James Inhofe, a US Senator, is the latest member of the Washington elite to be allowed to see the photographs of Osama bin Laden's body. He says the pictures are 'gruesome.' Thanks for the tip, Senator, but I'd say the rest of us could judge that for ourselves if the White House weren't still being too affectedly refined to let the common folk have a look. Of course, despite the display of the body, the myth started that the G-men hadn't actually shot Dillinger, that a man only resembling Dillinger was killed. The FBI agents killed Dillinger by pumping three shots into his body. Apparently that was the same number that the US Navy Seals used to kill Osama bin Laden, two to the head, one to the chest. Belt and braces. Of course, Dillinger only ever actually killed ten men; bin Laden's body count is in thousands. Either way, as my country friends say when they snap the neck on a rabbit infected with myxomatosis, 'better off dead.' But why can't we see the photographs? The White House is acting as if the killing were something to be ashamed of. But to ask me to find something jolly in it -- good grief. I've been away from HQ too long. The Mail officer class has forgotten that I'm the journo they didn't exactly post abroad -- no, I'm the one who was willing to be dropped behind enemy lines. The euro-quarrel this morning is over the terms of Portugal's £70bn EU-IMF bailout (sorry, that reads as though the bail-out is a balanced deal. In fact it is an EU bail-out the IMF has agreed to trot alongside). We won't know the terms for sure until later this morning, when the EU-IMF team gives a press conference in Lisbon. (We do already know, as Hugo Duncan reports in the Mail this morning, that £4bn of the money will come from British taxpayers.) Meanwhile, the Financial Times this morning insists they have seen a copy of the agreement and it is far more harsh than Socrates -- who is in the middle of an election campaign -- indicated. This bail-out is only a delaying tactic. Portugal and its shrinking economy (maybe down by two percent this year) are soon going to be out doing deals with creditors, 60 cents on the euro or whatever they can get. The bail-out is just meant to delay that for as long as possible while Brussels moves on to its next great idea: a permanent bail-out mechanism in 2013 to replace the temporary bail-out mechanisms that have been funding the Irish bail-out, the Greek bail-out and now the Portuguese deal. Not, of course, that the bail-out will succeed in steadying anything. If you think I’m heading to what happens next in Spain, you’re right. First though look at Portugal. According the research by the think tank Open Europe, in 2011 Portugal needs to refinance 25 percent of its national wealth. In relative terms, this is even more than Greece. While a bail-out may help Portugal to finance its debt over the next couple of years, its real problem is its competitiveness. Portugal has seen its cost competitiveness decrease by 5.5 percent since the euro was introduced, while Germany’s cost competitiveness had increased by 15.9 percent. That is a difference of 21.4 percent. Yet these two mismatched countries are lashed together in a currency union, which has from the start meant that Portugal could only end up where it is now: with a large current account deficit and large debt levels in the public and private sector, in a country too uncompetitive to pay off any of it. Add to that the increased austerity the bail-out will force on Portugal, and what you have is a new government coming in after the June elections that will have no tools to return the economy to growth. As Open Europe says: ‘As with Greece, Portugal’s problem is not simply one of liquidity but mainly of competitiveness and solvency. Even removed of its debt burdens, the Portuguese economy would find it hard to compete in the eurozone.’ Here’s the thing: rescheduling debt – extending the length of the loan – is a form of restructuring. This is where the eurozone zipper starts to pull apart. Now to Spain, el gordo, the fat one of the eurozone peripheral countries which just could bust up the whole single currency. You will remember that when Greece put its hands up and asked for a bail-out last year, eyes then turned to Ireland. The Dublin government kept saying, ‘Ireland is not Greece.’ Then when the Irish government surrendered and took the bail-out billions, eyes turned to Portugal and the Lisbon government said, ‘Portugal is not Ireland.’ So when I say that Brussels and Madrid are now insisting, ‘Spain is not Portugal,’ I hope you can see a pattern. The line lately from Brussels has been to point to Spain’s rather healthier – all things are relative – standing in the bond markets and declare: ‘The markets have uncoupled Spain from the PIIGS.’ But wiser men than those running the eurozone – and do remember the eurocrats running the eurozone have been shown repeatedly to be incompetent and ignorant of markets – reckon Spanish bonds decoupling from the periphery is unlikely to last. Spain could be heading for a downward spiral like Greece. And right next door, Portugal is heading for default. Time to get on with the defaults, which must come. And while it is usually me saying that, today it is Alessandro Leipold, former acting director of the IMF’s European Department, and now chief economist at a Brussels think tank called the Lisbon Council. In a paper just out, Mr Leipold says that ‘When a debt restructuring becomes necessary, the costs of delay are high and the limits of buying time with liquidity [which is all that the bail-outs do] become increasingly tighter.’ The present eurozone policy –this is the core of the ‘great idea’ – is that there can be no defaults now, but would be possible on bonds issued from 2013 when the permanent mechanism is in place. However -- and the markets think this stinks -- loans from this permanent mechanism would be granted preferred creditor status. That means loans the bail-out fund makes to eurozone countries would take precedence over loans from financial market investors, if – or, when – the eurozone country can’t repay its debts. At which point, the single currency goes over the edge. Here is my column from today's Irish Daily Mail: You know the drill by now: our entanglement with the euro has left this country still locked out of the markets with a 7.4 spread over German ten year bunds as of last Friday. You don’t have to understand the details, but you know that means things are as bad as ever for us in the markets. Our tax revenues are vanishing because of the German-EU demands for austerity. The independence of our corporate tax regime is being destroyed by the EU. Interest rates are being raised in Ireland to ease Berlin’s fear of inflation in Germany. I don’t need to go on. Even those among you who were foolish enough to vote Yes to Lisbon can now see: what’s poisoning this country is, ultimately, our surrender of sovereignty to the European Union. This country is now facing ruin because it has lashed itself to what Wolfgang Munchau, European economic columnist with the Financial Times, has recently called ‘the serial incompetence of the eurozone’s decision-makers. Not only do they know little about financial markets, they have surrounded themselves with policy advisers who know little too.’ How bizarre is that? As the EU institutions dismember the independence of this State, Fine Gael’s Junior Cheerleader for Europe is planning an appreciation day for the occupying forces. I’m not sure to whom she thinks she is sucking up, but from what I can see in Brussels, nobody has noticed yet that Miss Creighton is making ‘a statement of intent’ to ‘re-launch Ireland’s involvement and active participation in Europe.’ No doubt a memo about it will be forwarded by the European Commission’s office in Dublin to the headquarters of the commission’s €2.4bn-plus a year propaganda operation in Brussels. If the commission is still using the traditional French system, the memo will be filed under C for collaborators. Or if they have reverted to the old Soviet system, under U for useful idiots. But it is not Ireland’s ‘participation’ in Europe Miss Creighton should be worried about. It is the participation of unelected European forces in every part of the government of this State that should worry her. Let me make an aside. You will remember that right after this Government was elected, the Taoiseach and the Finance Minister were still insisting they were going to re-negotiate the vast loans that the ECB had forced Ireland to accept. But Brussels dismissed the idea and said the new Government couldn’t because the deal was with the State, not with a Government. ‘Governments are elected and unelected, they come and go. The EU is a different set-up, a network of permanent officials that spans national capitals to take politics out of the democratic fray.’ This makes it all the more grotesque that our new Dail is going to allow a day of support for a Union which is now established to take away its own parliamentary power – to move control of our politics out of the ‘democratic fray’ of our national parliament. Back to the Junior Cheerleader: her idea that this special sitting of the Dail ‘will mark Ireland’s arrival back at the centre of European political and cultural life’ is witless. You can’t be ‘back’ where you never were. All Ireland’s politicians and bureaucrats ever did before this crisis was pose around Brussels and tell any journalist listening that they were ‘punching above our weight.’ In fact, they were simply confusing a policy of flattery towards a usefully-malleable Ireland with us actually having any influence in the EU. Nobody in the Commission ever has or ever will start meetings by asking: ‘What is Dublin’s position on this?’ The only way Ireland will regain its economic and financial health is if it seizes back the power to make its own economic and financial decisions, and make them first and only for the benefit of the citizens of this State – and not for the benefit of ‘Europe,’ under the direction of the EU. That is the overriding duty of the Government now: get us out of these European shackles. The day is going to be worse than just Government and Deputies’ wind-baggery. Maire Geoghehan-Quinn, Ireland’s near-invisible European Commissioner and a relic of the kind of Fianna Fail the voters have just thrown out, has been invited to address the Dail. How near-invisible is she? I’ve just done a search on Euractiv, a detailed pro-EU policy train-spotters’ website in part financed by the EU. Mrs Geoghehan-Quinn’s most recent entry is a line last month on malaria research. And then, whoops, back as far as March for some lines on something called the Social Innovation Europe Initiative. Then some pious quotes about how Europe must not fall behind the US, and some lines about how cultural attitudes may play a key role in fostering innovation. I wouldn’t normally want to embarrass Mrs Geoghehan-Quinn by mentioning this measure of her irrelevance, except considering her unelected position and vast salary, perks and pension, she can just glow scarlet for all I care. Our Members of the European Parliament have been invited to turn up, too. You can bet taxpayers will be funding their airfares and any hotel rooms needed for this visit. The TDs will be allowed to question the MEPs about ‘latest developments’ in the EU. How many of the MEPs have ever claimed a subsistence allowance in Brussels and then flown straight off for the weekend? I ask because at one point this was happening so often the parliament barred one of the few virtuous MEPs from filming the sight of MEPs signing up for the dosh with their suitcases by their sides. How about telling us whether any of you have second pension schemes? Have any of you ever in part paid for these second lush pensions schemes by using money from unvouched expenses meant to be for the cost of running your offices? Did any of you know other MEPs were doing this? How much information did any of you have that MEPs have been engaged in a ‘cash-for-laws’ scandal, in which lobbyists were paying six-figure sums to your colleagues to table amendments to EU legislation? How can you justify European Parliamentary demands that the EU budget be increased while countries all over Europe must cut back their own spending? What are any of you doing to reverse the decision by the committee of legal affairs at the European Parliament to give immunity from prosecution for income tax evasion to leading German MEP Elmar Brok? Or, last question: when will Ireland be a nation once again?
Bin Laden's corpse: the elite are allowed a satisfying look, but not the rest of us
11 May 2011 12:55 PM
What I'm backing in Eurovision: three quick Gs and a long E-flat...
05 May 2011 7:56 AM
Portugal and its bailout: it will solve nothing, time to get on with the default
02 May 2011 9:00 AM
Irish politicians still suck-up to Brussels, despite national humiliation by the EU
Sunday, 15 May 2011
The federal government wasn't always so precious. When the FBI shot dead the gangster John
Dillinger in 1934, the body was put on public display at the Cook County Morgue. Ten thousand people -- satisfied taxpayers, I'd say, come to see that federal law enforcement employees were indeed earning their pay -- filed past to peer at the corpse. Wire service photographs of the body were sent out across the world. I'd be happy to show a few to you here, but copyright on the photos means I can't (you'll have to make do with this FBI picture of Dillinger alive).
One of my editors at the Mail has just asked me if I'd do a piece today on the Eurovision song contest -- the angle being that as a eurosceptic, I could write about it as a guilty pleasure (and don't bother posting a comment that the contest has nothing to do with the EU, I know that, but the 'Europe without frontiers' propagandists got their hands on it years ago).
Asking me to find anything jolly in any contest called 'European' is like asking an SOE agent
to write up an entertaining review of the Horst Wessel Song. It might have a few good tunes, but on Saturday night I'll be up in the loft with my hidden wireless, too busy to listen for anything except the opening notes of Beethoven's Fifth...
When José Socrates, the acting Portuguese prime minister, announced -- well, admitted -- on Tuesday night that Portugal would have to join Greece and Ireland in taking the money and agreeing to Berlin-style austerity terms, he couldn't resist bragging that the terms were not as dire as those the Greeks and Irish had been forced to accept: he insisted this showed the situation in Portugal was not as serious as in other countries.
But does it matter if Portugal gets a gentler bailout than Greece and Ireland were given?
Not really, and here’s why: a bail-out for Portugal is going to solve nothing, and the eurozone bosses know it. So, a bailout that does or doesn’t demand the Portuguese drop their minimum wage, that does or doesn’t demand cuts in the level of public sector pay – it is all irrelevant. Nothing short of a default on debt is going to solve Portugal’s problems, and the eurozone bosses know it. They just don’t say it.
However, when I say ‘great idea’ I mean in the Michael Caine-Charlie Croker sense: ‘Hang on
lads; I’ve got a great idea.’ While we wait for this new bail-out mechanism to be put in place, the eurozone has its front end hanging out over a ravine. All this Portuguese bail-out is meant to do is keep it steady in the meantime.
It will never, ever, be able to repay its debts without defaulting. But then, that seems to be the pattern: take the money and then start wriggling. On Monday the Greek finance minister George Papaconstantinou finally admitted he may seek a ‘rescheduling’ of Greek debt and a reduction in the interest rate. He said he would do that before he would consider restructuring (the polite word for defaulting), which is what the markets are betting he will do.
According to a note out on Tuesday from Lombard Street Research: ‘Although Spanish
private sector economic activity has stabilised, after its 6.3 percent slump during the recession, companies are still shedding workers at a rapid clip. The rate of job creation continues to fall. Business confidence remains fragile given the grotesque overhang of debt. Downside surprises to Spanish economic data could be a wake-up call for the sovereign debt markets.’
Yet the original plan behind the bail-outs was that the EU-IMF loans would keep countries such as
Greece liquid until they could get back in the markets. Now the great idea for 2013 means that the markets will refuse to lend money to weak eurozone countries, because their loans will be made into second-class investments.
Brian Lenihan has been whining that he was bounced by the European Central Bank into
signing over this country’s future to Frankfurt’s demands. (Note to the ex-Finance Minister: the locks on the doors in Merrion Street are on the inside. You could have walked out at any time and denounced what the ECB was doing. Denouncing it now is no use to anyone.)
So therefore what comes next is beyond absurd. Lucinda Creighton, the Minister of State
for European Affairs, is planning a special Europe Day in the Dail on this day week. The day ‘will begin a journey towards greater co-operation between the Government, the Oireachtas and the European institutions and will mark Ireland’s arrival back in the centre of European political and cultural life.’
What is absurd about this Europe Day special sitting of the Dail is that it was precisely
Ireland’s ‘involvement and active participation in Europe’ – participation in nearly every scheme Brussels has ever offered, most recklessly the single currency – that has led us to our current disaster. Now the Minister wants more.
Let a Brussels old-hand, Bruno Waterfield, explain what that means. Recently he wrote on the EU Observer website: ‘One of the bureaucratic mantras that you hear here in Brussels is that the EU deals “with states not governments.” This axiom gives the EU’s game away as a Union of state bureaucracies (civil servants, regulators, police officers, officials and diplomats) not people.’
Yet instead of organising a Dail Day of Rage against the damage membership of the EU has
done to this country, the Government is allowing the Junior Cheerleader to shake her pom-poms in an ‘Ireland hearts Europe’ day.
How about some questions like these -- and just watch how they don’t get asked next
Monday, unless the magnificent Joe Higgins, now returned to the Dail from Strasbourg, sinks his terrier teeth into their ankles:
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