Marie-Antoinette Governs EU?

The best with falling
is getting back up.

I have repeatedly referred to "blunders" made by the EU politicians and bureaucracy leading up to the debt crisis and coming recession. Some examples include:

• Basel III pushing the banks to allocate its investments to sovereigns and leaving the corporates. The Basel III framework is by some described as an act of war against the corporate society and the whole corporate world is now discussing ways to build up a new financial system without the banks. Because we need to be able to offload financial risk and borrow and invest cash disregarding of the regulation. The banks are also leaving the EU sovereign debt instead investing directly in the ECB to protect themselves further escalating the crisis. Remember that the previous crisis started in the regulated part of the financial industry.
• Censoring the rating agencies making investors unsure what risk each EU country's debt represents. Most investors have investment policies using official rating as the basis for allocating capital. 
• Introducing a Tobin tax taking away the liquidity of the markets forcing the corporates to find natural or strategic hedges, which in one way is good but may force some to move even more operations to the growing markets where the business is. The Tobin tax will definitely make corporate business more risky since fewer risks can be hedged instead borne by each individual corporation.
• There is a discussion and worry that corporates will not be exempt for the central clearing of OTC derivates. The concern is what such a clearing would require in respect of collateral forcing the corporates to tie up even more capital leading to cancelled capital expenditure.

Slipped too many times now

On top of all this there is now circulating a rumor that during the discussions of a rescue package for Greece the Elite decided that the CDS (Credit Default Swaps), being an insurance against default, should be worthless as part of the 50 per cent hair cut on Greece debt. The background is that the large funds managing our pensions and savings and the banks had invested in Greek debt and had bought CDS to cover for the risk of Greece defaulting or the risk of loosing money in a hair cut. By making the CDS worthless the investors who do not want to take the risk of default of e.g. Greece and Italy have now left the market, which dried up liquidity and further escalated the crisis. 

We need to stop this Marie-Antionette behavior by the Ruling Elite instead starting a dialogue so the corporates can avoid loosing too many jobs rampaging growth completely. The corporates are pragmatic and needs to act to mitigate for the political decisions, which now in all ways adversely affect their business.