Theatre of the Absurd

What are we to make of the late-night performance that took place in Brussels yesterday. The sums of money now being dramatically thrown around are different by an order of magnitude from the national budgets of just a couple of years ago. The €750bn euros this deal represents is a grotesquely large sum for governments to promise on our behalf.

The money is not real. It never existed and the bulk of it is 'guarantees'. What is a financial guarantee? It is an empty performance, a simulacrum to cover the absence of any real value being created by many of the European economies, a sideshow to divert public attention from the reality that our national wealth has been ransacked by the financial market and that nothing of any real value remains.

The ministers also apparently offered to buy bad debts from the market in the first round of 'quantitative easing' by the European Central Bank. The UK has injected as much money as it could possibly borrow to keep markets afloat last year; now only the wealthier economies of Europe can produce money to feed the rapacious wolves of the finance markets. As they do this, that money will be sucked into the stock market, causing the same artificial rally we have seen in UK markets over the past year. Their claim that balancing securities will be sold - to waylay German fears of inflation - will be tested in the coming months.

The curious question that must be asked is how can we be in a situation where everybody is in debt all at the same time. If you accept the standard view of money and accounting that would be impossible since a debt must create a parallel credit. The existence of debt in every economy simultaneously is evidence that money itself is created as debt and that, under such a system, debts accumulate until they feed on the very economies that gave rise to them.

This particular drama has distracted attention from our domestic problems. Now that the wounded prey in the Eurozone have attracted a strong monetary defender the wolves will turn their attention back to Britain, as a more likely source of profit. We are likely to have a greyer, more resigned version of the Greek tragedy in which to play a minor role over the coming months.