Today will be a truly of nailbiting and interesting day in European politics. I switched on the news this morning to find David Cameron has pulled out of the Eurozone rescue talks due to unacceptable demands which would place the city at risk. He is right to protect our financial services industry, as much as it galls me to say it – we need the bankers to stay in the city of London. We are now in what appears an isolated position and the markets will duly decide if that is a position of strength or weakness. The strain on the coalition will be interesting to observe given the Lib-dems euro stance.
On our high streets the carnage continues with Barratts going in to administation – I have never seen my local supermarkets so deserted a week before schools finish for Christmas – whether things will pick up next week we shall see – I’d say more shoppers on our high street is more likely than a resolution to the eurozone crisis though !
My tightly budgeted Christmas shopping is done and all the talk of financial meltdown makes me glad that we tackled our finances head on two years ago – it is our second Christmas where everything is paid for without credit so we can enjoy what we have without worrying about paying for it in the new year – its a shame the euro crisis can’t be solved as easily as stopping using credit!
This morning we hear that a Eurozone collapse would lead to living standards dropping to that of Latin America. Ex-chancellors Brown and Darling predict that France will be next to take a battering from the markets…
So how long will it be before we are urged to splurge on Christmas to save the UK economy? From preaching a message of austerity and belt tightening will our government change it’s Christmas message to – “spend spend spend?”
I for one have been running austerity measures in our household for too long to allow a huge Christmas splurge – we don’t do credit anymore so all our Christmas purchases will be paid for in cash – BUT my news savvy 13 year old has already commented that the Christmas budget should be doubled this year – because spending more on her presents is in the national interest !!
Scrooge or Greek style spending – what will it be in your household?
The crisis in Italy and the Eurozone debt nightmare is becoming like navigating spaghetti junction in rush hour.The complexities of the crisis and the ramifications for the world economy if country by country finds themselves insolvent make the mind boggle. We have built our societies on debt and some might see current events as divine retribution for greed – a natural reordering of an unsustainable world in which wealth has been created by manipulation,expoitation and massaging of the figures and not by plain old fashioned productivity and hard work.
We are being warned that the Eurozone crisis is worse than the banking crisis of 2008. Italy’s debt interest rate stands a 7% this morning described as unsustainable – I allowed myself a wry smile when I read that Barclays has a £27.5 bn holding in Italian debt – hard to feel sorry for their potential losses when they levy an interest rate of 30% on debt ridden Barclaycard customers – yet this punitive interest is in their eyes perfectly sustainable !