The news media this morning tell me that some of the pathetic runts who have inveigled themselves into Parliament have come up with a spiffing wheeze. They suggest that as Mrs Merkel is in a possibly-terminal struggle for her political existence, the time is right to cut down the amount that the UK should offer to the European Union to settle our obligations as departing members.
Most of the citizens I know - many of whom voted Leave - agree with Mrs May's public assertions that we should pay all that we owe, fair and square. It should have been possible to produce openly-published estimates of the amount many months ago, and most people are bemused that this has not been done. It is a matter of accountancy: the items should be listed, defined, quantified [in sterling] and a total determined. The UK government's tabulation may not tally with that of the Brussels bureaucracy, and an arbitration might be needed; but the whole thing should be open and and conducted in a fair minded manner on both sides.
This is the latest incident of low-mindedness among some politicians, whose behaviour has become a national embarrassment. The word puerile derives from the Latin puer - a boy - and is used to denote human conduct [chiefly by apparently-adult males] that seems to others to be very like the sort of behaviour in which pubescent males engage: often when they group together and goad each other on towards a greater excess of silliness. Every male adolescent is puerile at times: that is human nature. When grown men act in a puerile manner that is always embarrassing: when men in public life behave thus, it is a national disgrace. We have almost become used to fractions of the Conservative Party behaving in such a way: yet it is still painful, and the nation is shamed by it. That Mrs May is so weakened by her election debacle that she is at the mercy of such men is a national tragedy.
It is very hard to see where we go from here. It does appear that the government has ignored the idiots, for the time being, and agreed that we should make an increased offer to get the financial conditions of Brexit settled. It is devoutly to be wished that the government can hold to that decision and move on to substantive discussions.
Showing posts with label Merkel. Show all posts
Showing posts with label Merkel. Show all posts
Tuesday, 21 November 2017
Monday, 20 November 2017
Germany's Second State
It is a commonplace assertion that a cabal of German bankers and industrialists fixed Hitler's appointment as Chancellor in January, 1933, at a time when support among the electorate for the Nazis was waning. The business figures were scared that the Communists in alliance with the Social democrats could take power: then the Social Democrats would be dealt with and a Communist revolution would be achieved. To forestall that possibility, an alliance of the Nazis with other right-of-centre groups in parliament was cobbled together, and vonPapen was installed as vice-chancellor to provide a restraint on Hitler. vonPapen was easily set aside, but the Nazis followed policies that were endorsed, broadly, by both the bankers and the industrialists who got the orders for rearmament and the construction of the motorways.
Over the last weekend, as Mrs Merkel struggled to cobble a government together after her disastrous loss of seats in the parliamentary election, a cabal of German industrial and commercial bosses put out a statement to the effect that Brexit must be prevented. It looks likely that Germany will have to go through another election, in which the anti-immigrant, eurosceptic Alternative for Germany is likely to retain [or even improve] its share of the vote. If that election is to be avoided, Mrs Merkel must find coalition partners who will agree with the agenda suggested by the business lobby. If that election becomes necessary, Mrs Merkel will be replaced and a new coalition will have to be formed - probably on the lines of past left-right 'Grand Coalitions' that will start with the business sector resolution high on their agenda.
Several other European states want the EU to cut a deal with the UK, including the central European countries that have never submitted to Mrs Merkel's instructions to accept a share of the immigrants whose admission to the continent has caused her to loose her electoral power.
Unfortunately, the shambolic British Brexit secretary, David Davis, will flatter himself that his address to a business group in Berlin last week influenced at least the timing of this exercise of the influence of German's Second [or Secret] State's muscle; which has always been powerful within and behind Germany's politics. The massive economic success of Germany since the utter devastation of the country in 1945 has been driven by the lineal descendants of the people who put Hitler into power, and that lobby remains hugely powerful. Their recent announcement included a reference to the need for flexibility on the EU's principle of free movement of people, since it is well understood that immigration was a key element in the British people's vote for Leave; as it was the key to Mrs Merkel's electoral disaster in Germany itself.
Britain voted to 'leave the European Union'. The 'Tories for National Self-Destruction' [aka the headbangers] interpret that vote as meaning that the UK must leave the political club of Brussels and the Common Market. I have always assumed that it is only rational to split those two: we must leave the antidemocratic political institutions, but remain in the economic community [whether formally, or under the guise of a new trade deal]. That now looks feasible.
The Tories spent much of last week excoriating the MPs who have argued for such a solution. They will soon be vindicated. Then the real target for contempt, those who plan the economic devastation of the United Kingdom by quitting the European Economic Area, must be exposed and defeated.
Over the last weekend, as Mrs Merkel struggled to cobble a government together after her disastrous loss of seats in the parliamentary election, a cabal of German industrial and commercial bosses put out a statement to the effect that Brexit must be prevented. It looks likely that Germany will have to go through another election, in which the anti-immigrant, eurosceptic Alternative for Germany is likely to retain [or even improve] its share of the vote. If that election is to be avoided, Mrs Merkel must find coalition partners who will agree with the agenda suggested by the business lobby. If that election becomes necessary, Mrs Merkel will be replaced and a new coalition will have to be formed - probably on the lines of past left-right 'Grand Coalitions' that will start with the business sector resolution high on their agenda.
Several other European states want the EU to cut a deal with the UK, including the central European countries that have never submitted to Mrs Merkel's instructions to accept a share of the immigrants whose admission to the continent has caused her to loose her electoral power.
Unfortunately, the shambolic British Brexit secretary, David Davis, will flatter himself that his address to a business group in Berlin last week influenced at least the timing of this exercise of the influence of German's Second [or Secret] State's muscle; which has always been powerful within and behind Germany's politics. The massive economic success of Germany since the utter devastation of the country in 1945 has been driven by the lineal descendants of the people who put Hitler into power, and that lobby remains hugely powerful. Their recent announcement included a reference to the need for flexibility on the EU's principle of free movement of people, since it is well understood that immigration was a key element in the British people's vote for Leave; as it was the key to Mrs Merkel's electoral disaster in Germany itself.
Britain voted to 'leave the European Union'. The 'Tories for National Self-Destruction' [aka the headbangers] interpret that vote as meaning that the UK must leave the political club of Brussels and the Common Market. I have always assumed that it is only rational to split those two: we must leave the antidemocratic political institutions, but remain in the economic community [whether formally, or under the guise of a new trade deal]. That now looks feasible.
The Tories spent much of last week excoriating the MPs who have argued for such a solution. They will soon be vindicated. Then the real target for contempt, those who plan the economic devastation of the United Kingdom by quitting the European Economic Area, must be exposed and defeated.
Wednesday, 18 October 2017
A Macron-Merkel Plot to 'Destroy' London?
The world has been so intrigued by the bizarre conduct of President Trump that far too little attention has been paid to the oddity of the French president. Mr Trump has been ridiculously intrusive in sharing his rapidly-changing views with the media and in the Twittersphere: M Macron has been tight-lipped to an unusual degree; and there have been many reports of his contempt for the media. He has been reported as saying - to his own staff - that there is no point in him giving interviews and press conferences because his intellect is so far superior to the norm that people simply will not understand his statements and his answers to questions. His path to office has been engineered by the old establishment of the 'higher schools', who experienced the agony of the Hollande regime and were determined to seize upon the national consensus that politics had reached a nadir. Thus they presented a new sort of candidate from a new generation: a man with few friends and a most peculiar private life. His allies engineered a parliamentary landslide, and he appears to be in an unassailable position with a clear popular mandate - to be 'different' - backed by a parliamentary majority.
With these assets, he is attempting - as half a dozen of his predecessors did - to attack the established position of the trade unions and of the farming interest, and to try to change the culture of work generally in France. Given the fact that recorded French 'productivity' is very much greater than the British, and not far inferior to the German, it is unclear why he thinks that such disruption is desirable or necessary; but he is having a go anyway: and it fills column inches in the press.
His career record includes a few years with a major international bank, where he greatly refined his spoken English and learned how far ahead of French practice in banking and finance are the systems in new York and London; and how much bigger are the financial markets in those centres - and in Singapore - than in Paris. He also gained a perspective an the depth of support that the London finance sector has, from a huge array of specialist lawyers and a raft of support professions such as actuaries, arbitrators, loss assessors and adjusters. Some English-speaking critics reckon that he has developed a profound envy of these markets, and that he came into office with a determination to push Paris as a rival to those centres even though the ancillary trades there are massively under-developed.
Doomsters in London have now come up with the idea that he has decided to use the Brexit opportunity to diminish London massively: and that he has enlisted Angela Merkel and the gnomes of Frankfurt to his plot. This is seen as the hidden agenda behind the determination of a loyal, ambitious and deeply egocentric Frenchman, Michel Barnier, to use his role as EU negotiator with the UK to delay and diminish whatever settlement the UK can achieve with the EU. This sort of conspiracy theory can be very powerful in times of massive uncertainty; and the absence of any such plot - as with any negative argument in politics - is ultimately impossible to prove.
Mrs Merkel grew up, graduated and worked in the German Democratic Republic, and presumably had to learn Marxist dogma sufficiently to be allowed into university and into a research post. There is very little evidence that her education since 1990 has included any significant familiarisation with serious political economy. Her chancellorship has been supported by strong and well-informed ministers who have dealt with economic affairs and with business: she has read appropriate speeches, but no significant initiative has been attributed to her [other than the catastrophic decision to open Europe to mass immigration, which will mark her rule throughout future history]. It is possible, but improbable, that she has actually committed to any scheme systematically to attempt to smash the London market which - as is being stressed today - is an irreplaceable asset to world trade that even Germany and France rely upon heavily.
As a boy growing up in Lancashire, I became used to hearing older people say: "The French will never forgive us for saving them in two world wars", whereupon a minority said: "the First World War, yes: they don't like admitting that they needed us. But in the Second they hated us for disrupting their comfortable collaboration with the Nazis: remember, we bombed them and fought our way through France. DeGaulle was very much in a minority until the Americans put him in power."
It would be no surprise to discover that Macron grew up surrounded by the French mirror-image of such sentiments.
With these assets, he is attempting - as half a dozen of his predecessors did - to attack the established position of the trade unions and of the farming interest, and to try to change the culture of work generally in France. Given the fact that recorded French 'productivity' is very much greater than the British, and not far inferior to the German, it is unclear why he thinks that such disruption is desirable or necessary; but he is having a go anyway: and it fills column inches in the press.
His career record includes a few years with a major international bank, where he greatly refined his spoken English and learned how far ahead of French practice in banking and finance are the systems in new York and London; and how much bigger are the financial markets in those centres - and in Singapore - than in Paris. He also gained a perspective an the depth of support that the London finance sector has, from a huge array of specialist lawyers and a raft of support professions such as actuaries, arbitrators, loss assessors and adjusters. Some English-speaking critics reckon that he has developed a profound envy of these markets, and that he came into office with a determination to push Paris as a rival to those centres even though the ancillary trades there are massively under-developed.
Doomsters in London have now come up with the idea that he has decided to use the Brexit opportunity to diminish London massively: and that he has enlisted Angela Merkel and the gnomes of Frankfurt to his plot. This is seen as the hidden agenda behind the determination of a loyal, ambitious and deeply egocentric Frenchman, Michel Barnier, to use his role as EU negotiator with the UK to delay and diminish whatever settlement the UK can achieve with the EU. This sort of conspiracy theory can be very powerful in times of massive uncertainty; and the absence of any such plot - as with any negative argument in politics - is ultimately impossible to prove.
Mrs Merkel grew up, graduated and worked in the German Democratic Republic, and presumably had to learn Marxist dogma sufficiently to be allowed into university and into a research post. There is very little evidence that her education since 1990 has included any significant familiarisation with serious political economy. Her chancellorship has been supported by strong and well-informed ministers who have dealt with economic affairs and with business: she has read appropriate speeches, but no significant initiative has been attributed to her [other than the catastrophic decision to open Europe to mass immigration, which will mark her rule throughout future history]. It is possible, but improbable, that she has actually committed to any scheme systematically to attempt to smash the London market which - as is being stressed today - is an irreplaceable asset to world trade that even Germany and France rely upon heavily.
As a boy growing up in Lancashire, I became used to hearing older people say: "The French will never forgive us for saving them in two world wars", whereupon a minority said: "the First World War, yes: they don't like admitting that they needed us. But in the Second they hated us for disrupting their comfortable collaboration with the Nazis: remember, we bombed them and fought our way through France. DeGaulle was very much in a minority until the Americans put him in power."
It would be no surprise to discover that Macron grew up surrounded by the French mirror-image of such sentiments.
Sunday, 15 October 2017
Austria's Choice
Today, there is to be a general election in Austria. Thanks to the actions of Angela Merkel two years ago, the conclusion of the election in this neighbouring country to Germany was clear before voting began. The overwhelming majority of Austrians agree that there are now too many Muslims in the country, that the strain they have put on the social assistance and housing and education and health systems is unacceptable; and that no further significant immigration - however desperate the plight of people claiming to be 'refugees' might be - should be permitted. The government that will emerge from the election will be a coalition with a more right-wing structure than any since the re-unification of Austria [after allied occupation] in 1956. The two stand-out policy positions that it is expected to adopt are to seal the frontiers of the EU against immigrants, and to review and restrict access to the social security and related systems.
Neigbouring Hungary has had a government with policies designed to minimise immigration from outside the EU for several years: access to that country is very heavily controlled, with high wire fences and a strong presence of border guards. To the south-west of the Hungarian frontier is Austria's border with Italy, which has already been 'strengthened' to limit the onward passage of any of the tens of thousands of economic migrants who reach Italy by sea every year. No doubt that border will further be toughened: but there will also be sympathy for the Italians in their situation of receiving the migrants, which is resulting in right-wing politicians rising through 'populist' movements there, too.
There will be resistance in Austria to any attempt by Germany to impose any quota of Muslim [or, indeed, any other category of] immigrants on any EU country. It is widely expected that Austria will adhere to, and may even join, the 'Visigrad' group of countries [Poland, Czech Republic, Slovakia and Hungary] that have 'ganged up' to resist pressure from Germany and France. Thus there is already the making of a very powerful subset of the EU that will simply decline to go along with aspects of the settlement that the USA imposed on 'liberated' Europe after 1945. The Liberal Consensus to which Roosevelt and Truman, Churchill and deGaulle subscribed is fading fast.
The right-wing AfD in Germany has gained seats in the Bundestag, sufficient in number to harass whatever coalition government Mrs Merkel may be able to cobble together. France has a completely unproved president; and there are huge questions as to whether his parliamentary majority and constitutional authority will be enough to overcome the inertia of the trade unions, farmers and other vested interests. It has been noted above that Italy has strong and growing right-wing parties, and the legacy of Fascism is ceasing to be seen as an embarrassment. Those countries in north and west Europe that have a couple of centuries of constitutional government [Belgium, the Netherlands, Sweden, Finland and Luxembourg; plus non-EU-member Norway] have all seen some emergence of minority anti-migrant movements. The three Baltic States [Estonia Latvia and Lithuania] have no significant problem with Muslim immigrants; they have suffered, to varying degrees, net emigration to the more affluent west of the EU.
The Balkan EU members, and aspirants to membership, want to prove their democratic credentials; but they have limited resources to accommodate immigrants [balanced by limited means of keeping them out]. They will sympathise with [and envy] the countries to the north that have the means and the will to seal their borders to a significant extent.
Thus the European Union that is harassed by the Brexit issue is a very different political and emotional structure than it was at the beginning of 2015: the year in which Cowardy Cameron launched the Referendum as an election pledge. It is quickly becoming an entity about which any true democrat would have serious questions. Britain is so beset by a useless government that it has not yet faced up to the point: but there is a growing doubt as to whether we would wish to join, if that was the issue before us.
Neigbouring Hungary has had a government with policies designed to minimise immigration from outside the EU for several years: access to that country is very heavily controlled, with high wire fences and a strong presence of border guards. To the south-west of the Hungarian frontier is Austria's border with Italy, which has already been 'strengthened' to limit the onward passage of any of the tens of thousands of economic migrants who reach Italy by sea every year. No doubt that border will further be toughened: but there will also be sympathy for the Italians in their situation of receiving the migrants, which is resulting in right-wing politicians rising through 'populist' movements there, too.
There will be resistance in Austria to any attempt by Germany to impose any quota of Muslim [or, indeed, any other category of] immigrants on any EU country. It is widely expected that Austria will adhere to, and may even join, the 'Visigrad' group of countries [Poland, Czech Republic, Slovakia and Hungary] that have 'ganged up' to resist pressure from Germany and France. Thus there is already the making of a very powerful subset of the EU that will simply decline to go along with aspects of the settlement that the USA imposed on 'liberated' Europe after 1945. The Liberal Consensus to which Roosevelt and Truman, Churchill and deGaulle subscribed is fading fast.
The right-wing AfD in Germany has gained seats in the Bundestag, sufficient in number to harass whatever coalition government Mrs Merkel may be able to cobble together. France has a completely unproved president; and there are huge questions as to whether his parliamentary majority and constitutional authority will be enough to overcome the inertia of the trade unions, farmers and other vested interests. It has been noted above that Italy has strong and growing right-wing parties, and the legacy of Fascism is ceasing to be seen as an embarrassment. Those countries in north and west Europe that have a couple of centuries of constitutional government [Belgium, the Netherlands, Sweden, Finland and Luxembourg; plus non-EU-member Norway] have all seen some emergence of minority anti-migrant movements. The three Baltic States [Estonia Latvia and Lithuania] have no significant problem with Muslim immigrants; they have suffered, to varying degrees, net emigration to the more affluent west of the EU.
The Balkan EU members, and aspirants to membership, want to prove their democratic credentials; but they have limited resources to accommodate immigrants [balanced by limited means of keeping them out]. They will sympathise with [and envy] the countries to the north that have the means and the will to seal their borders to a significant extent.
Thus the European Union that is harassed by the Brexit issue is a very different political and emotional structure than it was at the beginning of 2015: the year in which Cowardy Cameron launched the Referendum as an election pledge. It is quickly becoming an entity about which any true democrat would have serious questions. Britain is so beset by a useless government that it has not yet faced up to the point: but there is a growing doubt as to whether we would wish to join, if that was the issue before us.
Friday, 22 September 2017
Merkel and May: Common Origins, Shared Failures and Different Prospects
Angela Merkel and Theresa May are both the daughters of clergymen, so they grew up in the psychologically comfortable environment of a clergy house with attentive members of the local community willing to support them even though the majority of the outside population was post-Christian. May's route into politics was typical of an Oxford graduate who had always been a young Conservative. The much rougher road that Merkel followed depended on the collapse of East Germany, on Helmuth Kohl's determination quickly and fully to integrate the east and the west, and on the ruthlessness that she had learned under Communism to move in at an opportune moment and slip herself into Kohl's place. By contrast. Mrs May's accession to the party leadership was by default of David Cameron, whose panic flight from the tragic situation that had been created by his daft, imprecise referendum question was one of the most shameful incidents in British history.
Mrs May's great 'weakness' as Home Secretary was the abject failure of her department to come anywhere near meeting the policy requirement to reduce net immigration to the UK to fewer than 100,000 non-students a year. In one sense, the target was unattainable under EU Freedom of Movement rules; Mrs May should have said that clearly: she had no way of limiting EU immigrants. She would then have had to establish and enforce a quota of non-EU immigrants; and that would have to be a tight one. That would be impossible to enforce, too, because almost every MP is constantly battered with demands and petitions from their Asian constituents to support the immigration of family members, and to support cousin-to-cousin mail-order marriages; many urban constituencies could be swung if the whole south-Asian population united to support one party [Labour, if the Tories in government had imposed a real cap on immigration]. George Osborne was apparently scathing about this'failure' in and out of Cabinet meetings: so she had to dismiss him on taking up office as Prime Minister; and superficially journalism's loss is her political gain in not having his constant carping at her elbow. He will, however, be a powerful enemy outside the Westminster hothouse, and he will surely dissect her ongoing failure to address Brexit adequately.
Mrs Merkel's massive mistake was to allow around half a million chancers from the Muslim world to claim to be asylum-seekers when she opened Germany to Syrians who were genuinely in flight from the appalling chaos of their home country. Many of these men - Afghans, Eritreans, Pakistanis etc - claimed to be juveniles, despite their appearance being clearly that of adults. She and her ministers appealed to Germany's Christian tradition as a major ground for welcoming the homeless: a sound point, in principle, which was instantly vitiated by the recognition that the chancers must include some jihadis and some potential recruits to jihad. Other EU countries have refused to take the quotas of these thugs that Germany has persuaded to EU to thrust upon them, and that will continue to be a source of discord within EU institutions for years to come.
Even if May is able to achieve a half-sensible Brexit, with the help of Merkel [which is by no means guaranteed], there is no reason to think that this will make May's position in the UK more secure: it could create the situation in which the Tory party can ditch her. May has, however, one cunning ploy that she has used already and will doubtless play heavily in her Florence speech today: that the UK can contribute materially to 'security' in the EU on an ongoing basis, after Brexit. That could well have a positive resonance, [particularly with Merkel and with the central Europeans who are resisting the quotas of chancers and thugs whom Merkel is foisting on them]. But everything is 'up for grabs' in a quickly-changing world and European context; with Trump and Putin spoiling on the sidelines.
Mrs May's great 'weakness' as Home Secretary was the abject failure of her department to come anywhere near meeting the policy requirement to reduce net immigration to the UK to fewer than 100,000 non-students a year. In one sense, the target was unattainable under EU Freedom of Movement rules; Mrs May should have said that clearly: she had no way of limiting EU immigrants. She would then have had to establish and enforce a quota of non-EU immigrants; and that would have to be a tight one. That would be impossible to enforce, too, because almost every MP is constantly battered with demands and petitions from their Asian constituents to support the immigration of family members, and to support cousin-to-cousin mail-order marriages; many urban constituencies could be swung if the whole south-Asian population united to support one party [Labour, if the Tories in government had imposed a real cap on immigration]. George Osborne was apparently scathing about this'failure' in and out of Cabinet meetings: so she had to dismiss him on taking up office as Prime Minister; and superficially journalism's loss is her political gain in not having his constant carping at her elbow. He will, however, be a powerful enemy outside the Westminster hothouse, and he will surely dissect her ongoing failure to address Brexit adequately.
Mrs Merkel's massive mistake was to allow around half a million chancers from the Muslim world to claim to be asylum-seekers when she opened Germany to Syrians who were genuinely in flight from the appalling chaos of their home country. Many of these men - Afghans, Eritreans, Pakistanis etc - claimed to be juveniles, despite their appearance being clearly that of adults. She and her ministers appealed to Germany's Christian tradition as a major ground for welcoming the homeless: a sound point, in principle, which was instantly vitiated by the recognition that the chancers must include some jihadis and some potential recruits to jihad. Other EU countries have refused to take the quotas of these thugs that Germany has persuaded to EU to thrust upon them, and that will continue to be a source of discord within EU institutions for years to come.
Even if May is able to achieve a half-sensible Brexit, with the help of Merkel [which is by no means guaranteed], there is no reason to think that this will make May's position in the UK more secure: it could create the situation in which the Tory party can ditch her. May has, however, one cunning ploy that she has used already and will doubtless play heavily in her Florence speech today: that the UK can contribute materially to 'security' in the EU on an ongoing basis, after Brexit. That could well have a positive resonance, [particularly with Merkel and with the central Europeans who are resisting the quotas of chancers and thugs whom Merkel is foisting on them]. But everything is 'up for grabs' in a quickly-changing world and European context; with Trump and Putin spoiling on the sidelines.
Monday, 11 June 2012
Dubloons for the Dons
Today's German press is highly critical of the fudge by which the eurozone is to bail out the Spanish banking system with a fund of up to 100 billion euros, by means to be clarified at an indeterminate cost to the currency union in general and to Germany in particular. In some editorials the term 'blackmail' is used frankly; in others the same analysis is more delicately expressed. While Greece and Ireland were implicitly deemed to be 'small enough to fail' Spain [like Goldman or Morgan] has been treated as 'too big to allow it to fail'. The eurozone could survive without Greece and Cyprus; provided there was no domino effect on Spain or Italy: but the impression over the past week became a conviction that if Spain was allowed to collapse financially the eurozone would be under terminal threat and the whole European project would massively be enfeebled.
All the eurozone finance ministers were complicit in the round of conference calls that took place at the end of last week. All their governments have become almost-unconditionally susceptible to being organised by Germany into a superstate. The details of the fusion, and of the way the inner union will articulate with the non-euro EU member states must be settled quickly; and Germany will predominate in all the discussions. The vulnerabilities of Italy and France are so significant that neither will have a veto on the integration process: and the influence of the eurorats in Brussels will be diminished in favour of the smooth suits in Frankfort.
The first few hours of trading in international markets after the announcement of the purported loan-guarantee to the Spanish banks demonstrated that supernational gamblers would only give credibility to the package when they can see the funds actually allocated by the Germans. The package was announced on trust: and it was not trusted. The eurozone expressed an intention to support Spanish banks, in circumstances where no fund had yet been established from which the guarantee could be converted into a series of payouts. 'The markets' on which the prices of Spanish [and Italian] bonds have fallen since the 'rescue' was announced are only in a tiny proportion driven by real-world firms [such as pension funds] that hold such bonds as part of their long-term investment portfolios. The majority of recent purchases and sales of state bonds and of bonds issued by south European banks are speculative gambles: the 'value' of the bonds is utterly irrelevant to the gamblers, who are interested only in making a gain by rightly predicting a rise or a fall in the price of the euro in terms of dollars, sterling, yen or other currencies. The market reaction strengthens the Germans' hand: the Spanish deal - and any subsequent deal for Italy or France - will only have credibility if Germany actually places resources in the appropriate backing funds. Chancellor Merkel faces elections: she and her party will be annihilated if they are perceived to have sold the German taxpayer short. Serious negotiations must now begin, with the collapse of the euro as the imminent threat. The eurorats will posture around the periphery, but the power unconditionally rests between Berlin and Frankfort; the modern and the medieval capitals of the German Reich.
Britain has blundered into the position where most of the electorate want the UK to be separated from this whole mess: so it can't be all bad!
All the eurozone finance ministers were complicit in the round of conference calls that took place at the end of last week. All their governments have become almost-unconditionally susceptible to being organised by Germany into a superstate. The details of the fusion, and of the way the inner union will articulate with the non-euro EU member states must be settled quickly; and Germany will predominate in all the discussions. The vulnerabilities of Italy and France are so significant that neither will have a veto on the integration process: and the influence of the eurorats in Brussels will be diminished in favour of the smooth suits in Frankfort.
The first few hours of trading in international markets after the announcement of the purported loan-guarantee to the Spanish banks demonstrated that supernational gamblers would only give credibility to the package when they can see the funds actually allocated by the Germans. The package was announced on trust: and it was not trusted. The eurozone expressed an intention to support Spanish banks, in circumstances where no fund had yet been established from which the guarantee could be converted into a series of payouts. 'The markets' on which the prices of Spanish [and Italian] bonds have fallen since the 'rescue' was announced are only in a tiny proportion driven by real-world firms [such as pension funds] that hold such bonds as part of their long-term investment portfolios. The majority of recent purchases and sales of state bonds and of bonds issued by south European banks are speculative gambles: the 'value' of the bonds is utterly irrelevant to the gamblers, who are interested only in making a gain by rightly predicting a rise or a fall in the price of the euro in terms of dollars, sterling, yen or other currencies. The market reaction strengthens the Germans' hand: the Spanish deal - and any subsequent deal for Italy or France - will only have credibility if Germany actually places resources in the appropriate backing funds. Chancellor Merkel faces elections: she and her party will be annihilated if they are perceived to have sold the German taxpayer short. Serious negotiations must now begin, with the collapse of the euro as the imminent threat. The eurorats will posture around the periphery, but the power unconditionally rests between Berlin and Frankfort; the modern and the medieval capitals of the German Reich.
Britain has blundered into the position where most of the electorate want the UK to be separated from this whole mess: so it can't be all bad!
Saturday, 3 December 2011
Conservatives and Europe: More of the Same
Jacques Delors - one of the all-time heroes of the European Project - has taken the opportunity of a press interview to damn the present condition of the EU, the establishment of the euro under a fake prospectus with a plenitude of false data, and the dangers of the 'Germanic view' of financial discipline.
Meanwhile the German view is absolutely prevelant in negotiations on the future of the whole project: in the absence of the current expectation by market participants that Germany would in the end 'rescue' at least a core of the present eurozone there could not be any 'value' in the euro or in any bond issued in euros. The immensely effective and intellingent - though often obtuse - French state machine that Napoleon established on the remnants of Louis XIV's omnipotent bureaucracy has failed to marshal arguments that can trump Bundeskanzler Merkel's simple housekeeping economics [which is massiviely supported in Germany]; so France will agree to a German plan, with minor modification. The full concept of fiscal union will take years to implement, and will probably cause the eurozone to shed up to a dozen member states on the way, but it will eventually come about.
The little-used second verse of the British National Anthem says:
"May She defend our Laws,
And ever give us cause
To sing with heart and voice
God save The Queen."
Successive premiers have advised the Queen to breach that sentiment, and probably her Coronation Oath; to which she has dutifully acquiesced in line with her clear understanding of her constitutional duty. It is probable that her Diamond Jubilee will be accompanied by the increase of the power of Brussels over Britain, even though the UK will not be joining the euro and may even be repatriating trivial aspects of labour law. In those terms it is a sad thought that in the jubilee year there will be almost no reference to the third verse of the anthem, in which is a plea that the Almighty will deal with those who would undermine the Monarchy:
"Confound their politicks," and "Frustrate their knavish tricks."
Cameron will not see his policy as a knavish trick. He will be persuaded - as his predecessors were - that there is no future for the United Kingdom outside the EU. So he will risk his already-tenuous popularity, and probably his position, in the pursuit of what he will perceive to be the national interest. It is not easy to imagine such a smooth operator adopting the role of a martyr, but it is probably going to be his fate; and his Liberal Democrat allies will do nothing to save him from the dilemma that will send him down that path.
Tory Eurosceptics demand 'repatriation' of powers from the eurorats of Brussels. This is such an arcane demand, in the current situation of the European Union, that the British Prime Minister can only make himself a figure of ridicule in his peers' eyes if he does anything significant to pursue their demands.This incredulity would apply not just to the leaders of the other EU members, but to Putin and Hu and Singh and Obama who are all being advised that a stable Europe is necessary for their own countries' economic success. So Cameron will go the way of Heath who lied systematically about the implications of EEC membership; of Thatcher, who talked tough yet signed up to the EEC becoming the EU; and of Major who flannelled and equivocated while he squeezed the UK into the Maastrich Treaty. Blair's 'offence' in agreeing to the tidying-up excercise of the Lisbon Treaty was relatively trivial and was popular in his own party. The last three Tory Prime Ministers eventually ignored grassroots opinion in their party to drag the United Kingdom more inextricably into the European system [whose surviving founders, not least Delors, now regard with despair]. Cameron will continue in that tradition, whetever rhetorical devices he may deploy while he diminishes his credibility among his rank-and-file as he is pushed along the lonely and painful route that lies ahead.
Meanwhile the German view is absolutely prevelant in negotiations on the future of the whole project: in the absence of the current expectation by market participants that Germany would in the end 'rescue' at least a core of the present eurozone there could not be any 'value' in the euro or in any bond issued in euros. The immensely effective and intellingent - though often obtuse - French state machine that Napoleon established on the remnants of Louis XIV's omnipotent bureaucracy has failed to marshal arguments that can trump Bundeskanzler Merkel's simple housekeeping economics [which is massiviely supported in Germany]; so France will agree to a German plan, with minor modification. The full concept of fiscal union will take years to implement, and will probably cause the eurozone to shed up to a dozen member states on the way, but it will eventually come about.
The little-used second verse of the British National Anthem says:
"May She defend our Laws,
And ever give us cause
To sing with heart and voice
God save The Queen."
Successive premiers have advised the Queen to breach that sentiment, and probably her Coronation Oath; to which she has dutifully acquiesced in line with her clear understanding of her constitutional duty. It is probable that her Diamond Jubilee will be accompanied by the increase of the power of Brussels over Britain, even though the UK will not be joining the euro and may even be repatriating trivial aspects of labour law. In those terms it is a sad thought that in the jubilee year there will be almost no reference to the third verse of the anthem, in which is a plea that the Almighty will deal with those who would undermine the Monarchy:
"Confound their politicks," and "Frustrate their knavish tricks."
Cameron will not see his policy as a knavish trick. He will be persuaded - as his predecessors were - that there is no future for the United Kingdom outside the EU. So he will risk his already-tenuous popularity, and probably his position, in the pursuit of what he will perceive to be the national interest. It is not easy to imagine such a smooth operator adopting the role of a martyr, but it is probably going to be his fate; and his Liberal Democrat allies will do nothing to save him from the dilemma that will send him down that path.
Tory Eurosceptics demand 'repatriation' of powers from the eurorats of Brussels. This is such an arcane demand, in the current situation of the European Union, that the British Prime Minister can only make himself a figure of ridicule in his peers' eyes if he does anything significant to pursue their demands.This incredulity would apply not just to the leaders of the other EU members, but to Putin and Hu and Singh and Obama who are all being advised that a stable Europe is necessary for their own countries' economic success. So Cameron will go the way of Heath who lied systematically about the implications of EEC membership; of Thatcher, who talked tough yet signed up to the EEC becoming the EU; and of Major who flannelled and equivocated while he squeezed the UK into the Maastrich Treaty. Blair's 'offence' in agreeing to the tidying-up excercise of the Lisbon Treaty was relatively trivial and was popular in his own party. The last three Tory Prime Ministers eventually ignored grassroots opinion in their party to drag the United Kingdom more inextricably into the European system [whose surviving founders, not least Delors, now regard with despair]. Cameron will continue in that tradition, whetever rhetorical devices he may deploy while he diminishes his credibility among his rank-and-file as he is pushed along the lonely and painful route that lies ahead.
Thursday, 10 November 2011
Markets and Memories
Twenty years ago Britain was struggling to retain membership of the European Exchange Rate Mechanism [ERM]. Ministers railed against pessimistic forecasts from market analysts, whom they stigmatised as 'teenage scribblers' - people whose exposition of the current market situation was uninformed by memories of previous difficult periods for the value of the British pound. The struggle was lost: Britain had to withdraw from the ERM and George Soros came away from his speculative involvement as a much richer man.
Italy stayed within the ERM: as a very specially privileged member. Under the rules of the System the other member countries had to take action to ensure that the market 'value'of their currencies remained within 2.5% of the median value of all the members' currencies: except the Italian Lira which was allowed to deviate from the median by 7.5% [and was informally allowed to get worse than that]. So the strongest currency - often the German Mark - could be 2.5% above the line, while Italy was [officially] 7.5% below: that was a 10% gap in Italy's favour.
It was therefore to be expected that when the Euro was created the other members of the old ERM club were habituated to turning a blind eye to detailed deviation by Italy from the strict entry criteria that were notionally imposed. Given that Italy was allowed to do this, the Greeks considered themselves licensed to take the trickery further. The manipulators of 'The European Project' carried with them huge optimism bias. They convinced themselves that all would be best in the best of all possible Europes if an all-inclusive Euro drove forward continental prosperity.
The teenage scribblers of 2011 have no significant historical awareness and no relevant understanding; consequently they have advised their clients to make the Eurozone situation much worse. When the dust has settled on the slowly developing crisis of 2007 to 2014 the memory will fade; and the next panic will collapse .
Germany needs an explanation for Hitler. One of the strongest is the idea that the hyperinflation of the early nineteen twenties caused the economic and social chaos that made even Nazism seem preferable. So millions of Germans are well primed to vote against any policy that could lead to excessive inflation, including 'quantitative easing' by the European Central Bank. Hence Chancellor Merkel has stood out against the ECB following the line taken by the US Federal Reserve and the Bank of England. So in this context selective historical recollection is of very dubious value; but it is very powerful. Whether or not it is more powerful than 'the markets' we will son see.
Italy stayed within the ERM: as a very specially privileged member. Under the rules of the System the other member countries had to take action to ensure that the market 'value'of their currencies remained within 2.5% of the median value of all the members' currencies: except the Italian Lira which was allowed to deviate from the median by 7.5% [and was informally allowed to get worse than that]. So the strongest currency - often the German Mark - could be 2.5% above the line, while Italy was [officially] 7.5% below: that was a 10% gap in Italy's favour.
It was therefore to be expected that when the Euro was created the other members of the old ERM club were habituated to turning a blind eye to detailed deviation by Italy from the strict entry criteria that were notionally imposed. Given that Italy was allowed to do this, the Greeks considered themselves licensed to take the trickery further. The manipulators of 'The European Project' carried with them huge optimism bias. They convinced themselves that all would be best in the best of all possible Europes if an all-inclusive Euro drove forward continental prosperity.
The teenage scribblers of 2011 have no significant historical awareness and no relevant understanding; consequently they have advised their clients to make the Eurozone situation much worse. When the dust has settled on the slowly developing crisis of 2007 to 2014 the memory will fade; and the next panic will collapse .
Germany needs an explanation for Hitler. One of the strongest is the idea that the hyperinflation of the early nineteen twenties caused the economic and social chaos that made even Nazism seem preferable. So millions of Germans are well primed to vote against any policy that could lead to excessive inflation, including 'quantitative easing' by the European Central Bank. Hence Chancellor Merkel has stood out against the ECB following the line taken by the US Federal Reserve and the Bank of England. So in this context selective historical recollection is of very dubious value; but it is very powerful. Whether or not it is more powerful than 'the markets' we will son see.
Thursday, 3 November 2011
Credibility and Credulity
In recent days an ages-old phenomenon of human relationships has become prominent. It emerges in questions such as:
# Can the Archbishop of Canterbury believe that he is being taken seriously, when it has taken the massive negative publicity about the Church that has followed the establishment of the squatter camp at Saint Paul's for him to speak with any clarity on the crisis that began four years ago?
# Can anyone believe that anarchist toughs and rent-a-crowd hangers-on will quietly leave Saint Paul's - on any date - as agreed by the 'Assembly' of middle and upper-class brats who have successfully attracted global media attention to their naive assertions? Will even the whole of the 'Assembly' pack their tents and go?
# Can anybody really believe that Merkel and Sarkozi are prepared for their countries to bankroll Greece and Italy indefinitely and without limit which is the obvious corollary to their demand that the Greeks should vote for permanent subjection to the rules and exactions of both the EU and the Eurozone? And can the Greek Prime Minister survive in office until the date of the Referendum? And will the Greek government and parliament agree to allow Germany and France to specify the question to be put to their people?
# Can anyone take seriously the ideas of the medical nannies who are demanding that extra taxes should be imposed on alcohol, salt and fat in order to change popular habits? Do the doctors not understand anything about the realities of consumer behaviour in modern society [as set out in my Personal Political Economy]?
Politicians and leading eurorats live in a world of high security, chauffeured cars and filtered news; as does an Archbishop and the President of a medical Royal College. But the organisations that they lead all have agents on the ground, deep in the miserable lives of the 'deprived': and almost all of these people have contributed to endless focus groups, studies, discussions, outreach exercises, social experiments and educational initiatives whose cumulative effect is considerably less than the local impact of the most impressive exercises in self-help. In seeking to answer each of the above questions one finds that grass-roots wisdom rarely reaches the general national consciousness, and hardly ever forms a basis for public policy. Public policy, in the churches and the royal colleges as much as in the state, follow the precepts of authoritarian academic hierarchies, who present the 'received wisdom' that is rarely concordant with the experience of the mass of citizens, not just of the 'deprived'. The academics think they are well-meaning, though they accept their subjection to the hierarchies of their 'disciplines'. Removing these disparities, between the professions and the people, and between the economic and social professors' dogma and observable reality, are crucial to resolving the present disconnection between power and people. These are even more important issues even than addressing transitory phenomena like the future of the Euro or the tax on salt.
# Can the Archbishop of Canterbury believe that he is being taken seriously, when it has taken the massive negative publicity about the Church that has followed the establishment of the squatter camp at Saint Paul's for him to speak with any clarity on the crisis that began four years ago?
# Can anyone believe that anarchist toughs and rent-a-crowd hangers-on will quietly leave Saint Paul's - on any date - as agreed by the 'Assembly' of middle and upper-class brats who have successfully attracted global media attention to their naive assertions? Will even the whole of the 'Assembly' pack their tents and go?
# Can anybody really believe that Merkel and Sarkozi are prepared for their countries to bankroll Greece and Italy indefinitely and without limit which is the obvious corollary to their demand that the Greeks should vote for permanent subjection to the rules and exactions of both the EU and the Eurozone? And can the Greek Prime Minister survive in office until the date of the Referendum? And will the Greek government and parliament agree to allow Germany and France to specify the question to be put to their people?
# Can anyone take seriously the ideas of the medical nannies who are demanding that extra taxes should be imposed on alcohol, salt and fat in order to change popular habits? Do the doctors not understand anything about the realities of consumer behaviour in modern society [as set out in my Personal Political Economy]?
Politicians and leading eurorats live in a world of high security, chauffeured cars and filtered news; as does an Archbishop and the President of a medical Royal College. But the organisations that they lead all have agents on the ground, deep in the miserable lives of the 'deprived': and almost all of these people have contributed to endless focus groups, studies, discussions, outreach exercises, social experiments and educational initiatives whose cumulative effect is considerably less than the local impact of the most impressive exercises in self-help. In seeking to answer each of the above questions one finds that grass-roots wisdom rarely reaches the general national consciousness, and hardly ever forms a basis for public policy. Public policy, in the churches and the royal colleges as much as in the state, follow the precepts of authoritarian academic hierarchies, who present the 'received wisdom' that is rarely concordant with the experience of the mass of citizens, not just of the 'deprived'. The academics think they are well-meaning, though they accept their subjection to the hierarchies of their 'disciplines'. Removing these disparities, between the professions and the people, and between the economic and social professors' dogma and observable reality, are crucial to resolving the present disconnection between power and people. These are even more important issues even than addressing transitory phenomena like the future of the Euro or the tax on salt.
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