Check out the latest article in my newsletter: Mriya Report — What countries are saying about Ukraine, and what they are actually providing linkedin.com/pulse/mriya-rep… via @LinkedIn @MriyaReport @UK_CYBERSEC @BalticSnowTiger @Jacobi_DK

Check out the latest article in my newsletter: Mriya Report 16th October - Chris, Leon and James from Ukraine linkedin.com/pulse/mriya-rep… via @LinkedIn @MriyaReport @UK_CYBERSEC @Jacobi_DK @BalticSnowTiger

🚨Of the debt-crisis acronyms, the PIGS of 2010 were the periphery. The new set sits in the core – 🇫🇷🇬🇧🇯🇵🇮🇹FUJI: France, the UK, Japan and Italy. Two borrow in a currency they issue, two in one they cannot print, and the market is pricing the difference. 📈Measured by the cumulative rise in each country's 10-year yield above the global average since 1 January, all four stand above the line. So does the 🇺🇸United States, which leaves 🇩🇪Germany and 🇨🇦Canada as the only G7 members not being marked up on their own account – and Germany only just. 🇬🇧🇯🇵The UK and Japan are monetary sovereigns. Neither can be forced into default on debt in its own currency, so the discipline arrives by other routes: the term premium at the long end, the exchange rate and inflation. Hence the pressure on the 30-year gilt and the super-long JGB, where the dependable domestic buyers of the last generation – defined-benefit pension schemes in London, the Bank of Japan in Tokyo – are leaving faster than anyone replaces them. The UK learnt the price in September 2022, when it needed no bailout, only another new Prime Minister. 🇫🇷🇮🇹France and Italy borrow in a currency issued in Frankfurt by an institution neither controls, which is the condition the PIGS shared and the reason the spread over Bunds, rather than the yield, is the measure that matters. The dependence runs both ways, however. The combined indebtedness of the euro area's second and third economies, France's immediate fiscal crisis and a political deadlock that will run into the presidential election of spring 2027 scare the living daylights out of the central bank, because the ECB knows that it, and no one else, would be the lender of last resort to both. In LSEG's afternoon quotations on 1 October, France paid roughly 130 basis points over Bunds and Italy roughly 110, although Borsa Italiana's own feed put Italy nearer 118 – an ordering, on either reading, that would have been thought absurd in 2012. Italy is being lifted by the global tide; France is being repriced on its own account, by a market that watched governments fall over the budget in December 2024 and again in September 2025 and has drawn its own conclusions. The backstop is the Transmission Protection Instrument, created in July 2022 to let the ECB buy a member's bonds against spread widening it judges unwarranted and disorderly. Its eligibility test begins with compliance with the EU fiscal framework. Both France and Italy were placed under the excessive deficit procedure in 2024, which does not by itself disqualify either: the bar is a finding that a government has failed to take effective action on the Council's recommendation, and a French government that cannot pass a budget is a strong candidate for exactly that finding. Whether the Governing Council would buy OATs for such a government, months before an election that may produce one still less inclined to act, is the question on which the coming year turns. One further distinction from 2010–2012 is the uncomfortable one: 🇬🇷🇵🇹🇮🇪Greece, Portugal and Ireland were small enough to rescue, and the ESM's lending capacity of EUR 500 billion was sized for them. By contrast, France and Italy are the second and third economies of the euro area, with well over EUR 5 trillion of public debt between them, 10x of the ESM capacity: the periphery could be bailed out, whereas the euro half of FUJI can be held only by the central bank, and the central bank's support comes with conditions attached. Those conditions, and the credibility of the backstop itself, rest in the end on the balance sheets and the political patience of the creditor states – 🇩🇪🇳🇱🇫🇮🇱🇺 Germany, the Netherlands, Finland and Luxembourg – which now need to be stronger than at any time since the euro was founded. Germany, the anchor of the four, has instead spent two decades eroding its industrial and therefore its tax base with the failed anti-nuclear energy policy of its Marxists and Green Bolsheviks, closing its last reactors in April 2023 and paying for the privilege in industrial electricity prices that are driving energy-intensive production and its supply chains abroad or simply ruining them. It has meanwhile loosened its own debt brake for defence and infrastructure, and the Bund is no longer quite the fixed point against which everyone else's spread is measured. Unless @bundeskanzler turns the ship around, Europe will find it has carelessly lost its anchor, and only the enemies of freedom will profit. If I can read the implications of the data in a lucid moment from my sickbed, every opportunistic market participant and, more importantly, our enemies will already have drawn the same conclusions. 'Zeit, dass sich was dreht'. @robin_j_brooks @HannoLustig @SchullerKonrad @Peter_Conradi @John_ForemanCBE