brawl has made for cracking entertainment. It’s been a super-fun read. But it’s time for government officials in the UK and France to shut their traps and get their heads back into the game of saving the Eurozone’s economy.
This weekend’s papers radiated with more headlines about the ongoing verbal affray between government heavyweights on both sides of the Channel.
It’s like watching two men on a sinking vessel who, panicked by the rising water, opt against bailing some of it overboard and decide instead to distract themselves by engaging in an impromptu, topside scrap.
Deputy prime minister Nick Clegg slapped back at François Baroin. The French finance minister said on Friday, essentially but not literally: Yeah, it’s bad here, but at least we’re not the UK. Christian Noyer, head of the Bank of France, had already said something similar. Cameron and Sarkozy are like pit bulls who can’t wait to clamp their teeth into each other as soon as they slip the leash.
Some may believe that, as an American, I don’t have a dog in this fight. But I very much do. The US does, and the rest of Europe does. China, Brazil and India do. Distractions from the task at hand — fending off any deepening of Europe’s financial crisis — aren’t good for anybody, anywhere.
I spoke to a British friend — we’ll call him Tom — on Saturday, about his business situation. Tom is co-owner of a structural engineering firm -- 15 employees in London, ten in New York. And he’s on the verge of bankruptcy.
Tom recently was very close to a buyout arrangement, after slashing his asking price by three-quarters. But at the last second, his potential buyer’s bank decided to whack the deal. The bank abruptly slapped his almost-buyer with a two-year, blanket moratorium on acquisitions. Two years.
I’ve learned from experience to put as much credence in such stories from people on the ground, as in any expert economist’s projection on things like when a downturn will end.
Don’t think for a second that absurd sniping between high-ranking government officials doesn’t deeply influence banks’ decision-making when it comes to things like green-lighting acquisitions. There are few professions more quakingly risk-averse, when times are tough, than banking. Still, I almost can’t blame the bankers, given the circus environment being created by some of Europe’s top dogs.
As for Tom, he’s got more immediate concerns. It’s been tough going for three years. He’s fought the good fight, but now he’s had it. “I’m ready,” he said, “for it to be over.”
Ted Kemp is Senior News Editor for CNBC.com, EMEA