Cameron Shoots UK in the Foot Trying To Sabotage Euro Rescue

By: Andrew_Butter

The problem with UK these days is that they have an obsession with youth, Tony Blair was a kid that never grew up and thought going to war and water-boarding “sounded like fun”; David Cameron is looking much the same.

Grown-ups don’t start trying to negotiate side deals when their neighbors and partners are laying sand-bags to hold-back flood waters. That’s rude and immature.

What UK was asked to do in the conference in Brussels yesterday to try and solve the problems of the Euro, was pretty innocuous. All we had to do was agree to what the 17 Euro-zone members had already agreed, and to what all the significant residuals had agreed, as follows:

1: Mandate a cap of 0.5% of GDP on countries' annual structural deficits (Well I thought Cameron was all for austerity, in any case that was in the Maastricht Treaty, just they re-worded it).

2: "Automatic consequences" for countries whose public deficit exceeds 3% of GDP (More on austerity – what’s not to like about that? In any case that’s also just re-wording the intent of the Maastricht Treaty to make it more enforceable).

3: European Stability Mechanism (ESM) to be accelerated and brought into force in July 2012 (that’s the Euro so why does Cameron care?)

4: Adequacy of 500bn-euro (£427bn; $666bn) limit for ESM to be reassessed (as above – that’s just about the Euro).

5: Euro-zone and other EU countries to provide up to 200bn Euros to the IMF to help debt-stricken Euro-zone members (OK so David you had wriggle room on that one).

The real reason Cameron said “No” was that he is in a tizzy about the EU possibly imposing a “Tobin Tax” on financial transactions which would be bad (perhaps) for the City of London where 75% of Europe’s financial transactions are carried out

But that wasn’t what was on the table, and one thing Cameron has done is to ensure that any co-operation or sympathy he might have won; is out the window.

No one was talking about cutting a bit of the pie that is in the City of London…but guess what they will be talking about now? Grown ups know that when you live in a glass house, it’s a good idea to be polite to the neighbors, and at least off them a token of a helping hand when they are in trouble.

I suspect he thinks Great Britain still rules India, so UK can go its own way.

Twenty years doing market analysis and valuations for investors in the Middle East, USA, and Europe; currently writing a book about BubbleOmics. Andrew Butter is managing partner of ABMC, an investment advisory firm, based in Dubai ( hbutter@eim.ae ), that he setup in 1999, and is has been involved advising on large scale real estate investments, mainly in Dubai.

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