David Cameron did not have to go begging to Berlin!!

Dear Readers, I thought the recent trip by British premier David Cameron was degrading. I do not see any point in begging the Germans for anything. If Angela Merkel wants to see the Euro collapse, then it is up to her. I can understand the German electorate not wanting to underwrite the crazy economics in countries such as Italy and Greece, where the local populations can retire a lot earlier than in Germany. However, expecting Greece, Italy and Spain to reform at breakneck speed is pointless.

For instance, Mariano Rajoy has won the general election in Spain for the centrist-right Partido Popular. He does not strike me as a Spanish Maggie Thatcher in the making prepared to reform the labour market (taking on the unions, ending collective bargaining etc), reducing the 17 regional governments to just two (the Catalans and Basques) or reforming the university sector, where lots of Spanish students spend years learning rubbish subjects.

However, I would be loath to give Sr Rajoy advice on these areas since the United Kingdom has exactly the same problems (politically motivated public sector unions),
the expensive Welsh and Scots and a non-performing university system. However, some British universities are the best in the world while Spanish business schools featured very strongly in a recent Economist survey. Spain has a great tourism sector
winning back business with the collapse of places like Tunisia and Egypt. What the country needs is time to get back on his feet after the mismanagement of Zapatero.

As for Italy, its banks did not buy many Greek government bonds, its citizens are wealthier than Germans and the country has some great companies and top managerial talent. However, Italy will never really pay off its debt mountain. One common problem for Italy and Spain is the level of corruption, especially siphoning off cash to fund political parties.

http://www.expatica.com/es/news/spanish-rss-news/spanish-corruption-probe-finds-millions-in-swiss-accounts---report_31311.html

What if the Krauts are right about the Brown package?

I remember going to West Germany in the mid 70s when the UK was collapsing with strikes etc. I think I got 11 DMarks to the pound but I am not sure. What struck me how well-organised things were. Public transport worked while railway yards seemed ultra efficient. Then later West Germany carried out the biggest corporate acquisition ever and it has taken years to sort out with write-offs etc. Now, the Germans have the key role in the Eurozone economy. They can literally decide who stays (Spain?), who goes (Italy?). The single currency zone probably only works for countries next to Germany such as Holland.
You get the sense that Merkel does not have much time for Brown but at least we don't suck up to the Russians like the Germans. The Brown financial and economic package has not attracted plaudits in Berlin and the Germans have laughed at the VAT reduction. They remember our PM's lecturing when he was Chancellor and apparently he did not bother to listen to speeches in Europe by taking his headphones off. Yet the package has represented an attempt to fight the credit crunch and the recession. We will have to wait a while to see if it works. Brown will probably call an election before that happens.
www.seachaccountant.co.uk