G20

But Mr Barroso mounted a strong defence of the EU's handling of the crisis so far.

"Frankly, we are not coming here to receive lessons in terms of democracy or in terms of how to handle the economy," he told reporters.

Mr Barroso said the global crisis had not originated in Europe.

"This crisis was originated in North America, and many of our financial sectors were contaminated by, how can I put it, unorthodox practices from some sectors of the financial market."

BBC

Really? Surely they don't think that they are handling the crisis well? Perhaps Mr Barroso should be a little more humble? They've just agreed to give Spain's banking system €100 billion. But with non-finance private debt at 220% of GDP they're in the same position as us. The private sector is over-stuffed with debt, and giving banks more money is a joke. The Spanish banks will more or less have to do what our British banks are doing: sit on the money, or lend tiny amounts at exorbitant interest rates. And pay big executive salaries and bonuses.

And as for the crisis originating in North America that needs to be taken with a grain of salt. The bubble began to burst there, but Europe and the UK were playing exactly the same game, and in some senses still are. Especially in the UK we had very similar unorthodox practices, particularly gambling on asset prices. We also had a debt fuelled demand bubble.

But the other interesting thing in this article is that the UK is the most exposed country in the G20. Our external debt is more than 420% of GDP (the govt. share is not mentioned) The USA, by contrast only has external debts of 98% of GDP. 

The main point is that when the European dominoes start to fall, the UK will be lucky not to be dragged down with them. This helps to make sense of David Cameron's recent moronic figure waving exercise. His advisers are telling him that if Europe goes they'll drag the UK with them. We are highly exposed to insolvent European banks. We may have stayed out of the Euro, but we borrowed a truck load of them.