Tuesday, 20 December 2011

What becomes of the broken currency?

In 1973 when Britain joined the European Economic Community the slogan was “common market or bust”. How ironic that sounds today. The crisis rocking the Eurozone is now so severe that the IMF has publicly stated that only an internationally coordinated bail out could prevent the globe being rocked by depression.

It is beyond embarrassment for the member states of the Euro area which regard the single currency as a cornerstone of their project. It has now reached a level where not only other member states may be sucked into the quagmire of fiscal misery, but the entire interconnected Gordian knot of global financiers.

It is unsurprising that the media is choked with opinion on David Cameron’s decision to veto the EU tax and budget pact. Its architects claim it is the only way forward in rescuing the Euro and guaranteeing the stability of every member state.

But what is essential to remember is that the proposals put on the table during that summit would do little to actually solve the crisis. The burning question of where the Eurozone would find at least a trillion Euros to prevent the currency union disappearing down a financial sink hole still remains unanswered.

We’ve had criticisms that Britain is now isolated and without power. Responses across the continent have done little to disguise the bitterness and vitriol many member states feel towards what they perceive as reckless, self serving betrayal. We have deeply frustrated France and Germany by blocking the legally viable option of unanimity to allow the changes to be enforced. A move by Brussels to sabotage our veto would involve changing laws in order not to break them and as such would be incredibly dangerous.

There have been rancorous demands for retribution, from stripping our rebate (which would leave the UK as the single highest contributor to Europe) to sabotaging any free trade agreement Britain may attempt to forge were she to exit the Union. Yet much less than losing influence, in many respects we hold it. Any attempt by Brussels to scrap the rebate would spark fury in the UK, potentially triggering our withdrawal, and threats made in anger to embargo trade would equally hurt the remaining member states and would do little to help the EU’s reputation on the international stage.

Even though it may have ruffled feathers in Europe, we are legally entitled to protect national interests and must be allowed to do so. To undermine our say would call the entire democracy of the EU into question.

Under this latest pact EU financial supervisors could govern the City in London. It is a coveted prize, to seize control of the place where 75 per cent of Europe’s private investment is dealt, potentially imposing taxes to siphon off much needed capital. But technocratic control would see banks quit London for Zurich, the effects of which would have a devastating impact on us. London’s financial services industry accounted for a £35 billion trade surplus in 2010, and contributed £54 billion in taxes as well as representing 2 million jobs.

The most repeated criticism is that the UK has lost its seat at the negotiating table, and thus decisions that affect us will no longer being taken in consultation with us. Some commentators suggest the Eurozone can enforce the policies anyway, rendering the veto entirely in vain. Yet the European Court of Justice states that changes to EU institutions must be subject to assent by all member states influenced.

A general consensus is that Britain wants one foot in the EU and one foot out. However we are not alone. There has always been a two-speed Europe, simply by the fact that 17 member states are in the common currency and 10 are not.

In Finland, Sweden, Hungary and the Czech Republic there is also widespread resentment of the demand that tax and budgets are controlled by Brussels, and quiet support of the UK stance. Even the French newspaper Le Monde confessed that the “Brits are not part of this euro crisis. And they have no responsibility for the failure of its institutions to resolve it.” Perhaps if we are isolated, it is for the best. After all, it is better to be on the docks waving goodbye to the Titanic.

German MEP Alexander Graf Lambsdorff suggests the EU “refounds itself without Great Britain”, suggesting “Switzerland is a model towards which Britain can turn”. Thereby it could trade freely with the bloc and cooperate bilaterally on important issues without being a member state subject to European law. As a result of autonomous cooperation, Switzerland is able to trade in a much freer environment. She has the highest wealth per adult in the world, was voted last year as being the most competitive country on the planet, and was listed as having the second highest quality of life globally.

Whatever comes to pass, the next few months are critical. Even without the UK veto, this pact could never solve the crisis. Whilst it may signify a willingness to prevent it happening again, it is rather like closing the stable door after the horse has bolted.

There will likely be more summits acting as stepping stones to complete political federation allowing all debt to be subsumed within one massive economy. In essence, this would be amalgamating the Eurozone into a single country rather like the USA. There is growing consensus that this is the only solution if the single currency is to be saved. However, such a bold decision will likely be made in increments to prevent public backlash.

UKIP MEPs have been arguing for years that a single currency without full fiscal union simply cannot work. We have been labelled doom mongers, political Luddites and even extremists for holding the view that, as it is today, the EU is much more than a common market of ten European countries. Instead, it is too powerful, too reckless and incongruous with both public opinion and political sense.nIt is high time people felt free to come out of the shadows and speak out against Europe. It’s high time we had a Referendum.

Sunday, 27 November 2011

Tragic Loss for Wales

The loss of Gary Speed is an utter tragedy. He was a superb footballer and later in his career a fantastic manager. I wish to send my condolences to his family. He will always be remembered as one of the true gentlemen of football, a credit to his country and an invaluable contributor to Welsh sport. I am shocked and devastated by this news.

Thursday, 10 November 2011

Comparing stuff with Downton - well, it's the current trend

Did you see the series finale of Downton Abbey? More happened in one hour of television than in decades of popular soap operas.

Finally there was "the kiss" leaving many of us to wonder what the no-doubt feel-good Christmas Special will be about now Matthew and Mary have hooked up (and regretted it miserably all in one episode) AND Mr Bates and Anna married and spent a romatnic conjugal night in a secret suite kindly decorated by the soon-to-quit Cora look-alike who's been snogging old Lord Grantham in side rooms, before old Bates was carted off by police. With the speed in which the plot line moves on, one imagines Matthew and Mary will have a Christmas wedding and spend most of series three tackling marital issues in the changing post war society of the swinging twenties while trying to secure the Grantham lineage in a few steamy scenes.

It was lucky that flu was so voracious though. It worked well to move various narratives and sub-plots along. Although did anybody else think it had the epidemic alacrity of the Ebola virus? One minute Lavinia was wandering down stars to see her betrothed tonsil-deep in Miss Mary, the next she was spluttering her last breaths as Lady Grantham's profuse sweating and nose bleeds persisted over the course of two gripping will-she-or-wont-she nights.

Apparently the actual Spanish Flu lasted from June 1918 to December 1920 spreading to the Arctic and remote Pacific Islands. Between 50 and 100 million died, or more than 3% of the world's population, making it one of the deadliest natural disasters in human history. The virus preyed upon the young and strong, turning a healthy immune system into a corporal civil war where the strongest fighters were cuaght up in a battle that turned against their own bodies.

Ok, so how was I planning to draw parallels between this and the EU?

Where there's a will there's a way.

The first cases of influenza were registered in the U.S., just a the collapse of Lehman brothers signalled the start of the global recession. The flu then spread around Europe before getting to Spain. The pandemic received it's nickname "Spanish Flu" because of the severity. Germany, Britain and France all had media blackouts on news of the flu that might be seen to lower morale and did not want to disclose information about disease and the number of deaths to their enemies.

The Euro crisis, first striking Greece, and spreading virulently from Ireland to Portgual has now reached Italy, deemed to large to bail out. Meanwhile Germany and France continue to insist that the Eurozone will be alright in the end, despite the fact that the latter's economy could well be next in line. Huge efforts have been made to cover up the extent of deficit in these major economies, to calm the world's markets and silence the enemies of the Eurozone who hage already called time on the stricken common currency project.

The Greek crisis is small fry compared to what is now looming in the wings and is preparing to sweep over the cast of Europe with the same narrative upheavals as Spanish Flu in Downton. Greece makes up just two per cent of the EU economy compared to Italy who was the eighth largest economy in the world last year, or the fourth largest in Europe.

Indeed so ferocious is the contagion that France and Spain could be the next to suffer. Some might argue that Spain's economic fate was written since Portugal contracted the debt disease bringing it to Iberia.The borrowing costs to France have soared to over 3%, almost half way to the dreaded 7% hypothesised doom that Italy has recently achieved.Perhaps just like the Spanish Flu, by the time contagion hits Spain it will have reached it's most virulent and deadly.

German experts have slammed the European Central Bank for buying Spanish and Italian debt, putting Germany precariously at the head of the pack when it comes to calling the shots and starting to revert to self interest, something which when adopted by a nation with as much economic might as Germany, could be quite hard to counter.It is interesting then to remember the founding goal of the European Union was to prevent another German war with her neighbours after 100 years of devastating conflicts. Even today it would seem the unenviable task of the EU is to again diminish the power of a reunified Germany.

So what for series three of Downton? We all know how history plays out from now, and considering series one started with the sinking of the Titanic in 1912 and has hurtled in 14 episodes to the Spanish Flu reaching UK shores in 1920 it is conceivable that a new head to head with Germany could be on the cards for the already battered and beleagured cast of the Abbey. And this time, the war really could be brought to the Grantham estate as World War II brought bombing attacks onto UK soil.

As for us? Well it looks as though Germany are getting rather wearied at playing the coy and well meaning big brother role. At the recent crisis summit in Brussels, hoping to secure the one trillion euro rescue package to save her embattled currency, Angela Merkel warned "No one should believe that another half century of peace in Europe is a given - it's not. So I say again; if the euro collapses, Europe collapses"

I would rather take this comment as scaremongering. After all, it's more than likely now that the Euro will collapse, and hopefully the EU along with it. However whether we will all start turning arms on eachother seems to me a rather far fetched concept used to scare member states into jumping to attention.

But then, after all, who knows? If there's one thing we have learned from history, and from Downton Abbey, it's that however predictable the majority of the narrative it, there will always be the unexpected twist in the plot that takes us all by surprise.

Tuesday, 25 October 2011

Monday should have been a schism in the modern political history of Britain. It should have been the catalyst for a new chapter in politics and inter-territorial relations. I say it should have been, because it wasn’t.

When the Coalition Government pledged a new form of governance embracing direct democracy and established e-petitions they should have known membership of the European Union would be mooted.

Perhaps in the wake of the Eurozone crisis, with ongoing bail outs and economic reverberations keenly felt in our own markets, people are more disillusioned with the European project than ever before. With Polski Skleps opening on a large number of commercial streets, perhaps there is an increasing perception of unjust competition for jobs with migrants from other EU member states, causing people to demand a rethink.

Yet I do not think this is what really underlies the call for a referendum. People in Britain are by nature far from hostile to their European neighbours, or economically egocentric.

Instead it is simply due to the Government’s track record of failing to heed the vox populai on Europe that the public are clamouring to be heard.

It was back in the 1970s that the UK held its first, and only, referendum on membership to the then European Economic Community. It was a free trade organisation. No Parliament. No common currency. Just a few years later Harold Wilson promised a referendum that never came, and again in ‘83, Labour pledged to withdraw from the EU in the following Parliament, but lost the election.

A decade later European leaders signed the Maastricht Treaty creating the modern day European Union. Denmark and France were the only member states to put it to a vote.

In 2004 Tony Blair promised a referendum on the European Constitution Treaty and all three main political parties promise referendums in their general election manifestos the following year.

France and the Netherlands held referendums and rejected the proposals, causing the European Commission to repackage and rename it the Lisbon treaty after only minor concessionary changes. In Ireland, after the public voted against Lisbon the Commission demanded a second referendum and poured millions into the campaign

The UK signed it without recourse a public vote and the High Court rejected calls for a judicial review into the legality of the ratification.

This week’s debate represented 37 years of defying public opinion and reneging upon promises, allowing power to be passed to a foreign body that today makes 75% of our laws.

Do not buy the argument that it’s because the timing isn’t right. The debate over whether to hold a referendum did not make a given date a condition. It merely called for a promise that has for so long been broken to be enshrined in law so that for the first time the public would be given a say.

The fact that public opinion has been unscrupulously ignored should anger all voters, whether pro-Europe, or Eurosceptic. The argument is not about whether the UK should or shouldn’t be in the EU. The argument is whether you the electorate get to decide.

It is hard to fathom why the Conservative and Labour Parties operated a three line whip. Only one Lib Dem MP voted for the motion and all three Plaid MPs opposed it.

Roger Williams Lib Dem MP for Brecon & Radnor and Glyn Davies Conservative MP for Montgomeryshire both voted that you should be denied a say.Read the full list of MPs who do not sign up for democracy here.

Last time I checked, ‘democracy’ was defined as a form of government in which all people have an equal say in the decisions that affect their lives, coming from the Greek terms “demos” (people) and “kratos” (power).

Thursday, 20 October 2011


If the reports are to be believed and Colonel Gaddafi has indeed been killed in Sirte it will represent the dawn of a new day for Libyans who have suffered under his regime for more than forty years.

However it is in many respects a shame that he was not brought to trial in The Hague and his cronies may well now seek to flea prosecution on the global stage.

We must not forget that Gaddafi was not only a tyrant but also incredibly calculating and was able to woo his foreign counterparts who then allowed him to remain installed as a dictator for the four decades he ruled over Libya.

Friday, 14 October 2011

Come on Wales!

It is actually a sorry thing that I am not in Brussels tomorrow to watch what should be an exhilarating match as Wales take on Les Bleus in New Zealand.
As a nation we are so incredibly proud of our rugby, and to be in the finals of the World Cup would surely put Wales on the map across the globe.
As people across Wales set their alarms for an early start on Saturday I want to echo their cheers of support and cry out a resounding


Every toe and finger is crossed.
This really could be, I hope and pray, our time.

Friday, 7 October 2011

Evidentally Turkey is not just for Christmas

I was recently invited to write this article for Public Service Europe. It raises interesting questions over who is working in Brussels, and how democratic a system is being employed.

Although I find there to be countless examples of why the EU flies in the face of democracy, I attempted to keep this item contemplative rather than empassioned, raising the key issues that I believe many readers would find interesting.

Here it is:

If complaints already exist about the level of legislative intrusion Brussels has on domestic governance, then imagine the consternation that could be felt with the revelation that such legislation is not only made by those 26 other nations who are members of the EU, but equally by a raft of other countries that are not.

Recently the Turkish Government appeared to gloat when they publicly announced that Turkish officials will be “shaping the EU’s future politics and legislation”. However they were not referring to finally being granted the membership that is so widely debated. Instead they were referring to the signing of a “memorandum of understanding” for the secondment of Turkish officials at the European Commission. The action, entitling Turkish foreign officials to steer policy alongside civil servants in Brussels, was ratified in Strasbourg at the end of last month by Minister for EU Affairs Egemen Bagis and Vice President of the Commission in charge of Inter Institutional Relations and Administration, Maros Sefcovic.

Turkish professionals with be employed at the Commission as “Seconded National Experts” - a scheme that allows applicants, usually from the EU member states, to work for the European Commission on secondment, while still receiving pay from their employers alongside generous subsidies from the EU. However the scheme also extends to non-EU member states, with Brussels labelling the recent agreement with Turkey a “milestone” for EU relations.

Turkish bureaucrats will work alongside Eurocrats in policy making and the implementation of EU politics, meaning effectively, Turks will have a role in shaping the EU agenda.

The majority of domestic laws, often estimated at around 75%, emanate from Brussels. To learn that Turkish officials will also be instrumental in creating legislation, despite Turkey not being a member of the Union, reveals what many may perceive as a democratically bankrupt and unaccountable lawmaking process. Laws affecting Britain can be developed by Turkish officials with no accountability to the British taxpayer and with questionable adherence to British interests.

As a candidate country for EU membership, Turkey is increasingly working within and alongside the EU. This is despite the fact that Turkey has been occupying a large part of Cyprus, a full EU member state for years and has been linked to potential security risks.

Alongside a customs union with the EU, which significantly increased the volume of trade between Turkey and EU member states, and EU foreign direct investment in Turkey to a tune of around €9 billion per annum, Turkish officials will now have SNEs in Brussels who will “work alongside Commission officials, helping to achieve the strategic objectives defined by a Directorate-General or Service for the benefit of EU citizens.”

Many would argue that increased cooperation between the EU and Turkey is no bad thing. However, without elected representatives in Parliament it is questionable whether they should have influence in the Commission.

It is not just Turkey given the privilege of having EU civil servants. A job advert for the EU Institute for Health and Consumer Protection stated that officials were wanted from “Albania, Bosnia & Herzegovnia, Croatia, FYR of Macedonia, Iceland, Israel, Montenegro, Serbia, Switzerland, and Turkey. Applicants of other nationalities cannot be considered for this specific call.” Indeed European law would likely prevent such a job advert being placed by a UK company that wished to specify that only certain nationalities apply.

Without doubt in a bid to pave the way for these other nations to eventually join the EU, work both on the ground in third countries, and within Brussels by third country nationals, is something about which the Commission remains tight lipped in the public sphere.

Yet it would appear that Turkey was calling somebody’s bluff by announcing their new found powers within the corridors of Brussels.

While civil servants across Europe are threatened with redundancies, pay cuts and pay freezes due to austerity measures, it is surely a bitter pill to swallow to learn that officials are being appointed from a wide range of non EU countries and also enjoy handsome remunerations on top of their pay.

Most importantly, I believe it is essential that the voting public are made aware of such contracts. After all, as an organisation that purports to be democratic, transparency and accountability should be the cornerstones of EU operations.

Friday, 30 September 2011

As The Grip Tightens

The news this week has left me reeling.Turkish officials been given a hand in drafting EU laws governing Britain. Civil servants from Ankara are being sent to work on policy matters alongside Eurocrats in Brussels. The European Commission already makes upwards of 75 percent of our laws. We now learn that some of them are to be written by Turks despite them not having membership of the Union.It is outrageous that laws affecting everybody in Britain can be written by Turkish officials who have absolutely no accountability to the public and won't reflect the interests of the UK.

On top of that levels of suspected fraud and other "irregularities" in the European Union budget have risen by 25 per cent to £1.6 billionm representing a cost to British taxpayers of £233million. Fraudsters stole at least £415million from Brussels projects in 2010, a figure that is only the tip of the iceberg.

In Parliament this week President of the European Commission, José Manuel Barroso, openly backed the Tobin tax for Europe in his State of the Union address. In the past the idea of a tax on financial transactions has been rejected by the European Commission on the ground that it would damage Europe, reducing GDP and raising unemployment. But this opportunity to rob from the City of London, who in spite of EU laws has grown successfully over decades, to fund the errors of the Eurozone is a disgrace.

Perhaps the most worrying item in the news this week is a report that the European Commission has threatened to take legal action against Britain if ministers do not water down rules limiting foreigners' ability to claim benefits. Taxpayers could end up handing out £2.5billion to EU nationals, including out-of-work "benefit tourists." Levelling out welfare across the Union means one thing alone: with our generous system, Britain will be the destination of choice for workshy from across Europe.

On top of that, think tank Open Europe estimates some 30,000 young workers will lose their jobs in the UK due to new European Union employment rules due to take force this weekend. The Agency Workers' Directive could put 28,000 young workers' contracts at risk by making them too expensive to keep on.

Monday, 12 September 2011

Go on, treaty yourself!

There's an undercurrent of debate in Brussels at the moment as we reconvene in Parliament about how decisions made to rescue the Eurozone (again!) will affect the dotted i's and crossed t's of the various treaties of the EU.
Whilst Mr Cameron is to be found, head buried in hands, praying that his bogus "Referendum Lock" (cue hand gesture with interlocked fingers, lifted meaningfully up and down like some kind of manual portcullis) will not be dragged out from the annals of "Most Pointless Legislation Ever Promised" it would seem his right hand man, Gorgeous George, cannot help himself when it comes to cheerleading deeper integration, as long as it doesn't include us! (meaningful glance of reassurance at Dave, now sweating profusely and wringing the portcullis hands).
Up jumps Bill Cash
"But you SAID that any Treaty change and we could pick and mix what we wanted and didn't want" the veteran Europhobe whines.
Nick Clegg grinning smugly "Oh, silly Billy, but we NEED the EU to be one big happy family. Let's not go spoiling that!" (thinking nervously that any treaty change would indeed need to be ratified by all 27 members while the vultures from the Express and Mail circle the carrion of the Eurozone as it is picked over by the Union's finance ministers, waiting for a glimpse of fresh meat)
Meanwhile Iain Duncan Smith making an appearance on Andrew from Mars adds his two bit that he personally is very much in favour of repatriating powers, but those ghastly Liberal Democrats will have nothing of it.
Over in Brussels, Herman Van Rompuy is sitting in a high backed leather swivel chair stroking a long haired white cat, his scheming eyes glimmering behind metal rimmed glasses, as his henchmen bustle around him spreading out maps entitled the United States of Europe, in blue and gold letters, with the UK tippexed out.
Somewhere in the background is the echo of a ticking clock....

Monday, 22 August 2011

Franco-Saxon Fiscal Union?

The phrase two-speed Europe has been bandied about in recent weeks, and it seems even the most optimistic commentators have started to pluck their heads from the sand and brandish claims that fiscal and federal union is the only thing that could save the Euro.

For a long time, people like me have claimed that you simply cannot have a common currency without the homogenisation of economies, harmonising taxation and spending and thus surrendering a great deal of sovereignty. That is why it is vital the UK never joined the Euro, and it is why the currency has suffered so significantly in the global financial crisis. Yet when we were saying this even just a year ago, we were labelled doom mongers, trying to scare the public that the EU was more ambitious than it really was, that no one was trying to undermine domestic power and there is no need to force the Eurozone to club together and become more than just an economic bloc, but in all respects other than name, a federal superstate. Now everyone is proclaiming how it is essential these moves are made, as if they too had been stating the obvious for years and were also jeering at the Commission everytime another bail out was awarded which would have as much efficacy as trying to bail out a sinking ship with a thimble.

Now, all of a sudden, the two Eurozone powerhouses, France and Germany, in the wake of the portent of economic federalisation, called an urgent meeting to establish a Eurozone government.

This new government would be made up of heads of state that will meet when necessary and will elect a stable president for two and a half years. The man they have in mind is (somewhat laughably) that famous European figurehead Herman Van Rompuy. Who? Oh, you've forgotten him already! You know, that chap who was elected President of the EU...

The establishment of this government to oversee national budgets and taxation and so forth will require changes to domestic constitutions over the coming years, and it will be interesting to see whether voters are consulted. One imagines if they were few would lean favourably towards the proposition of further intrusion upon national powers, so as is often the case with the EU when it comes to unfavourable voxus populai, one imagines there will be no recourse to public opinion. Not really democratic, but afterall, when it comes to the EU, what truly is?

It will also be interesting to see how other Eurozone countries respond. After all, the proposals amount to them handing a large amount of budgetary power over to France and Germany.
Angela Merkel and Nicholas Sarkozy are optimistic that they can persuade all the eurozone nations to pass these domestic amendments by summer 2012, which is highly unlikely.
Yet also these agreements have failed to solve the problem. International markets are wondering what will happen if Italy requires a bail out. The EFSF currently contains 440bn euros which would be a long way off enough to save Spain and Italy if there economies deteriorate. Yet actually growth in Germany has slowed to a painstaking place and actually stagnated in France, so where they could seek additional funds in the Eurozone is unclear. For the same reason the German and French leaders also refused to issue eurobonds, meaning underwriting European debt using their own taxpayers' money, by acting as guarantors. Eurobonds would have allowed weaker economis to borrow at the same costs as France and Germany, but would ultimately have led to huge public outcry by French and German citizens who do not see it as their responsibility to rescue the economies of their common currency neighbours.

The negotiations therefore are looknig at long term solutions of establishnig a tighter knit Eurozone but does not resolve the real problem today. This is surely to be expected. Since the outbreak of the recession the Commission has sought opportunities to push for deeper integration, often championed by France and Germany.

Casting my eyes back over speeches last year and in 2009 it's interesting to see how words I said over 12 months ago that were shouted down are now being echoed by the IMF to the ECB to the BBC. Take for example this speech:

"What is the future of the Euro in the light of the problems in Greece, and for that matter, Spain, Italy, Portugal and Ireland? It must be of some reassurance to the UK that we never joined the Euro. It seems promises of strength through solidarity couldn’t be further from the truth.

The problem for the 16 nations in the eurozone is who pulls the purse strings. With little fiscal coordination, and no treasury, membership to the Euro is by no means an elixir for good economic health.

It turns out that when all turns sour, they take the opportunity to seize greater control while you’re on your knees. We must wait to see how Greece will react to becoming an economic protectorate of the European Union and whether it will bring civil unrest. Is this really the European Dream? Who is next ? Spain? Portugal? Italy? Or Ireland?"

Evidentally, all the countries above slipped into economic turmoil.

Similarly I said last year that

"Ideological clinging to the euro will see monetary problems resurface in boom time and bust.

A single currency only works in tight knit federal environments. Perhaps, with this being the Commission’s ultimate intentions, they have put the cart before the horse."

I hope now people will begin to see that Eurosceptics are not extremists, right wing lunatics, heretics, scaremongers or ill intentioned. Perhaps we simply have common sense, which clearly means no common currency!

Tuesday, 19 July 2011

If only it were all one big funny joke...That we could laugh at

A cruise ship full of English, French, Germans and Italians, started sinking in the middle of the Med. The captain radioed for help, but the ship was sinking fast meaning passengers would have to jump into the sea and wait to be picked up. As he grappled with the impending disaster, he sent his Second in Command to give the passengers the instructions. Five minutes later he came back looking anxious. "What's wrong?" the Captain asked. "They all refused to listen" replied the Second. So the Captain went off to do it himself. He came back five minutes later. “Ok, done!” he stated. "How did you do that?" exclaimed the bewildered Second. "Well..." started the Captain "...I told the British it was traditional, I told the French it was fashionable, I told the Germans it was an order and I told the Italians it was forbidden!"

I like this joke. It certainly raises a laugh in Brussels. Perhaps what makes it so entertaining is the underlying truth in the words, a truth that underlines why a fiscal and federal union in Europe will never work.

Nevertheless, the EU remains unfailingly committed to their project. The ongoing crisis in the Eurozone is indicative of that. Greece should have been allowed to leave a year ago. The calls for the Commission to follow this course of action are getting louder and louder. Greece are set to default on repayments. Portugal needs a second bail out and has just discovered a €2 billion black hole left by the outgoing Government. The new leader Pedro Passos Coelho has told the nation that his government will not tolerate any interference by Europe. Italy are teetering on the edge of oblivion, their Minister of Finance stating rather emphatically that “If I fall, Italy falls as well…If Italy, a country too big to be rescued, falls, then the euro falls too!” Spain is also on the brink of collapse meaning the Eurozone’s third and fourth largest economies are set to go bust, which would surely cast the rest of the world back into recession. It’s no laughing matter. The only thing that stands between the Europe and solvency is EU vanity. Under no circumstances will the Commission admit the common currency has flunked or permit a return to former domestic currencies. There is a saying in Brussels that the EU has decided it is no longer correct to "spend a penny" - the new expression is to "Euronate."

Over the summer I will be taking time to get around as many fairs as possible to listen to people’s grievances. As always, I am especially keen to hear from farmers of their concerns about forthcoming changes in the Common Agricultural Policy. With compulsory greening of policy bound to bring a more red tape and a baseline freeze that will stop subsidies keeping up with inflation, farmers are right to be very concerned. To many people not in the agricultural sector, it’s hard to understand the broad impact European policy has. Hold on a minute, there’s another joke to explain:

You have two cows. Socialism: The state takes one and gives it to someone else. Communism: The state takes them both and gives you the milk. Fascism: The state takes both and sells you the milk. Capitalism: You sell one and buy a bull. European Federalism: You have two cows which you can’t afford to keep as milk is imported from member states with cheaper labour. You apply for EU aid to subsidise your cows and are given just enough to keep them. You sell your milk back to a government owned distributor who then puts it on the market at the low price that drove you to need subsidies in the first place.

One thing that can cheer us up this summer is looking forward to Wales having a football team in the Premier League. Whoever you support, Swansea’s promotion is fantastic for the country as a whole. There are also hints that Cardiff City Stadium, Parc Y Scarlets and Rodney Parade, as well as Liberty Stadium, could be full of stars. No, Malky Mackay has not signed Ronaldo, nor has Nigel Davies or Darren Edwards coaxed Dan Carter to play fly half. Sports grounds and team kits across Wales will all have to be adorned with the EU ring of stars if the Commission gets their way. Sadly however it’s not a joke, although I’d very much like it to be.

Top of Form

Monday, 11 July 2011

Nessun Dorma!

Nothing induces insomnia quite like stress, so I can well imagine a bit of Nessun Dorma in Italy over these coming weeks.

Fears that the "Euro Contagion" were spreading like Ebola to Italy has caused the country's cost of borrowing to reach it's highest level in almost a decade, prompting a large sale of bank shares and a sizeable plummet in the stock market. The problem is being exacerbated by Silvio Berlusconi and Italy's Finance Minister Giulio Tremonti who allegedly, and perhaps somewhat operatically, emphatically stated “If I fall, Italy falls as well…If Italy, a country too big to be rescued, falls, then the euro falls too!”

As a result of the latest fears, officials from the European Central Bank know report that the current eurozone bail out funds are insufficient and suggest doubling the available money to €1.5 trillion.

The creeping insolvency is also stalking its way across the continent to Spain who thus far have remained astonishly free from talk of rescue packages. It will once again fall on Germany's shoulders, who have actually enjoyed a serious period of good growth, to wade in and pull her floundering neighbours out of the shallow waters. And so again the debate continues - full fiscal unity, or break up the Monetary Union altogether, and risk making the EU a laughing stock?
Even in the Financial Times commentators are dismissing threats that contagion would only spiral out of control should Greece leave the euro or default as utter balloney designed to promote whichever purported rescue plan is currently on the table. Yet most EU leaders are now beginning to embrace some degree of default as the only option for Greece.

Friday, 1 July 2011

Why simply employing Brits will not work

And so the Government, well, Iain Duncan Smith, is going to announce that they will urge UK firms to employ British. Is this going to miraculously solve the problem of mass migration to the UK? Well if you consider the fact that since May this year EU migrants are now entitled to claim benefits after just 12 months of employment in the UK, probably not. Either Brits will be on the dole, or Eastern Europeans.

Recent figures show that between 1997 and 2010, half of the rise in UK employment was jobs taken by foreign nationals. The unemployment rate of 16-24 year olds went from 79,000 to 895,000 in just three months leading up to this April. Clearly we have a critical situation.

Now we all now under labour droves of foreign nationals were welcomed into the UK. Cynics would argue it suits the party to have firstly, less employment available, and secondly, foreign nationals they can pledge to look after and win a few more votes. Whatever the case however it's relatively irreversible. You cannot start sending people packing without seriously disrupting their lives, and who can blame them for wanting to ake opportunities and start afresh if they think they are able to do so in the UK? You would, I am sure, if you were in their shoes.

So the Government has put a cap on skilled workers from outside the EU in an effort to reduce migration from about 200,000 a year to tens of thousands, or 21,700 to be precise. But most citizens of EU countries face no restrictions on working in the UK an restrictions are due to be lifted on Romanians and Bulgarians too over coming yeats. British firms, under EU law, are not allowed to discriminate against non UK employees, so IDS is simply talking about the paltry 21,000 people who the government can control. Compare that to the fact that the population has soared 470,000 a year under the migration boom, pushing UK population through the 62 million barrier or 3 million more than judt nine years ago, and you realise that 21,000 is a drop in the ocean.

But that's not the only problem A recent EU ruling has seen Turkish workers returning home after having worked in the Netherlands are entitled to receive incapacity benefits from the Dutch authorities for the rest of their lives. The landmark ruling by the European Court of Justice could pave the way for further legal strictures dictating that even when foreign workers return home, the British taxpayer would still have to fund them. In that light, it would probably be better if they remained here and at least contributed a small amount to the country's economy.

I don't like to simply bemoan Brussels. I also do my best to challenge them at every turn.

I recently wrote to the Commission asking:

From 1st May, hundreds of thousands of migrants will be able to apply for full UK benefits after only three months of residency.

Welfare benefits such as jobseekers allowance, council tax and housing benefit will be available when previously migrants had to demonstrate a year of UK employment.

Since 2004, despite predictions only 13,000 workers would come, more than a million officially registered with 650,000 still here. The unofficial number could be far higher.

The change in rules also means more migrants will be able to claim welfare benefits for children still in their home country. Currently 32,000 children in Eastern Europe are paid maintenance from Britain.

The UK system is generous and in terms of currency value, far higher than domestic welfare payments in most EU countries.

A growing sense of resentment in many member states such as Germany and France reflects a public that is increasingly disenfranchised.

What will the Commission do to prevent EU migrants from moving to other parts of the Union to claim welfare?

What sort of restrictions will be drawn up to prevent widespread benefits tourism?

How will the Commission prevent mass migration of citizens from one part of the EU to another which could have economic impact on both the domestic and the recipient member states?

They kindly responded, stating:



Answer given by Mr Andor

on behalf of the Commission


Commission reports[1] on the transitional measures applying to workers from EU-8, which expired on 30 April 2011, and those still in force for workers from Bulgaria and Romania, show that the reason why most people move from a new Member State to an EU-15 Member State is to work there. These migrant workers have helped to alleviate labour shortages in sectors and occupations where demand cannot be met by workers from within the country. Intra-EU labour mobility has also triggered substantial economic growth in both the receiving countries and the Union as a whole. There is no evidence that it has led to a rise in ‘benefit tourism’.

The EU rules on social security coordination[2] provide that the Member States are to treat EU citizens who are not nationals on a par with their own nationals as regards access to social security benefits.

EU legislation on the free movement of EU citizens[3] aims both to promote mobility and to protect the legitimate interests of the Member States by ensuring that public funds primarily benefit those who contribute to them. It does this by making the right to reside for more than three months in another Member State conditional on being in remunerated (self-)employment or having sufficient resources to avoid becoming a burden on the social assistance system of the host Member State. The latter is required to grant social assistance benefits to EU citizens in need who are not their nationals but meet the conditions laid down by EU law (and who therefore have a right to reside there) as it would to its own nationals in the same situation.

EU law therefore requires the Member States to show a degree of, but not unlimited, financial solidarity towards EU citizens who are not their own nationals. To protect the legitimate interests of the host Member State, it also allows the latter to take action to prevent EU citizens residing within its territory and who are not nationals from subsequently becoming a burden on the public finances.

[1] See ‘Report on the Functioning of the Transitional Arrangements set out in the 2003 Accession Treaty (period 1 May 2004–30 April 2006)’ (COM(2006) 48 final of 8 February 2006), which covers the first two years (2004-06) of the transitional measures for EU-8 workers, and ‘The impact of free movement of workers in the context of EU enlargement: Report on the first phase (1 January 2007 – 31 December 2008) of the Transitional Arrangements set out in the 2005 Accession Treaty and as requested according to the Transitional Arrangement set out in the 2003 Accession Treaty’ (COM(2008) 765 final of 18 November 2008), which covers the impact of free movement of workers in the context of enlargement during the first two years (2007-2008) of the transitional measures for workers from Bulgaria and Romania and a further review of the transitional measures for EU-8 workers.

[2] Regulation (EC) No 883/2004 of Parliament and of the Council of 29 April 2004 on the coordination of social security systems, OJ L 166, 30.4.2004.

[3] Directive 2004/38/EC of Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC, OJ L 158, 30.4.2004.

Make of that what you will, but to me it sound like evasive waffle that is intent on not giving up. We must, must, must, leave the EU.

Friday, 3 June 2011

Cucumbers at Dawn

It’s all getting a bit nasty in the European Parliament these days. In fact, MEPs are getting so hot under the collar there will soon have to be weapons scanners on the entrance doors to the hemisphere with burly Belgian cops sweeping metal detectors up and down the trouser legs of infuriated MEPs.

Ok perhaps not, but Spanish MEP Francisco Sosa Wagner’s strong words about Cucumbergate were accompanied by a threatening wave of his mean green cucumber cudgel right in the middle of the chamber!

The EU has been caught in the crossfire between Spain and Germany over accusations that the recent deadly outbreak of E-coli all began with Spanish cucmbers. As a result thousands of farmers in Spain had to destroy millions of pounds worth of crop. The EU, as compensation, has proposed donating £134million in aid, yet the Spanish are threatening legal action unless Germany reimburses their loss 100 per cent. This is one cucumber sandwich that the British will not be having with their tea.

Meanwhile Europe are also getting tough on taxation. EU chiefs are demanding direct tax powers which could cost families up to £200 every year. That’s despite the cost of bailing out our neighbours costing the UK over £12.5 billion, far more than has been saved by savage government cuts.

Cuts which, incidentally, the European Commission approve. The fact that the European Commission has come out and demanded Westminster should stick with their “Plan A” for budget cuts and tax increases suggests that we probably are doing the wrong thing. What with protests in Madrid, Lisbon and Athens over EU and IMF enforced austerity measures, as well as three failed Eurozone economies and many more ailing governments in the single currency, the Commission seem increasingly out of touch with their people and decreasingly less likely to give a hoot anyway.

In fact over the next six months the European Commission are unrolling the “European Semester” where they will demand member state governments submit national budgets and reform programmes for EU approval. Jean Claude Trichet, the President of the European Central Bank, has described the new European Semester as the beginning of centralised fiscal policy.

We will watch and wait to see whether Osborne is happy to dance to the Brussels beat.

The one thing that is desperately missing from this dialogue is the fact that actually, Eurozone countries should be able to leave the common currency and return to independent fiscal governance. Currently the ECB in Germany controls interest rates across the Eurozone, to the detriment of weaker economies and in part responsible for the collapses in Ireland, Portugal and Greece. I put this forward to Barroso in the last President’s Question Time.

Notice how he fails to answer the question and instead talks about how the Euro was not responsible for the world recession (well duh? But really, it was a massive contributing factor to the so-called euro contagion) and that he is sure Greece wants to stay in the Euro. Frankly, they don’t really have much choice given how endebted they are now to the EU and IMF. No wonder Brussels is doing their utmost to make sure the next IMF President is a European, and, surprise surprise, from France.

I also challenged Parliament over a little and at first seemingly unobtrusive amendment to a directive on HGV charges that plans to add an EU carbon toll. It is basically the first indirect tax to be levied by the Commission. Although the UK does not partake in the Eurovignette scheme, the government has been discussing joining in 2015, yet before that the Commission reserves the right to make their little “experimental” carbon charge obligatory. We all know that such costs are never fronted by big business and always land in the consumer’s purse, but what is worse is the fact that taxation powers should be discussed and passed by unanimous vote at Council level with all 27 leaders of the member states agreeing to the proposals.

This matter however has been slipped through Parliament as it “only relates to transport” which is an EU competence under the provision of the Lisbon Treaty. A sneaky backdoor way to introduce an indirect tax, because frankly, the Commission know full well not all member states would agree to such a policy.

Sneaky sneaky Europe.

Monday, 28 March 2011

Financial Crisis

I know, I know

It must seem every time an argument is put forward about anything to do with politics it all boils down to money. But this is surely a reasonable expectation, given that the job of most governments is to collect and then spend the money of the people they purportedly represent in a manner they see most universally suitable.

Do not think just because you personally do not pay a direct tax to Europe that it’s not your money being spent. It is. And a whopping estimated £48million a day goes to Brussels from the UK.

Yet in Europe, the state of their own finances is atrocious. While they chastise Greece and Ireland for running up enormous deficits and have in the case of the former turned the country into little more than an economic protectorate, their own fiscal record is far from unimpeachable.

Not only has the Commission failed to have its annual accounts signed off for the past 16 years (and let’s remember their former Chief Accountant turned whistle blower was so appalled by what she had witnessed she signed up as a UKIP MEP) but when there’s allegation of serious wrong doing, everything is brushed under the carpet. Meanwhile they are standing with their begging bowl insisting that non Eurozone member states contribute to a bail out fund to rescue their pet project currency that countries such as the UK were wise enough to never sign up to.

More recently a sting by The Sunday Times revealed three MEPs willing to take money from planted bogus lobbyists in return for introducing amendments to European Regulations. Out came OLAF from retirement (the European Commissions own Office of Fraud Busters) yet were then barred from the offices of the three accused MEPs by the Eropean Parliament in an utterly laughable twist to the plot, leaving everyone scratching their heads as to who has the legal entitlement to investigate bribery of this kind. Should the honour be bestowed on national authorities, or can the EU wade in and conduct their own investigation (whose credibility, I hasten to add, would probably be called into question anyway).

Yet Europe is keen to set up a financial services watchdog that will operate on a pan European basis and tell every financial institution in the 27 member states how to conduct their dealings. Whilst from the outside in the wake of a recession it may seem eminently sensible, let us not forget that this is the self same Union that insists on awarding itself a year on year budget increase despite openly acknowledging that purse strings need to be tightened. To quell the upset in The City, which effectively manages around three quarters of European and international financial transaction, former UK Financial Services Authority head honcho Verena Ross has been granted the title of Executive Director of the European Securities and Markets Authority, as if that is going to make the big banks less jittery about suddenly having a rule book thrown at them.

On top of these complaitns, Brussels just can't seem to stop spending their own money, so it begs the question how they will go about telling banks and member states how to spend theirs. £58 million is being thrown at a House of History Museum which is designed to show a fluffy and beautiful history of harmony and similarity across our beautiful 27 nation bloc. For this reason, the clock has only been turned back only as far as 1946 due to deep divisions in the interpretations of World War II. It has also been revealed that more than £80million has been paid by the Parliament to fnd spin doctors and the hugely popular EuroParlTV, which of the half a billion citizens it is designed to serve, attracts fewer than 850 per day.

And so that brings me to my final grumble. Ireland are needing yet more bail out cash and as predicted so does Portugal. The European Central Bank renewed its bond buying activites by purchasing €432millon government bonds, mainly from Portugal. Despite the huge spend, markets seem to have barely registered the bold move, meaning a full scale bail out is becoming increasingly inevitable. Germany, already the good Samaritan for Greece and Ireland, are likely to insist the IMF is approached, meaning, yes, you guessed it, the UK will be part funding the rescue of Lisbon. Not that we wont contribute to the European Bail Out fund, negotiations about which were plunged into despair as Lisbon fell off the bottom of the debt scale. However it has emerged that despite all of his tough talk, Cameron seems to have agreed for Britain to pay a whopping £7bn into the fund, on top of the £3bn we have already given to Ireland. It has also been suggested Greece may need to shake their tin towards the EU or IMF again in order to reach the targets laid down by the Commission, as will Ireland. And of course, as we’ve said all along, if Portugal falls, it’s only a matter of time before they drag Spain down too. Already Spanish regional banks have had to announce plans to be recpaitalised to the Spanish Central Bank. Three have already requested funding from the Spanish government’s own bail out scheme.

And then of course you have the straw that will break the camel's back as Italy shouldn’t hold her breath either. Another economy biting the dust could well plunge the whole Eurozone into a quagmire of inflation, deep division and signal the end to the common currency.

Just like centuries before, The Fall of Rome could be a massive turning point in European history.