Two other countries join UK, France likely to lose AAA credit rating...

[heroinahalfshell]

Is Dave about to be proved right???

"I think the financial union was just a round about way for Britain to end up bailing out the Eurozone as most of the EU banking industry is based in the UK. If we are going to tax banking the money shoudl go to Britain not the Eurozone. If the Eurozone needs none eurozone countries to bail it out then it is not going to work in the long term, as this is now showing. And although we have the same debt and deficit as France, because we are making and sticking to cuts the credit ratings agencies have more trust in us than france. That is why we can borrow money a lot more cheaply than other countries."

Nah - doubt it was a conspiracy against the UK to pay up - they know we don't have the money. We might be able to borrow money a BIT more cheaply but that's now - it might not be next week.

Just because DC walked from the meeting it doesn't make UK immune to the issues. Not at all.

Unsurprising that some countries have reservations. It's nothing to do with being with eurozone or with DC. Each country has it's own issues to deal with.

I read this analogy on Time Magazine this morning and thought it was really apt. It goes some way to explaining why despite 26 out of 27 countries 'signed' up, the markets simply don't care.

"...Just think about Europe as a big, dysfunctional family. Germany, the dad has been working a dull desk job for more than a decade and has saved up a lot of money. But his teenage kids, Greece & Italy have taken out the family car and crashed it. Will dad pay for the repairs in full? And will the kids clean up their act and drive more safely if he deos? That's all the markets want to know -- and it hasn't gotten a clear answer yet."

In short, all this talk of future fiscal harmonisation isn't what the markets care about. All it's interested in is whether if push came to shove, will Germany will pay the debts for the rest of the Euro family?

Interesting, niceguy, but not entirely true - the Germans and French bent the rules that were supposed to guarantee the Euro as much as anyone else.

I despise the EU because the people in charge despise the electorate - having overthrown the elected governments of Italy and Greece without anything as inconvenient as an election where the people of Italy and Greece might get to decide who rules them. And because I met a very senior EU civil servant the other week - the guy in charge of a whole Directorate - who confirmed all my prejudices. Complete scorn of the idea that electorates might have something to say about the way the EU is run or the decisions that it makes. Apparently we can leave it all to unelected officials...

Edam - I agree on many levels.

My personal view is that europe is a large mass of tiny,provincial, very right wing countries and we're influenced by them (sadly). In my family we think global and not just europe. However, I hope the talks do work out as we need a good solution for all of europe, and UK is part of it.

Good luck to them.

Yes, btw - I had quite a bit to do with the commission at one point in my career. It was a nightmare.

Edam, for the 1000th I feel obliged to say that it wasn't the EU who overthrew the Berlusconi government. Berlusconi lost his majority in the Parliament, as a number of his MPs migrated to a different coalition. Yes, Berlusconi finally lost his majority due to the pressures of the alarming economic situation, but he was unable to make any kind of credible reforms, as his coalition was unable to find agreement, mostly due to its populistic nature.

It is not the first time that we have an interim government, when times are too rough to wait for an election (or would you have preferred we went bankrupt 3 weeks ago, just to prove a point?).

The new government has been appointed by the Presidente della Repubblica, who is elected by the members of Parliament every 7 yrs. The members of Parliament are elected by the people. The new government received a vote by the majority of the Parliament. We'll have a new election in a year time, unless this govmt falls before, which would be a disaster for the time being.

What I don't understand is, why, if the Euro is at so low an ebb, is the exchange rate still so low?
In 2002 when the Euro started, it was ?1.62 to the pound.
Now it is more like ?1.20 max. Why, if it is weaker than the pound, is it not climbing back up towards its original rate?

This puzzles me.
BTW I live in France so it would be VERY nice for me if it did!