Mario Draghi, former Italian prime minister and ex-chief of the European Central Bank, has a neat way with words.
His famous ‘whatever it takes’ pledge in 2012 to preserve the euro during Europe’s sovereign debt crisis will be remembered as the turning point.
Draghi has been firing his big bazooka again. His latest salvo came in a recent speech given in Italy, warning that Europe must face up to a harsh reality – that it is no longer a major global power.
For years, he said, the European Union believed that its economic size, with 450m consumers, brought with it geopolitical power and influence in international trade relations, adding: ‘This year will be remembered as the year in which this illusion evaporated.’
Tough words indeed. Draghi was referring to the brutal wake-up call that followed the EU’s hopeless negotiations with Donald Trump which saw the US imposing 15 per cent tariffs on all European goods, and 50 per cent on steel and aluminium.
And what did the EU agree to? Well, to eliminate all tariffs on US goods, open up its markets to American cars and agricultural products and not to apply its anti-trust policies to US tech companies. Nul points.
Wake-up call: Former Italian Prime Minister Mario Draghi (pictured) says Europe must face up to the reality that it is no longer a major global power
Again, Draghi is calling on Europe to reform and revamp its sclerotic economies, to become more competitive if it is to become a major player again in what he describes as this ‘existential’ crisis.
On that we can agree. Europe is not in a good place, and that includes the UK.
We may not be in the EU but we share many of the same problems: high welfare spending, high taxes, high immigration, low if no growth, an increasingly anti-entrepreneurial mindset in ever tighter regulatory environments.
Foolishly, the answers to these problems are the same too, whether they come from the governing parties or opposition ones.
Higher taxes. And yet more taxes – the latest fanciful idea doing the rounds is for even heavier wealth taxes.
At least the French prime minister, Francois Bayrou, is bold enough to raise the ante in his attempt to get his €44billion of budget cuts through the National Assembly.
Not surprisingly, his call for a vote of confidence on September 8 has spooked the markets, driving up French ten-year bond yields over 3 per cent and sending shares down on fears that weeks of instability lie ahead.
Bayrou made the call ahead of planned national protests by the Bloquons Tout (Block Everything) movement which is backed by the unions and Jean-Luc Melenchon’s Left-wing party, France Unbowed.
A recent poll found that the grassroots protests are backed by two out of three French people. As expected, the opposition parties say they will oust Bayrou and his minority government when it comes to the vote.
Melenchon has thrown fuel on the fire by calling for President Macron’s impeachment.
If Bayrou doesn’t put together a deal with the opposition over the budget cuts, then inevitably France will be forced into another snap election.
But Bayrou, who is backed by Macron, said while the vote is risky, it’s ‘even riskier not to do anything’. Like most European countries, France is laden with debt. Its budget deficit last year was 5.8 per cent of GDP, and growing.
It is highly unlikely, but there is even speculation that France, like Britain, will be forced to ask the International Monetary Fund to intervene if the financial markets keep driving up the cost of borrowing.
Maybe this would be the deus ex machina moment required – in both countries – to snap politicians out of their slumber?
Eye-watering Beckham
Every 30 seconds, Victoria Beckham sells one of her Satin Kajal Liners – that’s an eyeliner to you and me – which costs a cool £32 a shot.
It is one of many best-selling products in VB’s fashion-to-beauty line which has topped £100million in sales for the first time.
All credit to Victoria Beckham whose dabbling in business was scorned as being a celebrity vanity project built off the legs of her husband’s fame.
Yet she has more than proved her mettle, earning kudos from the snobbier Paris fashionistas for her design talents.
She’s also expanding at a time when even the luxury market is being squeezed. As the former Spice Girl would have sung, time to Spice Up Your Life.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
InvestEngine
InvestEngine
Account and trading fee-free ETF investing
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.