Happy Holidays!

As the leaders of countries go on holiday, I wonder just how they will be feeling. Mr Sarkozy will probably go and have a great time, forgetting the troubles both Europe and France face in 2012. No doubt his tremendous self belief, that sometimes crosses the line into blinded arrogance, will allow him to forget the following: France and other major European countries need to refinance and a large amount of debt in 2012, banks need also need to refinance a large amount of debt especially as they start preparing for new regulatory capital rules. French banks in particular hold a large percentage of Greek, Italian, Spanish and Portuguese debt. The rating agencies have France on their negative watch-list for a potential downgrade. Europe need to implement their new treaty quickly to at least give the markets some positive action to be come optimistic to a solution to the European debt problem.  He has elections in April and he basing his campaign on his handling of the economy. No matter of the severity of these problems, Mr Sarkozy will no doubt feel he has handled the situation to date perfectly, even though he has managed to cause friction with the UK, who the rest of Europe need to be amicable in order to quickly implement many of their new measures by using existing European Union infrastructure. Regardless Mr Sakozy will look into the mirror and still remain firmly in love in what he sees. Mrs Merkel will not quite have such a joyous christmas. Her biggest concern is how to convince domestic politicians and the German public that a greater federal Europe is the best for Germany. While economically her arguments are strong and clear, sociologically there are many issues. The greatest is Germany once being perceived as wanting to be the masters of Europe. If austerity leads to a protracted European recession Germany will become once again resented by the rest of Europe. This is something the German public want to avoid at all costs. Mr Cameroon christmas will be a subdued affair with element of exhaustion. While he knows deep down the stand he made regarding Europe was the correct one, he also knows the reaction to this action needs to be managed. Mostly he knows he must keep a coalition government united which has mixed and vastly different views on UK's participation in Europe. He also must balance UK's interest while still appreciating how dependent the UK is on the free trade benefits of being a part of a European union. He might feel a little proud of how he handled himself on the international stage especially compared to the juvenile French leader.  But this warm feeling may dissipate quickly as he remembers the present stress of the global banking industry, which is the main driver of the UK economy. Mr Obama will have a philosophical holiday break. He will be bemused at the process behind the US political system. He will question whether the systems allows for personal gain to prevent consensus cross party politics, which is necessary in times of crisis. He will be preoccupied by the Iranian situation. Somehow he must appease Israel enough not to take military action, and work out how best to diplomatically handle a irrationally Iranian leader. And for the Chinese premier it will be just another day, in a week, in a month, of a long term -cycle that will see China's influence in the world increasing. Happy holidays. 2012 looks set be just as challenging yet full of immense potential as 2011.