the way, you take your summer break and all-hell breaks loose, be it US downgrades, market runs or riots on the streets of London.

However, the roller-coaster still has some way to go.

Last night, the Franco-German summit failed to convince markets that there was an action plan in place to save the eurozone, indeed, proposals were resurrected to put fear into the stock exchanges with financials particularly taking a hit this morning.

As I have said before, a Tobin tax cannot work unilaterally. Money moves and in this electronic age money can move very quickly. Despite the individual costs being relatively low, it will add up and traders will shift to more friendly markets - in particular the burgeoning middle east bourses, I suspect will benefit, as will New York.

From a UK political perspective, this raises an extremely interesting scenario. The Conservatives have, for the most part, successfully clamped down on the European argument in their own party which threatened to overwhelm them with an image of being a one-issue party. Also, despite being portrayed to the contrary, Labour is also riddled with divides over Europe, indeed until the mid-80s it was Labour that was vehemently opposed to European union.

So the two biggest parties in the UK will find themselves in possible internal civil war with MPs from both the left and the right of the spectrum rising up against a further erosion of financial independence. The Lib-Dems will, inevitably, shift in the sand to the most politically convenient outcome for their party as personal manifestos make perfectly clear around the country, there is no real uniformed Lib-Dem policy, just convenient politicking.

And yet the question remains of whether there is anything the government can do to stop this tax? The Lisbon Treaty is an enabling document, that is it can continually be changed to suit circumstances. However, it has yet to be fully tested so it will be interesting to see what, if anything, can happen if the UK becomes a blocking point.

The so-called lines-in-the-sand that all UK governments boast about are about to be swept up in the wave of European tax proposals and it could mean that the only solution is the one that all leaders fear, the eventual departure from the EU to the European Free Trade Area by the UK.

Implausible? Possibly. But when you consider that the Tobin tax would essentially tax London which is not in the eurozone to bailout the eurozone and possibly kill-off a key component of the UK economy, the question becomes one of what risks are more important to the politicians?

Originally posted on Financial Risks Today blog

EUROPA

I'm not going to comment on the latest stitch-up by those unelected doyens of Brussels but one quick question now the French can exact their revenge on us perfidious Albions -

When is Britain going to get politicians that act in the national interest?

cycles

Funny how the political messages seem to come around again and again!



This is from pre-war elections!

h/t theo spark

MINISTRY OF TRUTH

With all the troughing etc going on, a private members bill that would make it illegal for MPs to deliberately deceive the public has been given a fresh breath of life

"The bill was originally presented by Adam Price MP to the House of Commons in October 2007, but ran out of time on second hearing.

After the expense scandal, the coalition want to re-introduce the Bill because the expense fraud is just a small part of a much bigger problem. Currently MPs police themselves for deception. They can’t be held to account by anyone other than themselves." Ministry of Truth

Headed up by Dom Joly, the site can be found here and the blog here

blog link

Sometimes it pays to randomly click on other bloggers' links, I have stumbled upon political cartoonist Moorland's blog and site.