Reinventing the wheel Tuesday 12 June 2012  There is a certain amount of excitement amongst the groupescules over an IEA Report by Chris Snowdon, on government lobbying. In particular, the role of green charities is explored, with the likes of Bishop Hill referring to "The Green 10", which Snowdon higtlights.For my own part, I find it rather ironic to be in receipt of e-mails directing me to the Bishop Hill blog, telling me how important Snowdon's report is. I muse that, if the issue is so important, why the same people (and Bishop Hill) took no notice when I raised it back in 2008, having first written on it in July 2007. One also wonders why, since this subject is now deemed so important, why so few of the current commentators took any notice of the Policy Networkpaper, published in March 2010, on which we then reported - also ignored by Snowdon. We might thus be forgiven for wondering why concern and "importance" were such narrowly focused things, noting the limited breadth of Snowdon's own report, which would have benefited from the overview provided by earlier work, and especially the Policy Network paper. More importantly, in a complex area where we are all fighting well-funded and dangerous enemies, I wonder why some writers believe that it is a good idea to waste resources on reinventing the wheel, or indulging on the ego trip of colonising a tiny corner of the blogosphere, in order to dominate some minuscule dung heap from which to crow. COMMENT THREAD Richard North 12/06/2012 |
Eurocrash: an extraordinary day Tuesday 12 June 2012  Europe, he wrote, has lit the fuse on an economic and financial bomb. Only three days earlier, he had been warning that Spanish banks may need anything up to €450 billion over time, making it the largest rescue in the history of the world. And s the markets were strutting their stuff, we was telling us that the rescue package "cannot plausibly be contained to €100bn once it begins", given the subordination of private creditors and collapse of global confidence in the governing structure of monetary union. The Guardian picked up the story at the end of the day remarking that the "hurried" Spanish banking bailout had failed to calm market nerves. The country's borrowing costs were edging up into the danger zone and, as nerves frayed, the word Italy was heard. "The size of the deal is meant to show a real commitment on the part of the eurozone to stabilise the system," said Robert Pavlik, of Banyan Partners. "However, this just moves the problem down the road and shows how nervous the EU was going into the Greek election". But this is kicking the can down the road, as opposed to Trevor Kavanagh of The Sun, who is aiming his kicks in a different direction. He has decided that "David Cameron and Nick Clegg's Pushmi-pullyu Government has much in common with the European single currency". They are totally artificial constructions which contain all the ingredients of their own inevitable destruction. And as sure as night follows day, the looming collapse of one will bring about the extinction of both. You have to have a little bit of sympathy there, I suppose. There was a time when young David had managed to banish the word "Europe" and all the Tory Boys were telling us that no one was interested. Now, Kavanagh believes it is set to bring down his government. And that, if Jeremy Warner is any guide, could be in less than a month. This bailout may not succeed even in buying time, although he doesn't even want it called a bailout. It may walk, talk and look like a bailout, but to the Spanish premier, Mariano Rajoy, Spain's handout is completely different to the three rescues we've already seen. That is one of the problems. Says Ambrose: the package offers no fundamental relief. It is a €100bn loan package to the sovereign state of Spain, not a recapitalisation of banks. It raises Spain's public debt by up to ten percent of GDP. There is no mutualisation of EMU debts, no move towards fiscal union. Nothing has changed. "Existing holders of Spanish debt will be pushed further down the credit ladder with each transfer of EU money to Spain. Europe will now pay the price for what it did in Greece, where EU bodies concentrated all loses on pension funds, sovereign wealth funds, life insurers, and others who had stood behind Greece until the bitter end. They suffered 75 percent haircuts as a reward for loyalty". But, says Ambrose, Europe's democracies can stop this. The broad Latin bloc commands the majority votes to compel the ECB to act as lender of last resort and reverse monetary contraction. They should use that power, even if it causes Germany and its satellites to storm out of EMU in a huff. That would be a solution of sorts. Monetary asphyxiation would end. The Latin euro would weaken to equilibrium levels. Capital would flow back into southern Europe once the boil had been lanced. Just do it, says Ambrose. Call the German bluff. One bound and you are free. But says EU competition commissioner Joaquín Almunia in a radio interview, "Of course there will be conditions. Whoever gives money never gives it away for free". And the fearsome Wolfgang Schäuble, warns: "The Spanish state is taking the loans, Spain will be responsible for them". Who will be responsible for Spain though, we wonder – when or if the dust settles. More to the point, when will it ever end? At the moment, Spanish miners are burning tyres to block roads (pictured above). How long will it be before politicians are wearing them when they do? COMMENT THREAD Richard North 12/06/2012 |
Open Europe: selling the lie Monday 11 June 2012  Having consistently opposed the idea of an in/out referendum - for the simple reason that we could not guarantee a win - as the eurocrisis deepened and a new treaty for the eurozone was proposed, we could readily see how the game had changed. For the first time, we have winnable options.But, if it was obvious to us, then it was just as evident to the "colleagues". And we now see the fruits of their deliberations via their favourite son, George Eustice. This is the man who has recognised the danger and has moved rapidly into damage limitation mode. George does not want us to leave the EU, but he knows that sentiment is not shared by many in the party in which he squats. Unable thus to sell an unadulterated pro-EU message, he is trying to confuse the issues in order to weaken the force of the withdrawal lobby. Previous methodology has been to introduce a spurious "third way" into the debate, the "renegotiation" option. But now that withdrawal has become a serious alternative, with a real chance of securing an "out", the mood has music changed. Eustice now warns that Eurosceptics who argue for a referendum on withdrawal "should be careful what they wish for", citing the alternative-vote referendum, "which last year vanquished the campaign for electoral reform for a generation". That has been precisely our concern – a lost referendum would neutralise euroscepticism for a generation. But that was before the "colleagues" decided on a new treaty. Skirting that, Eustice tells us: "While the time for a referendum may come, it must offer the public the option most want, which is to stay in the EU but under new terms". If by this means he can turn a referendum into "renegotiate – yes or no", he will have served his purpose. And to aid him in his efforts, he has had Open Europe intervene. The line here is that, when the Eurozone goes for its treaty, Britain can hijack the IGC and "stake out its own model for EU membership". This we explored on Sunday - arguing that the "colleagues" would be extremely hostile to the idea that they should break off from dealing with their existential crisis in order to address the British problem. However, there is more to this. Since Lisbon, the IGC process has changed. Procedurally, the European Council will set the terms of reference for the IGC and it is now chaired by the council president, Van Rompuy. He controls the agenda and, in accordance with the terms of reference, can exclude material, on a majority vote if need be. And he will have a majority. The UK's only option then is to wait for the final draft treaty and veto it – thus blocking the eurozone and a measure that he has approved. This is not a serious option – all the "colleagues" have to do is face Cameron down on something he has already agreed. Merkel made sure of that. They will get their way. The boys and girls of Open Europe, therefore, are wrong. So is Eustice. There is no renegotiation option, not unless or until the UK has formally notified its intention to leave the EU. But, as even Mary Ann Sieghart points out, this is the last thing that is wanted. The British public shall not pass. They shall not have their exit. COMMENT: "OPEN EUROPE" THREAD Richard North 11/06/2012 |
Posts
