And, apparently, Labour enters talks with the Lib Dems. Telling that his resignation takes effect only on the election of a new leader, and not immediately. Presumably, no caretaker was forthcoming. So much for Alan Johnson having no ambition.
My wife announced that she wants a GPS system for her birthday (its ok, she studiously avoids reading CT). Well, which GPS system should I get for her? Are there any differences? Looking around I am bewildered. (Ideally I’d like to avoid having one with a posh female English accent, both because it irritates me and because it induces my wife to mock mercilessly).
I’m rushing to prepare to go into a lockup to write reports on Australia’s government budget, brought down tomorrow, so this post is a bit scatty, but it might raise some points for discussion regarding the European debt crisis.
* First, a general observation. In a typical bailout, the biggest beneficiaries are not debtors, but creditors. So creditors ought to be “bailed-in” and made to bear some part of the cost
* The Greek case is misleading, in implying that government profligacy is the primary cause of the crisis. In most cases, the problem is the same as in earlier rounds of the crisis, most obviously in Iceland – bad loans by private banks which their national governments feel impelled to rescue, but can’t afford to
* The idea that the euro precludes devaluation as a way out is a relatively minor part of the story. Given that debts are denominated in euros, devaluation to improve the trade balance would be only marginally effective. The real effect of the eurozone so far, has been to raise the stakes regarding default.
* Resolving the crisis requires a couple of measures at the European level
– monetary expansion by the ECB
– co-ordinated action to strengthen government revenue, both by an acceleration of the attack on tax evasion and by discouragement of tax competition within the eurozone