Tonight’s YouGov poll for the Sun has topline figures of CON 35%, LAB 40%, LDEM 9%, Others 16%. The five point Labour lead is bang in line with recent YouGov polls, but it’s worth noting that within that 16% for others UKIP are on 8%, their highest since the European election in 2009.


188 Responses to “YouGov/Sun – CON 35, LAB 40, LDEM 9”

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  1. Mr Ned

    THanks-your posts are very informative !

    I share your admiration of Merkel.

    Every instinct tells me she is right to scream “moral hazard” until there is real evidence that profligate politicians have recanted & start to address overspending, under taxing & chronic uncompetitiveness.

    But I think -if/when that day seems evident -she will have to accept that real resource transfers are necessary to compensate for debts which cannot be repaid by any acceptable route to economic stability.

    As an East German she must know better than most what has to be done in the end-and who will pay for it.

  2. @redrich – I really think you are looking at far too long a timetable. It took an average of something like 20 days with rates above 7% for Ireland, Greece and Portugal to need a bailout. We’ve now had Italy at this level for around a week or so, and the pressure is getting worse.

    The Eurozone leaders probably have until mid December at the latest to sort this out, and frankly I don’t believe they can. Once the crisis mentality develops in the markets, what was yesterdays big bazooka becomes todays pea shooter – what counts as decisive action in the eyes of the markets just gets bigger and bigger.

    I really don’t see any prospects for the Euro to survive as currently constructed. What I find most painful is seeing the costs of the inevitable breakdown spiralling ever upwards. It’s like sitting in a very expensive taxi staring at the meter, constantly asking the driver to go faster – at some point you are bound to crash, but the longer it takes, the poorer you’re going to be.

  3. Alex,
    Labour ended MIRAS but it was down to 10 or 15% bu 1997

  4. @Alec

    @redrich – I really think you are looking at far too long a timetable. It took an average of something like 20 days with rates above 7% for Ireland, Greece and Portugal to need a bailout. We’ve now had Italy at this level for around a week or so, and the pressure is getting worse.

    Fair point, I remember how things started to move quickly with the £ being dumped out of the ERM – but if the pressure continues in all probability AM will be forced to relent on the issue of Eurobonds. This is based on the assumption that there is still sufficient political capital in support of the Euro within Germany (which I think there is), if there isn’t then failing a massive intervention by the IMF then you may well be proved correct.

  5. @Mr Ned

    “A message to tory supporters, UKIP supporters do not care, because on the major issues, there is no difference between the tories and labour anyway. They are both Europhiles, both support a high-tax, high spend way to run Government, both are soft on crime, both have failed on immigration, both are in favour of UNI fees, Both support a large complex and complicated tax system, both are in the pockets of the environmental alarmists (rather than realists), both are politically correct parties pandering to immigrants and any left wing minority group with a grudge.”

    In an earlier post I made the observation, in reply to a post from Colin, that I suspected that the make-up of UKIP support was many faceted and that the anti-EEC label may cover a multitude of dissatisfactions with mainstream Conservatism. I went on to say that it would be very easy for a UKIPer to nurture other Express/Mail type grievances that are unlikely ever to be assuaged by a centrist Conservative party.

    Thank you for making my point far more eloquently and persuasively than I ever could!

  6. There is a wonderful comment by mike ms on the last thread. I suspect that he might be a newbie, I do hope he becomes a regular

  7. @ COLIN

    This article suggests why the baqkns are so keen on the ECB printing…

    h ttp://www.golemxiv.co.uk/2011/11/buckle-up-credit-crunch-2/

  8. CLOUD SPOTTER

    Thanks.

    Ah Golem again:-)

    A bit long winded I thought-MF Global went bust & shareholders were wiped out. Seems like some clients’ cash went missing too-but they were mostly traders I guess-so who cares?

    Yes-there is obviously exposure in the banking sector.

    These high gilt yields are only a function of falling prices in the traded gilts market-so there are some nasty book losses skulking away-no doubt.

    Any sensible bank has taken the write down -certainly on Greece -and the authorities are tracking it :-

    h ttp://www.businessweek.com/news/2011-11-25/esma-tells-banks-to-value-sovereign-writedowns-consistently.html

    Midst the lengthening list of “things EU politicians have promised but not done” is recapitalising their banks to compensate for the Greek partial default……unless I missed it.

    BUt certainly it’s a worry-everyone knows Italy is in the “too big to fail” category-I presume it would bring the whole banking system down if it defaulted.

    But that’s not going to happen is it?

  9. CLOUD SPOTTER

    I’m not saying it isn’t worrying -it is :-

    h ttp://wallstreetpit.com/86530-europe-cant-move-fast-enough-to-halt-crisis

    But Frau Merkel seems determined not to have Germany footing the bill , until “the culprits” have mended their ways ! :-)

    Wing & a prayer ?

  10. @Colin

    But Frau Merkel seems determined not to have Germany footing the bill , until “the culprits” have mended their ways !

    I think she will find Italy more resitant to her charms / tough neogtiating stance than Greece ;-)

  11. Redrich
    Does the fact that their PM is an unelected EU bureaucrat make any difference?

  12. REDRICH

    Maybe-but Monti is from the “club”-a Eurocrat -I think he will be on the same wavelength.

    He doesn’t really have to worry about voters does he ?

    Must post this for both Richard in Norway and Bill Patrick-both of whom will get some pleasure from it I think :-) :-)

    h ttp://www.marketoracle.co.uk/Article31740.html

    Don’t know why I put those smilies in !

  13. @Pete B

    Nah – hes already going native ;-)

  14. @Jim Jam – blow me – you’re dead right about Brown and Miras. Shows how the memory plays tricks.

    It looks to have been very similar to the tax on pensions issue, which saw Brown finishing off something that the Tories started and that all parties agreed with but would prefer someone else to actually go ahead an do.

  15. @Colin

    Interesting article – one factor he doesn’t mention though is that many PLCs made a shift to sovereign debt a couple of years ago when the credit crunch started ironically as a risk reduction move, and are now desperately trying to reverse it.

  16. On the increase in global debt: note that global debt minus global credit is still what it was nine years ago- 0. It’s been there for quite some time!

    “While he did not verbally spell out the conclusion for the interviewer, it is this: when credit must grow by 12% per year in order to produce 4% GDP growth, at some point there will not be enough GDP to supply sufficient credit.”

    That’s one of the least coherent sentences I’ve read in a long time. So credit produces GDP, but GDP supplies credit? What is producing what here?

    I do like the analysis of the “restructuring” rhetoric.

    A mass default and deflationary spiral leads one way, as I see it: social collapse across Europe and the return of authoritarianism. I don’t remember much joy in Germany after childbirth; it’s more a proposal for “Rosemary’s Baby II” than the miracle of birth.

  17. @Richard in Norway

    “There is a wonderful comment by mike ms on the last thread. I suspect that he might be a newbie, I do hope he becomes a regular”

    You’re quite right. On your advice, I’ve just dipped back into the previous thread and his trenchant observations on the unreliability of polling sub-questions are spot on.

    Mind you, it still didn’t stop my good friend, Andrew Neil, selectively quoting some of them as if they were polling gold when he was talking to Alan Johnson on last night’s This Week programme. He seemed particularly interested (delighted) in the polling responses that, or so he felt, showed the low opinion that the public had for Messrs Balls and Miliband’s economic credentials. They were presented to Johnson as if they were excerpts from the Sermon on the Mount! Rather like some of the rightys on this site, he was trying to rubbish Labour’s lead in the polls in terms of voting intentions. In a nutshell his view was this. “The VI ratings are rubbish and devoid of all credibility but I really like this one that shows the public think that Miliband is a duffer. Now that is credible and deeply convincing!!”

  18. @Alec, @Redrich, @Colin
    Much as I hate to admit it, it looks like Colin is right: Merkel will “nein” eurobonds and ECB printing ad nauseam and even if the German coalition collapses and the opposition get in, they still can’t get past Germany’s Constitutional court.

    I bigged up eurobonds/ECB unlimited intervention (see previous posts) because it’s logistically possible: throw diet Coke, pizza and many pictures of Megan Fox at the techy spods in the ECB and debt gets diluted in the same way we compensated with QE – you can literally do it in an afternoon. But I can’t make them do it and if they won’t, they won’t.

    Merkel’s insistence on stability and altering the treaties to enforce it has certain attractions but two big disadvantages – it won’t actually cure the problem and it can’t be done in time. Big treaty changes take *years* – if they started *now* the earliest they could get all 27 to agree would be ~2014, and I don’t think they could get it past Ireland.

    So, what we are looking at? Markets charge higher and higher rates for more and more EZ17 government borrowing until *all* 17 states can sell *none* of their bonds at a realistic price – a buyer’s strike. At this point people start to think about converting to local currency – drachma, lira, peseta, deutchmarks, etc. But that takes 6-9 months, a bank freeze and a capital flight. So you’ll be trying to run a government with no money (bond strike) and convert currency at the same time. So you’ll put up taxes to compensate, but that’ll just make things worse. Meanwhile the middle classes are looking at bigger taxes and losing their life savings in the currency conversion. But there’s still freedom of movement across states, so they’ll start moving out. So less tax take, and – hey – we have a death spiral. So that’s a death spiral in 17 states at once. Ooops.

    Regards, Martyn

    h ttp://www.spiegel.de/international/europe/0,1518,799803-4,00.html

  19. Sorry to be esoteric but re MIRAS from memory Thatcher restricted to the standard rate of tax, introduced a ceiling and then stopped joint buyers (a big thing in the SEast for first time buyers) from both claiming. Then Clark (maybe Lamont) reduced to I think 15% before the Tories compained when Brown got rid of.
    Thing is low Interest rates neant hous epriuce inflation still sored – I guess it would have been even worse if the ’79 arrangements had been in place.

  20. Others no better than me but is not the sad thing about Italy that its accounts are in balance except for debt Interest. In which case classic Economics (not just Keynes) suggests that as long as they can grow even a little (say 15% over 10 years) their budget will sort itself out. The cuts in spending needed to plug the gap by negative growrh are exponential. The myth that high bond yields is purely a function of Gov’t overall debt or defecits and not related to lack of growth prospects has surley been challenged by the inability of the Bunderbank to sell all of it last auction
    Greece has insufficient genuine wealth creating activity and needed austerity of sorts (the degree is arguable) but I fear Europes leaders who (now Spain has changed are all right of centra in the bigger countries) are using single transferable solutions (an old anti Trot joke).
    Ireland looks promising and shows what can be done with a more balanced and bespoke approach.

  21. BILL PATRICK

    THanks for putting that in some context.

    I try to steer cleer of the Armageddon Merchants-but they do send the shivers .

  22. Merkel is making a mistake. TINA might have worked, were it only small nations (Portugal, Greece, Eire) in the firing line… & even the people’s of these small countries are beginning to react against Germany.

    Italy, Spain & perhaps even France are being lined up as next for ‘scalping’. There is going to be a political & economic backlash against Germany.

    Merkel is playing poker, thinking she has all the cards. But she has only 52 of them & there are several decks in play.
    8-)

  23. JIM JAM

    @”Others no better than me but is not the sad thing about Italy that its accounts are in balance except for debt Interest.”

    But it has total debt of 120% GDP-1.9 Trillion Euros.

    The market rates are only a function of gilt values for traded bonds in issue. They don’t impact the country until they have to make new sales.

    Fortunately Italy has a max of 300bn euros debt to rollover next year.

    Can one imagine that Monti has a little time on his side?

  24. @Martyn

    “So that’s a death spiral in 17 states at once. Ooops.”

    Or the other scenario Germany leaves the Euro and sets up a strong DM. The strength of the DM is such that it soon overtakes the Pound Sterling as a major currency trading standard and ranks itself alongside the US Dollar. Germany can then loan to its lesser Euro neighbours and set the standards of economic competency they are required to aspire to and achieve..

  25. Colin,
    I thnk my main point is that the medicine is too ‘one size fits all’ which is not sensible.

  26. JIM JAM

    @” the medicine is too ‘one size fits all’ which is not sensible.”

    THe whole monetary policy of EZ is “one size fits all”-which eurosceptics have said was not sensible from the outset.

    And they were correct.

  27. Colin

    I was curious about a link that both I and bill would enjoy, we don’t usually see eye to eye. But yes I was a good link but I would say that because it validates my viewpoint somewhat. So thanks

  28. @ Frank G

    Or the other scenario Germany leaves the Euro and sets up a strong DM. The strength of the DM is such that it soon overtakes the Pound Sterling as a major currency trading standard and ranks itself alongside the US Dollar.
    ——————————————-
    Germany cannot do this without the consent of the other Eurozone countries. Once a treaty is signed, it is binding on the strong as well as the weak. So that’s one deck which Merkel can’t play.

    Germany has a huge balance of payments credit; all of it denominated in euros. Would you bet on its creditors agreeing to repay in a much stronger, new German currency? I wouldn’t. And that’s another of the decks which Merkel doesn’t hold.
    8-)

  29. Colin,

    The trick with Armageddon merchants, like all sellers, is to be discriminating in one’s purchases of their wares!

  30. @Amber

    The reason why I posted that link to Der Spiegel was to demonstrate why Merkel *can’t* say yes – the German Constitutional Court says she can’t. From memory, the German Constution can be changed *but* there’s no guarantees and it takes time

    @FrankG

    That would be an excellent solution and everybody would be pleased if that happened. But I have no mechanism to *make* the German Government do it, and they show no signs of doing so. And again, it takes several months to create a new currency – if they announced it *now* they’d be done by, hmmm, July next year. We’re kinda running out of time…

    Regards, Martyn

  31. Colin –
    THe whole monetary policy of EZ is “one size fits all”-which eurosceptics have said was not sensible from the outset.
    I agree with you about that
    Not only Eurosceptics have said this.
    Being against the UK joining the single currency during the last 10-15 years does not make one a Euro-Sceptic.
    I consider myself pro-EU and pro the idea of a single market; and support the requirement for there to be pan-EU legislation on some environmental/employment/social legislation to ensure a level playing field
    I took the view that over the decades the single market could lead to Economies converging so much and currencies tracking each other to such an extent that if we reached the point of an ipso facto single currency it would be better being a Euro rather than a DM. I thought the Euro was putting the cart before the horse and even worse could not believe the rules were bent to let the Italians and (let’s not forget|) the Belgians in when they should not have been, demonstarting amply the the prime driver for the Euro was poliical not Economic. This was made worse by letting in Club Med countires far too early as well.

    Being a ‘Euro’ sceptic does not make me a Eurosceptic.

  32. @Martyn – “Much as I hate to admit it, it looks like Colin is right:”

    Just to set the record straight, I was saying this four months ago. My central thesis since the summer has been that the debtor nations economies and people can’t take the austerity, and the German’s won’t tolerate paying the via via the ECB, even if their constitution permitted it. They might, if they got the treaty control over other nations finances (but even here I doubt it) but this will take years.

    This is why I’ve been predicting what we are now seeing since June.

  33. Alec

    Ok don’t rub it in!

  34. @ Martyn, Alec,

    Merkel may well find that USA, China, Canada & Uk will QE enough cash to support the eurozone, possibly via the IMF.

    Merkel may find that she has sold Germany’s future to nations which can fire up a printing press.
    8-)

  35. @Alec, @Colin

    I said “… “Much as I hate to admit it, it looks like Colin is right…”

    Er, I meant Alec, not Colin: my bad…:-(

    Alec, there’s no need to point out it was you who said it – unless somebody thinks of something fast, what you predict will come to pass. I still hold out hope that the Germans will go with Eurobonds/RCB unlimited purchase (or even just look the other way), but saying something can be done isn’t the same as saying it will be done, and every time an answer has been found to the Eurozone crisis, the Germans have gone “oooh, scary” and hid under the blanket. All other solutions are expensive in time we haven’t got.

    So:
    * we’re in trouble
    * nobody can enforce a solution
    * things are getting worse

    Not good… :-(

    Regards

  36. @Amberstar

    ‘Germany cannot do this without the consent of the other Eurozone countries. ‘

    If Germany does not agree to fund loans unless the rest accept Germany’s austerity demands, what else can the rest do? As for their balance of payments deficits with Germany, what a lovely sweetener for a deal. People on this site have been suggesting that Greece leave the Euro, devalue the Drachma and then take the pain until the drachma regains its credibility. Since all the other 16 EZ seem to be so completely out of step with the strong Germany, why is the medicine suggested for Greece also not applicable to them as well? If any other EZ17 nation (although it is possibly incorrect to regard them as independent nations if they do not have fiscal independence) wants to join Germany then they must meet Germany’s fiscal conditions. Maybe the new currency could be called the DURO. As nations sort out their economies so they can apply individually to join the DURO club.

    How does Merkel sell it to the Germans. She faces defeat in the polls if things continue. What better re-election platform to have than:

    “We through our hard-work and economic prudence have made Germany the economic envy of Europe. We have tried to instill in others our economic stability ideas but they will not listen. Do you, the German people want to continue to hand over your hard-earned money to those that will not listen and change. If we remain in the Euro that is what is happening now and will continue to happen and happen and happen. Surely it is better we leave this Euro group and set up our own DURO to safeguard the prosperity of yourselves, your children and your grandchildren. Once those other nations have proved they are ready economically to join us in the DURO, they will be welcome. Vote for me, vote Merkel, save Germany from being dragged down again, don’t throw away all that hard-work, that pain, that enforced separation which we have suffered as a nation since 1945 (1918 is optional), be the true leader of Europe and lead them onwards to economic salvation”

    “Would you bet on its creditors agreeing to repay in a much stronger, new German currency?”

    I think you meant “its debtors” not “its creditors”. Personally I don’t think they would have much option. Anyway, Germany will probably have to write-off most of those debts whatever happens.

  37. @Amber

    (The below is from memory: apols for factual inaccuracies)

    * The total IMF “bag of money” was expanded in 2009/10, and another expansion was attempted recently and failed
    * The US is knee-deep in debt and gridlocked again
    * China refused to leverage EFSFv2 (or v3, whichever upgrade we’re on now)
    * The UK is neck-deep in debt and praying nobody notices us
    * Canada. Canada!?

    The weird thing about this is one finds oneself writing sentences like “the planet is running out of money” or “all 17 EZ states failing at once”. After dialogue like that, you’d normally expect lines like “you overestimate the Dark Side, Darth”, but – hey -it’s just another day in the wacky eurozone… :-(

    Regards, Martyn

  38. REDRICH.
    On switching old, and deeply loved party allegiances, or at least being forced to spoil ones vote, this from a man whose Grandad founded the Aberavon Party in 1918:

    About 60% of RC’s normally vote Labour. No longer is this explicable by economic/class differences or the ‘Irish Question’.

    Labour lost several marginal seats due to the fact that ‘The Party’ attacked church institutions. While of course still sending their children to them…As does Nick Clegg.

    And there is quite a middle class church going revival going on among anglicans and rc’s.

  39. @ Frank G

    Sure, if Germany are prepared to wave goodbye to Billions of euros as a ‘sweetner’ then they could take the deal which you suggest to the other EZ countries & ask to be released from the treaties which they’ve signed.

    There is a difference between Germans thinking they might not get all their money back, which is the situation now, & knowing they definitely won’t because Merkel has traded it away to get Germany out of the euro… it’s not going to happen.
    8-)

  40. Chrislane

    It the Jehovah’s witnesses among the feral underclass(I can say feral underclass cos I am one). This economic meltdown is not harming their cause either. But I’m sure I have spoken of this before

  41. BILL PATRICK

    @”The trick with Armageddon merchants, like all sellers, is to be discriminating in one’s purchases of their wares!”

    I try :-) :-)

  42. @ Martyn

    The weird thing about this is one finds oneself writing sentences like “the planet is running out of money”
    ————————————-
    This made me laugh. The planet has never had more money than it does now. China, US & Uk are QE’ing like crazy (each in their own way). Loads of other countries, out of the spotlight, could be doing exactly the same.

    And that money will find its way, possibly to the IMF or an emerging economy equivalent – which has already been mooted.

    Merkel – & Germany – may come to regret her lack of will to sell her case to the German constitutional court. Like I said, she is pretending she holds all the cards – the reality: She has positioned her country between a rock & a very hard place.

    Somebody will bail out the eurozone; & then Germany will be in a much worse situation than if they’d allowed the ECB to do some of the heavy lifting.
    8-)

  43. JIM JAM

    @”I consider myself (pro-EU )and pro the idea of a single market; and support the requirement for there to be pan-EU legislation on some environmental/employment/social legislation to ensure a level playing field”

    I could probably identity myself with most of that-but latterly & increasingly have to exclude “EU” in the sense of it’s institutions & governance which are moving away from democratic accountability with every month that passes.

    I think now that the whole structure-including the inneffective & vastly expensive Parliament , and the ludicrous empire of Baroness Ashton-is becoming unfit for purpose and quite detached from reality & voters.

    It all needs taking apart & putting together again in a severely slimmed down version.

    But that isn’t going to happen-the more they try to cope with and agree upon serious & difficult matters, the more time they take over it & the more bits they add on to their Gaudiesque ivory tower.

    So I don’t know if that makes me a Eurosceptic or a Euro Sceptic :-)

  44. Belgium downgraded, Outlook negative

  45. @Amber

    Fair point (re: planetary money supply), but I *think* I’m right about the IMF expansion failing. Again, apols if wrong.

    @Colin

    Considering the European Parliament and the Common Foreign and Security Policy (Ashton’s gig) are some of the EU things that actually work as designed, you may just be trying to whittle a better deckchair on White Star’s finest… :-)

    Regards, Martyn

  46. Blimey-hammered for a 4.6% Deficit !

    Mind you they haven’t got a Government…….but you would have thought that would be a plus point .

  47. MARTYN

    @”Considering the European Parliament and the Common Foreign and Security Policy (Ashton’s gig) are some of the EU things that actually work as designed, you may just be trying to whittle a better deckchair on White Star’s finest”

    Mmmm-working “as designed” is the problem.

    And costing an arm & a leg whilst doing it , is another problem.

  48. @Amberstar – re your rescue scenario; as has been pointed out, the US is locked in it’s own dance of death between Democrats and Republicans – their dispute makes the French/German disagreement look positively benign.

    And please don’t for a minute think China will ride to the rescue. Chinese property prices started to slip in September and got a lot worse in October. The government stopped publishing house price data in January – when the Chinese government stop publishing data, start thinking they’re frightened. China’s municiple authority at risk debts are between 10 – 30% of GDP – there is an Eastern credit crisis unfolding right now and no amount of pleading will see the Chinese state pour cash in Europe when they will have their own economy to rescue.

    As I see it, the only options we have are to do something like the following;

    1) Coordinated and big tax raids on wealth assets. Target the extremely rich and tax a proportion of their wealth, with sufficient gusto to generate a significant reduction in total national debt ratios. We couldn’t necessarily liquidate these assets without a big impact on the markets, so a means would need to be found to effectively transfer ownership of standing assets so they show on the state books and could be sold off a later stage. This isn’t a pretty option, but money needs to be found.

    2) Announce wholesale defaults on sovereign debts as necessary. To prop up banks, supply them with central bank backed guarantees/bonds/whatever, redeemable in say 10, 20, 30 years time?, equivalent to the face value of the defaults, but with zero interest.

    These would maintain banks capital ratios but would degrade slowly with inflation over a long period, spreading the losses but perhaps avoiding a sudden crash.

    3) Get the weak currencies out of the Euro – painful, I know, but it’s going to happen anyway – control it as best you can.

    I’m certainly not a global financial expert and my ideas might well be total [email protected]*cks, but frankly we’ve got to try to find a way to work the debt down without crashing the system. The money is going to be lost – it’s just a question of who loses it, how quickly that happens and what the collateral damage is when it goes.

  49. Richard

    THought you might enjoy this :-

    “The action by S&P is the first downgrade for Belgium in almost 13 years and puts its credit ranking on a par with Abu Dhabi, Kuwait and Qatar.”

    Business Week

    Downgraded to the level of an oil well !

    :-) :-) :-) :-)

  50. Here’s the thing, the USofA is the most powerful economy in the world… whether we like it or not, it is.

    When the ratings agencies downgraded the Stars ‘n’ Stripes to make a political point, everybody else was going to have to be downgraded too… & now it’s happening.
    8-)

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