So there I was, all ready to write about the near and far future of Europe, full of certainty as to my subject and then the stupid Euros starting voting and that took care of my theories.
Well, not entirely. You see, I was at the point of proclaiming, along with a lot of other people who foolishly published their views before me that there would be a massive shift to the right in the make-up of the European Parliament when the continental elections for the same were completed over the course of this weekend. The lock in this regard was the Netherlands. Wrong. The Dutchies, first to report, dealt the right a nasty blow, they gaining only 22% of the vote, well below the expected result. Why? No one has a clue, nor is anyone willing to speculate to the effect of "So goes the Netherlands…"
Anyway, yesterday the Brits went to the polls in local elections and the UKIN--that's United Kingdom Independence Party to you--while hardly winning anything outright, kicked the political crap out of the Libs who are of course in the coalition with the Conservatives and put a serious hurt on both the Conservatives and Labor. The party stands for precisely what its name suggests; it wants no part of the EU and whose showing has to be causing a rethink on the part of the big two as to their stance of the future relationship with the blokes across the Channel. Then again, the Scots are about to have the referendum on staying in or getting out of the UK---not to mention the EU--and one has to ask what kind of influence this result might have on that decision.
Now this European Parliament thing is no small matter. First of all it's about the best gig around. You show up about two months a year, do nothing except pass stupid regulations that are written by staffers which intrude on every manner of life for 360,000,000 people, get paid a bomb, travel first class in all respects and are answerable to practically no one. Once you get in you are IN, baby. Of course the time you spend on the job is in Brussels which is a dreadful city but the grub is fantastic. Some Brit newspaper did a study of the pay received by 10,000 Euro technocrats and pols and found it to be higher that the salary of the Prime Minister. Now of course the PM job does come with a rather nice house in central London within walking distance of the Tube (Westminster-Circle & District) and a lovely country place for weekends, but a mere 140,000 Pound…do get along.
Anyway, with this confusing set-up, the rest of the mob goes to the polls over the weekend and now I have to wait like everyone else to see where this is headed. Nevertheless, I get the distinct impression that the big losers may well be the Socialists..the real Socialists of decades past who have held on to the fiction of their beliefs despite the awful realism of the Euro which has made the philosophy pretty much a losing proposition. I suspect at the end of the day it's going to be a hodge-poge with all of the same pressures and internal road blocks to any meaningful structural change which will leave the future of the Union, at least in the near-term, with Sr. Draghi and the ECB. Now there could be a few real shockers, Italy being one and dare we say it…Greece which could really throw a spanner in the works as the rumblings along the Hellenic coast are of the nature that the bail-out is about to be scrapped and bugger the creditors…i.e. the rest of the Euros. And just when things were going so well in the public debt markets for the whole Southern tier. Oh well.
The good news is we have three days to decipher all this and an absolutely marvelous forecast for Memorial Day in the Fly-Over zone. Enjoy the weekend but remember, it is for those who served and as the Great President said, especially for those who "Gave their last, full measure of devotion."
See you next week.
Showing posts with label Netherlands. Show all posts
Showing posts with label Netherlands. Show all posts
Friday, May 23, 2014
Tuesday, January 29, 2013
BEFUDDLED AND BEWILDERED
Something called the Court for the European Free Trade Association ("EFTA"), headquartered in Luxembourg, sent down a ruling yesterday about which I can make neither hide nor hair and which has the capacity to cause a serious amount of confusion and difficulty for the Euros as they struggle to form a more perfect union--particularly in the financial sector.
You might remember...after all who could forget...that in 2008, the entire banking sector in Iceland ceased to exist which was the first chapter in the decline and collapse of Euroland which quickly followed. In the midst of the carnage there was a bank named Landsbanki (sounds like something out of Gulliver's Travels) that had a subsidiary named Icesave whose purpose in life seemed to be attracting deposits through offices in the UK and the Netherlands by paying above market interest rates which, by the by, is never a good sign. And so it came to pass that every bank in Iceland went bust, there were massive restructurings, depositors of Icesave had their deposits transferred to a newly formed bank and...oh wait a minute I left something out. Only the deposits of Icelander were transferred; the deposits of the Brits and the Dutch weren't. They were out to dry and on two separate occasions a referendum in Iceland prohibited the government from paying out the foreign depositors.
As you might imagine this did not go down well with the UK and Dutch governments who promptly grabbed everything they had of the parent and the subsidiary and paid out their citizens in full using those funds in addition to a substantial amount of taxpayer's money to do so. Law suits sprang up like tulips in the spring and then came the decision of yesterday.
Despite the fact that the EFTA rule required that all depositors be given parri passu treatment (see where I'm going with this), the court decided that given the systemic nature nature of the crisis and taking into account that Iceland is a small nation, Iceland need not be forced to make immediate restitution and could deny rights granted to their own citizens to another class of depositors. The legal basis? I guess it must be "it pays to be small" because there's nothing else around to justify this.
New agreements within the EU have made it clear that deposits of member state banks are now guaranteed up to 100,000 Euros by the member state in whom the deposit-taking institution is registered but one really must ask how good or enforceable is this codification if a bunch of good souls sitting in Luxembourg can decide that it's just not fair that poor little Iceland (or Luxembourg) be treated in this manner. Or to put it another way, who the hell would be dumb enough to place deposits cross-border which, in case you missed it, plays hell with the concept of no borders which the latest mob running the EU is trying to make reality, and does very little to help convince the Brits for whom finance is their lifeblood that they really want to be in this thing whole-hog.
As for me who toiled mightily in law school in the last century convinced that we should be a government of laws, not men, has to wonder if this "It makes me feel good" practice of jurisprudence might extend to the action against our friends the Argentines which is scheduled to be argued in front of the 2nd. Circuit in a few weeks. Look, we either have laws or we don't. We either have contracts that are enforced or we don't. I'm all in favor of people paying the consequence for stupid decisions but when you play by what everyone believes the rules to be and are forced into losses because of mere whim, then we venture in uncharted waters which are perilous for all. To it's credit, Iceland has always said that they intend to repay all deposits owed and continue to do so even having been given this gift, but the dead-beat Argentines will honor no such obligation having no honor whatsoever. They should not be rewarded by some made-up rule of law. The obligations of both nations were there for all to see and openly agreed. Enforce them.
You might remember...after all who could forget...that in 2008, the entire banking sector in Iceland ceased to exist which was the first chapter in the decline and collapse of Euroland which quickly followed. In the midst of the carnage there was a bank named Landsbanki (sounds like something out of Gulliver's Travels) that had a subsidiary named Icesave whose purpose in life seemed to be attracting deposits through offices in the UK and the Netherlands by paying above market interest rates which, by the by, is never a good sign. And so it came to pass that every bank in Iceland went bust, there were massive restructurings, depositors of Icesave had their deposits transferred to a newly formed bank and...oh wait a minute I left something out. Only the deposits of Icelander were transferred; the deposits of the Brits and the Dutch weren't. They were out to dry and on two separate occasions a referendum in Iceland prohibited the government from paying out the foreign depositors.
As you might imagine this did not go down well with the UK and Dutch governments who promptly grabbed everything they had of the parent and the subsidiary and paid out their citizens in full using those funds in addition to a substantial amount of taxpayer's money to do so. Law suits sprang up like tulips in the spring and then came the decision of yesterday.
Despite the fact that the EFTA rule required that all depositors be given parri passu treatment (see where I'm going with this), the court decided that given the systemic nature nature of the crisis and taking into account that Iceland is a small nation, Iceland need not be forced to make immediate restitution and could deny rights granted to their own citizens to another class of depositors. The legal basis? I guess it must be "it pays to be small" because there's nothing else around to justify this.
New agreements within the EU have made it clear that deposits of member state banks are now guaranteed up to 100,000 Euros by the member state in whom the deposit-taking institution is registered but one really must ask how good or enforceable is this codification if a bunch of good souls sitting in Luxembourg can decide that it's just not fair that poor little Iceland (or Luxembourg) be treated in this manner. Or to put it another way, who the hell would be dumb enough to place deposits cross-border which, in case you missed it, plays hell with the concept of no borders which the latest mob running the EU is trying to make reality, and does very little to help convince the Brits for whom finance is their lifeblood that they really want to be in this thing whole-hog.
As for me who toiled mightily in law school in the last century convinced that we should be a government of laws, not men, has to wonder if this "It makes me feel good" practice of jurisprudence might extend to the action against our friends the Argentines which is scheduled to be argued in front of the 2nd. Circuit in a few weeks. Look, we either have laws or we don't. We either have contracts that are enforced or we don't. I'm all in favor of people paying the consequence for stupid decisions but when you play by what everyone believes the rules to be and are forced into losses because of mere whim, then we venture in uncharted waters which are perilous for all. To it's credit, Iceland has always said that they intend to repay all deposits owed and continue to do so even having been given this gift, but the dead-beat Argentines will honor no such obligation having no honor whatsoever. They should not be rewarded by some made-up rule of law. The obligations of both nations were there for all to see and openly agreed. Enforce them.
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