Signs of Disintegration

“Disintegration.” That’s the word both billionaire George Soros and French President Nicolas Sarkozy have recently used to describe what’s going on with the European economic crisis.

It is really a solvency crisis for the big banks there, and leaders are trying desperately to fix the problem.

Last week, 26 European countries agreed to give up sovereignty and vote for new rules on tax and spending and tough sanctions to enforce them. One country, the United Kingdom, voted “no” in the form of a veto from Prime Minister David Cameron.

Here’s how British newspaper The Sun reported the story, “The PM vetoed a new treaty and kept Britain out of a dodgy deal to save the euro. But his bulldog spirit left the nation facing an unknown future and risking an EU backlash. The PM defended his historic veto of an EU deal intended to save the euro — despite infuriating pro-Europeans.” (Click here for more from The Sun.)

Cameron could not give up sovereignty over budgets in his country. I don’t blame him because, after all, the Brits still have the Pound Sterling and don’t need the Euro to conduct business.

Reuters’ take on the story was decidedly against the Mr. Cameron’s veto and said, “Napoleon dreamed of it, De Gaulle fought for it, but Nicolas Sarkozy may have achieved it — a Europe of Nations with France in the cockpit and Britain on the sidelines. The French president emerged as one of the big winners of a European Union summit on Friday which ended with up to 26 member states agreeing to move forward in economic integration around the euro zone, and Britain alone in staying out.” (Click here for more from Reuters.)

But what did these 26 countries really gain? This is just a pact to cut everything in order to pay back the loans of reckless bankers. There is no guarantee any of this will work because of the enormous debt in the EU banks.

The financial press will love this deal, but the people of these EU countries will not.

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