Image By Steve Punter (CC-BY-2.0)

With exactly six months to go to Brexit Day, the International Trade Secretary, Liam Fox, says that an intransigent EU is pushing us towards a no-deal Brexit.


Dr Liam Fox told the Telegraph that the recent treatment of the Prime Minister, Theresa May, at the hands of the Eurocrats went beyond the pale:

"It reminded me of during the referendum when you heard voices saying Britain would have to be punished for leaving the EU. Then I said it was the language of a gang not a club." He said.

He also said that the UK would be a better and stronger country outside of the EU, Brexit deal or no Brexit deal and that it was now the turn of the EU to make a Brexit deal proposal.

The more we discuss the British Government potentially changing its offer, the less the offer will be taken seriously.

"Any plan B needs to be an EU plan B. They need to come forward with an idea now because intransigence will push us towards exit and a ‘no deal’."

He then said that now was the time to make it clear and talk publicly about the damage that a no-deal Brexit would do to the EU.

But I've got to say that as far as I can see the EU has already pushed the talks into no-deal territory and it gets more set every day.

But people should not be worried as the EU is putting in place plans for the EU Commission to take over the EU side of the Brexit preparations and fix it all within five days if push comes to shove.

Now think about it, they cannot unilaterally take action to keep trade and transport going in order to stop just their own businesses suffering, can they? The claim has always been that the EU and UK are interwoven, so any move by the EU to keep things moving for its own benefit will also help the UK – because they will have to talk to the UK government to get agreement, won't they?

Does anyone seriously think the EU can put in place rules that enables the EU to be selective about the trade it takes from the UK, while protecting its own businesses by ensuring free movement of their goods into the UK with no friction? A fanciful idea in the extreme.

And considering more EU jobs rely on this two way trade than UK jobs you get the idea.

But of course the EU is relying on the UK political classes to do its job for them. And up to that particular mark steps ex PM Sir John Major and the Tory MP for Cambridgeshire South, Heidi Allen.

John Major has also condemned attacks on the PM, but not those from the EU, he is condemning attacks on her from the members of his own Tory Party.

He said that such talk was unacceptable and damaged the national interest while the Brexit negotiations were ongoing.

He then jumped straight in and damaged those international talks and the government's negotiating position himself, by calling for another EU referendum.

And that is just what Heidi Allen did too by telling Radio Four that if no deal was forthcoming then we need another referendum.

But how much longer can the Eurozone and EU last, is the real question.

Writing in Brexit central Catherine Blaiklock, the UKIP economics spokesman says that the real danger for the EU is shown by the Target2 balances.

Target2, is the 'Trans-European Automated Real-time Gross Settlement Express Transfer System' and its use is mandatory for the settlement of any euro operations involving the Eurosystem – which is the ECB and the national central banks of the eurozone member states.

"That’s euro-waffle for a payments system, settling transactions between banks." Writes Blaiklock, going on to point to this chart and say that it shows that something is wrong in Euroland.

Target2 balances By Osnabruck University (CC-BY-SA-4.0)

Target2 balances By Osnabruck University (CC-BY-SA-4.0)

What it reveals is that Germany has a huge positive balance building up and that two countries, Spain and Italy, are accruing sizeable negative balances.

"Germany now has nearly €1 trillion of credits against those two countries." says Blaiklock.

There seem to be a few theories doing the rounds about what is happening here.

One is that it shows a huge transfer of money from Germany to Italy and Spain in the form of loans and if one or both get into difficulty then Germany would lose out big time as well as bring the euro down. Alan Greenspan, the former head of the Fed warned about these Target2 liabilities over a year ago. And unlike the UK and the US the EU does not have its own treasury system that can step in and save the day.

But in an article for the FT, Marcella Minnena of the Italian securities regulator Consob, wrote that it showed that money and securities are being taken out of the weaker EU countries and are being deposited in the strongest – Germany.

Either way this, says Blaiklock, signals the start of a financial crisis but not driven by the stock market or property, but by a bond crisis driven by government debt.

The upshot here is that if the Euro got into trouble it would be Germany that would have to come to the rescue.

Editors from Capital & Conflict had a closed door meeting with Greenspan nearly two years ago and reported:

"From where our editors were sitting, it sounded like Greenspan believes the next major financial crisis will be triggered by either Greece or Italy and will result in the total destruction of the euro as a major currency."

As Catherine Blaiklock says, we may well be hearing a lot more about Target2 in the coming couple of years!

So, best we distance ourselves from this imminent train crash tout suite then, before we get embroiled in bailing the whole sorry mess out!


The Eurozone is heading for a bond crisis driven by government debt

Alan Greenspan predicts the euro’s demise

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