Forex Market Commentaries - The End Of The Entente Cordial

Sacré Bleu, La Fin De L'Entente Cordiale

Dec 16 • Market Commentaries • 2596 Views • Comments Off on Sacré Bleu, La Fin De L'Entente Cordiale

The French term Entente Cordiale, translated as “cordial agreement” or “cordial understanding”, was first used in English in 1844 to denote recognition of common interests between the United Kingdom and France. When used today the term almost always denotes the second Entente Cordiale, that is to say the written and partly secret agreement signed in London between the two powers on April 8, 1904.

The agreement was a change for both countries. France had been isolated from the other European powers, mostly as a result of the efforts of German Chancellor Otto von Bismarck to estrange France from potential allies, as it was thought that France might possibly seek revenge for its defeat in the Franco-Prussian War of 1870–71.

The United Kingdom had maintained a policy of “splendid isolation” on the European continent for nearly a century, intervening in continental affairs only when it was considered necessary to protect British interests and to maintain the continental balance of power. The situation for both countries changed in the last decade of the 19th century.

The change had its roots in a British loss of confidence after the humiliations experienced during their prolonged war in the Second Boer War, and a growing fear that the country was isolated in the face of a potentially aggressive Germany.

As early as March 1881, the French statesman Léon Gambetta and the then-Prince of Wales, Albert Edward, met at the Château de Breteuil to discuss an alliance against Germany. The Scramble for Africa prevented the countries from coming to terms, however. On the initiative of Colonial Secretary Joseph Chamberlain, there were three rounds of British-German talks between 1898 and 1901. After Albert Edward became King Edward VII, he declined to accede to the Triple Alliance, broke off the negotiations with Berlin and revived the idea of a British-French alliance..

The Current salacious tit for tat, regarding the apparent spat between senior officials in France and the UK, is proving to be music to the ears of the usual suspects within the mainstream media of the UK. Bizarrely the invented argument now appears to centre on which country has the ‘best worse’ economy and who should lose its AAA rating first.

 

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As each country hypnotically stares into the financial abyss and Great Britain is led in a style of “splendid isolation” not witnessed since the 1800’s the countries squabble over who should be pushed into the depths of the bottomless and unfathomed pit first. The spat has been a deliberately engineered policy in order to temporarily misdirect the general public’s attention away from the seriousness of the situation.

However, as a publicity stunt this nuclear war of words event’s radioactive decay will be immediate. Collective European leaders’ ministerial minds will now have to concentrate on the crucial aspects of the meltdown the zone is facing, a meltdown that the UK, despite it’s isolation, cannot be insulated from..

Yesterday’s warning by the head of the IMF Christine Lagarde that the world risks a repeat of the depression of the 1930s unless co-ordinated action is taken continues to reverberate around the financial markets. The claim has dominated many of the UK front pages sharing centre stage with France’s attack on the Britain’s AAA credit rating. It’s eleven days since Standard & Poor’s warned it could cut France’s credit rating by two notches as to whether France’s rating can see the year out remains to be seen.

The Italian parliament is expected to vote on technocrat Mario Monti’s emergency budget at around 11am GMT (noon local time). The vote has been called in an attempt by Monti to speed up the implementation of his austerity package, and to reassure the financial markets that he can make the changes he has promised. It’s less than six weeks since Berlusconi’s own reign as Italy’s prime minister was sunk by another confidence vote. The budget should be passed, neither Silvio Berlusconi’s centre-right PDL party or the centre-left Democratic Party wish to be blamed for inflaming the crisis.

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