British PM Cameron's Fiasco

• Allegra Stratton, political correspondent
• guardian.co.uk, Sunday 11 December 2011 20.05 GMT
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Nick Clegg promised to rebuild the government's shattered relationship with the rest of Europe and risked opening a coalition rift by going public with his "bitter disappointment" at David Cameron's decision to block a new EU agreement.

The deputy prime minister said Britain risked becoming "isolated and marginalised" from the European mainstream and, along with seniorLiberal Democrats, spent the weekend contacting European leaders in a "strategy for re-engagement to recover lost ground", according to a senior government source.

Several high-profile figures, including the former leader Paddy Ashdownand the party president, Tim Farron, joined Clegg in a wide-ranging attack on Cameron's resort to a British veto.

Clegg will hold a meeting with business leaders this week to convince them "they had not completely had the door shut", according to an aide. There is growing concern that the 26 EU countries who agreed on greater fiscal integration last week will now be able to strike deals affecting British banks and businesses.

The business secretary, Vince Cable, who warned the prime minister in Cabinet last Monday against the strategy he went on to follow in Brussels, is concerned that global companies including banks and pension funds will now shun investments in the UK, having previously favoured it as a "gateway" to the continent.

Clegg was biting in his critique of developments in Brussels but spoke of correcting the path chosen by Cameron by getting "back into the saddle". "I'm bitterly disappointed by the outcome of last week's summit, precisely because I think now there is a danger that the UK will be isolated and marginalised within the European Union," he told the BBC's Andrew Marr Show.Read more.

Save The Euro But Not The EU

By LEO CENDROWICZ / BRUSSELS

Dec. 9 is bittersweet for Europe: at a summit in Brussels, its leaders struck a deal that might save its beleaguered currency, euro — but at the expense of the European Union itself.

The deal could mark a turning point in the raging euro crisis if it convinces jittery markets that, by way of strict budget rules, member countries can claw their way out of debt woes. It is potentially historic, taking the continent deep into fiscal integration and union as the member states concede sovereignty on taxation and spending to a central authority.

The problem is the E.U. isn't heading into this adventure as one. Ten hours of tense talks failed to persuade U.K. Prime Minister David Cameron to sign up to the pact, and so the other 26 member states agreed to forge ahead on without Britain. Cameron argued that the planned deal would threaten key British interests, including its financial markets and the preeminence of the City of London as Europe's financial capital. And so he vetoed an amendment of the full Union treaty. Hence, the others had to take a different route to an agreement: the intergovernmental agreement they will hammer out by March will be written outside the E.U.'s legal framework.(See "Euro Treaty Takes Shape, But Without Britain.")

Read more: http://www.time.com/time/world/article/0,8599,2102019,00.html#ixzz1gCniEfQ7

Euro in danger, Europe races for debt solution

By GREG KELLER and PAN PYLAS and PAUL WISEMAN

PARIS (AP) - European leaders rushed Monday to stop a rampaging debt crisis that threatened to shatter their 12-year-old experiment in a common currency and devastate the world economy as a result.

One proposal gaining prominence would have countries cede some control over their budgets to a central European authority. In a measure of how rapidly the peril has grown, that idea would have been unthinkable even three months ago.

World stock markets, glimpsing hope that Europe might finally be shocked into stronger action, staged a big rally. The Dow Jones industrial average in New York rose almost 300 points. In France, stocks rose 5 percent, the most in a month.

More relevant to the crisis, borrowing costs for European nations stabilized. They had risen alarmingly in recent weeks - in Greece, then in Italy and Spain, then across the continent, including in Germany, the strongest economy in Europe.Read more.

Is The West Going Bankrupt ?

Hantu Laut

Be it an individual, a corporation or a nation, the consequence of over spending and over borrowing could be fatal.Many Western nations are now in deep financial trouble due to over spending.

Being highly geared is risky business.Many eurozone nations have debt to GDP ratio of over 100%, some as high as 400%.

Greece, the first victim of financial gluttony is having problems meeting its debt repayments. The financial debacle sent shock waves to members of the eurozone and financial institutions, which may have to give huge write downs and moratorium on repayments to keep the country afloat.The rescue plan announced in May by IMF and the European Union have not had its desired effect.The 110 billion euros rescue package came with expressed conditions of Greece cutting its public spending and boosting tax revenue.Plan to cut spending was met with violent street protests by unemployed youths.

Greece external debt is now at 182 % of GDP.Every man,woman and child in Greece now owed the rest of the world $53,984.per capita. Greece's trouble is not so much the debt to GDP ratio but more due to a stagnated economy, negative growth, living beyond its means (budget deficit) and rising debt level.In 2010 Greece showed a negative growth of - 4.5 %.Rising unemployment had contributed to violent and deadly street protests.

There is much talk that Greece's economic debacle would bring the demise of the euro currency club.Many US investment funds have taken flights pulling their money out of the eurozone to safer havens.S&P has downgraded Greece's debts to junk status.

Greece, is just tip of the iceberg, many European countries are in for much bigger trouble should they not able to service their debts.

Countries in the economic doldrums that may need lifeboats are Portugal,Spain,Ireland and Italy with Ireland faring the worst with current debt of 1382% 0f GDP.

In term of GDP the UK is at No.2 of the most indebted nation in the world, a whopping 413% of GDP and its every citizen owing the rest of the world $146,953 per capita.The country that wears the top hat for indebtedness is Ireland with a whopping per capita debt of $566,756.

With the exception of Japan, all 20 top debtors of the world are the highly industrialised countries in North America and Western Europe.

Surprisingly, the world's biggest debtor in term of value came out looking much healthier than most European countries.The US stood at No.20 for indebtedness and 101% of GDP and per capita debt of $48,258.It has raised its debt ceiling to borrow more money and its continuing deficit and slow growth rate would eventually render it a sick bill of health.If the US goes under the rest of the world goes with it.China and Japan hold $1.7 trillion of US debts.

It is not possible to foresee the next financial crisis, where it will originate from and how severe the impact on the world's economy.With available data, the low growth and highly geared Western economies appear to be likely candidates triggering the next financial crisis, probably bigger than the 2008 financial meltdown with some countries in the West going bankrupt.

The West have been living beyond its means for far too long at the expense of the poorer East.It's about time they trim their waistline.