The Bewilderness

Again, Europe doesn't win the pools

The Member States of the European Union, after a messy compromise, managed to agree a banking union. This hotchpotch has been roundly criticised for its inability to achieve its primary goal: avoiding the collapse of banks.

Instead of creating the stated goal of pooling the rescue, the finance ministers have diluted the national responsibility for saving banks by forcing other stakeholders and depositors to pay too. Thus, uncertainty and fear for investors is increased by a complex system that regulates banks at a supranational level and forces national authorities to undertake the rescue. Is that not similar to having a unified central bank and leaving national authorities responsible for dealing with monetary decisions over which they have no control. That worked well!

This system faces a further hurdle. The European Parliament is unlikely to pass the union in its present form. They would wish to see rescues undertaken by the Commission reducing the role of the Member States. A statement of "provide the money and we will take care of the rest". The whole system may yet founder on this rock.

For why are the states unwilling to pool their rescues? Are they aware of the debt lurking within their banks? Perhaps they are unwilling to share the bad debt with the good. Remember, unless you are Greece or Cyprus, there is always someone worse off than yourself.

Cashing In

Douglas Carswell MP has noted the growing demands of the House of Commons in holding the executive to account. Supine arselickers are no longer sauce of the day on the green benches. Yet the government still remains contemptuous of such demands. 

Cameron's Euroscepticism is a tour de farce in execution: dragged licking and screaming into the ligh as the latest victim of Brussels syndrome. His persobal penchant for compromise with the EU is highlighted by his latest ambassador to the Union: Ivan Rogers who has worked for the Europhiles, Leon Brittan and Ken Clark. That will raise eyebrows in the drier elements of the Tory party.

Such a combination of parliemantary scrutiny and EU scepticism marry in Bill Cash, chairman of the House of Commons European Scrutiny Commitee. The Committee's wish to speak to Ivan Rogers was rebuffed by William Hague, Foreign Secretary, on the grounds that the appointee was a diplomat. With such powers, the Committee is more than a little disgruntled with such executive highhandedness. 

This is just not good enough....and further evidence that Cameron is not to be trusted on Europe.

Economics will not decide this referendum

Walker's World at UPI decides to take a high-level view of a question which he argues could dominate the European crisis: Grexit vs. Brexit. Taking aside the question of political surprises in the present day, why does Brexit attract such interest? The short-term demands of Tory Eurosceptics may be swept away at the next election. It is unclear that a different government would observe a refendum promise or even adhere to the referendum lock. 

Walker's emphasis on the narrow economism that characterises Europhilia demonstrates that the primacy of politics remains the key driver for these events. Economics is a backstop but an EU, unwilling to reform, will not provide Cameron with what he desires for support.

Barroso Cake

When Jose Barroso set out his stall for further treaty changes at the European level, he used the phrase "political science fiction" to describe the potential recommendation that the Commission would champion. Avoiding the open and tedious door of satire, I do wonder if Barroso's words were chosen with an understanding of the term. Science fiction is a genre that embodies rationality, problem solving and futurist solutions as part of its suite. 

All of these virtues are embodied within the self-fashioned identity of the Eurocracy. Later on, Barroso appealed for democratic changes that would counter Eurosceptic and Europhobic parties through rational argument and "unwavering convictions". It is these small admissions that tease out the fundamental and irrational contradictions underlying these statements of 'cake and eat it'. Rhetorical homage to democratic outcomes and parliamentary debates are undermined by this teleology of development towards a European unity. If you vote the right way, welcome to Enlightenment and reason! If you vote the wrong way, you belong to an irrational and populist horde of darkness.

Perhaps Jose Barroso was unwittingly remembering some famous dystopias and how some were achieved by the stupidity of elites.

One day they will regret the long grass

The Draghi put may come to be seen as a short-term delaying tactic that destroyed any potential for implementing a deeper political and economic union. A deluge of money reduced the pressure on Italy and Spain removing the need for a coordinated bailout. Proposals for a banking union and greater political unity lost any immediacy and, as Euractiv have reported, are now pushed forward till next year. The drive for ever closer union has also become entagled with the electoral cycle of the paymaster, Germany: due to take effect in September this year. Angela Markel is not allowing European issues to affect the election since Eurosceptic parties are already outflanking the Christian Democrats and the Free Democrats on this single issue. 

But political expediency, in its own terms, is not news. Angela Markel agreed with Francois Hollande, at a summit meeting on the 29th May, that these issues would be negotiated and agreed upon after the European elections in May 2014. That is a delay of a year, probably eighteen months. This is where the issue of the slow burn may find them out.

The Economist cover for last week described the political leaders of the Eurozone as sleepwalkers. The urgency of the markets has been replaced by the apathy of stagnation. The problems have been institutionalised with an economic desert in southern Europe. This leaves the ingredients for further emergencies and bail-outs in place; spreading to other candidates within the currency union such as France and the Netherlands. The balm of press releases will not delay or prevent this crisis. The continual decline in economic activity and rise in unemployment cuts across the nonsense spouted by Eurocrats and renders the continent vulnerable to global crisis.

The Europeans will regret that they did not act whilst they had an opportunity to do so. Pain postponed is crisis redoubled.

A depressed, depopulated desert: the southern €zone?

I attended a lecture and book luanch this evening by Gavin Hewitt, BBC Editor for Europe, who has taken time oit to write a tome of contemporary history on the elite proceedings during the current crisis of the €. Hewitt set the stage with some thoughts on the emasculation of leaders, the gradual growth of fears over unemployment and the erosion of an adherence to austerity. 

Hewitt was honest in navigating between positions and showing how some criticisms are shared by both Europhiles and Eurosceptics. The problem is that their answers are different.

Yet, the talk omitted demographics. The depressed Mediterranean is suffering from a declining population with birthrates nowhere near replacement level. A crisis of economic growth was due to hit at some point. Yet, the crisis may have brought the effects of the demographic trap forward by encouraging emigration and creating a structural problem of youth unemployment. This would have crept up on the countries sometime within the next decade. Now that demographic death rattle can be heard within the Eurozone as a depressed depopulated desert becomes one outcome.  

No negotiation says Rompuy

Van Rompuy is the latest EU personage to make a statement about the theoretical 'Brexit'. Again, the line has been adopted: the treaties are not up for amendment and an 'a la carte' menu is not allowed. To force this momentum, Van Rompuy emphasised that the option was in or out. 

"The wish to redefine your country's relationship with the Union has not gone unnoticed," said Van Rompuy, a former premier of EU founding member Belgium. "I cannot speak on behalf of the other presidents and prime ministers, but I presume they neither particularly like it, nor particularly fear it."

Perhaps Van Rompuy thought that his line was a clever construction: emphasize the costs and introduce the notion that other members of the European Council are not particularly bothered. This could be defined as an emotional defence. Describe the exit as a form of petulance and indulge in personal metaphors as a descriptive narrative. If you judge this possible exit in a cold light: one of the biggest members leaving; Van Rompuy's speech trivialises the whole process and avoids an actual debate both here and in Europe.

The same symptoms are also displayed in debates over the Euro: an inability to engage with the catastrophic problems of the currency zone and rhetoric that puts forward stories without meaning. Sometimes, the utterances of EU spokespersons rival Comical Ali in their distance from reality.

How does this affect Cameron's wish to renegotiate relationships with the European Union? These statements prove that the ideological underpinnings of 'ever closer union' prevent the Commission and the European Parliament from supporting realistic changes to membership status. Their adherence to all or nothing leads those opposed from in to out. A truer question is how far their adherence will take them if political events within the Eurozone starts to undermine that glue?

Cameron should set out his stall in Berlin

How to break news? Especially news that some may view as good and some may view as bad. Even worse when most of your own voters are not that interested and would prefer you to be concentrating on the economy. The general questions prancing round David Cameron's as he wrestles with six impossible Eurosceptics before breakfast. His right wing are (rightly) enraged by puffed up parliamentarians from Germany and some US functionary from the State Department telling us what they would prefer. These people do not get a veto or a vote; and Cameron better not give them one.

The FT (a pink paper if ever there was one) notes that Cameron's timing could upset the Germans and the French. They will be celebrating their postwar treaty and the speech could draw attention away from the day "hundreds of French and German politicians gather in Berlin" to trough away on another taxpayer paid shindig. How dare Britain prevent the media from providing coverage of this extravaganza? I expect it to make page seven (maybe ten) in Bild.

The FT, after the usual roster of anti-referendum Europhiles (Heseltine, MacShane and Cable) also lays out the location: Brussels, perhaps, or the Netherlands. Location, location, location! If we are going to upstage this Franco-German anniversary, why not hold it directly in Berlin at the embassy? If Denis MacShane is right and the relationship is viewed in religious terms, then heresy at the gates appears an appropriate response. We may get as much spluttering and squawking as we have had from the talking heads in this article.

Alas, the carping may be the most exciting aspect of this speech. Cameron will satisfy no-one and will enrage his critics. The compelling message is "Better off out" and all the scaremongering from the relics is nonsense. 

If we leave the EU, we will face declining trade, permanent depression, poverty and mass unemployment ...like Greece, Spain, Portugal, Ireland.....

Osborne overruled

The final negotiations on the banking union for the Eurozone and its relationship to the remainder of the European Union come to the fore this week. One of the biggest issues has been the desire of the European Central Bank to demand that certain activities are located in the Eurozone, even though this would act as a barrier to the single market and undermine London's role as the major financial hub for Europe. Unsurprisingly, this has proved very attractive to the French. Mr Noyer is the French representative on the ECB and will champion the creation of a bloc on the banking regulator that can overrule non-€ members.

If, by the end of the week, we have a bloc that can overrule any other member, then it is game over. The core, an imperium, will begin to lord it over the periphery and rewrite the rules in their favour. Will Labour and the Liberal Democrats (and the supine Cameroons) continue to justify membership and say we are paying the price for our scepticism. Even when the Eurocore rip up the rules of the single market, these fools will say it is our own fault for believing in free trade and fair play. We are better off out!   

Democratisation within a flawed framework

The European Parliament has political 'families' not parties in the strange terminology used by Europeans within their distorted mirror universe. The use of language clearly differentiates the Union institutions from national democracies. Parties are the instruments of national interest, families are the consensual partnerships of Union interest. 

European Council President Herman Van Rompuy recently criticised the plan of the major groupings (not 'families') in the European Parliament to elect leaders who, if obtaining a majority, would obtain the Presidency of the European Commission. The link between the Parliment and the Commission would become explicit with a Prime Ministerial model. Van Rompuy also rejected direcet election of the European Council President.

The institutions of the European Union are capable of potential democratisation. And the Parliamentarians wish to grope towards this model. Of note is the opposition received from the European Council and, by inference, the national governments who do not wish to gift the Parliemant more influence than they have already received.