The Bewilderness

Philip Stephens of the Financial Times is one of the misguided Europhiles on the pink organ. Quite the chronicler of Tory failure, his tome from the nineties: "Politics and the Pound", is a timely reminder, if read today, of the mistakes and misguidance that has afflicted this country. The concluding remarks in his book sum up the erroneous assumptions underlying Europhilia and the ideological compass that underpins their reasoning:

Sterling is a useful indicator and an instrument of economic management but the currency markets can be as destructive as they are powerful. For now there seems only the slightest prospect that Britain will join EMU in 1999. A re-elected Conservative government would not survive such a decision. Tony Blair would almost certainly have more pressing priorities. But if the rest of Europe does create a single currency, sterling's future will look bleak. Once again Britain is likely to follow Monnet's advice.  It will watch from the sidelines to see if the venture works and, if it does, will join. Until then politics and the pound are destined to remain dangerously entangled.

The emphasis is upon British reticence, hesitation and cowardice, not upon the pros and cons of a currency union. When your magnetic north is inverted to Brussels, your reasoning does not look ahead but back, from out of your arse. The 'guilty men', who supported this disastrous venture have found any number of excuses for not amending their opinions.

This does not prevent our pygmies from another failure at the G7 (no Putin, so no G8). Strong leadership would demand the orderly dismantling of the currency union into convergent groups. Instead, isolating Angela Merkel, the Anglo-Saxons called for further integration, the mutualisation of debt and the monetary debasement of the Euro. The only response they can give is their own pisspoor stealth inflation and austerity spin. (The UK government is not on the austerity treadmill).

Why should the Germans pay for the debts of others? Their political elite may subscribe to a 'European Germany' and wish to avoid causing the gimps who gave all of their deposits in bad loans from facing the consequences of their actions. The German government have tried to stop bailing out their own banks. Merkel may have forced this poison on Ireland, Portugal, Greece, Spain and the periphery. Now that poison is being thrust upon her.

The stanks bubble away....

The tsunami of liquidity that the European Central Bank released in November and February to stave off an incipient 'credit crunch' no longer hides the inability of Member States to pay back their debt. Greece, Portugal and Ireland all remain mired in depression and austerity with no hope of recovery. Yields have begun to rise precipitously again in Spain and Italy.

There is no map for plotting the duration of this crisis: slow, slow, quick, slow. The gathering pace of European leaders towards the cliff edge will become far quicker when the first of the 'too big to bail' countries enters an antechamber of default. For this will be a moment of decision: integration or disintegration!

As Ken Rogoff again lists, the Eurozone does not meet the basic criteria for an optimal currency union: political legitimacy, labour mobility, a lender of last resort for bates and stanks (bank owned states and state owned banks) and a shared debt. When the crisis reaches its full fury, will some or all of the Eurozone leap headfirst into union?

This is unknowable, though all Eurozone leaders have urged greater rather than lesser integration. The current strategy of austerilty through liquidity runs the risk of political rejection after a period of time (depending upon the tolerance of the countries affected). After that, it is a matter of the Eurozone grappling with its strongest flaw: Germany.

A strategy for growth in Greece: parachute in the tax inspectors

Next month, we will be able to read the results of a new strategy for growth in Greece. This is from the same set of countries that has decided to send a flood of experts to aid the Greek government. Would this be a charitable donation of professionals to plug the gap left by an unendng stream of migrants seeking better lives and lower taxes elsewhere? When one sees the rise in poverty and hardship, one sees the disconnect between the creditors and those suffering.

Europe is helping Greece out by sending tax collectors. This currently counts as the only growth industry in the entire country. If the bloodletting of recession is not sufficient, European vampires wish to siphon what demand is left by "identifying" tax evaders and seizing their assets. 

This is part of Greece's permanent subordination; from Member State to paralysis. More revolting is the lack of pride by the citizenry in their own country. Their abject servitude before unelected appointees who have effectively disenfranchised their voice and tax them without representation.

We see the limits of the model. Soon, Europe will have to narrow the choice of political parties, since Member States may vote in a way unhelpful to the Project. Thank God we are travelling towards the exit.

Demos versus techno

Three democratic events could prove detrimental to the European edifice and its finely crafted farce. The French election could return Hollande, a socialist opposed to the current Bruning pruning; the Greek election could result in an implosion of the whole political class and their replacement by the extremes; and the Irish have told the EU to FU so that they can hold a referendum on the Fiscal disunion treaty.

This comes on top of Von Rompuy arguing that national sovereignty has been diluted by the creation of the European Union. Interdependence and impacts upon other Member States were cited to justify 'contracts' with the European Commission and intrusive limits on parliementary activity in economic, social and political fields.

"The commission and other euro area member states have to be consulted before adoption of any major fiscal or economic policy reform with potential spill-over effects, so as to allow for an assessment of possible impact on the euro area as a whole," Van Rompuy explained, adding that it is the responsibility of national parliaments to "adapt" to this new situation.

One can see the limits to this interdependence with the tension between voters demands and the undermining of solidarity (as they would call these). The fundamental contradiction between democratic accountability and technocratic rules can be resolved in one of two ways: the reversal of centralisation or the dilution of democracy (where national parliaments become parish jokes).

Bank bailout transacted through Greek front

The Telegraph caught up with Euractiv today, reporting that France and Germany would harmonise their corporate taxes on an intergovernmental basis. The pioneering duo hope to provide additional foundations for a Fiscal Union and prevent tax competition. I predict this is one wheeze that will survive a Hollande win, although he may wish to increase taxes against German opposition.

Still, the lunatics remain in charge of the asylum. A second Greek bail-out has been announced alongside some verbiage announcing the transformation of a basket case into a dynamic export driven economy. Potential strengths like tourism are ignored (since they would thrive in devaluation) and emphasis is laid on austerity and privatisation. You know, asset strippers.

Since the economy is now at crisis point, the paper is the final novel in this fantasy trilogy. Their medicine: cut wages, privatise the state and open Greece up to investment. How they will dispel the risk of default, depression and revolution is open to question. 

Such a programme can only be completed with victory for the political elite. Their support is shrivelling by the day. The collapse is priced in, now: duration till the event remains unknowable, but it can't be too long now. Elections in April.

The bandwagon rolls on: a killing joke

France and Germany have found that they were unable to obtain consensus for a 27 member approach to corporation tax. What we would call competition, they deride as dumping. Like Sarkozy in his magnanimous experiment on the Tobin tax, both countries have decided to bilaterally fix their corporation taxes as a step towards the mouthful: the Common Consolidated Corporate Tax Base (also known as 'all your taxes are for Europe'). 

From the Brussels perspective, this is described as 'enhanced co-operation', a sign of where they would like it to be, not just a Franco-German initiative. And we will see how far this lasts...given the French elections coming up. On this point, they do wish to foist this on the whole Eurozone, removing one more method by which endebted countries may be able to compete. 

And on another point of lunacy: we have Desmond Tutu lobbying the European Union for charging Canada more, as oil from tar sands and other sources could be imported, lowering the price of fuel. Part of the evil that forces the poor to choose between heating and eating, killing pensioners for the supposed good of the planet. The heating in Brussels isn't turned down.

Witting Collusion to save the Greek client state

Where to start with the hellhole that Greece has become. Why is it a hellhole? Because its politicians have opted for a continuation of their membership in the Eurozone at the expense of their electorate. The political class from left to right have supported a technocratic executive, joining a coalition government to appear as if they were carrying out the measures required for the bail-out. None of these parties were strong enough to dismantle the clientelist insider model.

I am depressed that even, in the throes of depression, the Greek political classes remain insulated from radical change, as demanded by their victims. It is not in their interests to be voted out and lose their powerbase. Nor is it in the interests of those who have bailed them out: watch their money shrivel in the cold wind of righteous popular anger. Neither the Greek politicians nor their debtors have an interest in putting any plan to the Greek voters. Why would the kleptocrats desire an election when they can acquiesce and blame inevitable change on financial paratroopers from occupying forces.

So we have a series of mock battles on sovereignty: shifts from democracy to technocracy and finally, the potential surrender of fiscal sovereignty to external forces.  

Whatever paeans to nationalism we may see drop like swill from hogs, no politician in Europe wants to risk an election with a revolutionary outcome. 

Sovereignty (as the will of the people) will be the EU issue of 2012.

Brussels and the No Turning Back Group

The European Commission is making its view known in London. The Social Affairs Commissioner, Laszlo Andor, was talking to an audience of trade unionists, since any other group may have taken  umbrage at his words. But, Andor's words, whilst music to the brothers, was a broadside to David Cameron. Choosing his terrain carefully and in a calculated insult, Andor confirmed that there could be no opt-out on social policy. He stated that repatriation would not be allowed: socially, legally or politically. 

Then, Andor attacked an "unreasoning" defence of free markets and joked about unelected bureaucrats rather inadvertently proving a Eurosceptic point:

"May I take the opportunity to debunk a myth frequently heard here in the UK - that 'unelected Brussels bureaucrats' dictate EU health and safety at work legislation. I often muse at the term 'unelected bureaucrats' — as if many bureaucrats were elected! It also fudges the issue of accountability, which has nothing to do with being elected."

It is only through elections that politicians are rendered accountable, which does beg the question: who does Laszlo Andor think he is accountable to?

For Barroso, the answer is in a form of political union. As he told to the Chinese in a recent summit: first economic, then fiscal, then political. Barroso did not confirm if there would be any voters involved.

 

Yet one more vote, one more summit, one more bail-out...

Greek rioters have begun to burn buildings as a torrid backdrop to the parliamentary vote on accepting austerity measures. Parliamentary opposition has coalesced around a question of sovereignty. All of the political parties that used the technocratic government of Papademos to distance themselves from these policies are suffering meltdown in the polls. If nothing else, the destruction of the political class that brought Greece to this pass would be a welcome development.

Even if the parliament votes in favour of Papademos, new elections should remove the tainted parties. Voters are emigrating from the austerity pack and moving towards the far left. Elections are due within a few months, and it is unlikely that any deal will remain unmodified unless Greece suspends its democracy. Watch them deploy the fear card: vote for us or leave the Euro. Except that the buildings are already burning....

It has taken a few years, but we are beginning to see the much predicted resurgence of the Left. 

The Commission's figleaf for external affairs

Has the European Union made any headway in its subsidised publishing and agitporn? Alas, no. Baroness Ashton, obscure before her appointment, now languishes second from bottom in a poll to guage popularity of the Commissioners in their own country. Whilst I am the first to laud this healthy indifference and contempt to the EU, I do enjoy the unreal descriptions of Euractiv:

But the same logic cannot be applied to Ashton. Despite being in charge of the most visible dossier on a global scale, the high representative for the European foreign affairs and defense marked a very poor performance on the Web.

Her website had fewer than 8,000 visitors in December, in the same month the European Union moved to step up sanctions against Iran and Syria.

That is definitely less than Guido. And We know why Baroness Ashton gets no publicity. It is because the Commission runs her affairs and she does not even have the power to release her own statements. In all, the role is a waste of time. 

If the EU wishes to release funds for an emergency, it can take a week (the process lie) or a month (the process reality):

In one example, if the EEAS wants to release up to €20 million in emergency funds the decision must go through Ashton's secretary general, her private office, the FPI, "relevant" commission services and the Political and Security Committee (a group of EU countries' ambassadors).

Michael Mann [Ashton's spokesman] said the process takes one week. The head of delegation noted: "It takes about a month and this is supposed to be our fastest instrument."

The poor die so that bureaucrats can have the time to stamp their turf. It is the byzantine politics of the madhouse; time to leave. And what person could principally stand by, thinking that their role has any moral worth....