Richard North, 09/08/2020  

About the only interesting Brexit-related detail this weekend is the claim that the sugar firm, Tate & Lyle, stands to gain around £73 million from being allocated a tariff-free quota when it buys its raw material from overseas suppliers.

However, this is not as straightforward as it appears. The EU will doubtless react by setting tariffs on products made with UK-produced cane sugar, using "rules of origin" requirements to make it very difficult to sell processed products into the EEA. Tate & Lyle might find itself in a swings and roundabout situation, cutting costs but losing domestic sales.

Meanwhile, back on the treadmill, I've now – after a week of solid work – just got The Great Deception revision to the end of 2010, barring a few weeks which I'll complete today.

The year, however, presents me with some problems as I was intending to cover the whole period of 2010-2015 (inclusive) in one chapter of about 14,000 words. As it stands, I've already written 6,000 words and I haven't quite finished the first year in the period.

My problem stems from the fact that 2010 was an extremely busy year. This is the time when the euro-crisis really got going, after Greece started to get into serious trouble after the Socialists had been elected in October the previous year and spilled the beans about how bad the financial situation really was.

This made 2010 - in which was engineered the first Greek bailout, and which finished with the Irish bailout – the year of the beneficial crisis. I use an analogy here, in describing the euro as akin to an aircraft without wings and engines.

It was built that way because the makers had rightly judged that the shareholders would not fund a complete aeroplane. So they built what they could. They filled it with passengers, gave it a piggy-back ride to the upper atmosphere and cast it loose.

The hope was that, as it hurtled to the ground, the shareholders would see disaster looming and shell out for the missing wings and engines – so making the aircraft whole, and flyable, whence it would calmly resume its journey, untroubled by gravity.

To my delight, I then stumbled on a quote from Kalin Anev Janse, Secretary General of the European Stability Mechanism – the body charged with safeguarding the euro. He described his early work as "like we were flying a plane while we were still building the engine", which is uncannily close to what I've been writing.

I did a treatise on the beneficial crisis some time back, and have used a version in the book. It is an interesting concept. As applied to the Community and then the Union, former Telegraph Brussels correspondent, Ambrose Evans Pritchard, thought it was a Monnet term that lots of people in Brussels used - mostly behind closed doors.

But the term pre-dated Monnet: Una Crisi Benefica is found in Papal doctrine. Interestingly, though, neither this nor the French term, crise bénéfique are particularly well used. But that is not to say that the concept is not known.

It is recognised by the Vatican, even finding its way into an encyclical letter from Pope Benedict XVI, where a crisis becomes "an opportunity for discernment, in which to shape a new vision for the future".

This English translation may reflect the Latin, the form expediunt discrimine coming out as one of the options. In modern Italian, though, it seems to have morphed into crisi salutare – translated literally as "healthy crisis". And here, not only is there a wealth of usage, it goes back well over a century.

We can, for instance, see it in the work of Giulio Pullé, published in 1858 (La nostalgia; dramma in tre atti, di Riccardo Castelvecchio). It is used by Francesco de Sanctis, who lived from 1817-1883, a volume of whose political writings were published in 1900.

We also find it used in the writings of Giustina Michiel, published in 1829 (Origine delle feste veneziane). In contemporary works, we have evidence of Romano Prodi in 2007 using the term when he was Italian prime minister.

Then we have Delors using the term in 2004, where he is cited in an Italian language report, claiming that a 'No' in the constitution referendum would not be una crisi salutare. We find it in Il Fatto in March 1999, describing the affairs of the French socialists. And, in the same year, we see Corriere Della Sera talk of una crisi salutare in relation to the collapse of the Santer Commission.

Thus, it would seem that the concept of a beneficial crisis is long-established in Italian politics, the term openly used. The same could be said of France, where the term crise salutaire is no stranger to the print media. There are multiple references to Delors in this context. But, while the concept clearly goes way back, it is a very continental phenomenon, only recently finding a home in the UK.

Ambrose seems to have first used it in print in May 2005, when he wrote that, "EMU's architects always expected trouble, but counted on a 'beneficial crisis' that would help push Europe further towards full economic federalism". He was to return to the theme on 27 November 2007, writing that:
The politicians were told that the euro would ultimately lead to a crisis. They did not care. Indeed, they saw the uses of pushing events to a head as Romano Prodi candidly admitted as Commission president hoping for a 'beneficial crisis' that would then enable Brussels to push its agenda, taking over parts of fiscal policy and establishing the beginnings of a debt union.
"The euro", wrote Ambrose, "was to be the midwife of the federal state". Since then, only a few other British journalists have used the term. One of those, of course, was Booker, who occasionally used it in his Sunday Telegraph column.

But in the early decades of the Century it became the driving force behind the development of the euro – the most important issue of the time, dominating the European stage and threatening the entire global economy. And all because the "colleagues" thought they could build a currency without "wings" and glue them on later.

With that, I've been faced with the task of describing the progress of the Greek financial crisis, on which whole books have been written. It was easily the eurozone's first big test, in which prime minister George Papandreou likened his country to "a laboratory animal in the battle between Europe and the markets".

Greece was certainly the test bed for devising support systems for the euro, spawning in the first instance the Greek Loan Facility (GLF), a cumbersome €80 billion facility comprising 15 separate bilateral loans from the Eurogroup pooled by the European Commission.

But this was not a Greek rescue package. If Greece defaulted, Portugal or even Spain could follow. Thus, the terms were deliberately harsh. Faced with hostile press in her own country, Merkel admitted that it was the only way to save the single currency: 'These countries can see that the path taken by Greece with the IMF is not an easy one. As a result, they will do all they can to avoid this themselves', she said.

Finance minister Papaconstantinou said Greece had been called on to make a "basic choice between collapse or salvation". This was by no means to be the only time. As a European Commissioner was later ruefully to observe: "Marathon is a Greek word".

From this first attempt at a bailout stemmed the second attempt, the European Financial Stabilisation Mechanism (EFSM), worth €60 billion, linked in with the European Financial Stability Facility (EFSF), a Special Purpose Vehicle to raise funds guaranteed on a pro rata basis by participating Member States. That could borrow up to €440 billion, but the mandate would expire after three years.

Collectively, the EU had by early May created a loan facility worth €500 billion, which could be used to rescue eurozone countries, with the possibility of an even 'bigger bazooka', in the form of an additional €250 billion from the IMF.

It was just in time. In Aachen on 13 May 2010, to be awarded the prestigious Charlemagne Prize, Merkel warned: "If the euro collapses, then Europe and the idea of European union will fail". There could be no clearer indication as to the nature of the single currency project.

Back in the UK, of course, there was another event going on – a general election in which David Cameron failed to secure an outright majority for the Conservatives, ending up in coalition with Nick Clegg's Liberal Democrats. And we're not even halfway through the year.

I dread to think what the rest of the years will be like.

Also published on Turbulent Times.

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