The spat between 23 of the EU with UK+Cameron and the other 3 deferring to their parliaments but likely to toe the EU line, has been all about shoveling heaps of political PR garbage done the gullets of the press into the heads of the public. (I used “heads” rather than “minds”), rather then economics.

What was agreed this week should have been on the agenda when the Euro was formed: it is nothing more than a sensible rule book for good financial planning.

The next stage will be to ensure the approval of national governments to enshrining these targets on debt into their constitutions or similar. That should be fun. The current agreement ignores how these utopian and wise targets are to be reached eg 3 years or 5 years. Its like signing up for a multi year study programme and forgetting about the effort required. This agreement is therefore naive.

More importantly this agreement ignores how growth is to be stimulated and the threat to tax transactions is silly meddling. The only people to absorb the real cost of such taxes will be the consumers in the impacted countries. Directors salaries and dividends of the banking industry will not be cut but the competitive playing field of the global banking industry will be disrupted for a while. The new taxes will be passed on via charges and higher interest rate spreads. The absence of a plan despite months of talking is silly.

Most importantly it ignores how the excessive debt and we are ignoring the unrecognised debt of government pension liabilities and PFI style financing are going to be tackled. This is stupid.

This week has been all about politics, fooling the various national electorates and ignoring the elephant in the room. The bond market is already pushing up interest rates and credit agencies are waiting like vultures eager to exercise and display their new found “we are now righteous” vigilance by downgrading a euro banking industry that is slowly being strangled of liquidity by its own collective mutual distrust (just like northern rock was but now on a far bigger scale).

Their is real pain on its way for the deluded EU elite but which will be born by the still gullible electorates. The UK was right to stay out but it should have been proactive on debt and growth rather than pandering to a single sector in this country.