Zut
alors, it took only a few hours for the Cyprus bailout deal to fall apart; when
the black hole widened by some mysterious €5 bn, which was the number nobody first
thought of. The Troika immediately screamed “not a cent more, Cyprus will have
to find the difference”. One assumes, by following the rainbow under sofa
cushions all over the island. To any sentient being, the conclusion, even
throwing all the Archbish’s beautiful monasteries, icons and gold chasubles
into the pot, is that Cyprus doesn’t have a prayer. (Poor Christostamos’
Ortho-Church has already taken a €100 mil hit on his bank deposits).
Anastasiades is clearly hoping to wake up to find he’s had a nocturnal
visitation by the tooth fairy. His only other available remedy is to utter
endless Troika commissioned platitudes and make like Nero.
Not
so fast – now the fat is really in the fire – the Cyprus AG has opined (very
late in the day) that Parliament must endorse the bail-out deal. The very same
body that voted “Nyet” by 100% the last time they were asked to select which
Nicosia lamp-post to select for their own hanging. Any PM worth a hill o’beans
should of course have joined his ex FinMin by immediate self-ex-fenestration.
Credibility now less than zero. Forget the three line whip. It’s sauve qui peut
time. Now this could possibly be the traditional
Euro-vote-until-you-get-it-right routine. But what appears to be dramatically
different this time is that the lovely Christine of the IMF is starting to go
very wobbly on her seat in the Troika. It’s careening, swerving, listing to
port and starboard and it appears Christine wants off. Whoa there!, but Frau
Angela and Mario still have the whip. Maybe M. Le President François back in
Paree has been burning up the wires to DC and letting Christine know that DI
Clouseau over at the Deuxième has found the smoking gun, entres ses foulards
d’Hermés. Enough with the austerity already! She’s also been hob-nobbing with
little Georgie O in DC and telling him his wheels are coming off and he’s
entering a death spiral. And the UK still has Sterling to let slide (thanks to
the late and much lamented Maggie). Subito la chemise aux cheveux allemande is
starting to feel very uncomfortable and seems to be breaking a lot of Club Med
china. When even Paris is sounding strident alarums, the IMF (France prop) has
to pay attention. Why else would une Française have been allowed to succeed the
charming DSK as MD? It’s a cluster folks, of a magnitude we haven’t seen since
the Gold Standard collapsed (and we don’t have John Maynard Keynes nor Uncle
Milton F to pick up the pieces). Christine is smart enough not to wish to be
the MD who brings the wrath of the world down on the IMF. It’s also entirely
possible that she has lost control of her IMF Secretariat and economists and
they are putting out the word that the Euro-Zone is right off its trolley. No
external payments adjustments can succeed without the IMF’s favourite devaluation
medicine. Perhaps they are briefing furiously against the Troika with the
great and the good of the financial world all assembled in DC at the IMF's annual knees-up.
Cyprus
of course is de minimis, merely a rounding error in the paradox of large Euro
numbers, notwithstanding which, if its Parliament doubles down with a repeat
Nyet, the Troika knows its bluff will have been called. Christine is looking
for her ejector seat controls because she’s seen the cards and they aren’t
worth the bluff. She’d much prefer to be standing looking over the cliff at the
Troika on the rocks below and not be responsible for the run on Portuguese,
Irish, Spanish and Monte dei Pasche di Siena banks that might follow. Mario
Draghi cannot run the presses fast enough to contain that flood. Even the toothless
European Parliament is trying to create some distance from the Teutonic train
wreck which is unfolding. Make no mistake, this is going to be Frau Angela’s
Little Bighorn. When the smoke clears she and a few sycophants will own it free
and clear.
What
is also true is that the monetary union of the Euro Zone is not just a de jure, but
also a ghastly de facto irreversible process. Far more agonizing than the
simple expedient of John Major being forced by little Georgie Soros to let
Sterling crash out of EMU. (How bizarre that Reuters should inadvertently have
run Georgie’s Obit today). From which one must conclude that tonight Europe is
very much twixt Scylla and Charybdis and the Sirens are singing mightily from
rocks aplenty. If Cyprus goes, because its sovereign Parliament summons the
intestinal fortitude to vote that it is indeed sovereign, all Club Med, Troika
and Uncle Tom Cobley’s bets are off. There will be rending of garments and
gnashing of teeth and Die Kaiserin will be left standing without her frumpy
frock gazing out from her Berliner Bu-Bunker at the devastation wrought again
on the benighted Continent. Another Euro-Rocky-Horror-Show brought to you by greater
Germany; just when it was assumed the Bundesrepublik no longer threatened
anyone. Not bad for an Ossie Hausfrau. I guess she means well.
Ambrose’s
monks and zealots could be in for a very bumpy ride.
And
we haven’t even mentioned the post Hugo Chavez crisis unfolding in Caracas.
Poor Christina, and poor Fidel and his little bro Raul, desperately trying to run
Maduro from Havana to keep the free oil flowing. Too many puppet-masters, not enough strings. Maduro is entering half-life of a prawn sandwich territory. Castro Bros will soon need to find a new Commandante Quisling.
Simon
