One step closer - by Richard... Thursday, September 24, 2009

One step closer - by Richard... Thursday, September 24, 2009                

eureferendum.blogspot.com

It was very nearly a year ago, with the first phase of the financial crisis in full flow that I observed: "If, by the end of this crisis – if it ever ends – the EU is not a smouldering wreck, it will emerge stronger, more powerful and more arrogant than before. It will destroy the City of London and what remains of our prosperity with it. It will regulate it to death."

The crisis is not over – just in temporary abeyance - with rumours of a currency crisis building ... and hotly denied.

But, if the financial system is weaker, the EU is not a smouldering wreck (yet) and has thus emerged stronger, taking advantage of the beneficial crisis by launching a major new tranche offinancial regulation.

This it did yesterday, to no great fanfare, and with media coverage confined to the financial pages, thus lacking any serious political input that would draw attention to yet another – and very major – EU power grab. On the table is what even the EU commission calls an "important package" of draft legislation, which it tells us "significantly strengthen the supervision of the financial sector in Europe."

The legislation will create a raft new EU institutions, comprising a European Systemic Risk Board (ESRB), which will "detect risks to the financial system as a whole with a critical function to issue early risk warnings to be rapidly acted on", a European System of Financial Supervisors (ESFS), composed of national supervisors, and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors.

At this stage no one can even begin to assess the long-term effect of these institutions on our financial sector, but what is very clear is that they do involve a substantial transfer of power from national authorities to the EU – the results of which, as history tells us, are bound to be malign. 

The system is based on the Larosière report, about which we wrote earlier this year, but so technical and arcane are the provisions that few people will understand their significance and they will thus pass into our legislative system with little comment and no political controversy. And when they do, the UK government will have lost that much more power and will be weaker as a result.

The "colleagues", of course, are gift-wrapping this and giving us a good spiel, with Barroso telling us the aim of the benevolent commission is "to protect European taxpayers from a repeat of the dark days of autumn 2008, when governments had to pour billions of euros into the banks." 

Furthermore, says Barroso, this European system "can also inspire a global one and we will argue for that in Pittsburgh". Global governance is about to take another lurch into our lives. 

Nothing can disguise the nature of this power-grab, but then the "colleagues" do not need to. The deed has already been agreed in principle by the European Council in June when we reportedthat, in the couloirs of Brussels and beyond, one of our most important wealth generating activities had been "stitched-up, kippered and delivered to the enemy." 

We then forecast that as the EU exerted its malign grip, its depredations would not be reported and that which escaped into the public domain would not be understood. The only thing certain, we said, is that we will pay, directly and indirectly, and keep on paying ... until such time as we are forced to leave the EU or go bankrupt.

Nothing has changed. We are just that bit closer to the final outcome – whatever it might be.

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Leaving it a bit late - by Richard... Wednesday, September 23, 2009

It is the New York Times that is now telling us that Obama is exploring alternatives to a major troop increase in Afghanistan. The process includes considering a plan advocated by vice president Biden to scale back American forces and focus more on rooting out al Qaeda there and in Pakistan.

This amounts to a "wholesale reconsideration" of a strategy the president announced with fanfare just six months ago, helpfully summarised by Newsweek. That strategy involved defeating the insurgents, preventing Al Qaeda from re-establishing a sanctuary and working to set up a democratic and effective government.

Crucially, it also involved training Afghan forces to take over from US troops and coaxing the international community to give more help. There was also an added element, focusing on Pakistan - "assisting efforts to enhance civilian control and stable constitutional government in Pakistan and a vibrant economy that provides opportunities for the people of Pakistan."

In pursuit of the Afghan end of what became known as the AFPAK strategy, Obama agreed to despatch an additional 17,000 troops to the theatre and then another 4,000 to help train Afghan security forces. And it was that strategy which Gen McChrystal took as his brief, working to produce his "assessment" of how it should be implemented.

What has actually confused the issue is that McChrystal writes extensively about needing a new strategy. In fact, the strategy had already been determined. What he has offered is a "significant change in ... the way we think and operate." 

As we know, the essence of this "significant change" is defined as "take, hold and build", the first step having been achieved in part with the 17,000 extra troops. But now the coalition forces have taken more territory, McChrystal finds – as he always would – that he needs more troops to hold it. The figure of 30-40,000 has been mentioned.

Now – or so it would seem – Obama is having to confront the inevitable consequence of a strategy defined last March, which effectively rubber-stamped what Bush had put in place, and is now having second thoughts. Thus do we learn that Obama met with his top advisers on 13 September to "begin chewing over the problem", only to find no consensus – in fact, quite the reverse. "There are a lot of competing views," said one official.

Major factors which have prompted the second thoughts, though, are deteriorating conditions on the ground, the messy and still unsettled outcome of the Afghan elections and McChrystal's own report. However, there is view that Obama might just be testing assumptions — and assuring liberals in his own party that he was not rushing into a further expansion of the war — before ultimately agreeing to additional troops.

This notwithstanding, the debate seems to have polarised into two separate camps, on the one hand a counterinsurgency strategy – on which basis McChrystal has been working - and, on the other, a focus on counterterrorism. The latter is not dissimilar to that advocated by George F. Willknown as "offshore balancing" which, as the New York Times observes, "would turn the administration's current theory on its head'. 

Given that in May, Gen David D McKiernan was replaced by Gen McChrystal, who was empowered to carry out the "new" strategy, McChrystal can perhaps feel aggrieved by now having his assessment second-guessed at this late stage, after so much effort and energy has gone into responding to the original brief and the strategy has been partially implemented. 

The "game changer" though appears to have been the Afghan presidential election, which has undermined the administration's confidence that it had a reliable partner in Karzai. As Bruce O. Riedel – the man who led the AFPAK strategy review – observes, "A counterinsurgency strategy can only work if you have a credible and legitimate Afghan partner. That's in doubt now."

Obama, says the NYT, now has to reconcile past statements and policy with his current situation. And, says former Defense Secretary William S. Cohen, "The longer you wait, the harder it will be to reverse it." In fact, Obama has left it a bit late now to question the very basis on which McChrystal was working, when strategy issues should have been settled from the outset – as indeed they appeared to have been.

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