Feb 3 • Market Commentaries • 8494 Views • 1 Comment on The UK Is A Rock In A Hard Place
Pandora’s box is an artefact in Greek mythology, taken from the myth of Pandora’s creation in Hesiod’s Works and Days. The “box” was actually a large jar given to Pandora which contained all the evils of the world. When Pandora opened the jar, all its contents except for one item were released into the world. The one remaining item was Hope. Today, to open Pandora’s box means to create evil that cannot be undone…
There was a hidden sub text to the reasons why the UK prime minister David Cameron vetoed the E.U. proposals on the fiscal compact. Whilst the right wing media in the UK frothed at the mouth and cheered the premier for ‘giving the finger’ to Jonny Foreigner many commentators, with a loose grasp on the real agenda, missed the element of misdirection that underpinned the decision to “veto”. The fiscal rules, that have been agreed by twenty five members of the European state, contain an agreement to bring individual deficits down to 0.5% levels, or face penalties and these rules would have extended to countries outside of the seventeen nation users of the euro. For the UK to sign up to such a commitment would be impossible given the current alarming state of the UK finances. Whilst the image carefully choreographed through a compliant media is that the UK is punching it’s weight, in a fairly stagnant global economy, the truth is rather different.
The fact that the UK combined debt versus GDP level is circa 900%, making it second to Japan as a hollowed out husk of an economy, is not the news most want to hear. No matter how often the debt versus GDP levels are discussed commentators refuse to open the Pandora’s box and accept the reality, that similar to Japan and not too dissimilar to the USA, the UK is not in any shape to recover easily from what will be, if the next set of growth figures are negative, a deeper recession than that experienced in 2008-2009.
Much has been made of the territorial (arguably colonial) ownership of the rocks off the cost of Argentina known as Las Malvinas
Nicholas Ridley, was a Foreign Office minister back in the 80’s, he went to the Falkland islands 33 years ago and gave them a sensible option. Britain couldn’t bear the cost of supporting and defending them any longer. The best course of action would be if Argentina was a helpful neighbour. Geography and common-sense dictated the peaceful solution of ‘leaseback’. The islanders would live their lives as before, Buenos Aires taking sovereignty. It was what Ridley and Margaret Thatcher thought best.
The 3,000 islanders said no, the Argentine junta got its messages mixed up and conflict erupted. The irony was that shortly after Argentina gained a stable democracy and there were promises against any further attempt at a military solution.
The Falklands question has been recently raised again. Ironically the UK is, as it was when last defended, in recessionary times. Suspicions have always remained that part of the reason for the defence of the Falklands owed more to mineral rights and claims as opposed to sovereignty, subsequently the spoils have been calculated and the prognosis is not that good, in cold hard economic terms the rocks just aren’t worth fighting over. Sadly the islanders may have to face up to the fact that, unless the UK govt wants to rattle the chains of jingoism and patriotism, then the islanders may be on their own.
The opportunity for a grown up conversation on the future of the islands is well overdue, the Argentina of today is completely unrecognisable to that of the late seventies early eighties. Its economy is diverse, not the powerhouse of it’s neighbour and rival Brazil but the future is bright, geographically and economically it’s in a very ‘good space’, unlike the Falklands. And there’s another group of small barren rocks that risks further isolation unless it begins to have some grown up dialogue with it’s nearest neighbours, the United Kingdom…
There’s been a bit of a fuss made in the UK with regards to India choosing to buy fighter aircraft from France as opposed to buying the UK Typhoons. India has committed to buy 126 French made Rafale fighter jets instead of the UK manufactured and assembled Typhoons. A prominent UK trade union subsequently warned that India’s decision to opt for 126 French-made Rafale fighter jets, instead of the UK-backed Typhoon aircraft, will have “serious implications” for the UK aerospace industry.
Ian Waddell, national officer for aerospace and shipbuilding at Unite, said.
We are concerned about the serious implications this decision may have and want urgent talks with the company about future plans for the workforce. The latest decision by the Indian government to select a French fighter aircraft over the BAE Systems Typhoon, highlights how important it is to support British jobs when it is within the power of the government to do so.
Unite warned the selection of the Rafale could have “serious implications” for BAE Systems and the UK aerospace industry. It is estimated that 40,000 UK jobs are supported by the Typhoon project.
Moving aside the fact that Nicolas Sarkozy must have had a chuckle to himself when Cameron lost the fighter jet order this blow to the UK economy should be viewed in the context that no less a figure than the UK prime minister David Cameron went on a sales mission to India in 2011. Britain is a key player in the military industrial complex, it’s as long a history as the colonial influence it mistakenly believes it still wields. No sooner had Cameron become the unelected prime minister of the coalition govt and he jetted off to Saudi to sell arms. The whistle stop tour didn’t end there and few questioned the mixed up priorities on display, if questioned the answer was simple; “British jobs depend on selling arms”.
But here we are and the UK has been rebuked by India, a country/continent that ranks the UK a twenty in terms of it’s value as a business partner. Previously the UK ranked a five, in recent years a twelve, but as the UK’s manufacturing influence has wained and it’s competitiveness also, the UK has little to offer a potential volcano of an economy such as India. In fact the one true arguably inelastic economic asset the UK still has (in the eyes of India) is education, speaking English is still ranked highly. Isolation abroad and isolated at home does not bode well for the UK’s potential economic improvement..
Perhaps as the powers that be in the UK ponder what to do about; Europe, India and Las Malvinas they’d be best advised getting out a map (an old colonial style one showing Great Britain in the centre will suffice). Take a long hard stare at Europe, then India, then South America. Take some time to muse over how isolated the UK will be unless it begins to adopt a completely different stance.
But time’s running short, the UK is in danger of slipping to a twenty in the world economy inside two decades from the lofty position of eight. Financial services alone can’t rescue the UK, and who’s to say that the power of the peso, real and rupee won’t soon overtake that of the Great British pound.
eurozonerecessionuk
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The UK Is A Rock In A Hard Place
Feb 3 • Market Commentaries • 8494 Views • 1 Comment on The UK Is A Rock In A Hard Place
Pandora’s box is an artefact in Greek mythology, taken from the myth of Pandora’s creation in Hesiod’s Works and Days. The “box” was actually a large jar given to Pandora which contained all the evils of the world. When Pandora opened the jar, all its contents except for one item were released into the world. The one remaining item was Hope. Today, to open Pandora’s box means to create evil that cannot be undone…
There was a hidden sub text to the reasons why the UK prime minister David Cameron vetoed the E.U. proposals on the fiscal compact. Whilst the right wing media in the UK frothed at the mouth and cheered the premier for ‘giving the finger’ to Jonny Foreigner many commentators, with a loose grasp on the real agenda, missed the element of misdirection that underpinned the decision to “veto”. The fiscal rules, that have been agreed by twenty five members of the European state, contain an agreement to bring individual deficits down to 0.5% levels, or face penalties and these rules would have extended to countries outside of the seventeen nation users of the euro. For the UK to sign up to such a commitment would be impossible given the current alarming state of the UK finances. Whilst the image carefully choreographed through a compliant media is that the UK is punching it’s weight, in a fairly stagnant global economy, the truth is rather different.
The fact that the UK combined debt versus GDP level is circa 900%, making it second to Japan as a hollowed out husk of an economy, is not the news most want to hear. No matter how often the debt versus GDP levels are discussed commentators refuse to open the Pandora’s box and accept the reality, that similar to Japan and not too dissimilar to the USA, the UK is not in any shape to recover easily from what will be, if the next set of growth figures are negative, a deeper recession than that experienced in 2008-2009.
Much has been made of the territorial (arguably colonial) ownership of the rocks off the cost of Argentina known as Las Malvinas
Nicholas Ridley, was a Foreign Office minister back in the 80’s, he went to the Falkland islands 33 years ago and gave them a sensible option. Britain couldn’t bear the cost of supporting and defending them any longer. The best course of action would be if Argentina was a helpful neighbour. Geography and common-sense dictated the peaceful solution of ‘leaseback’. The islanders would live their lives as before, Buenos Aires taking sovereignty. It was what Ridley and Margaret Thatcher thought best.
The 3,000 islanders said no, the Argentine junta got its messages mixed up and conflict erupted. The irony was that shortly after Argentina gained a stable democracy and there were promises against any further attempt at a military solution.
The Falklands question has been recently raised again. Ironically the UK is, as it was when last defended, in recessionary times. Suspicions have always remained that part of the reason for the defence of the Falklands owed more to mineral rights and claims as opposed to sovereignty, subsequently the spoils have been calculated and the prognosis is not that good, in cold hard economic terms the rocks just aren’t worth fighting over. Sadly the islanders may have to face up to the fact that, unless the UK govt wants to rattle the chains of jingoism and patriotism, then the islanders may be on their own.
The opportunity for a grown up conversation on the future of the islands is well overdue, the Argentina of today is completely unrecognisable to that of the late seventies early eighties. Its economy is diverse, not the powerhouse of it’s neighbour and rival Brazil but the future is bright, geographically and economically it’s in a very ‘good space’, unlike the Falklands. And there’s another group of small barren rocks that risks further isolation unless it begins to have some grown up dialogue with it’s nearest neighbours, the United Kingdom…
There’s been a bit of a fuss made in the UK with regards to India choosing to buy fighter aircraft from France as opposed to buying the UK Typhoons. India has committed to buy 126 French made Rafale fighter jets instead of the UK manufactured and assembled Typhoons. A prominent UK trade union subsequently warned that India’s decision to opt for 126 French-made Rafale fighter jets, instead of the UK-backed Typhoon aircraft, will have “serious implications” for the UK aerospace industry.
Ian Waddell, national officer for aerospace and shipbuilding at Unite, said.
We are concerned about the serious implications this decision may have and want urgent talks with the company about future plans for the workforce. The latest decision by the Indian government to select a French fighter aircraft over the BAE Systems Typhoon, highlights how important it is to support British jobs when it is within the power of the government to do so.
Unite warned the selection of the Rafale could have “serious implications” for BAE Systems and the UK aerospace industry. It is estimated that 40,000 UK jobs are supported by the Typhoon project.
Moving aside the fact that Nicolas Sarkozy must have had a chuckle to himself when Cameron lost the fighter jet order this blow to the UK economy should be viewed in the context that no less a figure than the UK prime minister David Cameron went on a sales mission to India in 2011. Britain is a key player in the military industrial complex, it’s as long a history as the colonial influence it mistakenly believes it still wields. No sooner had Cameron become the unelected prime minister of the coalition govt and he jetted off to Saudi to sell arms. The whistle stop tour didn’t end there and few questioned the mixed up priorities on display, if questioned the answer was simple; “British jobs depend on selling arms”.
But here we are and the UK has been rebuked by India, a country/continent that ranks the UK a twenty in terms of it’s value as a business partner. Previously the UK ranked a five, in recent years a twelve, but as the UK’s manufacturing influence has wained and it’s competitiveness also, the UK has little to offer a potential volcano of an economy such as India. In fact the one true arguably inelastic economic asset the UK still has (in the eyes of India) is education, speaking English is still ranked highly. Isolation abroad and isolated at home does not bode well for the UK’s potential economic improvement..
Perhaps as the powers that be in the UK ponder what to do about; Europe, India and Las Malvinas they’d be best advised getting out a map (an old colonial style one showing Great Britain in the centre will suffice). Take a long hard stare at Europe, then India, then South America. Take some time to muse over how isolated the UK will be unless it begins to adopt a completely different stance.
But time’s running short, the UK is in danger of slipping to a twenty in the world economy inside two decades from the lofty position of eight. Financial services alone can’t rescue the UK, and who’s to say that the power of the peso, real and rupee won’t soon overtake that of the Great British pound.
eurozonerecessionuk
« Greece Will Default On Its Debt And Will Eventually Leave The Euro Three Of The Little PIIGS Come Clean As Greece Discovers A New Black Hole »