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

Maastricht 20 years down the line

Yesterday was the 20^th anniversary of the Maastricht Treaty. On 7^th February 1992 the European Economic Community laid the foundations for becoming the bureaucratic beast it is today. Common Foreign and Security Policy was adopted, as well as the creation of Justice and Home Affairs. The EEC now extended into military and judicial cooperation. But perhaps most ironically, Maastricht also led to the creation of the currency of Europe.

A mere two decades later, the Eurozone is on the brink of collapse. How timely that next month the clock ticks down on Greece to address its public finances. Twenty years to the exact day the treaty creating the Euro was signed, Greek leaders have been told they must enforce austerity measures or risk losing a new bail out which could prevent the country from defaulting on March 20^th when the current loan matures.

Greece must now demonstrate they will satisfy terms laid down by the EU, European Central Bank and International Monetary Fund, known collectively as the troika, ironically a Russian word once used to describe the supreme officials of Communist states. Yet it is becoming increasingly difficult for Greece to enforce spending cuts, leading to job losses and slashed budgets, with full democratic acquiescence from both Parliament in Athens and the Greek public.

In effect, EU chiefs are edging Greece towards the exit door. They are willing to risk a default and then eject Greece from the euro if Athens refuses to comply with demands insisting that the eurozone is now strong enough to fight against the risk of contagion. Both Merkel and Sarkozy are talking to the press about "time running out" and the French President has even argued that the South Mediterranean member state would get "no community money" without reform.

It seems to me that Greece is being made a scapegoat and enabling the two big economies to flex their muscles. Of course, the Greek crisis was spawn of irrationally high unsustainable public spending under a new currency where vast sums could be borrowed at such low interest. But who set those rates, and who benefited from them? Germany of course. Then when the house of cards came crashing down after the credit crunch struck in 2008, all fingers pointed towards Greece and their woeful borrowing track record. Nobody seemed to comment on the fact that a single currency spread across such diverse economies without fiscal integration and with one common interest rate could not in essence actually work.

NowGovernments across the EU are struggling to assimilate into domestic law savage measures dictated by Brussels; measures that, in effect, will soon be underscored by the new fiscal compact signed last month by 25 member states which essentially criminalises budgetary indiscipline as determined by the European Court of Justice. Finally the Euro members are building fiscal integration, but are essentially closing the stable door after the horse has bolted. As a result, Greece, who indeed was reckless with spending in the boom years, will effectively be left in tatters and expected to pick up the mess.

It is now widely held that Europe cannot cut and grow. Thus far austerity measures have led to deepening recession. Focus on growth is needed to pull southern European states back into competition, yet ironically the stranglehold on trade and working flexibility imposed by EU competition rules and social policy written twenty years ago prevent growth-enhancing investment taking hold.

Twenty years ago the UK negotiated opt outs which could be argued as having prevented us from becoming like Greece ourselves. As a nation we run quite a high structural deficit, that is, we spend far more on public services than we can logically afford. However the pound is strong, enabling us to borrow at rates that we can pay back. As a result, the Labour Government ran up incredible debt, leaving the mess to be sorted out today, but because we were not a euro member the tidy up is not one hundred per cent dictated by Brussels and we did not collapse when Ireland went down. Equally opt outs in social policy mean that we can in some areas be more flexible if we decide to "work our way" out of recession. Despite strikes over pensions and wage freezes, we are not witnessing the sort of uprising that has taken place in Athens. Then again, our austerity measures are not being drawn up by essentially an entente of foreign governments and supra national powers. We are also not part of this new compact, which although by law cannot be an EU treaty following the UK veto at Christmas, in all but title, is. Essentially when we said before Christmas "no" to EU law criminalising cerrtain percentage budget deficit, due to a lack of unanimity, the law could not be passed. Instead what has happened is 25 out of the 27 member states, that is, everyone bar us and the Czech Republic, have clubbed together to forge a treaty that will be governed by the European Court of Justice and whose negotiations and administration will take place within EU buildings. In essence, they went ahead and made the treaty anyway, calling into question the legality of its operation. But what are we to do? The highest court of appeal on such issues IS the ECJ. Are we to approach the Court of Justice and ask them to examine how lawful they are? What about when decisions made between the 25 members of the entente have an impact on Britain, via the single market, or through financial services reform? We are in a highly precarious situation that will at some point in the future rear its ugly head again.

This week Greece has been forced to accept an additional 15,000 public sector job cuts, which still fail to satisfy the demands of the troika. It has been reported that the Greek Finance Ministry is now examining the economic consequences of leaving the Euro, following on from the not so discreet rhetoric being issues from France and Germany.

Unsurprising then that this milestone anniversary for the EU has been kept so quiet

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....