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.

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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.