This is news? - by Richard... Saturday, May 14, 2011

This is news? - by Richard... Saturday, May 14, 2011

Anyone who has been remotely following the situation in the fringe euro economies will know that it is only a matter of time before Greece, Ireland and Portugal crash and burn. However, for the MSM – or, at any rate, The Daily Mail - there seems to exist only the "spectre" of a further round of bailouts, following the line taken from the EU commission.

In its latest round of "Armageddon for dummies", the paper is running the line that debt levels in bailed-out countries are "expected to soar significantly higher than first thought". Thus, the Janet & John narrative has it that all three countries are "trapped in vicious high unemployment levels, low economic growth and falling tax receipts, which will prevent governments from tackling their crippling national debts".

What is not explained, however, is how saddling these three governments with even more debt, at rates which are far from generous, is actually going to help them out - or how they are going to repay it. And in this, the Daily Mail does not seem to be able to link to its own pieces, such as this one, that talks gaily of default, a racing certainty when the Greek debt will be 166.1 percent of gross domestic product (GDP) by next year.

Despite this, one gets the impression from this current piece that the bailouts are being touted as alternatives to default, when in fact they can do little more than delay the inevitable and make the outcomes worse. The same line, incidentally, is being pushed by Reuters, presenting a highly distorted picture. Yet, despite the misleading headline, it looks as if Germany is getting ready to pull the plug.

The great concern is that, if default is on the cards, it is going to cost us dear. Finance ministers of EU member states are expected on Monday to approve a £68 billion "rescue" for Portugal, which will require an input of £14 billion from the UK – money which we haven't got and will have to borrow.

With a poll of investors putting the odds of Greece defaulting at 85 percent, Portugal cannot be far behind. We are thus facing the situation of having to borrow money to lend to basket-case economies, which are not going to be able to repay the debt, leaving hard-pressed British taxpayers saddled with even more liabilities.

But this is not the news the media wishes to give us. What we are getting instead is a pastiche – a scenario so vague and unthreatening that, when reality hits, it will come as a complete shock.

Then it will be news – but only after it is too late to do anything about it. One suspects then that it will be presented almost in terms of the unavoidable, no hints being given that the plug could have been pulled earlier, saving us all a great deal of grief.

One has to wonder, therefore, in whose best interest is this attempt to delay the inevitable. It is certainly not in the interest of the British taxpayer.

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Robbing Peter - by Richard... Friday, May 13, 2011

It was earlier this year that the vexed issue of aid to India briefly hit the news, with the commitment of £280m a year from the British budget to a country which spends £20bn a year on defence and has an active space programme.

But what was not mentioned at the time was that, while we have committed over £1 billion in aid to this country, India itself is a major aid donor, in particular to Afghanistan. And, with theannouncement from Indian prime minister Manmohan Singh to the Afghan parliament that it is committing an additional $500 million for various developmental projects, this now brings total Indian aid to Afghanistan to over $2 billion.

In effect, what is happening is that roughly the equivalent in cash value of our aid to India is being turned round and being used to bankroll the corrupt Karzai, regime, effectively using our money to buy Indian influence in the region.

It says something also of the poverty of US foreign policy that the United States have been amongst the first countries to applaud this move, even though the motives of India are far from benign. The strategic objective of India in this country is primarily to destabilise Pakistan, creating a second front to the west, and thus keeping Pakistani attention away from the Indo-Pak border, and from the Kashmir hotspot.

The support of India for the Karzai regime also bolsters the traditional enmity between Afghanistan and Pakistan, increasing tensions in the region and rendering stability even less likely, as Pakistan retaliates by supporting its own proxies, fuelling the local insurgencies.

The situation is not made any better by William Hague's recent announcement of a "substantial expansion" of Britain's diplomatic representation in India. Add to that the tension over the Bin Laden raid and Pakistan's already well-matured paranoia can only be intensified.

Not a few commentators, such as this, are questioning whether Manmohan Singh's visit to Afghanistan at this time was altogether wise, but questions also need to be asked about the emphasis of British policy in the region, which is showing clear favouritism to India.

Given that we still have troops committed to Afghanistan and in harm's way, and that we regard Pakistan as our strategic partner in the war against terror, one wonders whether HMG really understand the policy implications of its support for India, the message it is sending to the region and the effects of its continued financial aid to India.

It seems more than a little perverse that the British government should be robbing its taxpayer "Peter" to finance the Indian "Paul" to promote its own foreign policy initiatives in a region where we have troops at risk, and the Indian actions are very far from being in the British interest.

But then, the Cleggeron policy wonks will have thought of all that, and will have their own reasons for pursuing the current line. One supposes that they know what they are doing.