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At the end of 2011, the European Union took one further step - albeit without the UK - towards a fiscal union, the latest stage in its efforts to satisfy the markets and bring back stability for the Euro. New rules of fiscal prudence are being put in place: national finances will be in a German straitjacket. True, it was the Germans and the French who first showed that the fiscal rules of the Euro (current account deficit no more than 3% of GDP) could be set aside when recession threatened. No matter, the new rules will be enforced on all.

Political rumblings have continued through the early months of 2012. Most recently, the success of Hollande, in the first round of the French Presidential election, seems in part due to his pledge to re-examine the Merkozy fiscal pact. ...