Wednesday, December 14, 2011

Cameron was wrong to use the EU veto for city interests!

We have heard allot about David Cameron wielding the veto in European negotiations for the UK's national interests as far as our financial sector was concerned. It was wrong to wield the veto for that reason.

It is true, that were they the only reason to use the veto, I would have done it, however a better reason is that the deal on the table, whether it involved us or not, was wrong for the following reasons:

  1. It does nothing to actually address the Euro's sovereign debt crisis, which was the purpose of the summit. Crucially there is no stated mechanism for the ECB to become the lender of last resort.
  2. It proposes a set of rules that Euro members promised to keep to last time, and most did not but the Euro countries promise to be really good from now on. It's not credible.
  3. The rules allow a country to run up it's debt to GDP ratio in good times as well as bad, creating an automatic structural deficit if a recession hits. (Gordon Brown would have met those rules.)
  4. It has too little flexibility in the event of an actual recession for those countries who have behaved well to borrow what they need to as a recession hits. 
So, I don't disagree with the veto being used, but it should have been used because the deal does not fix the problems of the Euro zone, it makes them worse, and punishes the UK for it.

What we could do with though, is counter proposals. The French and German governments are busy trying to look like they are doing something useful, and forcing others to back them when all they are doing is coming up with quarter measures to keep their electorates on side. This will work in the short term. Sarkozy has an election next year. The problem is last weeks summit will only work until the new year, and then only if they are lucky. The ink will never dry on the last deal to be signed in March 2012 because it will be renegotiated at least twice before then.

Tuesday, December 13, 2011

Worlds smallest steam engine? No!

The BBC has an article entitled: World's 'smallest steam engine' built in Germany, except if you read the article, it is obviously not a steam engine at all.

It is in fact a Stirling engine, originally invented by the Rev Dr Robert Stirling (and his brother) in 1815 as a safer alternative to steam engines because many of his parishioners had died in boiler explosions. It is positively not a steam engine and is nothing at all like one.

I know journalists love to bask in utter ignorance, but this is really irritating. You do have to wonder where else they talk compete and utter rubbish because they are simply ignorant of the facts.

That may sound like an unfair rant, and in some ways it may be. However the news media spread knowledge and information and it is dangerous when they get it wrong as they frequently do.