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

The Non-Treaty-Treaty Veto U-turn Thingey

This week has seen plenty of dicsussion about David Cameron’s treaty “U-Turn”. In fact I was a little startled to not see the matter picked over on Question Time last night but one assumes the BBC hadn't picked the right members of the panel for that.

The Prime Minister has revoked his original standpoint of blocking a new compact observing tighter fiscal regulation and budgetary control governed by the European Court of Justice. That is now going ahead, but without the involvement of the UK or Czech Republic. What does this mean? Well before Christmas the UK vetoed a new treaty which would effectively see economic governance enforced to all 27 members of the EU by Brussels. Apparently we do not have a new treaty, due to the veto, and so instead 25 out of the 27 member states have drawn up an "intergovernmental pact" which is supposedly separate from EU jurisdiction (as we blocked it - you see, any new treaty has to be ratified by all member states) yet the European Court of Justice will preside over it and the meeting will take place within the governmental buildings of Brussels. In essence, they have I would propose illegally sidestepped the knotty issue of the fact that an EU treaty of fiscal governance was blocked, and gone ahead and effectively made one anyway. This poses the question of how a 25 state intergovernmental pact can use the jurisdiction of an institution of the 27 member state EU without it in some way being regarded as an EU treaty. It also leaves the UK vulnerable to decisions made under this new entente which could affect the single market or financial industry in the City of London as we are not part of it. Now I'm not suggesting I'd want us to be part of it, far from it. Instead we have been told that if new regulation encroaches upon UK sovereignty, the legality of the agreement will be called into question, which would effectively mean appealing to the ECJ to pass judgement on its own lawfulness. It is a strange situation that until put into practise, remains pretty hard to fathom. What is clear is that the EU is prepared to work above the law which it writes itself and bend the rules whenever it feels like it if not all parties are appeased by the decision making.

So when will this not-a-treaty-treaty come into force? Well Nicholas Sarkozy has stated that France will not ratify the new “treaty” until after the French Presidential elections, with his main contender, Francois Hollande, suggesting he would demand a rewrite if he were to gain power. This means the 25 member state agreement will not even be put into place until after the start of May, yet the Eurozone is likely to stumble quite dramatically before this legislation can seriously send out a message of calm to the markets. The initial bail out loan to Greece is set to mature on 20^th March with the possibility of an uncontrolled default looming large. The bubble of toxic debt currently hovering over southern European Euro countries could burst when Greece fails to start paying back the loan and with potentially disastrous consequences. If this were to happen, how much would the UK be dragged into the mess?

I have addressed two letters, one to the UK Chancellor of the Exchequer and one to Edwina Hart, the Welsh Government Business Minister, asking whether any contingency plans or impact assessments have been prepared for euro collapse and whether any public money has been set aside to rescue businesses should the single currency come to a timely end. We have heard how the UK Foreign Office has prepared a rescue strategy for British nationals if a collapse of the single currency leads to social uprising across Europe, but what about the equally pressing possibility that shockwaves from another crunch could smash against UK shores?

I am concerned that Welsh businesses are implored to trade further afield than the EU, especially with the fantastic links we have with the Commonwealth, yet the rhetoric from the First Minister’s Office suggests a vain clinging to the ideal of the EU as some kind of saviour for Wales. After all, if the single currency goes down, anybody who relies on trade with the countries involved will be equally damaged. So have Welsh businesses been encouraged to slough the bonds with Europe and look elsewhere? I have heard little to this end. Instead all we continue to hear are members of the political elite still championing the EU as of some kind of irreplacable benefit to Wales. The usual reasons, trade and regional funding, are constantly echoing around newspaper columns, but in truth, we can see how in fact the trade links established with the EU are the reason many businesses should be starting to panic, while recent damning reports confirming what I have always said about EU Cohesion Policy are coming to light.

It is interesting how recently the myth of structural funding has been overturned. For years Cohesion Policy has been championed as the greatest benefit for Wales of EU membership. Even though parts of West Wales are net beneficiaries of the funding, overall, Wales, like the UK as a whole, pays far more in to the pot than is ever returned. In fact, I have often argued that Cohesion Policy is essentially Brussels saying to Wales ‘You pay us millions, we will give back 65% and tell you how to spend it in return for you publicising how generous the EU is’. It’s simply propaganda funded by extortion.It would of course be far better for us to manage our own regional spending, but propagandist nationalists would suggest Westminster would leave us high and dry and only Brussels can be trusted to make sure we get a fair deal. Really? It is silly to believe this just to fulfill a patriarchal agenda when it is clear that this would surely not be the case. In Scotland and here in Wales the forces for independence vainly cling to the idea that membership of the EU in their own right would be the way forward, after all, the benefits of being part of the British pound and receiving money via the Barnett Formula from Westminster would need to be replaced with another pot of cash. I think not. If one can see how easily the UK can be defied when it suits the EU, imagine the rollocking smaller states would get from Brussels. Plus the EU would control the North Sea Oil, the whole of the Welsh farming industry, would force us to sign up to Schengen, and make all businesses stick to their frankly inept and dangerous working and competition laws which would render us wholly uncompetitive and wholly dependent upon Mother Brussels for everything (which is of course, what they want). Plus with a whole contingent of new members lined up to join, our needs would be increasingly disregarded. It is also part of EU law that any new member states must sign up to the Euro, a rather chilling prospect I think you will agree. Plus I can't see member states like Spain sitting back and letting Scotland, or potentially Wales, sign up to the EU independently when it has such problems with the Basque separatists and those who want to see an independent Catalunia. If Brussels were our look-to government and not Westminster, I would imagine people would soon grow sick and tired of the amount of legislation and control being filtered down from Brussels when the dream was to have a Wales standing on her own two feet. I would also imagine if that were the case England may well decide to break away from the EU and grow in wealth and freedom until the disparity across the Severn would be unimaginable and everyone was regretting not sticking with the devil we know.

However let's not go too far with this line of thought. The more pressing concern is what is going to happen over the coming months to the economy.

The unravelling narrative of the Eurozone crisis is far from over and I would venture to suggest that across the continent the public are becoming wearied and justifiably concerned about the direction what was once a simple free trade community has recently taken. What is left unaddressed however is whether public opinion alone can democratically overturn the burgeoning powers the EU bestows upon it’s self. Given the recent move in Brussels to compose an essentially illegal “treaty” one would suggest that democracy is slipping further and further away from EU conscience. Only time will tell how long this delicate balance between an increasingly agitated public and a wilful supranational superpower can last.

Propaganda Funded By Extortion

It can be hard trying to convince certain Welsh people about why leaving the EU would be so beneficial for Wales. So often they will call up the millions given to Wales through Cohesion Policy and suggest Brussels has really helped impoverished Welsh communities develop in the wake of huge industrial closures.

I try to explain that even so, we'd be better off if we handled our regional funding ourselves, but there must be something mesmeric about the swathe of blue plaques dotted on a handful of new buildings, positioned in some of Wales' most idyllic locations and prominently displayed on hoardings for events and occasions that makes people think "look at all the stuff Brussels is paying for". [Incidentally here are Brussels rules on blowing their trumpet]

Well finally, it's been calculated that Wales would be better off out of the EU. A recent report by Open Europe examined the costs of cohesion contribution against the value of regional funding in the UK. As a whole, the UK pays far more in than it gets back out. But this is not something that we didn't know before. For hardline Welsh nationalists, what matters is that West Wales is nonetheless a net contributor, and some cynics would suppose that if regional funding was governed by Westminster, greedy London would no doubt leave Wales high and dry. Perhaps therefore that at least for Wales, it's a good idea to stay in the EU. Even better, think some Plaidists, Wales should become a member in her own right.

Well thankfully the Open Europe report and some number crunching reveals that Wales is in fact a net contributor.

West Wales gains 40p for every £1 but balanced with the contribution made by East Wales of £2.90 for every pound, Wales overall pays £1.65 for every £1 received.

Cohesion Funding is often championed as the reason why being a member of the European Union is of benefit to Wales. I am delighted to see that this myth has finally been busted.

Cohesion Policy is essentially Brussels saying to Wales

‘You pay us millions into a central pot, we will give back 65% and tell you exactly how to spend it but you must then say how kind and generous the EU is’.

It’s simply propaganda funded by extortion.

Croatia's EU Membership - Started as it will indubitably go on

And so it would appear Croatia will be the 28th member of the European Union, given that the bloc ratifies its application, which I think we can assume is a given.

News reports told of an outright majority but is this really the case? Well, as is often true of referenda, especially those associated with EU membership such as in the case of Ireland back in 2005 and of course in 2009 when the referendum was famously re-held in order to garner the right outcome, there is always another side to the story.

It was reported that while 33% of those voting chose NOT to join the EU, double the amount, 66% of the turn out, voted in favour of EU membership. So where's the grey area?

Well, first of all, it would appear Croatia had more voters than citizens.

According to the latest 2011 Population Census, Croatia has a total population of only 4.29 million, yet according to the Electoral Commission it has 4,504,765 voters over 18 years of age eligible to vote. Now that is a quickly ageing and expanding population!

Also, given that most Croats abstained from the referendum, resulting in record low participation of only 43%, even if all those who turned out voted in favour of EU membership, it would still represent a minority.

Conveniently however the Croatian Government changed the constitution just prior to the EU referendum revoking the rule that invalidated a referendum unless at least 50% turn out was achieved.

At the first-ever referendum held in Croatia in 1991, the turnout was 83.5%, of which 94% voted in favour of independence. So what stopped people running to the polls this time around?

Very often people are dissuaded from polling their opinion when they consider the result a foregone conclusion.

Prior to the vote on EU membership, Croats, like the Irish before them, were subjected to a massive propaganda campaign with the Government spending huge amounts of public money on a Yes campaign while the No campaign was pitifully unfunded. The European Commission also ran its own very expensive Yes campaign, enlisting state enterprises, celebrities, corporations, while State TV aired pro-EU adverts for free, Croatia Post delivered 2 million leaflets as well as the city of Zagreb placing free EU advertising on trams.

In theory the referendum campaign was restricted to a four week period however the hugely financed Yes campaign was already spending tens of thousands on pro EU advertisements on radio and television. In fact one newspaper, the Vecernji List Daily reported on the 10th August that the Ministry of Foreign Affairs and EU Integration paid for more than 13,000 radio adverts and 2,300 TV adverts across 80 radio stations and 6 national and 15 local TV stations all in the months of June and July. This wave of propaganda only increased in cost and breadth over the following six months in the run up to the referendum.

The message was EU Prosperity or isolation and poverty. Some reports even suggest that days before the vote, Foreign Minisiter Vesna Pusic threatened Croatia's 1.2 million pensioners that they would lose their pensions if they voted against EU membership. At one polling station in Zagreb, accounting for several retirement homes with 1,100 pensioners, 80% voted in favour of EU membership.

Whether you accept these reports as valid depends upon your desire to believe them or not. This is what makes referenda very tricky subjects unless clear legal permaters are drawn up, regarding turn out, or legality of not voting, and governance of the funding of campaigns.

From my point of view and considering the two cases in Ireland where public opinion was neatly sidestepped when it appeared it would not validate the EU's wishes, I would tend to imagine that dark forces were at work. Especially considering the first time Croatia was questioned on EU membership, a resounding 94% voted against joining the EU. Given the EU's recent track record and the single currency crisis, plus new legislation that demands any new member sign up to the Euro, it is hard to see how the population has suddenly changed its mind, without some very not-so-gentle persuasion. It may not have been a very large turn-out, but it certainly was a mammoth turn-around.

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?

Faulty Implants due to EU Boob

The debate about whether people should or should not get implants removed on the taxpayer has conveniently taken the heat away from asking serious questions about HOW the PIP implant that potentially poses a major health risk, entered mainstream circulation in the first place.

In some respects, I support the private health clinics who say they are not the ones to blame for the health scare, after all, they were told that the implants used in the procedures were safe so why would they imagine otherwise?

In fact the buck stops not with the clinics, or British regulators MHRA but in France where the implants were deigned and manufactured, and with the EU, who allows national regulatory authorities to grant their companies and products a CE (European Conformity) mark as guarantee of quality, but then forbids the MHRA from conducting further checks in order to protect British patients. The MHRA is forced, under EU law, to permit the import and marketing of anything with a CE mark, disabling regulatory bodies here from having any jurisdiction over EU manufacturers.

French authorities only shut down PIP after a staggering 40,000 British women had been fitted with the faulty implants, suggesting that in fact covering the cost of removing the implants should come from our Gallic neighbours. Imagine if the shoe was on the other foot and a British designed and manufactured product was putting French health at risk. Can you imagine Sarkozy NOT demanding that the UK government shoulders the bill? Exactly.

From this boob one should hope that in the future British authorities be allowed to make quality control checks on imported CE marked products. It is another example of where broadreaching, homogenised legislation is damaging to the UK, and until we are fully out of the EU, there will be more stories like this to come.

No surprise at latest Turner of events

Whatever Brussels touches turns into disaster, rather like a kind of Anti-Midas.
We have seen Common Fisheries Policy destroy marine stocks and encroach upon the seas of developing countries, trawling their waters and stripping whole communities of a means of sustenance.

Common Farming Policy led to stockpiling milk, leading to artificially high prices. Farmers are effectively paid by Brussels rather than by the consumer and only after jumping through hoops, rather than having the freedom to farm and sell their produce at proper prices and maintain and healthy and free agrarian industry. Seeing what has happened to the single currency, can you imagine how severely food supply and self-sufficiency would be rocked should a bio catastrophe or drought hit the European farming sector? I dread to think.

Of course the Eurozone is an utter, utter disaster and is heading directly towards even deeper crisis as Eurocratic egos cannot face relinquishing the keystone project of the single currency or admit defeat.

Now proposals to tax financial transactions have been slammed by Ernst and Young for potentially creating a £95 billion abyss in EU public finance at a time when quite frankly the European economy is crippled by the single currency albatross nobody is prepared to slaughter. It's common sense that a tax levied on banks making financial transactions only in Europe will cost Europe dearly. It can only work if the rest of the world agrees to something similar. But the EU is desperate to get their hands on cash from somewhere and are left with the difficult situation of either having to go to the German taxpayer and potentially alienate the one stalwart voterate of the block or find international investment to plug the trillion euro hole that has emerged like a gaping apocalyptic chasm, and unsurprisingly, nobody wants to cough up. The Chinese have turned their backs, stating that Germany is the only country that can rescue the common currency, and other than that, few international buyers are really up for solving the debt crisis of a bungling Union.

2012 has started much in the same way that 2011 trundled along, with inconclusive crisis talks, insubstantial commitment to solve the problem and pie in the sky solutions that say more about inter-state grievances than any clear direction to grab this issue by the scruff of its neck. We've had more rhetoric from France seeking any way to attack "anglo saxon" capitalism, hence proclaiming they will steamroller through a tax on the City of London. But hold on, was it really anglo-saxon capitalism that got us into this mess? It is convenient to point the finger at bankers, and nobody is saying they didn't play their part in the global financial crisis, but what is keeping the Eurozone stuck in fiscal quicksand is no longer the credit crunch but for a large part underscored by the sort of unrealistic, idealistic and potentially disastrous socialism that blighted Communist Russia.

There is even a storhttp://www.blogger.com/img/blank.gify today on the BBC that I could hardly bare to read, about Greek parents abandoning their children due to the severely troubled economic times being faced in the member state. Why it is almsot like the beginnings of Holodomor. When the common currency is leading to heartbreaking poverty on this scale it is time to let go of political ideals and admit defeat. It all chimes of the sort of blind arrogance of a political elite who wish to impose plutocratic ideals on the populace, regardless of the fall out.

It makes you want to put your head in your hands and simply yell out "how on earth did they let it get this far?"

Current rumours have reverted back to suggestions that Greece may be ousted from the single currency. Merkel and Sarkozy warned that vital rescue funds would be held back from Athens unless Greece completes a deal over the size of losses that will be imposed on private investors, with the German leader branding Greece a "special case" suggestive that rules may be twisted to allow a swuft departure of Greece, thus sparing the German taxpayer the financial if not the moral onus of rescuing the failing mediterranean economy. For while the southern states of the Eurozone may have ended up in a quagmire of overspending brought on by sudden access to low interest rates and the possibility to spend more than they could ever hope to accrue, Germany flourished due to riding roughshod over interest rates to suit her own booming manufacturing economy and has come out on top not just due to the German work ethic, which is evidently commendable, but due to sheer bloody dominance of the single currency. There is surely some burden to shoulder there, as the Chinese press has rightly pointed out.

One thing is for sure, if 2011 was a year that rocked the boatm perhaps 2012 will either see the whole vessel capsize or a man thrown overboard.