The Euro ain't sunk yet but the band are playing "Goodnight Irene!"...

As everyone knows France and Germany breached the Growth and Stability Pact for the third year in a row, despite Germany not including the cost of its Health Service obligations.

Greece got caught out by not including the cost of the Olympics as that one a one off they thought.

Italy just scraped home - sold off state assets and called a tax amnesty - until somebody realised that they haven't been adding up the right numbers since 1997 so they've been in breach for 7 years....a new record, lets hear it for the Azure!!!

Their finance minister resigned earlier this year by the way, said he couldn't manage an economy with the third biggest debts in the world, (106% of GDP), unless it was the third biggest economy - which it ain't.

Belgium came close to a breach and Portugal nearly breached for the second time.

The Euro's effectively dead!

So what's new to give us sleepless nights?

Well, to avoid a breach, Belgium took over the pension funds of Belgacom and BIAC, (Brussels Airport) - the fund assets they received went to bring government borrowing within the G & S Pact limits. In return the state is guaranteeing to pay the employees pensions when they retire.

In the same vein, in Portugal the governement has accepted the assets of four schemes in return for the responsibility of paying the pensions when they fall due.

So thats six massive schemes that no longer have assets, just State IOUs.

Is this really something that you want all governments to do?

Do you want your company pension cash to be handed over to the government, (possibly even the Government of the State of Europe), and to eply on your penion being paid on a promise from the State??

As I said... nightmare stuff...

More on this when I post Pensions meltdown parts 3 & 4
[Rep]