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Friday 18 May 2012
The interesting thing about seeing history being made is that, not until the dust has settled, do you really have any idea of what has been going on. "Being there", in the sense of living through the events, is no great advantage. All one can see is the chaos, the dust and the smoke.
That much teaches you to be cautious for, whatever one might with confidence believe will happen, ain't necessarily going to. Events have an endless capacity to surprise, and especially in an issue as complex as this, with so many players.
And then, to guide you through events, at one extreme you get the shallows joes, who think they know it all yet have very little to offer, while others have the capacity to make you sit up and think.
In that latter category is Jeremy Warner, who is telling us that the Germans are going to fight with entschlossenheit (determination) to keep the euro. It is an article of faith that they can and will succeed.
Very few would agree with this "take", except that Warner is positing actions that must happen, but in fact can't. For instance, he wants the ECB to begin operating like a proper lender of last resort. It can't do that overtly, not without a treaty change, and there is neither time nor the ability to get a new treaty written.
That aside, it must be pretty galling for the Germans to have Cameron lecturing them with rhyming sound-bites: "It either has to make-up or it is looking at a potential break-up". That was a pretty vacuous statement of the bleedin' obvious that Frau Merkel could have done without.
Nor indeed, following his additional offering, would one expect the "colleagues" to fall about in stunned amazement, declaring: "Sacrebleu! Vee vood neffer haff sort off ziss!", or words to that effect.
They really did not need to be told: "Either Europe has a committed, stable, successful eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the eurozone, or we are in uncharted territory which carries huge risks for everybody".
The Guardian isn't that much better. That paper is telling us that the fact that leaders such as José Manuel Barroso, Olli Rehn, Angela Merkel, and Wolfgang Schäuble are publicly discussing the eventuality of a Greek exit suggests strongly they think the damage can be limited, that they've used the past two years to quarantine Greece.
But then Ambrose is already out of date, and the fact that Spain is taking a hit is muddying the waters.
As pandemonium struck Spain, we are told, Fitch slashed Greece's credit rating deeper into junk, from B- to CCC, to "reflect the heightened risk that [it] may not be able to sustain membership of the monetary union". It warned that all eurozone members would be at risk of a downgrade if Greece exited.
The most entertaining quote of the week (so far), though, came from George Soros, who grandly declared that the euro crisis will only be over when the euro is over. If true, that could mean we are well and truly domed. But then, we knew that anyway.
That said, I couldn't bring myself to watch the whole of the Peston show. I looked at it long enough to get a screen grab (above), but then found it so laboriously tedious that I gave up on it. We will have to wait for events to unfold, because Mr Peston seems to have very little idea of what is going on, and probably wouldn't be able to tell us if even if he did.
That brings us back to where we came in. History is in the making – but we have no idea what the outcome will be. John Ward has got one thing right: its a brain-hurting nightmare at the moment.
COMMENT THREAD
Richard North
18/05/2012
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Thursday 17 May 2012
Despite claims to the contrary, this has to be the ultimate "nanny state" production. But, the uncritical enthusiasm with which the Failyhraph reports it suggests that they are treating the government advice as a DIY manual for their editorial staff.
Richard North
17/05/2012
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Thursday 17 May 2012
Wolfgang Schäuble gets the Charlemagne Prize today – the very prize that was awarded to Ted Heath. It is given for services to European unification, and makes for an interesting development.
Despite claims that the eurozone crisis is reinforcing German power, we have a German finance minister at the heart of the crisis who, according to Deutsche Welle, is "passionate about Europe", and is committed to greater integration. The Franco-German alliance, we are told, is particularly important to him.
He is seen as an eminence grise, both in Brussels and Berlin, having played a central role in negotiations over the EFSF and ESM rescue funds and had worked closely with Merkel on the European fiscal pact. Now he is being asked to become head of the eurogroup.
Schäuble is also the man who is saying that Europe needs closer financial integration – that the eurozone "must learn from its sovereign debt crisis by forging a more closely integrated financial policy".
That was earlier this week, when he was speaking at an academic event in the western German town of Aachen. Schäuble then said: "We must ensure that financial markets retain confidence in the common currency", adding: "I would be for the further development of the European Commission into a government".
This is his long-term response to the eurozone crisis which, he says, may have been exacerbated by the fact that the EU lacked the tools - such as a central transfer system - effectively to deal with it.
He says he wants to widen citizens participation in EU politics beyond voting for MEPs to voting for the president of the EU Commission, noting that the recent French presidential elections, including a three-hour TV debate between the two candidates, attracted interest far beyond the country's borders.
And this is the same man who, earlier this year, was drawing up plans for Greece to leave the euro, against rumours of a split with Merkel. But, he stopped short of pushing when it became apparent that the "colleagues" were uneasy, so he backed off and played the EU game.
The euro-credentials of Schäuble, therefore, are somewhat at odds with the Germanophobia rampant throughout this crisis, even more so when he is staunchly supporting the EU's new fiscal pact.
It seems to me that far from being an example of Germany attempting to dominate Europe, this is a situation familiar to us in Britain. There, like here, the élites are staunchly pro-EU and are pursuing their own agenda, no matter what the people want. In all probability, the British and German peoples have more in common with each other than they do their own leaders.
Deutschland über alles, as a slogan, it should be recalled, referred to the goal of a unified Germany taking precedence over formerly independent states. With the same thing happening on a larger scale, it is not Germany we need to fear, but a German finance minister singing Europa über alles.
COMMENT THREAD
Richard North
17/05/2012
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Thursday 17 May 2012
It is difficult to know with people like Peston whether they are being obtuse, or attempting to be Machiavellian. In a sense, though, it doesn't really matter. The effect is the same – they get it spectacularly wrong.
The error of the Great Peston, this time, is in candidly advising us that "creating the currency union was not a random act of collective economic suicide". Rather, he says, it was "in some senses a rational or even noble project that was either premature or too late". But, as we will see, this is more an error of omission.
Calling the single currency a "currency union" is odd – that is an unusual term, and it might give some insight into what passes for Peston's thinking. But his headline premise that the euro's survival "requires political union" is the one that grabs attention – as indeed was intended.
In fact, Peston is quoting former German chancellor, Gerhard Schröder, who has recently declared: "The crisis makes at least one thing obvious and that is we need more of Europe, we need the political union as the only way to save the stability of the euro".
When we then get is the view that Schröder, and the likes of Jean-Claude Trichet are the witnesses (to put it not stronger) of a tragedy. These post-war leaders, "whose intentions would be seen by many as honourable, made a series of disastrously ill-timed decisions".
So, according to this Giant Amongst Men, it is all a matter of timing. And now, with sovereign debt spiralling out of control, "sharing of the debt burden requires near revolution in the way the EU is governed – we need a federation, a United States of Europe".
What Peston misses out – and one can only think deliberately – is that we are currently seeing the doctrine of the "benficial crisis" at play. The founding fathers of the euro – most recently Jaques Delores and then Romano Prodi, all acknowledged that the single currency could not survive without economic governance.
They also knew, when the euro was being introduced, that there was no appetite for that degree of political integration. Thus, in 1999, they went with what they could get – a "currency union" in the hope that it would some day force the pace and bring them political union. The sequence then was intentional, the timing quite deliberate. They went with what they could get. That was always the plan.
The idea, of course, was that a crisis could be exploited, just as it is being done now, to push the eurozone members into that final, planned stage. And it is there that they have got it so wrong. The crisis is far bigger than anticipated, and the "colleagues" are not prepared to take the step of abandoning what is left their sovereignty. Even now, they refuse to hand over their economic governance, one of the final stages in creating the long-dreamed of federation.
"Without such a federation, can the single currency survive?", the fatuous Peston then asks Helmut Schlesinger, "another influential central banker", now retired. And here the response is entirely predictable. It is an "either-or" answer.
Either we get "the United States of Europe, that is an actual political union, and then that political union gets its own currency", says Schlesinger. "But then it is no monetary union any longer, but the currency of that new state". The alternative is fairly obvious. His prognosis is "very limited in time".
So the game enters its final stages, and the "colleagues" are losing it. They are not going to get their "United States of Europe". The great gamble has failed, and the political élites have taken the economic system of Europe – and the world – to the brink and beyond, for nothing - to the ruin of us all.
Yet, to Peston, this reckless, ill-considered gamble was a "rational or even noble project". Rational, it most certainly was. Noble, in its intent, it might have been. The idea – as always with le projet - was to prevent war between the French and Germans.
It was, however, also dangerously, malignantly ill-conceived. But you will never get any sense of that from the BBC's Robert Peston. It is simply a heroic failure by honourable men. To say that might even be rational - but to omit the rest of the detail is mendacity.
COMMENT THREAD
Richard North
17/05/2012
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Thursday 17 May 2012
The Berliner Morgenpost daily received a message from the "Friends of Loukanikos" claiming responsibility for this attack. The paper said the message also threatened the "troika" of inspectors from the EU commission, ECB and IMF.
One hesitates to applaud such action but we do see an awful lot of officials who under-perform, yet get away scot-free. The benefit of the doubt, therefore, tends to go to the perpetrators, purely on the basis that if this particular official didn't deserve it, there are plenty who did.
This, though, may be a very small footnote in the eurozone drama that has the media now fully engaged, with the pundits coming out of the woodwork by the dozen to say "I told you so". I find this aspect rather tedious, especially as I really do not recall as many people in the period 1999 to 2002 (when the euro was being born) telling us what a really bad idea the euro was.
Nevertheless, there were a lot of people warning against the idea at the time, except very few of them were journalists. Ten years later, it is very obviously a bad idea, and even the likes of Peter Oborne is getting the point. The "over-riding purpose was, beyond question, political", he writes in the Failygraph. "The founding fathers of the eurozone were determined to use the single currency to promote political union".
Despite discovering this all by himself, though, he still doesn't seems to be able to join up the rest of the dots. The founding fathers of the EU were also determined to use the Single Market to promote political union. They were also determined to use the Common Defence and Security Policy to promote political union. Also in line was the Environment policy, the transport policy, the energy policy – every policy you could think of. They were all used (and are being used) to promote political union.
When you properly understand what the EU is all about, it is fair to say that, it only has one real policy … political unions. Everything the EU does is designed to achieve that object.
Yet still there are those, like indeed Peter Oborne, who cannot understand that this incubus is by design distorting public policy and perverting our systems in pursuit of the undesirable and the unattainable. And nor can they understand that the only way to improve the situation is to leave the EU.
But we're going to see a lot of "clever after the event" stuff in the next few weeks. The likes of Oborne only started writing seriously about the euro in January 2009. He wrote more in early-2010. But then he wasn't saying it was a political project.
He wrote another piece in November 2010 about Thatcher and the euro, but even then he didn't mention that it was a political project. Thatcher's objections, says Oborne, were "economic".
Thus, I sometimes wonder whether there should be a dedicated unit here, that went around trashing cars like they seem to be doing in Germany. People like Oborne are so ignorant of what is really happening, so insulated from the consequences of their own folly, and so arrogant about others who do not share their "wisdom", that it needs something pretty drastic to get through to them.
But that, that would be far too extreme. So clever-clogs Oborne and all his mates can continue being of sooo clever, while we all have to put up with the consequences of their ignorance and vanity. But at least it'll be all over soon, and we can be regaled by their jolly tales of how they predicted it all along.
Richard North
17/05/2012
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Wednesday 16 May 2012
You would have a hard time from The Guardian finding out which national contingent was responsible for this operation, with the EU taking all the glory.
There is no such problem with this Royal Navy operation (below), carried out by a Merlin helicopter, backed by boarding teams from HMS Westminster. The Daily Wail reported this one, letting the EU off the hook for its blatant attempt to take the credit for the actions of its member countries on the other operation, members who provide the assets, the manpower and the money.
Most of the costs of these EU-flagged operations "lie where the fall", which means that the national taxpayers are paying to provide ships, for which the EU claims the credit.
The worst of it is that the commander of the "EU Naval Force" in Operation Atalanta is a Royal Navy officer, by the name of Rear Admiral Duncan Potts. It is he that so egregiously flies the EU flag (below), saying: "We believe this action by the EU Naval Force will further increase the pressure on, and disrupt pirates' efforts to get out to sea to attack merchant shipping and dhows".
These are the people who are selling us out. They take our money and willingly serve alien masters, promoting a concept which flies in the face of the national sovereignty that they are sworn to protect.
And then we have the euroslime parliament complaining about lack of funding for an operation that created direct operational costs of €8.4 million for 2010 and €8.05 million for 2011, shared via the Athena Mechanism between the EU member states, based on their GDP.
Their idea, it seems, is that the member states should have an open cheque-book for the EU to strut its stuff, completely ignoring the fact that many EU members (including the UK) are also financing Nato counter-piracy operations in the region ( Operation Ocean Shield), and that the EU operation is unnecessary duplication.
When it comes to the greater glory of the EU, though, money is no object.
COMMENT THREAD
Richard North
16/05/2012
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Wednesday 16 May 2012
They can't leave it alone. At every opportunity, the euroslime are back in there with their poison, seeking to impose their religion on their fellow man.
Lord Howe thus charges that the country has been "dithering" on the issue of metrication for 150 years and that had led to a split between a "metrically literate elite and a rudderless and bewildered majority". He adds: "The only solution is to complete the changeover to metric as swiftly and as cleanly as possible".
The interesting thing is that he doesn't look across the Atlantic to that other "ditherer", the United States, with its robust attachment to ounces, pounds, pints, quarts and gallons.
Yet, the noble Lord wants to end the "deeply confusing shambles" of using a mixture of metric and imperial measures, but cannot see that the most obvious way of doing that is to rid ourselves of the alien and confusing metric system.
COMMENT THREAD
Richard North
16/05/2012
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Wednesday 16 May 2012
There is an air of unreality to the current hyperbole on the euro – whatever happens will happen, but the reporting is something else … especially if you are Dominic Sandbrook. Give him a head start and he will provide the necessary narrative.
For months on end Europe's leaders have been telling us that we were about to turn the corner, he says. Instead, things have been getting steadily worse, and now they have reached a new low. My own feeling, says the man, is that things will get a lot worse before they get better. This week's events may not be the beginning of the end. They may only be the end of the beginning.
Yet, five months earlier, Mr Sandbrook was offering us a very different story. There is a strong case, he said, to let the euro die a quiet and unlamented death, allowing poorer countries to go back to their old currencies, devalue, set their own interest rates and try to build their economies back up.
It would be difficult and painful, certainly. It could well see banks collapse, businesses go under and inflation head through the roof. Yet, says the great sage, the unpalatable truth is that this might actually be the least of the evils open to Europe’s leaders. And despite their doomsday rhetoric, saving the euro may be the worst possible outcome for the continent's beleaguered people.
Doomsday rhetoric indeed – now you see it, now you don't. This is fear to order. It is not based on facts. There is no analysis. We are just getting extruded verbal material to conform with whatever happens to be the current "line".
You might think, though, that little Dominic would have read his previous copy.
COMMENT THREAD
Richard North
16/05/2012
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Tuesday 15 May 2012
 On the eve of a Nato summit in Chicago, the first to be hosted by the US since 1999, the American think-tank, Atlantic Council, has published a report arguing for the enduring importance of Nato.
Written by former under secretary of state and US ambassador to Nato, R. Nicholas Burns, and entitled Anchoring the Alliance the report argues that Nato is a "force multiplier" for the US and "remains essential to addressing the security challenges of a globalized world".
Nato remains central in the coming decade, it says, the United States will have to provide strong leadership of the Alliance, Europe must maintain its aspirations for global leadership, and the Alliance as a whole must strengthen its engagement with global partners.
Deconstructing this, in part, one gets from Burns what appears to be a worrying contradiction, in that there is overt support for Nato, yet he also supports the aspirations of "Europe" for global leadership.
Just as it is difficult to imagine scenarios in which the United States will engage in combat without allies, Burns says, Nato is unlikely to undertake future operations without the participation and support of "key partners" from outside the Alliance.
The involvement of Nato partners has become the "new normal", Burns adds, then telling us that, "One of the most important partnerships for the Alliance is with the European Union". It shares twenty-one members in common with the Alliance and offers complementary capabilities to Nato.
This though, is the least of it. Earlier in the report, we have Burns asserting that key European allies cannot sustain a vigorous and effective Nato without an involved and committed United States.
The United States, he says, remains the "essential" power in Europe and the only country capable of providing effective leadership of the Atlantic Alliance. For Europe to take its full place as a global partner of the United States, the United States will have to remain at the forefront of leading Nato.
Then, it gets even more complicated. A successful Nato, Burns would have us believe, also demands that the UK retain the ambition and military capability that have made it one of the world’s most influential countries in recent decades.
The US has no better or more capable ally than the UK. There is indeed a "special relationship" between the two nations based on shared heritage and a willingness to act in pursuit of a common strategic vision. But, he says, the operational nature of the "special relationship" is at risk.
Burns that wants us to put more money in the kitty, although he has other ideas for us improving military capacity, but he then goes on to criticise Cameron's coalition government has yet to develop a coherent strategic vision for the United Kingdom's role in a changing global landscape.
Now, however, my brain starts seriously to hurt, when Burns complains that the coalition "has downplayed the term 'special relationship' with the United States at the same time his government has weakened its ties to Europe".
Cameron's handling of a decisive December 2011 European "summit" threatens to leave London isolated as Europe pursues further fiscal integration. Aside from pursuing a policy of "commercial diplomacy" and robust development assistance, British foreign policy vision and strategy remain unclear.
London, he says, must demonstrate the ambition and capability to be a leading global security actor in concert with the United States and other Nato allies.
Putting all this together, one gets the idea that Nato is a "Good Thing" – for the United States, because it acts as a force multiplier, for the United States.
For it to work effectively – for the US – the United States is going to have to lead it. It is all right, though, for "Europe" to have global aspirations, but that requires of the said Europe to take its full place as a global partner of the United States.
The UK, on the other hand, should improve its operational capability, and it should maintain its special relationship with the US. In addition, it should strengthen its ties with Europe, while "demonstrating the ambition and capability to be a leading global security actor in concert with the United States and other Nato allies".
That is my "take" on this report – an outrageous summary, but I've done my best to be faithful to the content. And, as you might imagine, by now I am in serious pain, struggling to get to grips with something which seems incoherent and contradictory.
The Failygraph, however, has its own "take" and you may prefer it – although you might think that we have been reading completely different reports.
On the other hand, I may have misread the report, or completely misunderstood it. Clearly lacking the skills set of a US ambassador, or a Failygraph hack, one hopes that is the reason for my failure to understand. Nevertheless, I remain utterly confused.
COMMENT THREAD
Richard North
15/05/2012
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