Douglas Carswell's Blog

Today's real news

Today's news that will have an impact on millions of UK households had nothing to do with telephone hacking.  Rather it was the fact that Italian 10-year bond yields began the day at 5.824 percent and closed at 5.97 percent - at one time peaking over 6 percent. 

Why does this matter? 

Because a few more days like today, and Italy will be at the stage where no private lenders will be willing to loan her government more.  Given the amount of money Italy must borrow in order to pay various bills between now and October, unless she can find a public lender (China? Germany? European Central Bank? You?) to sub her the money, her government will be unable to pay its bills.   

At every stage in this unfolding Eurozone crisis, the European political elite have stuck slavishly to the "bailout-and-borrow" orthodoxy.  It simply does not appear to have crossed their minds to try an alternative, such as the 3D strategy of Defaulting on the debt, Decoupling from the Euro and Downsizing the public sector.

Today's real news is that the orthodox approach to dealing with this debt crisis has about as much credibility as a Greek government IOU.  

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