The Sun politics team have tweeted tonight’s YouGov voting intention. Topline figures are CON 38%, LAB 41%, LDEM 9% – so Labour’s lead down to 3 points. Changes may well just be sample error like the 2 point poll we saw earlier this week, but certainly there doesn’t appear to be any boost for Labour from their party conference.

288 Responses to “YouGov/Sun – CON 38%, LAB 41%, LDEM 9%”

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  1. Let’s have less of this no state / more state argument. Let’s look at the obvious; it all depends on where you are talking about.

    Anyone want to go back to allowing bankers total freedom to destroy the world again? Or should we accept the idea that more state control there is needed?

  2. Jack

    Piffle. All our wealth is in our houses (overall, you get the diea). None of us can stump up 25% of the value of our houses so that means we all have to sell our houses and buy smaller ones. There goes the economy…

    The wealth tax on the very rich might be justified, however it would raise zilch as these people have very effective tax avoidance schemes. If the worst came to the worst they would remove their assets.

    This means that middle wealth would pay, as they always do. However any tax over about 2% would be impossible to collect for as you say people do not have the cash.

  3. @Alec

    Wasn’t Adair Turner also the person who said, way back in 2009 whilst we were in the depth of the recession, that much of the activity of the financial sector and City of London was “socially useless”?

    I think he was right then, and probably right now, and doesn’t this devastating critique from a former chairman of the Financial Services Authority chime rather nicely with the essence of what Miliband was saying in his Conference speech on Tuesday?

  4. Jack

    Did you read the report, I did provide a link. It’s not very detailed and it arguments are sketchy but its only 15 pages and to make its case properly would need to be at least 60 pages(if you are interested in more detailed stuff I have loads from a variety of viewpoints) but the point they are making is that the debt overhang is crushing the economy and the suggest a solution which does not change the system but only fixes the immediate problem. They do say that its a solution which will only be considered when the crisis becomes overwhelming

  5. @Jack

    “Anyone want to go back to allowing bankers total freedom to destroy the world again?”

    Isn’t that exactly what we are doing, if maybe by default???

  6. Crossbat

    No what we are doing is putting our fingers in our ears and singing la la la very loudly

  7. RinN

    Late night/early morning always appears to be my most controversal time.

    I think the censorship things are a dilemna for Liberals, even more than the wider LDs. Personally I am not worried by the Sun pictures in terms of their influence on boys perception of women. I wonder if our leaders are aware of what goes on on the Internet.

  8. @socalliberal

    ‘But even those parties have to adjust their policies and their stances according to what the public wants and where the public stands. That’s why, as you pointed out, the gradualists camp of the Scots Nats won out.’

    Exactly, the SNP tailors it’s policies to ones the Scottish voters want because people don’t generally vote on constitutional issues and hopefully the voters will reward us with voting for independence if they are implemented well.

  9. @Jack – I think you are misunderstanding the concept of a wealth tax. I haven’t read @RiN’s link so can’t comment on that specific idea, but in general most of these calculations are not based on taking a proportion of everyone’s wealth, in which case your objection would be justified. Instead, they tend to look at a proportion of the wealth of the very richest.

    I can’t recall the precise numbers, but when I had a debate with @Colin on this I recall working out that if the top 20% wealthiest in the UK paid a third of their wealth in a one off tax we would effectively eliminate the debt.

    Even if you wanted to levy a tax on everyone’s wealth, this would be very easy to construct in relation to property – in simple terms, the state would pick up it’s share when you die.

    What you have to understand is that you are rejecting the concept of a wealth tax for whatever reason, while accepting a tax of 73% on the earnings of people on minimal wages. (Look it up – this is the marginal tax rate on low earners recieving tax credits and some others on £40,000 – £42,000). Even basic rate tax tax payers on a salary are paying 33% of their earnings in tax.

    So what’s the problem with a 25% one off tax on the assets of the very richest, or would you prefer screwing the poorest instead?

  10. I don’t object to a wealth tax, but I am a little sceptical about it’s “one-off-ness”. Blackmailers and extortionists tend always to go back and ask for more. I suspect the state might be tempted to emulate them.

    I think we’d have to think very hard about the implementation of it though, as like a land value tax it might just nudge the very rich to dump their UK assets with negative consequences for all of us.

    Personally I think the solution lies in a clearer, simpler and much better enforced tax regime, rather than completely new types of tax, but I am no expert and I am certainly open to persuasion.

  11. On the SNP,

    I rather thought the competitive advantage of the SNP was that they don’t really have an underlying political philosophy of government. Scottish Nationalism seems to me to be above where Scotland is run from rather than how it is run. Given the freedom from “core values”, “party ideologues” and all the rest of the fluff (ahem, I mean central tenets of party political identity) they are able to design policies on a case by case basis around an objective assessment of what might actually work.

  12. to be above = to be about

  13. Alex

    Did you look at my other link about marriner-eccles the god father of the new deal

  14. I am actually with Neil A on the difficulties of a “one-off” wealth tax. One-off taxes work when there is a clear and pressing justification for them – windfall profits etc. I do believe in a wealth tax as an ongoing form of taxation on assets held over a specific value. I think it is a valid means of increasing the marginal taxation imposed upon the wealthy without being punitive – and it would address the clear anomalies whereby with indirect taxation the poor clearly pay far more than the wealthy as a share of income on taxation.

    I personally would like it to replace some of the burden of VAT ( a cowardly odious iniquitous tax in my opinion – there should be far more exemptions and those items that are deemed to be suiotable to have VAT placed on them should be avoidable – or if there must be VAT it should shrink back to under 10%) – now that would be a fair and progressive tax.

  15. @Henry

    I think your analysis is too one dimensional due to the fact that all major parties are coalitions (which shift over the long term), and their policies a result of the current compromise/power balance within that coalition at that time. No one faction ever gets 100% of its own way over all policy positions.

    I still believe the basic difference between Labour and conservative is that Labour’s traditional drive is to secure an improvement in the lot of working people and a willingness to do this by intervention where necessary, while the conservatives focus is to do what it can to support business (on the basis that it will increase the overall wealth of the country) and conclude that its best done by none intervention. Neither of which, I point out are necessarily contradictory objectives.

    @ SoCalLiberal

    I have always thought a major difference between many Labour and the Lib Dems supporter comes down to the extent an individual perceives the relative importance of the principles equality and liberty in the economic sphere and its impact on society as a whole. Labour supporters tend to believe that if you allow liberty to be overly dominant over equality in the economic sphere, it will undermine liberty and equality in other areas as those who acquire excessive wealth will have un-equal influence. Therefore, Labourites are much more supportive of intervention than LDs in this sphere, as the LDs do not share this fear to the same extent and are more likely to apply a ‘liberal’ principle. There is also the difference between socially conservative Labour supporters who often share similar position on law and order issues and the LDs – but Labour tends to be split on this area of policy itself. Both of the above explain why we have two very distinct parties.

  16. ICEMAN

    @” personally would like it to replace some of the burden of VAT ( a cowardly odious iniquitous tax in my opinion – there should be far more exemptions and those items that are deemed to be suiotable to have VAT placed on them should be avoidable – or if there must be VAT it should shrink back to under 10%)”

    “The European Union Value Added Tax (EU VAT) is a value added tax encompassing member states in the European Union Value Added Tax Area. Joining in this is compulsory for member states of the European Union. As a consumption tax, the EU VAT taxes the consumption of goods and services in the EU VAT area.
    Each Member State’s national VAT legislation must comply with the provisions of EU VAT law as set out in Directive 2006/112/EC. This Directive sets out the basic framework for EU VAT, but does allow Member States some degree of flexibility in implementation of VAT legislation. For example different rates of VAT are allowed in different EU member states. However Directive 2006/112 requires Member states to have a minimum standard rate of VAT of 15% and one or two reduced rates not to be below 5%. Some Member States have a 0% VAT rate on certain supplies- these Member States would have agreed this as part of their EU Accession Treaty (for example, newspapers and certain magazines in Belgium). The current maximum rate in operation in the EU is 25%, though member states are free to set higher rates.”


  17. Neil

    You are quite correct that a one off tax is likely to be repeated in this case I would guess about once a generation. What I find interesting about this report is that it is suggesting a radical solution which sounds suspiciouly Marxist but it is coming from a source which is definitely not Marxist. To me that illustrates the seriousness of the problem. The other thing which is interesting is that they treat govt, corporate and household debt equally in that all three are problematic.

  18. Henry
    “at the Tory Conference, there may be a boost for LDs as well, as DC praises NC, Vince etc.”

    Ahhh, Henry. You’re still not getting it are you?

  19. Thanks for that Colin, I was going to ask about VAT because in Germany hotel VAT was reduced to 7% last year and I wasn’t sure what the rules were.

  20. @Iceman,

    I don’t share your aversion to VAT (actually I rather like it as a form of taxation) but I agree that much more could be done to make it equitable.

    It evolved from what was originally a “luxuries” tax and in my view it needs to devolve back into one. The exemptions need to be wider, and greater variety in levels needed, to the point where it is the exception rather than the rule for “ordinary” families to be paying top rate VAT on a purchase they make.

    A brand new Ford Focus should not be taxed at the same rate as a brand new Lamborghini. A prawn salad in a cafe should not be taxed at the same rate as beluga caviar at a Michelin-starred restaurant.

    Thorough and hawkish monitoring would need to be in place on imported items (we don’t simply want the rich to buy their Lamborghinis in France and ship them over), but I’d hate to give up the simple ease of raising tax on purchases, or the nudge it gives people away from being spendthrifts.

  21. @oldnat

    “The three main parties are the same”

    Do you think a Conservatives would have introduced a minimum wage? After all Conservatives campaigned against it, warned of dire consequences if we introduced it, and voted against it.

    Even now you get right wing Tory MPs who suggest effectively abolishing or seriously watering down the minimum wage – never mind the occasional swivel eyed loon at ConservativeHome who thinks he should get to have his own personal Baldrick for turnip money.

  22. Henry.
    “The other side of the coin is the expectation that all europhiles will be demanding the abolition to be closer with the EU.”

    Fair point. But to be serious for once, there is a big moral and economic argument to be had here.

    In this country, we have an enviable record on road safety. We’re streets (no pun) ahead of similar European countries, and I suspect it’s not a co-incidence that we also have stricter controls and enforcement of controls over speeding. Should we jeopardise that jsut to allow a few speed-heads (me included if I’m honest) to get home 5 minutes earlier?

    The argument that “many otherwise law-abiding citizens regularly break the speed limit” is ridiculous. Do people think that if you legalise 80mph, everyone will stick to that limit? Of course not – 90mph will become the accepted norm. Just like it is in Italy where I drive regularly, where I am regularly terrified by the appaling standards of driving and where my intelligent, handsome, athletic 13 year old cousin was mown down and left brain damaged by an otherwise law abiding driver who decided that speed limits didn’t apply to him.

  23. It will be interesting next week how Osborne explains that ‘plan A is working. Many believe that it is not, with borrowing up for example, as the economy has stalled. I therefore expect that he will just say that there was no choice other than to curb spending increases, as to not do so, would just increase the borrowing above current levels, at an increased interest rate. The UK economy would therefore suffer even more in very choppy waters, particularly in Europe. He will probably say that in tough economic times, you have to tighten your belt and make your money go further. So expect plenty of the standard sayings that we hear from government ministers during bust cycles at party conferences. I suspect that the Tories will make a meal of the waste they have found during Labours years in office and how they are managing taxpayers money more wisely.

    So next week will be like ‘groundhog day’, where we think that we have been here before. I suspect that if you went back through government party conference speeches in the past and you analyse the content, you will find that is has all been said before. Question is whether politicians of any political colour really have any influence over events ? Particularly in the current world we live in, where China, Goldman Sachs and the ratings agencies, probably have more influence on how we fair in the world.

  24. The IMF wants to double its bailout fund to 1.3 trillion and it wants to start issuing bonds. This is not reassuring!!

  25. Seems to me that +6 leads for Lab are the blips now and +3/4 are the normal.

    And I do expect a huge Lab bashing time at the Con conference, about overspends, money wasted. Why not … it creates impression.

    Everyone knows that even the worst IT budget overspend has nothing to do with the Global Financial Crash, or the reason why cuts are now being done, but it reinforces the narrative.

    I do think when sovereign debt, world economy, global recession hits the headlines it does actually help the Cons – people think there’s no choice to Plan A.

    When the UK economy is hit, UK growth is slow, UK unemployment is rising, and UK cuts seem to not make sense (e.g. cuts that actually seem to cost money – e.g. scrapping UK Film Council) it does a lot of damage to the Cons.

  26. @RIN

    Can you explain to me, the difference between the economics of debt now and that which existed after WW2 ?

    After WW2, many countries were in a devastatingly bad economic state. In fact I believe that the UK did not finish repaying the debt they owed to the US until end of 2006.

    So surely the world must recognise the situation it has got itself into and to restructure debts over a longer period. We should deal with the situation, as if there had been a world war. Or is this no longer possible, as the economic/financial world we are in is far too complicated and politicial leaders in countries no longer have the power to authorise such a move, even if they were all in favour.

  27. SoCalLiberal

    I didn’t even realize you guys were having an election. Haven’t you guys had the same leader since the early 1980?s?

    The House of Keys election is every five years (technically a bit less this time, as it is brought forward from November to September from now on). Actually we have had a different Chief Minister every five years since 1991 – Miles Walker who set up the ministerial system in 1986 served two terms and then left to spend more time with his directorships. We’ll have a new one this time too as Tony Brown, the last CM, did not stand again as he finally realised the derision in which he was held.[1]

    We have a surprisingly fast turnover of politicians in reality. Five lost their seats last night (I forgot about one in my own costituency – which probably explains why he lost) plus two retiring. Looking back twenty years there are only 2 MHKs out of the 24[2] still there. Both are full-time politicians elected comparatively young at first[3], while most others get elected at a variety of ages.


    From what I’ve seen Liberal Vannin seem to be a right wing party who want to cut public expenditure because the previous Government wasted money.

    Is that the correct perception?

    I think ‘eclectic’ would be the polite term. Its Leader, Peter Karran (see below) was originally Labour Party – though all MHKs really get elected mainly as Independents on their personal qualities and record. He is generally seen as a left-wing gadfly to the Manx establishment. Its Campaign Manager did the same job getting Kilroy-Silk elected as a UKIP MEP. The Party is a member of Liberal International.

    The perception is that the Manx Government is massively over-staffed and over-paid at all levels (especially higher ones); wildly ineffective and in some departments criminally negligent; and that it has frittered away vast sums of money in capital projects, some unnecessary, all overpriced. This perception is almost universally held and almost entirely correct. So Liberal Vannin aren’t unusual in holding to it. What is to be done is a matter for much discussion[4].

    [1] Like the contemporaneous British PM he was actually called James Brown*, but used his second name. Presumably neither of them felt like sex machines.
    [2] There have always been exactly 24 members of the House of Keys since time immemorial (1000 plus years allegedly), irrespective of territory covered, boundary changes, etc.
    [3] This gives the rather odd situation that Peter Karran at 51 is the ‘Father of the House’ – a similar situation as with Stuart Syvret in Jersey, to whom he also bears some other resemblances
    [4] The reasons for all this are too long and complicated even for one of my comments or Anthony’s patience.

    * He wasn’t even the most important person in Manx politics called James Brown, that being a Black 19th Century newspaper editor who was one of the leaders of the fight for an elected House of Keys and ended up imprisoned in Castle Rushen and having to be freed by the British government. (See even my footnotes have footnotes – beat that Martyn)

  28. R huckle

    I wish I could explain the difference. But I ain’t that smart and there are too many conflicting ideas

    But the financial architecture is vastly different than the post war period and growth figures are very different. Also post war govt debt was high but private debt was low, we go on all the time about govt debt but I think private debt is actually a bigger problem

    You should read the link I recommended to alex. He was the creator of the post depression compact(Keynes was in there as well) which was destroyed in the 70s. You can see that the similarities of today’s situation and the early 30s is erie. I think there will be a growing public appetite for the same solutions and I think red ed is moving in that direction very gently. But will the same solutions work twice?

  29. R huckle

    You should note that my second link suggesting a 25% wealth tax is an attempt to solve the immediate problems without changing the system as it stands, the authors wish to avoid a return to the post war keynesian consensus.

  30. @Leftlampton

    Sad to read about your cousin in Italy.

    It is compelling how people, who have family or friends who have been killed or seriously injured in a RTA, argue for more control of speeding ,while your “average joe” bitterly complains about the unfairness of speed cameras and how he is being victimised. 8-)

  31. @Henry
    I do not think you are wrong or stupid to expect a few kind words from Cameron toward your party at the Tory conference. Whether the opposition like or not, Cameron is a realist and is quite capable of flattering the non-brain damaged wing of the LD’s. Going by attitudes from right wingers on this board, a vote of thanks for stalwart support of financial sense is very acceptable to most if not all of us. Indeed if truth is told, a further period of coalition is not a terrible prospect.

  32. @RIN

    Yes I realise the world debt situation is very complicated and didn’t expect an answer that included definative solutions. I don’t think there is an economist out there who genuinely knows how countries are going to deal with the problem. The UK’s overall debt including private now stands at 385% of GDP. China in comparsion has 5% overall debt. Only Ireland has a worse problem at 1100% of GDP.

    The more you look into the debt, the more baffling it is. The Bank of England holds $352 billion of US government debt, whereas France and Germany hold $22 and $65 billions of US government debts respectively. I suspect that both France and Germany have more in the way of Euro debts, hence less US debt. But the question is that if all the debts are being held by central banks in such massive volumes, is whether the whole of financial system has just become a massive joke. It is basically covering up for a capatalist system that does not work and has not done so for decades. i.e. demand for goods/services/housing/raw materials/energy etc has galloped away, the supply side has not kept up with the pace and therefore debt has been created. There is also the issue that raw materials are gradually being depleted, so the cost goes up. Not saying that communism and state control is a better system, but we would not have the current problems, had there been better state regulation.

  33. “The Bank of England holds $352 billion of US government debt”

    Does that mean that the Bank of England bought US Government Bonds to the tune of $352 billion?

    For what purpose?

  34. @Roger Mexico

    You said “…See even my footnotes have footnotes – beat that Martyn…”

    Hmm, a challenge… :-) The Beeb, Times et al are reporting the size of the EFSF to be 440 billion euros, but I reckon it’ll be 780 billion euros after ratification. Usually when I say one thing and the int’l media say another, it’s me who’s wrong (strangely enough… :-) ). But occasionally (albeit rarely) it’s the other way around, and those cases usually involve Europe. So I’ll try to find out if I’m right and the BBC is wrong.

    Regards, Martyn.

    Meanwhile, here is the latest scary post about Greece:
    h ttp://

  35. @ Nick Poole

    “Does that mean that the Bank of England bought US Government Bonds to the tune of $352 billion?

    For what purpose?”

    Investment/ Security.

    It is how the current system works. Central banks print money and it gets invested. If you looked at how much money the BOE has invested in different countries, it would add up to a lot money.

  36. Martyn

    Great link which confirms much of what I’ve seen elsewhere, however as always when a study is done by a bank you have to factor in their own interests. But I wonder why you don’t just post links the normal way as the rules on links have been relaxed


    “a vote of thanks for stalwart support of financial sense is very acceptable to most if not all of us”

    Yes-count me in Roly & Henry

  38. “Investment/ Security.

    It is how the current system works. Central banks print money and it gets invested. If you looked at how much money the BOE has invested in different countries, it would add up to a lot money.”

    I’m missing something here. The Bank of England prints money and buys US bonds? Why does it want to invest or provide security? It doesn’t need to print the stuff at all.

    How can the Government claim we are broke when the debt consists of money printed out of nothing to buy bonds from the US?

    Why doesn’t the Bank of England print money to invest here? Pay my wages and then my pension? Build social housing? Broadband, education, universities…

    Why should it buy US Government bonds? WHAT FOR?

  39. Nick p

    Yes why has the BoE got so much useless US paper

    My guesses

    The fed has done a lot of backdoor bailouts of British banks, this is a way of paying back the favour

    It’s an attempt to tie sterling closer to the dollar, I’m not sure how this would work, it just my feeling that we are becoming part of the dollar bloc

    The BoE are insane, its as good a theory as any

    But bill p will be on later to give us the conventional view. So you should wait for that.

  40. LeftLampton

    I am sorry to hear about the serious injury to your cousin by a reckless driver.

    I support road safety, and I am not sure what are safe or unsafe speeds.

    The point I was making was obvious, both the europhiles and eurosceptics will pick and choose the aspects of EU and Europe they like.


  41. The only thing I can speculate is that the whole dang lot is bad debt that has been magically transformed in Government debt by our Governments buying the banks or the dodgy mortgage deeds.

    So now we buy each others bonds because nobody else in their right mind would want to. So all debts will be honoured with printed money eventually and inflation will soar, but my wages won’t.

  42. LeftyLampton

    Ahhh, Henry. You’re still not getting it are you?

    Put it another way I would be really surprised if DC does not make positive noises about the contribution made to the Coalition by a number of LDs. I’m not expecting many tributes to Tim Farron, but then I am not sure he deserves many.

  43. Henry
    My point wasn’t that the Tories won’t enact a less costly state – but that is a consequence of Tory ideology, not the goal.
    The economic goal is to build a government to help those who help themselves. Not those who want a hand out.
    But they are big state on law and order. Big state when dealing with unions. etc
    It’s not the size of the state in politics, it’s how you use it.

    I agree that Cameron will praise Clegg and Blair and that may boost Lib VI. But it’s also counter intuitive as it will help make Ex-Lib-Now-Lab support more concrete.

  44. Nick P,

    This may help. It’s not a case of the BoE printing money to buy bonds…..

  45. Tinged

    Yes I too am sure that DC will knife us in the back by saying nice things about us, but I’m hopeful that there will be lots of complaints about the dems which would prove that we are doing something useful in govt and maybe help our VI

  46. R Huckle

    “But the question is that if all the debts are being held by central banks in such massive volumes, is whether the whole of financial system has just become a massive joke. It is basically covering up for a capatalist system that does not work and has not done so for decades.”

    No question about it. The world is basically bankrupt and in denial, and the thing just goes on. Scary actually.

  47. DC is not going to say nice things about NC because he knows that will make NC’s position even more precarious and threaten the coalition. Whenever it’s looked like NC is in trouble, DC has done what he can to bolster him – he has to.

    He then has the added bonus of a few right wing Cons shouting at him for being nice to the LDs thus making him seem more centrist and a New Breed of Tory, appealing to the Blairite/Independents.

    What we have to realise is that DC needs NC both for cover, to keep the coalition going, and to appeal to floating voters. They both actually like being in coalition together (as opposed to DC having to try to rule in minority and being held hostage to his back bench nuts).

  48. So who is going to do the Tim farron speech for the blues. The only name that springs to mind is David Davies but that just silly really silly. Maybe the baroness will do a hatchet job on us. Any ideas??

  49. I don’t want to say it, but Ed Miliband’s leadership speech at the Labour Conference reminded me very much of Ian Duncan Smith. There was the same quiet delivery, contrary to content of the speech trying to claim ideological passion which at the same time being reasonable and moderate. Ther was the same dilemma as to whether to identifywith or distance from a previous leader and Government. And there was the same problem of trying to make an impact with a speech at a time when the opposition does not want to define its policies.

    My recollection in that his Newsnight interview this week Ed Miliband claimed at one point to be capitalist and at another to be a democratic socialist. He can’t have it both ways.

    And a Party that cannot get its leader’s annual conference speech onto the front pages of hostile daily newspapers (e.g. “Telegraph”, “Mail”) has got big problems. Being ignored is worse than being attacked.

    Part of the problem is that the record of successive Labour governments means that it is very difficult for Labour to get it’s spokespeople believed. In this respect they made a big mistake just before their Conference saying they would reduce (why not abolish, principles please) university fees. Of course, this policy area is notoriously an instance of a big big LIbDem broken promise, and given past Labour resords, few believe they would have done different. Labour should have left higher education alone last weekend.

    No wonder Labour are not getting much boost in the polls!

    Frankly, outside the political village this years’ Labour Conference was barely noticed, even though there were few big news stories (the financial crisis is becoming perrenial) to compete.

    Given that none of the major parties look like taking on international financial interests (there is a lot to happen on this front before 2015, which make current opinion polls of limited relevance), my psephological vew would be that Labour needs to go for a leader who would be distinctive in personality terms and in leadership debates. Which bluntly means Yvette Cooper. Maybe not the best option in terms of Prime Ministerial qualities (although there are far worse), but the person I suspect I would tell Labout to put up if I were a backroom adviser. And actually there are some signs, e.g. Ed Balls lowering his profile, that Labour are gearing up for this.

    Incidentally, even if David Miliband would have been the best choice as Labour leader a year ago he would be impossible as a replacement for his brother. .

    Polls for a choice between Cameron, Clegg and Cooper would probably not give the same figures as Cameron/Clegg/Miliband.

  50. @Roger mexico

    Ah, gottit

    The latest version of the EFSF (EFSF v2.0) works like this:

    * Take the total guarantees of ~€780 billion.[3]
    * Subtract the countries that have already been bailed out (Greece, Ireland, Portugal), which gives you ~€726 billion.[2]
    * Divide by the overguarantee ratio of 1.65, which gives you €440 billion

    So the latest version of the EFSF currently under ratification has guarantees of €780 billion and can issue bonds (not including ones it’s already issued) of €440 billion

    By the same logic, the previous version of EFSF (EFSF v1.0) worked like this

    * Take the total guarantees of ~€440 billion
    * Subtract the countries that have already been bailed out (Greece, Ireland, Portugal), which gives you ~€410 billion.
    * Divide by the overguarantee ratio of 1.2, which gives you ~€341 billion

    But what commentators seem to have latched on for EFSF v1.0 was the guarantees from Austria, Finland, France, Germany, Luxembourg and Netherlands only, which totalled ~€255 billion[2] (I think this is where BNP Paribas got its €255 billion[1] figure from as the “effective size”).

    So when you see headlines like “EFSF increased its size from €255 billion to €440 billion”, that’s how they got their figures.

    Regards, Martyn

    [1]: h ttp://
    [2]: h ttp://
    [3]: h ttp://

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