Them's The Breaks

"They're right to be talking about growth, because unless they get the economy going and arrest this slide into a slump, there's no chance of getting public finances across the union under control. It's not so far showing up in terms of a change in strategy." Simon Tilford, chief economist at the Center for European Reform

What's ailing the European Union? Too much togetherness, perhaps. The mucilage of cohesion is proving to be a trifle awkward to stick to when not everyone is pulling in the same direction. The result is a bit of economic chaos, never helpful, but particularly not at a time of disintegrating financial viability, production, trade, and employment.

The EU's PIGS have been too generous at the trough, not sufficiently resourceful, nor abstemious, living far too high on the hog; imprudent! It's like a group of collegial acquaintances wanting to keep in touch with one another and arranging for regular lunches where everyone orders whatever they like, the tab is pooled and everyone pays an equal share.

After awhile the light eaters begin to look askance at the appetites of the gourmands, and wonder why they have to pay for a luxury meal when they themselves eat a bare minimum? Germany is one of those capable of restraining its appetite, and France and England, comparatively speaking. Yet it is their economies that must be strained to rescue Greece.

And possibly Italy and Spain. "What you see across Europe is the recognition that the lack of growth is a problem. I'd like to tell you that therefore they'd do something about it, but I'm afraid I can't", is the dim view given to the situation by a former British finance minister, Alistair Darling.

So the International Monetary Fund, heavily involved in Europe's bailouts of Greece, Portugal and Ireland, is getting nervous about the lack of stimulation. Without stimulation how can growth result? Stimulation as in spending, producing, growing the economy. But that's the issue; with high unemployment and the insecurity it brings how can people spend, and if they don't spend, there's no production and zero growth.

Factory orders are stagnant, people aren't buying, they're worried, and they're upset and they're mad as hell and won't take it any more. Or wouldn't, if they could. Europe ideally could use something in the neighbourhood of $1.4-trillion. Can't look to the United States to help them out, since the U.S. could use an additional trillion itself.

China, on the other hand, is being cited as a possible source and accordingly wooed. China is interested in selling its products, in increasing its manufacturing potential, in acquiring raw materials and energy sources.

And here's the combined trading strength of the EU mewling for financial breaks.