Rob's 19th guest post on Saving the Euro.
Was Cameron Right?
Firstly, I must say that I think that he did the only thing that he could to protect the UK's unique position in the financial markets.
Nothing different to the French attitude about agriculture, which they have protected from day 1 as it is a massive money spinner for them.
Will the "Euro zone plus" concept work, well "the proof of the pudding is in the eating" as they say?
The UK is not as isolated or vulnerable as some may think – still a couple of other countries not on the Merkozy train yet – and also it puts them in an interestingly strong bargaining position.
To push a number of directives through, the "Euro zone plus" group wants to use a number of EU organisations to monitor and enforce the dictates that will come out of the discussions in the coming days/weeks, but these organisations are financed by all 27 EU members including the UK and the other hold outs, and they have the right to veto their being used.
If the "Euro zone plus" group decide to introduce the "Tobin" tax within their countries, that may well convince more banks etc. to relocate their HQ's to London where the tax will not be introduced, thereby further strengthening London's position as the key financial centre.
What did the market think of this?
Bizarrely, once again we have a key summit which didn't go to plan and nothing whatsoever happened in the markets – stocks and currencies all ticking over as if it was a normal Xmas market – very quiet, very low turnover and volatility.
Having been a currency trader for more years than I care to remember, this is starting to freak me out a bit – I have never seen the FX markets in particular so relaxed about things.
I keep having to ask myself is it really this quiet, or have I missed something – is there pressure building up under the surface that I cannot see, and is it suddenly going to erupt in to a chaotic frenzy of trading?
Perhaps it is all a dream and I will suddenly wake up to the sound of frantic dealing, and markets spiralling out of control……..or perhaps not.
__________
The author, Rob (not his real name), works in one of UK's largest charities.
No comments:
Post a Comment