Britannia Radio

Eurocrash: last ditch or ready to ditch? Saturday 28 July 2012 Following Drahgi's intervention, with a promise of "whatever it takes", then backed by the joint statement from Merkel and Hollande to like effect, we now get Die Welt reporting that the ECB is preparing a large-scale intervention, and has an "inexhaustible source of money". There are two ways of looking at this. One option is that the "colleagues" are preparing to ditch Greece – or perhaps something even more traumatic – and are therefore talking up the euro big time to hide their intentions from the market. The other is that they really do have that pretty amazing rabbit ready to be plucked out of a hat, and they are going to astound us all with a brand new, cunning plan in order to mount a last-ditch rescue. The Bundesbank, however, isn't playing ball, opposing any further government bond purchases by the ECB, or giving a banking license to the ESM. Given that Germany has not ratified the ESM treaty, and can't do so until Karlsruhle has handed down its judgement in September, it is difficult to see how the Draghi plan can work. And the idea that there is suddenly a massive new line to credit that the ECB can tap into seems a little far-fetched. Predictions in this game though are getting too hard to call. Possibly, the "colleagues" are trying to bluff the markets into supporting the euro. But if that is the game, it is a very dangerous play. Markets mislead can extract a terrible revenge. COMMENT THREAD Richard North 28/07/2012

The Harrogate Agenda – direct democracy, part I Friday 27 July 2012 There are good reasons for being cautious about direct democracy, when the primary instrument of this form of people power is the referendum. It was, after all Hitler who in 1938 used the referendum to cement single-party rule and confirm his dictatorship. More recent experiences demonstrate the fragility of the process, not least with the 1975 referendum on the EEC where the question was rigged and the campaign weighted in favour of the "yes" proposition. However, those who would thereby dismiss any idea of extending the role of referendums might care to reflect that the parliamentary process has hardly covered itself in glory. That there are flaws in both is not an argument for rejecting either. Explored at our Harrogate Conference, however, were particular applications for the referendum process, the first of which – the subject of this essay – was in relation to the approval of legislation. The anomaly we have at the moment is that all Bills, once they have gone through their procedures in Parliament, require Royal Assent before they take effect and become full-blown Acts. The Queen is thus sovereign, and the people don't get a look in. If we are to take our declaration of sovereignty at face value, no law should be passed without the approval of the people. To take effect, every law must be given "public assent", the obvious mechanism being the referendum. The practicalities of this, however, are daunting. We could hardly have a situation where almost daily at times, there could be a referendum. Nor would it be appropriate to have to require multiple approvals in one voting session. That would create its own difficulties and distortions. What we could do, as an alternative, is borrow from the procedures used for statutory instruments, where regulations and the like go through either positive or negative assent. For the bulk of such legislation, negative assent applies. The law is "laid" before Parliament for forty days, during which it can be "prayed against", following which a debate may be held and a vote held. If there is no "prayer", then the law is deemed approved. Using a variation of this procedure, we could have a system where, following parliamentary approval of a Bill – with or without Royal Assent – there is a "window" where a public objection may be lodged, requiring a threshold level of signatures. Should the threshold be reached, then there follows a referendum. In the event of a "no" vote, the law is voided. It does not take effect. This then leaves the "positive assent" procedure, where a statutory instrument requires a positive vote before it can become law. In the "public assent" content, this would apply to any constitutional Bills – those which have the effect of adding to or altering the constitution. Then, a referendum would automatically be required. But that leaves statutory instruments, and also existing legislation. We'll deal with that in part II. COMMENT THREAD Richard North 27/07/2012

There are times when only German will do Friday 27 July 2012 With the debt crisis in Spain escalating, this headline left untranslated probably best expresses what the Spanish leaders are doing. In fact, they are "wavering", while Merkel and Hollande both, in a joint statement, have said they "are determined to do everything possible to protect the eurozone". Elsewhere, Wolfgang Schäuble, in an interview with the Frankfurter Allgemeine Zeitung is saying that the next crisis would no longer be just a crisis of the financial and economic system, but also a crisis of the political system. And in a delicious comment on the rumoured re-entry of the ECB into the [junk] bond market,Handelsblatt headlines: "Soon, the ECB will also be buying old bikes". When the Huns start taking the mick, you know that the euro is truly domed. COMMENT THREAD Richard North 27/07/2012