Douglas Carswell's Blog

Nick Clegg keeps getting Europe wrong

Writing in the Observer yesterday, Nick Clegg told us that " the markets approve” of the latest attempt by European leaders to cobble together a Eurozone rescue package.

Really?  An article full of trite cliches that sounds good amongst establishment opinion in SW1 looks a little shallow by Monday tea time. 

Less than 24 hours on, and it is  beginning to look as if Nick is as wrong in his current assessment of the Eurozone rescue package as he was when in 2002 he declared that Britain should join the Euro or "subside into relative poverty compared to our more prosperous European neighbours".

Despite Nick telling us that the markets were on board with the latest £ zillion bailout deal, private lenders are less happy.  They are now demanding so much more to cover the cost of lending to Rome that the cost of borrowing for the Italian government has rocketed to red alert levels.

This is the graph showing the cost of Italian two year debt over the past year.  This morning alone it shot up so fast to over the 5 percent mark that the Bloomberg annual chart has not yet had time to update.

Italy is now going the way of Greece.  All of the meetings, by all of the Euro elite, issuing all the communiques cannot make 2 + 2 = 2 trillion.  

The arithmetic of the bond market will spell out what our political leaders lack the clarity of thought to see.  The markets will settle an issue that our political leaders seem to lack the courage to confront .  

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