Isn't It Time To Bite The Bullet?

Back to Europe yet again for this Blog because, whether we like it or not, what happens there is ultimately going to affect us here in Asia. It is all very well for us to continue to pat ourselves on the back and say we are in good shape in places like Hong Kong, but I think we would do well to remind ourselves of the Boy Scout motto “Be Prepared". 

But before I spread more gloom and despondency, as in recent writing, I remarked to a good friend a day or so ago that after all this prevarication, on and off discussions, no decisions, and “will they won’t they” diplomacy, it was probably time that the major players took a deep breath and decided to bite the bullet

Talented man that he is, I got this by return.

 

An original, no less.

But he doesn’t stop at creating cartoons. We were discussing the European events in September or October in the wake of a stock market up-turn, - “a frenzy of blind optimism”, he said, "rather flimsily based on rumours that European leaders were suddenly ready to act”. “Where did that come from" he added "they hadn’t taken any action in the previous 18 months, so “sudden” was rather unlikely”. And so it has been proved.

Clearly one cannot take a snap decision over something as complex as this, but by the same token one cannot delay forever. There is certainly no shortage of advice out there from the media, the professionals, the laymen and the politicians, but little consensus beyween them. Suggestions run the gamut of reverting to the original Eurozone members and letting the "new" joiners either sink or swim in another pond. That, to me as a non-expert, seems to be a reasonable suggestion, but it leaves the big question of what do you do with the remaining 21 members? Anarchy in their own countries perhaps, spreading into the rest of Europe? It would seem there are enough people out there who are ready for a fight.

Or let Germany move out from the Eurozone and do its own thing. There appears to be a growing swell of public opinion in that country which runs along the lines of "how much longer are we expected to bail out people who cannot balance their own books?" The trouble for Germany would be that going it alone would see an appreciation of their currency that would have an immediate impact on its ability to export and earn revenues, bringing Germany to its knees.

There are more variations on a theme than those written by Elgar. But the time has come for real leadership from a group of politicians whose re-election hopes must be made secondary to the main role of resolving the crisis. They would work together with organisations including the IMF, and the financial community and the European Governments with a view to coming to a decision - and then implementing it! (I saw an article today that said the IMF should not get involved – or at least the non-European members should speak up against a bail out coming from the Fund. A short sighted view, I think, because this is a global problem).

It is important to get this resolved because the longer it drags through the winter months, and the uncertainty lingers, the more chance there is of matters turning ugly – and they will not just be economic issues but social ones. “Occupy Wall Street” will become focused on real issues and develop a sense of purpose. It will spread. We can do without that .

And for us in Asia, we are not immune. China is going through a leadership change that will take months to settle down, and the current level of inactivity will continue. We have our own – and rather ridiculous – “Occupy the space under the Bank because it is covered, but protest about the property developers” movement in Hong Kong, and also a leadership election. Korea is moving into an election year in 2012, while Japan seems to be having trouble keeping a Government at all. And that’s just the politics. Economically in Asia we are beginning to feel the effects of reduced orders, and rising inflation. Unemployment too, is an issue amongst the “young” populations particularly in South East Asia – which will lead to a testosterone imbalance, and add more anger and fuel to the fires of unrest that are already bubbling under the surface.

And from a crisis that had its origins in the USA – an economy that itself is still not out of the woods – and has spread with alarming and amplified effect vengeance into Europe, we need a resolution before it gathers more potency and hits us.

There is no “soft” option really – and measures that will actually resolve the problem are likely to be painful – but something has to happen, and be followed through.

Now is the time to bite that bullet.

 

Comments

[Robert]

Well, I think we can now say that David Cameron has indeed bitten the bullet,(despite like 'Christopher Robin, dragging round a limp Pooh Bear'- ie. Clegg!!)Thank goodness a leader has, at last,shown some Statesmanship. This quality is clearly lacking in any other EU leader!'Real leadership secondary to re-election'!!Not much hope of that, based on form to date.These guys (if we can include Adolphe Merkel in that description) would be completely baffled by the sentiment! Let us hope that Cameron continues to show a quality of leadership which he may well be capable of (in the absence of Pooh bear, of course!!)