Calton makes no apology for once again commenting on events beyond the borders of Scotland because, with our First Minister's avowed desire to see Scotland at the top table in Europe, we ignore what is happening there at our peril. Today the European Central Bank gave out 489bn Euros-worth of 3-year loans to European banks at 1% interest and with lower collateral requirements which is the equivalent of your bank lending you £2000 at 1% for a clapped out old car. The hope is that the banks will use the money to buy up the debt of the likes of Spain and Italy, thus making the ECB a lender to sovereign nations at one remove. In other words, we are only one step away from seeing the ECB become a national bank for the nation of Eurozone, ie fiscal union. And fiscal union means political union. As Angela Merkel said to the Bundestag early this month - "We have started a new phase in European integration ... we aren't just talking about a fiscal union, rather, we have begun creating one." However in the same speech, she also said "A joint liability for others' debts is not acceptable", reiterating the German opposition to the introduction of Eurobonds. This is because, while the Germans want fiscal union, they don't want to be responsible for the debts of other nations like Greece and Spain. A case of the Germans wanting to have their cake and eat it then.
(See also Stephanie Flanders on the BBC News website.)
