A QUICK NOTE

The fat is in the fire.  Faced with a fiscal deficit well in excess of 3% to GDP, France refused to adopt a budget that reflected the austerity demand by it European partners…read, Germany.  Early reports would have the deficit more at 5% by 2017 which is a real poke in the eye to Frau Merkel but Frankie is in a terrible spot not only with his party but with the entire country, not that he isn't responsible for a good deal of the mess itself.

France is one thing, and for them it wouldn't be the first time.  But if there are no sanctions under the EU rules--and there will not be--I suspect we can forget about fiscal discipline Over There across the board as it will be impossible for a leader of Italy or Spain to toe the line especially as in the latter's case the cries of dissolution of the Spanish state can be heard in a half dozen ethnic areas.  Unfortunately, in my view, the cry will be for greater spending absent the structural adjustment so desperately needed, but make no mistake, the future of the European soft socialist model is very much in jeopardy.  What I also fear is that this situation is ready-made for the destabilization of the EU as well as NATO by Russia simply through the playing of the energy card as winter approaches.    Got to think about this one a bit.  More tomorrow.