Power and the money, money and the power, minute after minute, hour after hour.

It's not often one feels compulsed to entitle a blog post with American Gangster rap circa 1995. But it's a rather apt extract.

First of all let me praise the industriousness of our emergency services for their hard work during the flooding in Aberystwyth ad Machynlleth. Until something of this nature happens to you it is difficult to understand the traumatic affect it can have. As parts of Ceridigion were submerged under five foot of water and clean up operations continue to take place in Talybont, Dol-y-Bont and Llandre I trust that the Welsh Government will do all it can not just to help households and businesses seek compensation but to prevent such incidents ever happening again. It is also imperative that authorities thoroughly screen flood waters for potential contamination which could affect farms or even the local water supply.

While it poured here in Wales, the rain in Spain thundered down from a dark economic storm cloud hovering over the banking sector. Indeed despite weeks of protestations we all knew to be vacuous, Spain finally had to plead for a bail out to stabilise the country’s inexplicable nexus between state funds and banking finance. The Spanish Government had borrowed extensively from the banks to fund a burgeoning structural deficit, yet after the property bubble burst in the 2008 credit crunch, the Government was then forced to start bailing out the banks. Now however finances ministers have agreed to pour £100bn to shore up Spanish finances. However a more conservative estimate for the figure needed is £400bn. Even though the sticking plaster may calm the markets temporarily, what is startling is how this will have a knock on effect across Europe. Mediterranean neighbour Italy is responsible for providing no less than 22% of the bail out at a shrivelled repayment rate of just 3%. But in order to cough up the funds, Italy herself must borrow from the markets, at a rate of interest of 7%, inevitably dragging her below the gathering rip tide. Meanwhile the loan to the Spanish Government itself will actually add a further 10% on top of already astronomical state debt. You could hardly make this stuff up.

And still the problems with Greece are not solved. In fact on the 17th June Greece is set to go to the polls again – a day which could see a newly elected government steadfastly refuse to abide by the austerity measures conditional of receiving future financial aid. No wonder. These imposed cuts have ripped the economy to shreds throwing hundreds of thousands out of work, leaving pharmacies empty of life saving medicines, slashing welfare payments as the state finance pot runs totally dry forcing families onto the streets to beg for food. A ‘Grexit’ is liable before the month of June is even up. The exposure of the European Central Bank to bail out countries such as Greece is almost €500 billion. If Greece leaves the single currency, that is likely to cause the ECB itself to go bust, unless it can recoup money from Portugal, Ireland and Spain.

Speculation among Eurosceptics and Financiers alike is that the whole sorry mess was intentionally engineered to force Europe into becoming a European Republic. It has been common consensus for years that a single currency cannot work with so many different Exchequers. As the crisis struck, instead of Brussels shrinking from its disastrous fiscal errors, instead the call has been for deeper integration, forcing the burden of debt to be passed from neighbour to neighbour dragging each and every country into the same calamitous myre. The next country veering headlong towards bail out is Cyprus, and while we are not in the single currency, the exposure of British banks to European debt is an eye watering $430bn, or 19 per cent of our GDP.

Customers of Santander may fear the fate of their savings given the bank’s Spanish parent, but the bank is one of the least vulnerable in the wake of a dramatic and increasingly likely Euro crash. Barclays and RBS, the latter having been already bailed out by the British taxpayer, have the greatest amount of money tied up in the Eurozone. A total of £191.8 billion is estimated to be at risk.

Should the Eurozone fail to repair its problems, the global financial sector would breach under a ripple effect far greater than observed in 2008 after the Lehamn Brothers collapse. Yet it is more and more apparent that perhaps Brussels does not want the problem to be solved. Whilst economic crisis may lead to human misery as we are seeing in Greece, it also, rather conveniently, allows Brussels to conduct the most flagrant power grab for the final slice of federal pie – fiscal integration. For he who controls the money also controls the power

Welcome to my club

How easy it is to jump onto the bandwagon of popular opinion.

For years, UKIP have been labelled everything from fanatically anti-European to xenophobic for holding the view that the European Union was bad for Britain. As recently as a couple of years ago, throughout the early months of my tenure as an MEP, I received accusations of scaremongering if ever I suggested the Eurozone was doomed. Those critics have fallen strangely silent of late.

Now politicians from across the political spectrum are championing a British exit from the EU, warning of the dire economic consequences of prolonging the single currency without fiscal unanimity and bandying about suggestions of an in-out referendum. All of a sudden our party line is trendy.

One thing is for certain. For the single currency to survive member states must forge closer economic bonds, to the extent of becoming a single federal entity (the argument is that the EU has borders, a flag, an anthem, a Parliament, an army, foreign policy, a currency and laws, so the only thing separating it from a federal state is the lack of tax raising powers). If this does not happen, the Eurozone will, eventually, implode, and in doing so, force the UK into a decade of depression.

Of course, the UK would resolutely not wish to be part of a federalised super-state. It raises the question of what sort of relationship we could have with a new Europe. UKIP has always championed a relationship akin to the current Swiss model, where free trade and continental cooperation remain priorities, despite not being a member. This is now being mooted by politicians who but a few months ago championed a more integrated European Union, only to find their subject today ridiculed by fate.

Either way the tapestry that has been woven by Brussels over the last five decades is unravelling at an alarming rate. Spain requires a £100 billion bank bail out to save her finances. The incomprehensible nexus that has formed between the Spanish state and the banking sector means the Government can no longer sensibly bail out the very banks that have been bailing out the Government. The Spanish Finance Minister has resolutely denied needing a bail out, but we’ve heard this before. Greece, Portugal and Ireland all said the same thing. In the UK, the Government recapitalised British banks to the tune of £1 trillion, a measure that was widely criticised on the continent as too closely bound to Anglo-Saxon capitalism. But it saved us from the economic disaster we are now seeing affect banks in the Eurozone’s largest economies – even in Germany. It’s estimated at least £200 billion must be injected into Eurozone banks to stimulate borrowing capacity, but in order for this to happen Germany must essentially underwrite all single currency loans.

It’s understandable that Germany doesn’t like the idea of so-called “Eurobonds”. Why would they? Holding them culpable of the debts of their neighbouring countries is hardly going to seem fair to the majority of Germans. Meanwhile Spain wants a bail out with no strings attached. Of course they would. They can see what has happened in Greece, where desperately ill people are queuing outside pharmacies for life saving medicines as stocks run dangerously low. Germany does not want Spain to get a free handout without agreeing to fairly stringent conditions. And thus we are left trapped in an ever revolving circle of national self-interest that is leading critics to cry out for the greatest seismic shift in political power ever seen by Europe – the move to federalise the Eurozone before the clock ticks down, despite such a schismatic resolution flying in the face of democracy.

What about the UK? What do we want? We need Eurozone banks to be protected. Barclays is exposed to Spanish banks to the tune of £26.5 billion. RBS is liable to £14.6 billion if they do collapse, while Santander, one of the high street’s biggest financial retailers, is actually Spanish owned. Then there’s our economy. In many respects inextricably intertwined with European markets, not just through EU membership but as the result of simple geographic positioning.

The most sensible answer would be the UKIP option. Leave the EU, enhance trade with traditional partners in the Commonwealth and demonstrate neighbourly cooperation and free trade with Europe as is the modus operandi of Switzerland and Norway.

As part of the Queen’s Diamond Jubilee celebrations, a lunch with Commonwealth leaders was hosted at Buckingham Palace. We were reminded that our Queen is not just the head of state in the UK. She is Queen of Antigua, Barbados, Bahamas and Belize, Canada, Grenada, Jamaica and New Zealand, Papua New Guinea, St Kitts, St Lucia, The Grenadines, the Solomon Islands, Tuvalu and Australia, as well as being head of the 54 countries that make up the Commonwealth of Nations, including India, Nigeria, Pakistan, Singapore, South Africa and Kenya. These are long established natural allies of Britain, countries with a diverse diaspora, different geographical landscapes and as a result, present true international trade opportunities.

This year Commonwealth GDP will soar past the Eurozone’s. While the Eurozone will grow by only 2.7% if it manages to avert fiscal disaster, the Commonwealth will be boosted by 7.3% growth.

I’m not bitter that my views are now being championed when for so long they have been slated. I would be a poor politician were my pride more important than my conviction. I just hope the newest recruits to Eurosceptic ideology have strength enough to hold as steadfast to their beliefs. For what Britain and Europe needs more than anything right now is a steady hand on the tiller.

Enough is Enough

The tragedy unfolding in Greece has escalated to such a stage now that I am increasingly concerned by pan-European complicity in the austerity measures planned to save the Euro - a currency nobody wanted - which are putting so many human lives at stake.

I have talked about Greece repeatedly in this blog. It's been hard not to. It has after all been the focal point of European news for over a year.

But today's news about the suicide of a 77 year old retired chemist outside Parliament in Athens last night has to be talked about. In fact, it has to be shouted and screamed about.

This high profile case caught the public's attention and sparked further rioting in the country's capital. Petrol bombs were hurled at police and tear gas fired back.

The carefully written note was without doubt designed to strike a chord with society. In many people's eyes, the man unofficially named by the Greek press as Dimitris Christoulas, is a martyr.

The retired chemist, with a wife and a daughter, had sold his pharmacy in 1994.

He shot himself in Syntagma Square in the city centre just before 09:00. His note accused the government of cutting his pension to such an extent that life had become unbearable.

It read

"The government has annihilated all traces for my survival, which was based on a very dignified pension that I alone paid for 35 years with no help from the state.

"And since my advanced age does not allow me a way of dynamically reacting... I see no other solution than this dignified end to my life, so I don't find myself fishing through garbage cans for my sustenance."

Hundreds of demonstrators turned out onto the streets outside Parliament on Wednesday evening, pinning notes to trees that read "Enough is enough" and "Who will be the next victim?"

Greece used to have the lowest suicide rate in Europe. In recent months it has soared, in Athens alone it has risen by 25%. The face of the country has changed. Shop fronts are closed up, homeless people are more evident, there's a sense of discord hanging in the air.

Early elections due in just over a month could bring about interesting results. The question is whether the results will be quashed by Brussels if they do not serve up on a platter an ideal puppet for the European Commission to manipulate in order to save their beloved single currency.

The situation in Greece is no longer about the Euro. It is no longer about free trade and rules on bendy bananas and protecting post war Europe through solidarity. It is about real people who cannot work, cannot live and cannot eat.

Almost a third of Greeks are at risk of poverty, with one in five of those unable to afford meat every other day.

Suicides increased by 18% in 2010 from the previous year, according to Reuters.

When the price to pay for a political ideology is people's lives - then the international community has a duty to stand up and say

enough is enough

Dear George

Now the EFSF has been downgraded as a result of the recent ratings slash of France and Austria and 7 other EU member states it would appear to me that the Eurozone is headlong towards obliteration.
How can Greece expect to avoid default when the initial loan matrues on 20th March? With the bail out fund essentially halved by the downgrade, just where is the money other than subsumed within an imploding black hole that threatens to consume the entire European economy if leaders continue to simply cut cut cut and use thimbles to bail out a stricken cruise vessel?
It is apparent now that the crisis cannot be resolved and as I have argued for a long time, a more sweeping, schismatic approach needs to be taken if Europe is to rectify its ills.
With it in mind that the red letter day fast approaches and the bailiffs are poised in the wings, I have addressed George Osborne imploring him to tell of what sort of reinforcements are in place to present British interests in the wake of a catastrophic downfall and break up of the single currency. I will also write a letter to Welsh Government Minister for Business Edwina Hart asking her what her department is doing to prepare welsh businesses for a possible fall out in trade. I was alarmed to read a statement from the First Minister's Office suggesting Wales seeks to broaden trade ties with the Union, when financial experts from Ernst and Young are imploring the UK to trade further afield to prevent a return to recession.

Anyway, below is the letter I will send to 11 Downing Street today.
With any luck we will get a prompt reply and have insight into whether the government really are protecting British interests.

Letter to George Osborne

Dear Chancellor

In response to the recent downgrades of both France and eight other EU member states and most recently the European Financial Stability Facility I am deeply concerned that the UK and its constituent countries have made preparations for what is now looking like inevitable fiscal disaster across Europe.

It is a growing probability that Greece will default on debt repayment when the current loan matures on March 20^th. This of course would likely lead potential investors to lose confidence in the Eurozone and alongside the near halving of the bail out fund as a result to the EFSF downgrade, would lead to a spiralling downfall that could occur extremely swiftly.

The escalating urgency of the situation is without doubt apparent yet I adhere strongly to the sentiment that it is not the UK’s responsibility to bail out stricken single currency nations, as I hope you would agree.

However it is imperative that all of the United Kingdom’s constituent territories prepare for a break up of the single currency and mitigate the impact of fall out from ongoing crises within the Eurozone which may cast reverberations across global markets. It is with regards to this matter that I contact you today.

I would like reassurance that Britain is prepared for the worst when it comes to the future of the single currency and ask that you outline the preparations that have been made to ensure UK industries and markets are protected from ongoing problems on the continent. There has been suggestion that the UK Foreign Office has drawn up preparations for executing evacuations of British nationals if the single currency break-up leads to social uprising. However I have heard little of how British businesses, banks and investments would be safeguarded and whether public finances would be summoned to prop up the private sector in the event of a catastrophic fall.

I would also wish to question how Britain would react to potential future Irish default given the implications it would have on the UK after underwriting a significant tranche of Ireland’s debt.

Please would you also reaffirm commitment to resolutely standing against the notion of the British taxpayer bailing out single currency members, either directly or as a contributor to the International Monetary Fund.

It is a deep concern of mine that devolved governments have been consulted and advised on how to deal with the ongoing crisis in the Eurozone. I am writing to the Minister for Business, Enterprise, Technology and Science in the Welsh Government Edwina Hart to determine what measures she has taken to ensure her department prepares for the worst. Have the relevant devolved administrations been consulted on the matter and are you reassured as UK Chancellor that businesses and investments across the UK are sufficiently protected?

I was alarmed to hear a statement from the First Minister’s Office suggesting Welsh businesses should seek to expand trade with the EU at a time when many experts have advised that the UK slough trade with Eurozone countries in favour of trading with the wider world.

Please could you outline any strategic implementation that the UK Treasury has thus far coordinated with regards to safeguarding British interests in the event of the break up of the single currency and also clarify future intentions of the British Government to protect British business and investment against a financial crash in Europe?

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.

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....

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!

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.

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.

A Greek Tragedy?

Well we don't know yet, we'll have to wait and see, but it has been at least a tragi-comedy.

It is such if we don't have to bail them out, but if we do, public mood over here deserves to change with regards to the EU.
We can smile, or perhaps breathe a sigh of relief, as we have always staunchly rejected inclusion in the Eurozone, whereas it is in France and Germany's interests to not watch Greece go under. But apparently the Council, under Van Rompuy, has come to an agreement, although the details wont be revealed until probably Monday when the Heads of State sit down for a summit regarding economic and fiscal strategy in Europe.
So who is to blame? Well, everyone of course says Greece, who apparently covered up the true extent of their deficit in order to become a member of the Union. But look what has happened, one falls and risks dragging the rest down. At least if Greece were going solo, the problem would be contained in one country.
But what happens here will set a precedent for future behaviour. A bail-out is by all accounts "illegal" under European Law - Open Europe cover this really well. At first there was hesitation from other member states at rushing to Greece's aid, and help has only been forthcoming from those states-France and Germany- who would suffer the fall-out of a Greek fall-apart. So much for strength through solidarity. It goes to show that this Union to which we belong is more of a dead weight than an enriching co-operative, and is certainly no elixir for a good economy.

Throughout the recession Federalists would have had you believe that the only reason so many European countries haven't folded under the weight of all those red letters is because of the global bargaining power and economic strength the Union delivers. This week we've heard how Obama thinks the EU is all hot-air, and wouldn't attend the latest summit. Then the Greek affair has turned that on it's head and goes to show that, if anything, doubt has been cast over the value of the EU globally and speculation and caution have been tempered towards the other Eurozone countries because the single currency has no single treasury, no stringent development plan and no recognisable fiscal policy. We have also seen that, get it wrong, lose it all and fall to your knees and the European Union will only kick you while your down and take the opportunity to march in and turn you into an economic protectorate!

I wonder how we'd be doing right now had we not joined the European Union at all. Those countries that are flourishing and are set to grow over the coming era are historically more likely to call upon Britain than Europe, as a whole. Our Commonwealth ties should serve us very well as we progress into a new era of socio-economic development. India has one of the world's fastest growing economies and already trades with us separately from the EU. Oil fields have been found offf the coast of Ghana (not to mention the Falklands of course) - and already the Chinese,who have always shown great trading interest with Africa, are offering to provide the technoloy to drill it. Why we follow around France and Germany and fund the development of their lesser continental friends rather than standing on our own two feet and using all the trade relations and opportunities centuries of history enshrine, we'd rather sit back and lose out all for the sake of creating a better Europe.
We may not have been the most fair or ethical country in terms of our practices in trade and foreign affairs. We have a lot of apologising to do. But the UK was mighty due to attitude, industry and innovation and can be once again. As for Greece, perhaps they kept in mind the concept expressed by their very own Socrates in Plato's Republic and sought a Philosopher to take control in times of crisis...Haiku-writing van Rompuy certainly channels Karl Marx.