Terry Smith Straight Talking

Financial Times, Letter to the Editor - Should Greenspan be stripped of knighthood?

Today’s Financial Times published my letter to the Editor concerning Fred Goodwin. Here is the letter in full.

From Mr T.C. Smith.

Sir, For Fred Goodwin to follow in the footsteps of traitors, dictators and fraudsters in being stripped of his knighthood seems extreme. He did not make the decisions that produced such a disastrous outcome for the Royal Bank of Scotland alone. He shared responsibility with the board chaired by Sir Tom McKillop, and the fateful acquisition of ABN Amro was approved by the RBS shareholders. Banking is also a highly regulated industry and his actions were supervised by the Financial Services Authority, then chaired by Sir Callum McCarthy.

But if the current mood is for those in the financial services industry who received honours in those times and who made mistakes to be stripped of their titles in order to “appease” the public, as UK prime minister David Cameron suggests, surely attention should now focus on the honorary knighthood bestowed upon Alan Greenspan in 2002 for his “contribution to global economic stability”.

T.C. Smith,
Chief Executive, Tullett Prebon,
Chief Executive, Fundsmith,
London EC2, UK

BBC Radio 4 World at One Programme, 01 February 2012

Today I was interviewed on Radio 4’s World at One regarding Fred Goodwin being stripped of his knighthood.  We had a lively debate about whether it was right to take his honour away - I think not - and whether other people should have their honours stripped from them. The BBC interviewer pointed out to listeners that the RBS chairman did not receive his knighthood for services to banking and by implication it would not be appropriate for him to be treated in the same manner as Fred Goodwin. I did not have the time to point out that Anthony Blunt received his knighthood for services to art yet was stripped of it for spying. One person that clearly does stand out for scrutiny is Alan Greenspan.

You can listen to my interview here (commences at 20 minutes 55 seconds) and a full transcript is below.

SHAUN LEY: Presenter
Well, Terry Smith is chief executive of Tullett Prebon, a money broker and Fundsmith, a fund management company.  He’s in the City now. Welcome to the programme.
What do you make of the decision to strip Fred Goodwin of his knighthood?

TERRY SMITH: Chief Executive, Tullett Prebon and Fundsmith
I think it’s deplorable.  He’s now been bracketed with traitors, dictators and convicted fraudsters.  If he did something wrong, I’d like to see some proceedings against him – civil or regulatory – and then if he is found to have done something wrong, strip him then but at the moment it looks like a deplorable, political willingness to go along with the sort of morals of a lynch mob.

SHAUN LEY:
But honours are discretionary: there’s no real criteria for rewarding them.  Why should there be any specific criteria for taking them away?  If they’re given by politicians why not allow politicians in response to public opinion, to strip them from those who’ve received them?

TERRY SMITH:
We could do that if people wish.  It would be a break with the way that this has been done in the past, of course – that’s not necessarily a bad thing – but historically, as I say, traitors, dictators and convicted fraudsters have been it so this is a complete change.  If we are going to strip them at discretion for failing though, I would like to suggest to you that the Buckingham Palace probably need a rather large cupboard for returns, because if everybody who fails has to hand back their honours there’ll be a lot.  If we take the specific case of Fred Goodwin, he didn’t make his decisions alone.  The chairman of his board and his board helped him – the chairman, by the way, was Sir Tom McKillop – and he’s in the regulated, highly regulated banking industry where the FSA basically approved what he was doing and that was chaired at the time by Sir Callum McCarthy.  So I presume if we’re going down that route, there will be a lot of other people rather than this lone individual singled out.

SEAN LEY:
I suppose I should say, just in passing, that Tom McKillop’s knighthood was for services to the pharmaceutical industry before he went to banking but I think your point is well made. 

TERRY SMITH:
Who cares what it was for?

SHAUN LEY:
Fair enough and on that basis, are you concerned that this might have an impact on the City, on the attractiveness of Britain for business, particularly this idea perhaps if you fail, which a lot of people do in business, even people who are subsequently successful, you’re going to get punished for it?

TERRY SMITH:
Yes, I think the only way to absolutely guarantee that you won’t fail, is not to try in the first place.  I think it will have a bad effect on people and I think people who either aspire to receive honours for whatever reason in their career, or those who like Stephen Hester, have taken on a job in the public sector who see that something that they were contractually received is taken away for political reasons, must surely think twice about ever taking something on like this again.  But going back to an earlier point: if we are going to take honours away from people because of their mistakes, could I suggest another one that should obviously be called into question?

SHAUN LEY:
Go on, briefly.

TERRY SMITH:
How about the 2002 honorary knighthood given to Alan Greenspan, the chairman of the Federal Reserve and the citation was “ for his contribution to global economic stability”.  I’ll believe that people are not on a witch hunt for a single man when they proceed against Alan Greenspan and strip him of his knighthood.

SHAUN LEY:
OK, Mr Terry Smith in the City: thanks very much for joining us.

UK should leave the EU and join NAFTA

There is a good article in the Wall Street Journal suggesting that the UK should consider leaving the EU, which has strayed a long way from its free market origins and is set to go further, and join NAFTA:

http://online.wsj.com/article/SB10001424052970204791104577110163558996698.html

Exchange controls may be introduced within the Eurozone

There is an interesting article by Bill Jamieson in The Scotsman. He discusses preparations for the possible introduction of exchange controls and controls on the international movement of capital in Europe which I have been saying for a while may be a necessary response to a run on Euro deposits in the other PIIGS if or more likely when Greece exits the Eurozone:

http://www.scotsman.com/lifestyle/arts-blog/bill_jamieson_apocalypse_could_be_now_for_euro_1_2028344

Michael O'Leary on the EU

This presentation by Michael O’Leary in Brussels to the EU is worth 15 minutes of your time. It is ostensibly about airlines but he also offers some insight into the EU:

http://www.youtube.com/watch?v=p4HYSsrlcq8&feature=player_embedded

Cameron's veto was consistent with history

There was a wonderful letter in the FT yesterday from a Mr Shenkman. He has clearly got a better grasp of history than those who have claimed that David Cameron’s veto of changes to the Lisbon Treaty and the UK’s alleged isolation as a result is in some way a reversal of British foreign policy towards the Continent.
 
I have a strong interest in history as I have a first class honours degree in the subject and in my view Mr Shenkman is right. For hundreds of years Britain’s successful policy with regard to the Continent has been to ally with the weaker powers to prevent a single power dominating the Continent. This which would have been to our detriment as an island off the coast of mainland Europe whose prosperity has depended upon trade with the wider world.
 
This policy was implemented during the Napoleonic Wars when the successful military intervention of Nelson and Wellington prevented the Continental System from being imposed upon Europe, and again in the twentieth century with two world wars fought against Germany.
 
There may no longer be a military dimension to the current problems in Europe (although I think we should hesitate before dismissing that possibility given the historic instability of south east Europe). There is, however, little doubt that the Eurozone has been used as an instrument for Germany to dominate the Continent through productive might and David Cameron’s veto is consistent with the aims of centuries of successful British policy on Europe which it would be foolish to abandon.

 

Financial Times, Letters to the Editor
Long tradition of holding other powers in check
From Mr Gregory Shenkman.

Sir, Perhaps the history I studied at Cambridge was different to that absorbed some years later by Jonathan Powell at Oxford (“Cameron has betrayed 200 years of history”, December 12). Mr Powell suggests....

Read the full text at http://www.ft.com/cms/s/0/9f1ca328-1c4c-11e1-af09-00144feabdc0.html#axzz1gJnGZzdi

 

(Those of you without a subscription can access a limited number of articles each month via FT.com's free registration.)

Isolation Hysteria and the IMF

I am frankly amazed by the outpouring of hysteria from some politicians and the media on the subject of David Cameron’s use of the veto over changes to the Lisbon Treaty.

To listen to some in politics and the media bemoaning what they claim is the resulting ‘isolation’ of the UK you would think that the UK should accede to any request from the EU in order to avoid this fate. Why? The Euro, which these proposed changes were designed to support, has been a predictable disaster for almost all the countries involved other than Germany.

It is also worth bearing in mind that many of these commentators-such as Ken Clarke and Michael Heseltine- were vociferous supporters of us joining the Euro. Indeed, Michael Hesletine thinks we still should-an unusual case of trying to join a sinking ship. Had we done so, we too would now be bankrupt and quite possibly governed by an unelected official appointed by the EU, as Greece and Italy are. These commentators were wrong when they wanted us to join, so why should we listen to them now?

We should now move onto redefine and renegotiate our relationship with or within the EU, starting with the question “What do we get for the£50m per day we send to Brussels?”. If we do not get what we want, we should accept that the UK’s future, like its past, success will lie in being an open economy servicing and trading with nations with which it has historic connections in the Americas, Asia, Africa and Europe.

One aspect of the “deal” at last week’s EU summit puzzled me. It was seeing Christine Lagarde, the Managing Director of the IMF (a Frenchwoman-her predecessor being maybe not coincidentally a Frenchman) proudly announce that the EU countries (other than Britain’s) central banks were going to make loans to the IMF of €200 billion. This might seem counter intuitive-how can countries which are to put it mildly short of money make a loan to someone else? Of course the answer is that the funds would be loaned to the IMF for it to loan back to the Eurozone.

That is obviously a circular piece of none too subtle legerdemain, but the hope was that other countries would join them with additional funding. This hope was rather dashed when the Canadians immediately announced that they has no interest in subscribing funds to rescue the ‘rich continent’ of Europe. Sensible people the Canadians: they dragged themselves back from being a basket case in 1994 with spending cuts which restored a budget surplus and have not experienced a banking crisis. They also just announced withdrawal from the Kyoto protocol on climate change. Following the refusal of China to take part in such nonsense despite the myriad rumours, I can only assume that this latest leg to the circular Ponzi scheme that is now the Eurozone is a non starter.

The Sunday Telegraph - All Britain is isolated from is a looming eurozone disaster

I wrote an article for yesterday's Sunday Telegraph. Here is the article in full.

David Cameron was right not to agree to the proposed changes to the Treaty of Lisbon at the latest summit.
The immediate cause of this was that the other EU leaders (in reality Germany and France) refused to give the safeguards that he demanded that they would not impose regulatory and tax changes which would adversely affect the UK’s financial services sector.
He had no choice. Financial services are a far more vital part of the UK’s economy than they are of any European country.
The City provides services to a large part of the world, and financial services are our biggest sector for employment, taxes and exports.
The EU, and Germany and France in particular, envy that position. They would like to divert as much of that activity as they could to Frankfurt and Paris, hence the proposed regulations to move the markets in so-called Over the Counter Products such as foreign exchange, and bonds onto exchanges, like Deutsche Borse and Euronext.
The eurozone leaders also fear the markets because they are the last thing which holds them to account.
Because the eurozone countries are running such large budget deficits they are answerable to the bond markets which are now refusing to supply those funds.
The attempts by the EU authorities to silence the markets by devices such as bans on short selling are a clean sign of their wish to shoot the messenger, but they are ineffective whilst those market are in and regulated from London.
We are told by critics like Labour’s Douglas Alexander that this move has left Britain isolated from Europe. This might be worrying if it were not for the fact so far the Euro has proven to be an unmitigated disaster and there is nothing from this latest in the seemingly endless series of summits to suggest that this will change.
We are told that the whole point of the treaty changes was to ensure that there was some central authority which would ensure that, in future, eurozone countries cannot run up the sort of debts which they now have.
Didn’t we already have such rules in the ironically named Growth and Stability Pact enshrined in the Maastricht Treaty which were disregarded?
Introducing new rules strikes me as like the former Labour government’s approach to knife crime, which was to pass more and more legislation (in 1997 and 2007). Stabbing people was already illegal, what was required was some enforcement.
The same is true of the eurozone - already there are weasel words in the summit agreement about limiting 'structural’ deficits. When you spend more than your income, it’s a deficit. What’s a structural deficit? I suspect it’s a device to ensure there is no penalty when you exceed the limit.
The summit agreement also talks about funding a bailout fund and sending money to the IMF for them to lend to back to the eurozone. This is all circular. If you are spending more than your income, at some point you need some third party to lend you money.
And finally, neither this summit nor any of the others has even sought to address the underlying flaw at the root of the Euro: Greece, Portugal, Spain, Italy, Ireland and even France, cannot make their economies competitive in a currency union with Germany.
So all the UK is isolated from is an impending disaster: the eurozone will fragment with countries leaving and debt defaults. It is like being as isolated as a man who failed to get onto the Titanic before it sailed.
Terry Smith is chief executive of Tullett Prebon and Fundsmith

BBC Radio 4 Today Programme, 09 December 2011

I was interviewed this morning on the Today Programme regarding last night’s EU summit talks in Brussels in which David Cameron declared Britain’s official decision to isolate itself from the EU. Britain's isolation from the EU is like someone who refused to join the Titanic before it sailed as there is nothing that guarantees that the euro will survive at all.

You can listen to what I had to say here.

The full transcript of the interview is below.

JUSTIN WEBB: Presenter
Is it a good result for the euro? The markets, Robert Peston was telling us a few minutes ago, have not been too impressed, at least in their early thoughts. Let’s go to Terry Smith who’s chief executive of Tullett Prebon and Fundsmith, and what do you make of it, Mr Smith?

TERRY SMITH: Chief Executive, Tullett Prebon and Fundsmith
What I make of it? I’m not sure that this leaves Britain isolated, we’re still members of the European Community. But if we are isolated, we might be as isolated as somebody who refused to join the Titanic just before it sailed.

JUSTIN WEBB:
It’s still the Titanic?

TERRY SMITH:
Yes, it’s still the Titanic. I mean, there is nothing that guarantees that the euro will survive at all, or in its current form in this. The essentials that would be needed to make that work just aren’t obviously present in the deal that’s being done.

JUSTIN WEBB:
What’s the one big thing, or one or two big things that are missing?

TERRY SMITH:
Well, the one big thing which may be missing is whether or not you can have any central control over the individual governments’ budgets and, of course, that is something that people say is going to be incorporated in this, but frankly, there was already that in the growth and stability pact and it’s not unknown – in fact it’s well known – for a lot of the countries involved to disregard rules.

JUSTIN WEBB:
I haven’t seen this in the details of what was agreed, but certainly before last night one of the differences was going to be that they were going to have to put it into their own internal domestic constitutions as well. But that doesn’t impress you?

TERRY SMITH:
No, not really. I mean, we’ve seen so many proclamations. The new rules to make people behave remind me of the former Labour government’s passing of two pieces of legislation, ‘to bear knife crime’. It was already illegal to stab people. And there are already rules that the countries are supposed to keep to; they’ve disregarded them. So that’s one. The other thing is, I think for the countries at the periphery, who’ve clearly got massive financial problems - including France I might say - whilst they remain in a single currency unit they will never be able to become competitive.

JUSTIN WEBB:
Ah, well, this is the other question, isn’t it, whether…

TERRY SMITH:
It is.

JUSTIN WEBB:
Just assume for a second that they do come together, that they do do the things that they’ve been saying the last few hours that they’re going to do, there is an argument, isn’t there, that actually it’s just the wrong prescription, if you’re doing the wrong things.

TERRY SMITH:
It is. I think it is. I mean, because what it will amount to is central control and more austerity for those countries. I don’t think that you can cure their position by more austerity. Greece cannot become competitive, in terms of its major industries like tourism and agriculture, whilst it’s in a strong currency caused by the membership of Germany. Neither can Italy, certainly the south of Italy, Spain, Portugal, Ireland and France, basically. In my view a single currency unit for those countries is misconceived.

JUSTIN WEBB:
And yet… a final thought, Terry Smith. I mean, you would have heard what the Chancellor said yesterday and a number of people who are in the know about these things, suggesting that the cataclysm that would result, economic cataclysm - possibly political as well but let’s stick with economic - as a result of the euro breaking up, would be so huge that really everything has to be done that can be done to shore it up.

TERRY SMITH:
I don’t think that’s the case really. I mean, if you look at what’s happening economically, as a result of the existence of the euro, it’s not exactly a bed of roses at the moment and it may be, if the only way for those countries to become competitive is for them to leave the euro, the sooner they do it the better. People have left currency unions before: we left the ERM, Italy left the ERM in 1992; we actually had some of our most prosperous years after that.

JUSTIN WEBB:
Terry Smith, thank you very much.

BBC Radio 4 Today Programme – Eurozone downgrade warning a ‘statement of the blindingly obvious’

This morning I was interviewed on the Today Programme about the decision late last night by Standard and Poor's to review the credit standing of 15 eurozone countries including Germany and France.

Evan Davis opened the interview by asking, ‘how important do you think the Standard and Poor’s declaration is?’

To which I responded, ‘it’s not terribly important in itself. It’s a statement of the blindingly obvious in many respects. The idea that many of the eurozone countries, possible all of them, might be less able to service their debts than people had thought historically strikes me as fairly obvious.’

You can listen to the full interview here.

The full transcript of the interview is below.

EVAN DAVIS: Presenter
Well, yesterday was an extraordinary one, even by the high standards of the ongoing eurozone crisis. On the one side there was a glimpse of a possible solution to the immediate crisis as a compromise between France and Germany was agreed. Maybe that would pave the way to the European Central Bank easing up on its policy. Then, with impeccably bad timing, came the bombshell announcement from the credit ratings agency, Standard & Poor’s, that the debt of every member of the eurozone was being looked at for a possible downgrade; not every member, in fact, Greece and Cyprus, who are already very lowly rated, were exempt. Well, S&P is one of several private organisations that make a living out of rating the security of different governments’ debt; even Germany might go down, they said, France might go down two notches on their scale. Well, obviously, Standard & Poor’s don’t have any particular inside information, they’re just another group of analysts making their own assessment but they are a group who, for good reason or bad, are taken very seriously. We’ll discuss the implications of it, and that French/German agreement, in a few moments, but let’s just get Robert Peston to explain the significance of the Standard & Poor’s review.
Robert, what’s the significance of the Standard & Poor’s review

ROBERT PESTON: Business Editor
Well, I mean, you know, whether eurozone leaders like it or not, investors still take what credit rating agencies say about governments’ ability to repay their debts, seriously, and actually that authority of credit rating agencies is built into the system, because central banks, for example, when they’re lending to banks they actually use credit ratings to determine what kind of assets they take from banks as collateral. So what credit rating agencies say… and in the case of Standard & Poor’s, it’s not actually their analysis that I think people will regard as particularly controversial. We know that banks have been finding it increasingly difficult – that’s eurozone banks - have been finding it increasingly difficult to borrow, we know that governments like Italy and Spain have been finding it increasingly hard to borrow. And we’ve also witnessed how difficult it’s been for the eurozone to come up with solutions to these very serious financial difficulties. And, therefore, the analysis that underpins the downgrading is one I think that many people would accept. It is the timing, as you say, of them that is quite so shocking and explosive, coming as it does midway through what many would regard as make or break negotiations to try and solve these problems.

EVAN DAVIS:
Well, they didn’t mention the… I didn’t see in the bits I read of Standard & Poor’s mention, this French/German agreement. Now does the French/German agreement change the picture so significantly that Standard & Poor’s are out-of-date before they’ve even been published?

ROBERT PESTON:
Well, not yet Evan, because the French/German agreement is only one step along the way to reform; the other eurozone members have to sign up for it. And anyway, we haven’t yet seen all the detail of what the French and the Germans want in respect of limiting the ability of eurozone members to spend and borrow recklessly. We’ll only have a sense of how credible that plan is towards the end of the week, and actually if history is any guide, it may… what we may get at the end of the week is simply more broad brush statements by eurozone leaders, it may be weeks before we have the fine print, and it’s the fine print of these agreements that we now know from bitter experience which determines whether in the end these rescue proposals will actually work, and so far, over the past 18 months, the eurozone governments have rather let us down, given us, you know, wonderful hope on the basis of the thrust of what they’ve been saying and then we’ve seen the fine print we’ve thought, “well, actually, there’s rather less to all of this than we hoped”.

EVAN DAVIS:
Robert, thank you very much indeed. Well, let’s talk through this with Ngaire Woods who’s Dean of Oxford University’s Blavatnik School of Government, and with Terry Smith, a veteran City commentator, Chief Executive of Tullett Prebon and Fundsmith.
Good morning to you both.

TERRY SMITH: Chief Executive, Tullett Prebon and Fundsmith
Good morning.

NGAIRE WOODS: Dean of Oxford University’s Blavatnik School of Government
Good morning.

EVAN DAVIS:
Terry Smith, how important do you think that Standard & Poor’s declaration is?

TERRY SMITH:
It’s not terribly important in itself. I’d agree with Robert Peston’s comments, basically. It’s a statement of the blindingly obvious in many respects. The idea that many of the eurozone countries, possibly all of them, might be less able to service their debts than people had thought historically, strikes me as fairly obvious.

EVAN DAVIS:
Yeah. It’s annoying in the timing, though, isn’t it? There they are, trying to get everything together for Friday and then suddenly this thing is dropped and it’s humiliating saying Germany is going to be downgraded, essentially France, two notches.

TERRY SMITH:
Well, no, I don’t think the timing is particularly bad. If you remember, during the credit crisis, one of the great things levelled against the rating agencies was that they weren’t independent enough. So I think when they start behaving independently it’s a bit remiss to start complaining about them. And I think they’re absolutely right in what they’re saying. One of the great things in this situation is that France appears alongside Germany as one of the, sort of, financially stable, dispensing the way in which this crisis will be handled. If you look at France’s finances they have far more in common with the countries in the periphery than they do with Germany.

EVAN DAVIS:
Well, hang on, the debt level’s no higher than ours; it’s just because of the banks. It’s only because their banks will be infected by what goes on.

TERRY SMITH:
I don’t want to say ‘just because of the banks’, because if the banks need recapitalisation I think the debt level will soar, and there seems little doubt that they will need recapitalisation.

EVAN DAVIS:
OK. Well, give us a reason why Germany should be downgraded then?

TERRY SMITH:
Germany is the one that actually in the end will end up risking its credit for the remainder of the zone, if it goes down the path which is currently being outlined. So Germany doesn’t have the resources to support the whole of this. That’s why.

EVAN DAVIS:
OK. Well, look, let’s focus a bit more on this French/German agreement and ask this question, as to whether that somehow makes Standard & Poor’s a bit out-of-date. Ngaire Woods, I don’t know whether you think, what we saw yesterday – and the markets reacted very optimistically to it – what we saw was a glimpse of a solution.

NGAIRE WOODS:
No… I think there’s a political logic to the French/German agreement, which is that neither Merkel nor Sarkozy want to be seen as writing a blank cheque to all of Europe’s debtors. Of course that’s what the markets would like them to do but that’s not what they want to do. But what they’ve put in chain is a very long process, it’s going to take years for that treaty to be ratified and it’s going to have to be ratified in countries which are deflating fast, where people are losing 35%, 40% of their income and being expected to vote in favour of the euro. So I think it’s going to be a very contested process that will send many more shivers through the markets. And what the markets are looking at – and this is what Standard & Poor’s is saying, and I very much agree with Terry – is that they want to know how it is that Italy and other debtors are going to refinance several hundred billion euros of government debt over the next four or five months, and they can’t understand why the French and Germans are sitting, you know, designing their summerhouse while their house is burning around them.

EVAN DAVIS:
But isn’t the answer to that: that if they design a nice summerhouse the ECB will come in and sort it all out next year? But the ECB aren’t going to do that until they’ve got the cover of a proper structure being designed for dealing with the insolvency issues down the road.

NGAIRE WOODS:
Well, I think the other issue, though, is that for every step that governments like Italy and Greece and Ireland are trying to take to move forward, by cutting government expenditure, they’re risking sliding two steps backwards because they’re not growing. And debt, of course, depends not just on how much you owe and how much you’re spending, but also on how much you’re earning and how much you’re growing. And what the markets are looking at is a situation where, although governments might be making strenuous efforts, the growth prospects are looking more and more pessimistic. So they want to know, you know - the numerator and the denominator – ‘what’s going to happen to the debt and what’s going to happen to growth?’. And I think that’s what the eurozone leaders haven’t delivered on yet.

EVAN DAVIS:
Right. So in a way, we’re saying they haven‘t solved the immediate problem, because that would still rely on the ECB coming in. We haven’t solved necessarily the long-term problem, which is this growth austerity nightmare that there’s only a limit to how much austerity is going to work. Do you agree with that analysis, Terry Smith?

TERRY SMITH:
Yes, I do agree with the analysis. But I would pick up on one thing. We’ve seen, literally, countless summers here, and we’ve seen pronouncements of agreements - and it’s quite true this is a long process and it’s quite true we haven’t seen the details - but even if it all came to pass – and I must say the odds, looking at history, are against it – the idea that the ECB would then be able to buy bonds and that’s a solution, I’m afraid is farcical, because what you’re talking about is the central bank for these countries buying bonds that the countries are issuing. If you’re spending more than your income – and these countries are going to be spending more than their income for the foreseeable future – you need to be able to sell these bonds to some outside third party that’s got money. And for that to happen you’d need to convince them - as we’ve already heard - that your economies are competitive and that they’re able to grow. And I just don’t see how most of the peripheral countries, and France, can grow within the straitjacket of the euro. In fact, the whole point about these proposals, is putting in place things that will probably prevent their growth for quite some time.