Eurozoned out

I try to keep on top of developments in the eurozone, but it’s complicated. Part farce, part black comedy, part horror flick; the plot unfolds with predictable unpredictability.

Separated from the European mainland by just a few miles of cold, grey water, last summer it was all too easy to ignore the bad-news stories from those funny continental folk. Britain was too busy indulging in its own unique and shameful brand of social unrest in August. We were also side-tracked by flantastic, high-drama Parliamentary Select Committee performances from the Murdochs and their courtiers – be they hacks, politicians or some of Britain’s top police officers. Certainly most Brits were in denial about the trouble brewing over the Channel.

As summer turned to autumn the true scale of the eurozone’s problems started to become apparent. The PIIGS: Portugal, Italy, Ireland, Greece and Spain looked ever more fragile; Greece’s bankruptcy looked inevitable. Italy suddenly became a focal point when its government borrowing costs soared to unsustainable levels. Berlusconi’s long-overdue downfall prompted celebrations in Rome’s streets. The beaurocrats took charge in Italy and Greece. The fact that democratic norms were abandoned and barely a whimper was heard in response speaks volumes. Everyone finally understood just how deep Europe was in PIIGS shit.

Summits, serious faces, the emergence of the Frankfurt Group (who appointed them to be in charge, and just how much influence do they have?), the ping pong debates over whether or not to eurobond. The rush to invest in gold and the yen and the swiss franc and then the pound and silver and then the dollar and back to gold. Where’s the safe haven today? Banks and investors clearly have no real clue and nor do the politicians. Dave Cameron’s ‘veto everything’ moment looked cack-handed at the time, although those arch Tory backbenchers became quite sweaty over it. Was he right? I’m no Eurosceptic but I no longer have a strong opinion on the (lack of) wisdom of this monumental EU flounce.

So, the latest in the saga seems to be that the European Central Bank is lending European banks shedloads of money, and the banks are then depositing much of it back with the ECB for lack of any better ideas. And this is supposed to help matters how?

You may never understand every aspect the EU’s darkest hours, but do try and keep an eye on key developments. At some point you may find yourself drawn into discussion with someone from a law firm, and it would be plain wrong to not be able to at least keep conversation going. No one will expect you to have all the answers, just a general sense as to how wrong it all is.