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Dominique Strauss-Kahn

rbsCometh the man. Cometh the hour.

With the International Monetary Fund’s reputation a tad tarnished after Dominique Strauss-Kahn’s resignation over a sexual assault charge, who, oh who can take up the baton and save the honour of this multinational institution?

Step forward, ex-RBS high heid yin Sir Fred “The Shred” Goodwin, who has thrown his hat into the ring with a masterstroke – as it were.

After Lib Dem peer Lord Stoneham raised the issue under parliamentary privilege, we now hear that Sir Fred took out a superinjunction to silence claims that he was “making deposits” with a senior colleague at the now publicly owned RBS.

Lord Stoneham said: “Would [the speaker] accept that every taxpayer has a direct public interest in the events leading up to the collapse of the Royal Bank of Scotland?

“So how can it be right for a injunction to hide the alleged relationship between Sir Fred Goodwin and a senior colleague? If true it would be a serious breach of corporate governance and not even the Financial Services Authority would know about it.”

Now, I have no idea what the truth is about Goodwin’s private life. I do not know if he and the alleged colleague were giving new meaning to the terms “accord and satisfaction” and “institutional liquidity transfers”. I am not one of his intimates and have a team of very expensive lawyers ready to bankrupt anyone who says (or even thinks) different.

His record is clear, though. The former RBS heid bummer (a idiomatic colloquialism not covered by any injunctions, super or otherwise) enthusiastically axed the livelihoods of little people, he gambled recklessly in pursuit of short-term profit and then screwed the pooch (a metaphor not covered by any injunctions, super or otherwise) to the extent that the bank had to be nationalised, costing you, me and every British citizen hunerts and hunerts of pounds.

Goodwin has now embraced a hated legal instrument inimical to freedom of speech, which is available only to the wealthy. The best bit is that, as much of his wealth derives from payments from the nationalised bank, you paid for the superinjunction. Ain’t that dandy? We pay for the privilege of not being allowed to know what happened at the bank we saved at crippling expense.

Anyone familiar with the record of the IMF can see immediately that Goodwin is a great fit with its mission to screw up developing countries in the name of western monetarism.

Right, now I’ve had my fun I’m going to do something surprising: I’m going to defend Fred Goodwin.

There is a great lie being foisted on us. It is this: that in some way Goodwin is a “bad apple” or an aberration. That is what the Neocons would regard as a “useful fiction” to blind the great unwashed to an uncomfortable truth.

Are you ready? Goodwin’s not unique, exceptional or even unusual. His actions at RBS were entirely in line with global corporatism. His only failure was that he was unlucky. The problem is the game. Not just this particular player.

Stock market-driven business demands ruthless job-cutting in the interest of share prices. The City applauds reckless adventurism. The “players” get massive perks. The “little people” get (mis)sold worthless products and charged £6 a day if their accounts go into the red.

Sure, we can laugh at the guy but there are thousands of Goodwins in the City of London and around the world. And they are laughing at us as they trouser outrageous bonuses.

They then have the cheek to tell us that if they and their employers face proper taxation, then all this “talent” will flee the country.

Tell you what, I’ll give them a lift to the airport.

I don’t care about Goodwin’s private life: that’s between him, his missus and any alleged partners. We can pretend that naughtiness in the trouser department may have brought down RBS. But it didn’t. And nor did Fred Goodwin.

What brought down RBS was a game that still goes on. A game played with our savings by organisations largely owned by us.

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Rikers Island <em>Picture: US Geological Survey</em>

Rikers Island Picture: US Geological Survey

Sometimes I think that that the day of rationality has dawned and that humanity has finally achieved civilisation.

I had one of these epiphanies when I heard the radio tell me that the Head Bean Counter of the International Monetary Fund, Dominique Strauss-Kahn, had been imprisoned on Rikers Island.

At last, I thought, somebody is asking hard questions about the IMF’s doggedly monetarist approach – especially to do with the minor issue of brown people getting food.

About time, I thought, as I reached for the Cohiba cigar (Che’s favourite smoke) that I had been saving for just this occasion. I savoured the prospect of this phenomenon cascading, with David Cameron and Nick Clegg throwing each other to the shower daddies in Joliet. And Tony Blair starring in a new reality TV show called: “Britain’s got life sentences”.

But the radio bulletin explained that the less-than-delightful Dominique is being held not for his IMF activities but for attempted sexual assault. He was (allegedly) trying to do literally to a hotel employee what his organisation has done metaphorically to developing nations the world over.

Reality crashed in. Rampant unfree corporate capitalism roams unfettered. I extinguished my Exquisito in a mug of Campaign Coffee (it made it taste better) and put on the telly to make myself feel better.

What was on? The Scheme – a documentary about everyday folk in the charming Kilmarnock suburb of Orthanc.

For the first ten minutes I was convinced it was a work of dark comic genius dreamed up by Chris Morris and the Chewin’ the Fat team. “Recovering drug-addict Marvin is pinning his hopes on a stable life with a former girlfriend … when she gets out of prison.” (A high point for Marvin is when the methadone-addicted teenager gets her electronic tag changed so they can live together. I don’t think even Clintons have a card for that romantic milestone.) How about the chubby lassie who utters the immortal line: “I’m a pole dancer. If any of you want a go of me. £10 a go”? And who could forget: “He’s never been arrested sober”, or “He called him aw the Bin Laden bastards so they done him for a racial”?

All the comedy staples are there: unusual dentistry, Old Firm tops and Burberry aplenty, pregnant teens smoking heavily and disabled spaces for the clearly able-bodied. Every one a coconut. As for the use of the C word: less is more, chaps, especially in front of a five-year-old who’s supposed to be at school.

It is so tempting to laugh at these people off as neds, chavs, pikeys, schemies and junkie scum. It would be so easy to crack open a bottle of Tempranillo and ponder ethnically cleansing “them” through a combination of sterilisation and dramatically increasing the purity of street drugs.

It is also tempting to take the other course, pursing one’s right-on lips and writing off The Scheme as “poverty porn” that misrepresents the Onthank community or exploits the yadda, yadda, yadda.

We need to stop pretending that The Scheme does not happen on streets all over Scotland. And we need to realise that it isn’t funny. The bottom line is that there are many, many Scots who lead miserable lives made chaotic by an excess of drink, drugs, violence and crime and a deficit of education, opportunity and responsibility.

The tragedy is that many of these Scots are children: with a quarter of under-16s north of the Border living in poverty. 150,000 Scottish children have to deal with substance-abusing parents. Our care system sees too many young people graduate to prison – with more than 25 per cent of those in “jile” having been through it.

People in Scotland – one of the most advanced countries in the world – die of malnutrition. We drink too much, eat garbage and die younger than we need to. Our mental health problems cost the country more than £10bn a year. We have a disgracefully high suicide rate.

Ah, wha’s like us?

And what the hell are we doing about it? Poverty does not seem to be high on the political agenda, despite being the root of crime, ill-health, drug abuse and all the associated costs to society.

But by tackling these issues we’d slash billions from the health, welfare and crime budgets. Where are the radical ideas to solve these problems? As the tragi-comic Scheme shows us, we’re getting nowhere fast.

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Tyldesley miners outside the Miners Hall during the 1926 General StrikeEurope is bracing itself for a wave of mass industrial action. As austerity measures start to bite in several EU countries, including France, Greece and Spain, strikes are already planned. Now, those countries include the UK. At its annual congress in Manchester, the TUC agreed to co-ordinate protests here as well.

Some unions have already started preparing to direct their members on to a collision course with the government. Their leaders lined up to condemn the coalition for its spending cuts. They argue that those implemented have already hit public sector workers. They claim that over 200,000 jobs have already been lost or are under threat of redundancy.

The TUC general secretary, Brendan Barber, attacked what he dubbed “the demolition Government”. He admitted that unions were facing “stark realities” following the general election, explaining that he meant “the Government’s determination to drive through massive spending cuts, which will not only devastate the services we rely on, but do untold damage to our economic prospects.”

Mr Barber went on to say that no-one could deny the depth of the recession, which he maintained was made in the boardrooms of the world’s banks. “Rightly, governments made sure that the banking system did not collapse. They took emergency action to ensure that recession did not turn into slump. They showed that we did not have to repeat the 1930s”

But in his speech, Dave Prentis, general secretary of Unison, insisted that it was a “lie” that the country could not afford decent public services. “If there’s money available to bail out banks and bonuses, if there’s money for war and Trident, there’s money for our public services,” he said. “If money’s tight, never mind a pay freeze for our members, how about a pay freeze for bankers?”

And it looks likely that the unions will have support from at least some leading members of Labour as well. In her keynote speech to the TUC, Labour’s acting leader, Harriet Harman, backed union plans to mount a massive campaign of co-ordinated strike action.

“We will not be silenced by the right-wing characterising protest as undemocratic,” she said. “Trade unionists have the democratic rights to protest. We will not be deterred by suggestions that this is illegitimate – it is perfectly within the law. We will not be cowed by accusations that this is irresponsible and putting services at risk – the very opposite is true.”

Militant left-wingers, like Bob Crow of the Rail, Maritime and Transport union, have called for civil disobedience to defend public services. He drew loud applause when he said: “We lie down or stand up and fight.”

If their plans come to fruition, this country is facing a bitter series of strikes. The protests and demonstrations could start as early as next month and last for years.

That could be the shape of things to come in several EU countries. Looking at the wider picture, Juan Somavia, director general of the International Labour Organisation (ILO), told an international conference in Oslo it was “natural” for trade unions to protest and help “vent steam” in societies hurt by job losses. But they should also be involved in deals to keep the economy going.

The ILO’s latest statistics show just how damaging the recession has been. Up to 30 million people have become unemployed in the last three years, mainly in the developed world. If it hadn’t been for the stimulus packages introduced by many Governments, that figure could well have been 50 million or more.

It also warns that almost 450 million people will try to join the global workforce over the next decade. That’s double the number currently without a job. The ILO says that raises “the spectre of a lost generation”. Somavia wants governments to extend measures to foster the still fragile recovery and help support jobs.

In this, he’s supported, perhaps unexpectedly by the International Monetary Fund (IMF). Its managing director, Dominique Strauss-Kahn, now supports government intervention. He insisted at the same conference that it was a “misleading caricature” to think that the fund cared only about the austerity cuts usually associated with its programmes.

Unemployment is “about far more than just a pay cheque”, he said, adding that schemes to extend unemployment benefits helped maintain demand and morale. They also gave short-term incentives to companies to retain more workers but at reduced hours and wages.

Reuters has reported that several European leaders have issued warnings about the risks of a “crisis of confidence”. In Spain for instance, the unemployment rate has hit 20%. It has led that country’s prime minister, Jose Luis Rodriquez Zapatero, to claim that the “worst crisis would be a crisis of pessimism, of a lack of confidence, of resignation. Europe must not fall into that.”

But the news agency reports that the secretary of state for work and pensions here, Iain Duncan Smith, insisted that “everyone is throwing out a lot of stimulus, but to lesser and lesser effect. We think it’s time to start pulling that back. If it goes on, we will start to squeeze out the private economy so it won’t have room to grow.”

The European Commission believes that some growth will come anyway. In its latest economic forecast, it suggests that the seven largest members of the EU, including the UK, are recovering at a faster pace than previously envisaged. Between them, these seven countries represent almost 80% of the European Union’s GDP.

Looking forward, Europe’s economists believe that GDP will grow by 0.5% in the third quarter of the year and by slightly less in the fourth. They argue that, for 2010 as a whole, growth should now reach 1.8%, a sizeable upward revision on six months ago. At the same time, they expect inflation to remain either steady or to fall slightly.

However, the commission’s report insists that “uncertainty at the current juncture is high, with non-negligible risks to the EU growth outlook. On the upside, the impetus from the export-led industrial rebound to private consumption could prove stronger than assumed in the baseline, as was the case in the first half of the year.”

The EU economic and monetary affairs commissioner, Olli Rehn told a news conference that “the European economy is clearly on a path of recovery, more strongly than forecast in the spring, and the rebound of domestic demand bodes well for the job market. However, uncertainties remain and safeguarding financial stability and continuing fiscal consolidation remain key priorities.”

He stressed the need for “structural reforms to lift our growth potential. The sooner and stronger we act on this front, the more certain we can be of sustained growth and job creation.” But he added: “ We now have solid ground under our feet. We have started scoring again, but there is no reason to shout for victory. We must remain alert and vigilant.”

The question now is whether that growth can be maintained if countries like the UK, France, Spain and Greece are brought to a halt by striking union members. At least one other member of the European Commission, Laszlo Andor (who deals with employement and social affairs), has warned that “2011 may turn out to be the annus horriblis for social cohesion”.

Tyldesley miners outside the Miners Hall during the 1926 General StrikeEurope is bracing itself for a wave of mass industrial action. As austerity measures start to bite in several EU countries, including France, Greece and Spain, strikes are already planned. Now, those countries include the UK. At its annual congress in Manchester, the TUC agreed to co-ordinate protests here as well.

Some unions have already started preparing to direct their members on to a collision course with the government. Their leaders lined up to condemn the coalition for its spending cuts. They argue that those implemented have already hit public sector workers. They claim that over 200,000 jobs have already been lost or are under threat of redundancy.

The TUC general secretary, Brendan Barber, attacked what he dubbed “the demolition Government”. He admitted that unions were facing “stark realities” following the general election, explaining that he meant “the Government’s determination to drive through massive spending cuts, which will not only devastate the services we rely on, but do untold damage to our economic prospects.”

Mr Barber went on to say that no-one could deny the depth of the recession, which he maintained was made in the boardrooms of the world’s banks. “Rightly, governments made sure that the banking system did not collapse. They took emergency action to ensure that recession did not turn into slump. They showed that we did not have to repeat the 1930s”

But in his speech, Dave Prentis, general secretary of Unison, insisted that it was a “lie” that the country could not afford decent public services. “If there’s money available to bail out banks and bonuses, if there’s money for war and Trident, there’s money for our public services,” he said. “If money’s tight, never mind a pay freeze for our members, how about a pay freeze for bankers?”

And it looks likely that the unions will have support from at least some leading members of Labour as well. In her keynote speech to the TUC, Labour’s acting leader, Harriet Harman, backed union plans to mount a massive campaign of co-ordinated strike action.

“We will not be silenced by the right-wing characterising protest as undemocratic,” she said. “Trade unionists have the democratic rights to protest. We will not be deterred by suggestions that this is illegitimate – it is perfectly within the law. We will not be cowed by accusations that this is irresponsible and putting services at risk – the very opposite is true.”

Militant left-wingers, like Bob Crow of the Rail, Maritime and Transport union, have called for civil disobedience to defend public services. He drew loud applause when he said: “We lie down or stand up and fight.”

If their plans come to fruition, this country is facing a bitter series of strikes. The protests and demonstrations could start as early as next month and last for years.

That could be the shape of things to come in several EU countries. Looking at the wider picture, Juan Somavia, director general of the International Labour Organisation (ILO), told an international conference in Oslo it was “natural” for trade unions to protest and help “vent steam” in societies hurt by job losses. But they should also be involved in deals to keep the economy going.

The ILO’s latest statistics show just how damaging the recession has been. Up to 30 million people have become unemployed in the last three years, mainly in the developed world. If it hadn’t been for the stimulus packages introduced by many Governments, that figure could well have been 50 million or more.

It also warns that almost 450 million people will try to join the global workforce over the next decade. That’s double the number currently without a job. The ILO says that raises “the spectre of a lost generation”. Somavia wants governments to extend measures to foster the still fragile recovery and help support jobs.

In this, he’s supported, perhaps unexpectedly by the International Monetary Fund (IMF). Its managing director, Dominique Strauss-Kahn, now supports government intervention. He insisted at the same conference that it was a “misleading caricature” to think that the fund cared only about the austerity cuts usually associated with its programmes.

Unemployment is “about far more than just a pay cheque”, he said, adding that schemes to extend unemployment benefits helped maintain demand and morale. They also gave short-term incentives to companies to retain more workers but at reduced hours and wages.

Reuters has reported that several European leaders have issued warnings about the risks of a “crisis of confidence”. In Spain for instance, the unemployment rate has hit 20%. It has led that country’s prime minister, Jose Luis Rodriquez Zapatero, to claim that the “worst crisis would be a crisis of pessimism, of a lack of confidence, of resignation. Europe must not fall into that.”

But the news agency reports that the secretary of state for work and pensions here, Iain Duncan Smith, insisted that “everyone is throwing out a lot of stimulus, but to lesser and lesser effect. We think it’s time to start pulling that back. If it goes on, we will start to squeeze out the private economy so it won’t have room to grow.”

The European Commission believes that some growth will come anyway. In its latest economic forecast, it suggests that the seven largest members of the EU, including the UK, are recovering at a faster pace than previously envisaged. Between them, these seven countries represent almost 80% of the European Union’s GDP.

Looking forward, Europe’s economists believe that GDP will grow by 0.5% in the third quarter of the year and by slightly less in the fourth. They argue that, for 2010 as a whole, growth should now reach 1.8%, a sizeable upward revision on six months ago. At the same time, they expect inflation to remain either steady or to fall slightly.

However, the commission’s report insists that “uncertainty at the current juncture is high, with non-negligible risks to the EU growth outlook. On the upside, the impetus from the export-led industrial rebound to private consumption could prove stronger than assumed in the baseline, as was the case in the first half of the year.”

The EU economic and monetary affairs commissioner, Olli Rehn told a news conference that “the European economy is clearly on a path of recovery, more strongly than forecast in the spring, and the rebound of domestic demand bodes well for the job market. However, uncertainties remain and safeguarding financial stability and continuing fiscal consolidation remain key priorities.”

He stressed the need for “structural reforms to lift our growth potential. The sooner and stronger we act on this front, the more certain we can be of sustained growth and job creation.” But he added: “ We now have solid ground under our feet. We have started scoring again, but there is no reason to shout for victory. We must remain alert and vigilant.”

The question now is whether that growth can be maintained if countries like the UK, France, Spain and Greece are brought to a halt by striking union members. At least one other member of the European Commission, Laszlo Andor (who deals with employement and social affairs), has warned that “2011 may turn out to be the annus horriblis for social cohesion”.

<em>Picture: Davide Oliva</em>

Picture: Davide Oliva

A collective sigh can metaphorically be heard from finance ministries and banks in the more economically challenged European countries today. The 16 members of the Euro Zone have reached agreement on a emergency finance package worth a staggering €500bn (£430bn) to prevent the Greek debt crisis from spreading.

The talks ran on until, symbolically, the eleventh hour. It means that each of the member states will access to the money, a mixture of loan guarantees and emergency funding from the European Commission. Economic Affairs Commissioner, Olli Rehn, said it showed a commitment to “defend the euro whatever it takes”.

Under the deal, the IMF will contribute over 250bn euros. Dominique Strauss-Kahn, its managing director, issued a statement in which he stressed that the organisation would “…play its part, in the interests of the international community, in addressing the current challenges. It shows through this decision that we are placing considerable sums in the interest of stability in Europe.”

Within hours, the single currency started to bounce back in trading in the Far East. It rose against the dollar, the pound and the yen. The President of the EU Commission, Jose Manuel Barroso, said that the “eurozone is certainly regaining confidence. Our fundamentals are certainly good”. Global stock markets also rose with FTSE in London opening 3.7% higher.

Despite this positive reaction, the markets will want more detail about how the money will be raised, how it will be handed out and under what conditions and how quickly it cab be made available. That will depend on decisions of the European Central Bank.

It’s already announced that it would buy eurozone government and private debt “to ensure depth and liquidity in those market segments which are dysfunctional””. In its statement, the bank said the scope of the purchases was yet to be determined, but that they would be “offset by liquidity-absorbing operations so as not to affect the stance of monetary policy”.

This now raises questions about the UK. This country didn’t take part in the negotiations and has a very limited exposure to the package. Analysts will be watching the Tories and Liberal Democrats as they discuss a possible power-sharing deal. However, these do not seem likely to produce a quick result.

As a result, analysts said UK assets, including sterling, may come under increasing pressure. They’ll also be watching carefully the outcome of today’s meeting of the Bank of England’s Monetary Policy Committee. It’s expected to leave interest rates at 0.5% for the 14th month running. It’s also expected to decide against buying any further assets, limiting its purchase of bonds to £200bn.

The meeting was postponed last week because of the election. MPC members will have to take the worrying growth data for the UK into consideration. The figures released in the past month have been weaker than expected, while inflation was higher than forecast.

Dominique Strauss-Kahn. <em>Picture: Guillaume Paumier</em>

Dominique Strauss-Kahn. Picture: Guillaume Paumier

Today’s attempted storming of the Greek parliament, the deaths of three people in an attack on a bank and the firebombings of at least two other buildings in Athens have brought home to European leaders the gravity of a financial crisis that threatens to rip the EU apart.

As tens of thousands of Greeks took to the streets of Athens in protest against the government’s austerity programme, the German Chancellor Angela Merkel told the German parliament that the EU and IMF’s 110 billion euro bailout of Greece was “about nothing less than the future of Europe and the future of Germany in Europe”.

The anti-capitalist demonstrations were the most violent since President George Papandreou’s Socialist government unveiled an austerity package aimed at slashing the public deficit from 13.6 per cent of GDP today to under three per cent by 2014.

In Athens, petrol bombs were thrown at police who used tear gas and stun grenades to break up an attempt to storm the Greek parliament building. The protesters chanted “thieves” at the MPs meeting inside to discuss the new austerity measures, which will hit Greece’s bloated state sector hardest and will include a pay freeze, cuts in pensions and sharp tax rises on cigarettes and alcohol. VAT is set to rise to 23 per cent, the retirement age for women will be raised, and Greeks in both the public and private sectors stand to lose the 13th and 14th month salary bonuses they are accustomed to receiving at Christmas and in the summer.

According to Greece’s finance minister, George Papaconstantinou, the government had managed to protect Greeks who are worse off, as higher-paid civil servants will be at the receiving end of the biggest cuts.

Urging German legislators to back Germany’s 22 billion euro share of the Greek bailout plan, Mrs Merkel said her country had “an exceptional responsibility for Europe” and must avoid at all costs a “chain reaction” which could infect other countries struggling with huge budget deficits.

Mrs Merkel made no mention of other states, but Portugal, Spain and Italy may be next in line for austerity programmes and the kind of social unrest afflicting Greece.

In an interview in Le Parisien newspaper yesterday, Dominique Strauss-Kahn, head of the IMF, told Greeks that although he understood their anger, their country’s financial situation would be “infinitely more serious” without the EU and IMF bailout, and the belt-tightening that entails.

Even if the Greek protests subside – and there is some indication that they will, as many demonstrators and union leaders were shocked by today’s deaths – some economists are sceptical that Greece will be able to slash its deficit by 11 percentage points by 2014. Latvia, Hungary and Romania, three non eurozone states that borrowed from the IMF, all failed to meet their targets because austerity measures agreed with the fund plunged their economies into deeper recession.

- Latest European Commission forecasts for EU economies

- What Greek papers say

- Parallels with Argentina

Dominique Strauss-Kahn. <em>Picture: Guillaume Paumier</em>

Dominique Strauss-Kahn. Picture: Guillaume Paumier

Greece looks set to bow to pressure from other eurozone members and take the unprecedented step of asking the International Monetary Fund (IMF) for a bailout.

Dominique Strauss-Kahn, the IMF managing director, said today that he would send an IMF team to Athens on Monday to begin discussions with the Greek authorities. “The Greek decision to initiate Fund programme engagement is consistent with the agreement among European leaders last weekend that financial support from members of the euro area should go hand-in-hand with IMF engagement and financial assistance,” Strauss-Kahn said.

If a standby agreement is reached with the IMF, it would be the fund’s first bailout of a country that uses the euro currency.

Last week the 15 other euro countries agreed on their share of a 45 billion euro rescue package for Greece, with Germany agreeing to provide around 8.4 billion euros. The IMF is expected to contribute 15 billion euros.

Greece admitted last year that it was much deeper in debt than it had previously made known. The admission plunged the EU into an embarrassing dilemma: should the other 15 countries which use the common currency reward Greece for its irresponsible fiscal policies, or should they accept the collective embarrassment of turning to the IMF for help?

They look set to do both things, but the IMF usually attaches harsh conditions to its loans that include radical restructuring of economic and social welfare policies, hence the Greek government’s hesitation in announcing IMF intervention.

The Greek crisis is problematic for German Chancellor Angela Merkel, who faces a state election next month that could see her coalition lose its majority in the Bundesrat (upper house) of parliament. Opinion polls show the German public is strongly against the financial bailout, which may be challenged in the German courts.

The EU’s financial affairs commissioner, Olli Rehn, however, said he believed Germany was committed to its part in rescuing Greece.

The billionaire financier George Soros told Italy’s Corriere della Sera that the euro and the EU itself were at risk of breaking up if Germany refused to make oncessions, and suggested that the EU set up its own monetary fund..

“The Germans have always made the concessions needed to advance the European Union, when people were looking for a deal. Not any more,” he said. “That’s why the European project is stalled. And if it can’t go ahead from here, it will go backwards. It’s important to understand that if you don’t make the next steps forward for the euro, the euro will go to pieces and the European Union too.”

He called for “a sort of European Monetary Union” which would make adjustments like Greece’s less painful.

In an interview with the Financial Times Deutschland, Rehm said he wanted a greater say for Brussels in the budget policies of EU member states, with all members coming under the control of a body similar to Germany’s finance planning council, where budget policies are coordinated jointly by the federal government and the German states.