Julian Knight: Global action needed as Europe loses grip on crisis

As withdrawals from Continental banks leap, the trouble could spill over to the UK, cutting the availability of loans and mortgages

It's more a jog than a run but there is a lot of money flowing out of banks at the epicentre of the eurocrisis. In Greece in one day, €700m (£563m) has been withdrawn by savers. In Spain, Bankia has called on savers to remain calm, while furiously denying €1bn has been withdrawn, hardly confidence inspiring. Reports of higher-than-expected withdrawals are also coming out of Portugal and Italy.

Once this starts who knows where it will stop? We are not immune, particularly with continental banks, such as Santander, on our high street. People aren't stupid: they have been told for the past five years that the banking system is interrelated and can make the leap that problems with banks in the eurozone could spread to here, particularly if financial institutions start sitting on their money again, as they did after Lehman's collapse.

But should you really be worried for your personal finances?

Yes and no. There are guarantees in place for deposits. Just be aware of the limits, £85,000 per institution, and spread your money accordingly. Mortgage holders may find the clock going back to 2008 and the home loan taps turned off again. A Greek exit from the euro should increase funding costs to banks, which will have a knock-on effect on mortgage and loan rates. If the pattern of 2008 is repeated, short-term lending such as personal and business overdrafts could see limits cut.

This has deep recession written all over it and I dread to think what government finances after the massive borrowings of recent years are going to go. However, financial institutions have precious little choice than to keep buying this government debt – which is then devalued by the printing of money – because of regulation and the fact that if they don't keep buying it then what they already hold will collapse in value – a ponzi scheme no less.

I am losing hope that Europe can sort this out. There is a maddening going on its political elite as political constructs nearly 60 years in the making teeter. A global response is needed, a settlement to ensure the move of wealth from West to East is more orderly than what we are seeing. But first there will be some nasty shocks.

too taxing for hmrc

The Icaew, an independent accounting body not prone to hyperbole, has issued a red alert over plans to taper child benefit for those earning between £50,000 and £60,000. The Icaew has concluded that introducing such means testing through the tax system, already burdened by tax and pensions credits, is a "policy disaster" stating simply that HM Revenue and Customs systems "will not be ready for this". The tax system, once a global leader, is now dysfunctional thanks to Gordon Brown. The Chancellor has been warned.

Unjustified PPI attack

The body representing no-win, no-fee firms, the claims standards council – the word standards is here an oxymoron – has issued a jaw-dropping press release "slamming" consumer body Which? and Martin Lewis's Moneysavingexpert for "supporting banks over mis-sold PPI claims".

Their crime is to have written to the Justice Secretary Ken Clarke to ask for more regulation of claims firms to further deter bogus claimants. I have experienced it. In the past week I have been contacted by readers stating they don't know if they have had PPI but plan to submit a claim anyway. A quarter of all claims are from those who have never had a PPI policy. The no-win, no-fee firms are fuelling this.

A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
Lane Del Rey performing on the Pyramid Stage at Glastonbury 2014
people... but none of them helped me get a record deal, insists Lana Del Rey
Life and Style
fashion Designs are part of feminist art project by a British student
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
Arts and Entertainment
British author Howard Jacobson has been long-listed for the Man Booker Prize
Life and Style
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Louis van Gaal watches over Nani
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
New Real Madrid signing James Rodríguez with club president Florentino Perez
transfersColombian World Cup star completes £63m move to Spain
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

    £300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

    Insight Analyst – Permanent – Up to £40k – North London

    £35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

    Test Lead - London - Investment Banking

    £475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

    Business Analyst - Banking - Scotland - £380-£480

    £380 - £480 per day: Orgtel: Business Analyst - Banking - Edinburgh - £380 - ...

    Day In a Page

    Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

    Noel Fielding's 'Luxury Comedy'

    A land of the outright bizarre
    What are the worst 'Word Crimes'?

    What are the worst 'Word Crimes'?

    ‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
    Can Secret Cinema sell 80,000 'Back to the Future' tickets?

    The worst kept secret in cinema

    A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
    Facebook: The new hatched, matched and dispatched

    The new hatched, matched and dispatched

    Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
    Why do we have blood types?

    Are you my type?

    All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
    Honesty box hotels: You decide how much you pay

    Honesty box hotels

    Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
    Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

    Michael Jamieson: Why weight of pressure rests easy on his shoulders

    The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
    Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

    The 'scroungers’ fight back

    The welfare claimants battling to alter stereotypes
    Amazing video shows Nasa 'flame extinguishment experiment' in action

    Fireballs in space

    Amazing video shows Nasa's 'flame extinguishment experiment' in action
    A Bible for billionaires

    A Bible for billionaires

    Find out why America's richest men are reading John Brookes
    Paranoid parenting is on the rise - and our children are suffering because of it

    Paranoid parenting is on the rise

    And our children are suffering because of it
    For sale: Island where the Magna Carta was sealed

    Magna Carta Island goes on sale

    Yours for a cool £4m
    Phone hacking scandal special report: The slide into crime at the 'News of the World'

    The hacker's tale: the slide into crime at the 'News of the World'

    Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
    We flinch, but there are degrees of paedophilia

    We flinch, but there are degrees of paedophilia

    Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
    The truth about conspiracy theories is that some require considering

    The truth about conspiracy theories is that some require considering

    For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn