This afternoon Herman Van Rompuy emerged from the secret meeting of the European Council, the 27 European Union prime ministers and presidents, to announce their decision on what to do about the Greek crisis. It was: 'We support the efforts of the Greek government and their commitment to do whatever is necessary.' And, err, that more or less was it. The bond markets are treating Greece as if it has typhoid, the EU-invented eurozone may unzip and leave the economies of Greece, Portugal, Spain, Italy and Ireland in economic chaos, and all the EU 27 can do under the 'leadership' of Van Rompuy is agree that they will give undefined 'support' to Greece -- and may even 'adopt additional measures.' At the press conference after the meeting, one of the first questions out of the pack was from a journalist who noted the markets had reacted weakly to the statement, and what did Van Rompuy say to that? (By the way, 'weakly,' is about the best anyone could expect from such an absolute refusal by the European Council to say whether the EU, or some group of EU countries -- for which, read Germany and one or two others -- would support Greece by buying its bonds or lending it money.) Van Rompuy snapped back that 'I haven't been following the markets because I have been working this afternoon.' Tripe. Either he still doesn't know how a President of the European Council is supposed to keep informed, or he just resented anyone calling attention to the fact that his 'text', as he kept calling it, failed to impress the markets. Or both. He made the statement hours before the press conference. He had time for a briefing from one of his highly-paid eurocrat staff between the time the meeting ended and his meeting with the press. Either he knew his statement tanked in the markets, or he was too dull-witted to find out that it had. Any actual dig-out is now going to be agreed next week by the Finance Ministers of the 16-member eurozone; or by the Finance Ministers of the 27 members of the EU. Or, again, by both. Because whatever is agreed, it seems certain that it will a) break EU treaty law forbidding bail-outs (so, like the death warrant of Charles I, the men taking an ax to the law will want to have as many signatures as possible on the document) and b) involve British money, despite Britain not being the the eurozone. In between being weak in the bond markets, Van Rompuy was showing a bit too much taste for muscle when it comes to increasing his own influence. He announced that, starting later this year, he wants the Council to meet every month instead of just a few times a year. It seems Van Rompuy imagines he can turn the Bundeskanzlerin, Le President de la France, Her Majesty's First Lord of the Treasury, Il Presidente del Consiglio dei Ministri della Repubblica Italiana, and all the rest of them into his personal Scout pack. Let's see if they put up with it, or start dropping out after the first couple of pointless monthly Van Rompuy meetings on the grounds that they have better things to do. For, how long could anyone take being closed up in a room listening to some unelected Belgian politician of whom no one had ever heard before last December? There Van Rompuy was this afternoon, sitting alongside José Manuel Barroso, the not-too-bright unelected President of the European Commission. The only one missing from the line-up was the doubly-unelected nobody British Baroness Ashton, who is now 'High Representative of the Union for Foreign Affairs and Security Policy.' This is absurd. These three jumped-up jokers claim to speak with a voice superior to the voices of the most ancient nations of Europe. I mentioned to an admirable economist I know that what we have running the EU now are Groucho, Harpo and Chico. Wrong, he said. What we have running the EU now are Tony Hancock, Hattie Jacques and Sid James. I stand corrected. The story so far on the Greek accounts: when the new government took over in Athens four months ago, they found that the outgoing government's claim that the deficit was just five percent was a fiction. The real deficit, Prime Minister Papandreou, seen here, assured us, was actually a shocking near-13 percent. It now seems that was not the full shock. A report out yesterday indicates the deficit last year actually reached 16 percent of national output. As the old Russian proverb has it: 'The Greeks tell the truth, but only once a year.' It's these dodgy accounts which have helped set the bond markets against Greece and triggered the present doubts about the survival of the euro. According to Eurointelligence's translation of Der Spiegel's story: 'Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period -- to be exchanged back into the original currencies at a later date.' 'Such transactions are part of normal government refinancing. Europe's government's obtain funds from investors around the world by issuing bonds in yen, dollar or Swiss francs. But they need euros to pay their daily bills.Years later the bonds are repaid in the original foreign denominations.' 'But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion [£642m] for the Greeks.' This credit disguised as a swap didn't show up in the Greek debt statistics. The reporting rules at Eurostat -- the European Commission agency for statistics -- don't comprehensively record transactioins involving financial derivatives:'The Maastricht rules can be circumvented quite legally through swaps,' says a German derivatives dealer. Now, on to the summit, waiting for leadership from Herman Van Rompuy. Oh, dear God, that it should come to this... This week the Swedes were at it again, bless them. They are now saying 'No' to the EU's Data Retention Directive, which came out of Brussels in 2006. The directive requires telecom operators to store information on all the phone calls, text messages and emails made by everyone. The point is that the telecom companies have to keep this private information for at least a year, so that the police and other state authorities can dip into it whenever they want. The Brown government introduced the directive into British law in April 2009 without a debate in either house of parliament. The Swedes aren't so easy to stampede. Yesterday the European Court of Justice told the Swedish government they had to implement the directive. At first, the Swedish government buckled and told the court that it would put the directive into law by April. But according to the Swedish on-line paper, the Local, just hours after the verdict was made public the Justice Minister Beatrice Ask told a news agency that the government would not be putting the directive into law before the general election due in the autumn: 'The extent to which private companies would be forced to store information about the activities of individuals is an important matter of principle. That's exactly what this is about.' She said the government would wait at least until an enquiry into police methods had been completed. 'There is good reason to exercise a certain amount of caution when it comes to gathering information.' Exactly. So the role of a government in such circumstances is to say 'No' to Brussels. It's not really hard. To paraphrase Lauren Bacall in To Have and Have Not, 'You know how to say No, don't you Gordon? You just put your lips together and say...No.' Borissov and Kuneva are from different political parties, so deciding to appoint someone else to Berlaymont is usual: no one would have expected Gordon Brown to drop-in a Tory to Baroness Ashton's new job at the commission (the EU foreign minister is a vice-president of the commission, too). That's is Kuneva above, in a picture from her website as commissioner for consumer affairs. In other words, she is the nanny who has lately been finger-wagging over how loudly anyone should be allowed to play his i-pod. Other than that, you probably haven't been much aware of her much these last five years. Still, it seems the president of the commission, Jose Manuel Barroso, likes her and her work (international i-pod control?) so much he doesn't want her to leave. The head of the Bulgarian government may want her out of the commission, but these days, who in Brussels cares what any national government wants? So Barroso has appointed Kuneva to be head of the Bureau of European Policy Advisers now that her term as a commissioner is ending. The BEPA is yet another body of eurocrats not one in 10,000 people in Britain has ever heard of, though their taxes are paying fo it. It is described as 'the EU executive's own in-house think-tank.' The appointment means that Barroso will keep Kuneva at his side in commission headquarters, whether the prime minister and government of her own country like it or not. The appointment is so typical of the post-Lisbon atmosphere in Brussels, which is, that all the barriers are down now to a centralised euro-government. National governments are just euro-county councils (except for Germany, but again that is another story). A bigger issue is the determination now of the European Parliament to take control over the appointment of individual members of the commission. The appointment of a commissioner is supposed to be within the power of a national government. Barroso may decide which commissioner gets which portfolio, but the choice lies with the national government. Or has until now. The parliament has had the ability to question incoming commissioners, but if they were determined to keep one out, they would have to reject the whole commission. This was meant to protect the power of national governments to control who would be their man at Berlaymont: it has always been felt unlikely that the parliament would want to use the nuclear option of rejecting the whole commission. Indeed, they've only tried it once. This arrangement is supposed to be locked in by European law. But in Brussels, again -- who much cares about law? The parliament is hunger for power in this new unitary state. Indeed, note how the European Parliament tries to make its members cut off identification with their own nations. At hearings or in debates there is no reference to the home country of any MEP -- they are never identified by which country they come from. They are only identified by name and the political grouping with which they sit in the parliament. The power-grabbing parliament is cutting a deal with Barroso that he must 'seriously consider' shoving a commissioner out if the parliament says it does not have confidence in him. This would apply both at appointment of a commissioner and during the individual commissioner's five-year term. None of this will be any kind of new legal powers for the parliament - it will all be an 'informal' transfer of power. What in Anglo-Saxon tradition would be called 'a back-room deal.' Or in Brussels is called 'business as usual.'
11 February 2010 6:37 PM
Hail to the Chief: Belgian, pointless and in charge
05 February 2010 10:20 AM
The power of 'No'
02 February 2010 10:04 AM
What, national governments? Who cares what they think?
Saturday, 13 February 2010
Well, that was the most unenlightening appearance since Punxsutawney Phil came out of his lodge to check his shadow.
I was just folding up my laptop to move over to the Council building for the 'informal' economic summit, -- how do I know now's the time to make the move? I can hear the security helicopters overhead and the police sirens in the street. These 'leaders' do think they are important -- when this item from the Eurointelligence news summary caught my eye. A report in the German newspaper Der Spiegel says that Goldman Sachs helped Greece to present fraudulent accounts.
I first became a fan of the Swedish nation's attitude towards the EU when I went to Stockholm to cover the referendum on joining the euro in 2003. The Swedes gave the single currency a roaring great 'Nej,' with a turn-out of more than 80 percent.
A small item, but it's the flavour of it that counts: according to a Brussels website, Euractiv (backed by, among other outfits, lobbyists, corporations and those things called NGOs, but that is another story) the new Bulgarian prime minister Boyko Borissov made it clear when he was elected last year that there was no chance he would re-appoint Bulgaria's European Commissioner, Meglena Kuneva.
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