In sickness and in health

George Osborn, in the company of a possibly smiling Mervyn King, recently knighted for being in a prominent position at a time of great trouble, announced in to the assembled panjandrums of British financial engineering, that we are ‘within touching distance’ of solving ‘the British dilemma’.

Keep smiling

What is the British dilemma? Not ‘boom and bust’: Gordon Brown solved that one. It is apparently that our booming financial services sector ultimately busts the rest of the UK economy. I had better rephrase that to remove the b words, but essentially that appears to be what our Chancellor meant.

On the subject of ‘touching’, I notice that Vitor Constancio, an ECB vice-president, has observed that "Greece could have a contagion effect." It seems to me that he chose the wrong metaphor. It is surely not just Greece that is sick, and about to spread the illness to an otherwise healthy international economy, but that the whole thing is already desperately sick and about to topple like the house of cards once the stressed jack of Greeks crumples under the strain.

Not smiling

Mr Constancio is also a former governor of the Portuguese central bank, and as Wikipedia tells us, ‘Two Portuguese banks (Banco Português de Negócios (BPN) and Banco Privado Português (BPP)) had been accumulating losses for years due to bad investments, embezzlement and accounting fraud. The Portuguese Central Bank led by Constancio was criticized for having allowed this situation for years.’

The good Vitor also told us: "The euro area faces a very challenging situation that comes mostly from the interconnection of the sovereign debt crisis and the situation of the banking sector." At least he made that clear for us. But he doesn’t want a haircut, as you can tell from this photo.

In fact everybody in finance seems to have particularly smart tonsures - if not quite up to the standard of A C Grayling.

It is also reported that the Americans, who of course have put their own financial sector in blooming good health, ‘are exasperated with the failure of the big EU states to resolve the crisis and fear for the impact of a Greek default on the international economy’. Remember ‘toxic assets’, now all neatly filed away under C for central banks (ask Mr Constancio what’s in his cupboard), awaiting doses of T for taxation and A for austerity.