State of disunion

There has been very little to report recently concerning the triggering of Article 50 and Brexit negotiations. Last week, David Davis, the Secretary of State for Exiting the European Union, stated that it would be “improbable” that we would stay within the Single Market. The following day, a spokeswoman for the Prime Minister stated that Mr Davis was only “expressing his opinion.” Likewise, Boris Johnson’s enthusiasm for an Australian-style points system to manage immigration does not represent offical government policy. The same spokesperson said, “There are various ways you can do that and it is something the government is looking at and will come forward with proposals”.

So apart from a statement from Mr Davis that the WTO route looks “unlikely”,we are none the wiser about Mrs May’s exit plans, Indeed, Mr Davis said that “the government will not give away its negotiating position”, although he stated on Monday that the talks may be “the most complicated negotiation of all time.”

One of the biggest surprises following June 23rd’s vote was the reaction of senior figures from the EU member states and its institutions.  After the implication of the vote had sunk in, the message coming from Brussels was “get on with it and get out.” In other words, rather than begging us to reconsider, the powers-that-be wanted the UK to trigger Article 50 as soon as possible to prevent contagion and to make the period of uncertainty as short as possible.

A note of realism has crept in to more recent utterances from across the Channel, recognising that, with David Cameron refusing to allow the Civil Service any opportunity to plan a Brexit strategy before the vote, the UK would have to  do a great deal of homework before being ready to trigger Article 50. However, the “get on with it” message was  restated on Monday by Guy Verhofstadt, the former Belgian Prime Minister who is likely to be the lead Brexit negotiator from the European Parliament.

“I want the UK to trigger Article 50 as soon as possible, so we can finalise these negotiations by 2019,” he said. “I can’t imagine we start the next legislative cycle without agreement over UK withdrawal.”

In view of Mr Davis’ statement about the complexity of Brexit negotiations, this may be a tad optimistic, but from the EU’s point of view, with European Parliamentary elections due in 2019 and the next seven-year budget cycle due to begin in 2021, the desire to move on from Brexit is understandable.

On  Thursday 14th, Jean-Claude Juncker, the President of the European Commission, delivered a “state of the union” address to the European Parliament. In the wake of Brexit, it was hardly going to be a particularly upbeat speech. “Our European Union is, at least in part, in an existential crisis,” he said.

He went on to say that “never before have I seen such little common ground between our Member States. So few areas where they agree to work together.” He has some justification. He and some other Western European leaders are keen to press on with further integration whereas there is very little support for further surrender of soverignty among he former Soviet bloc countries. Their lack of enthusiasm for the EU’s federalism was behind Juncker’s comment that “We have to stop with the same old story that success is national, and failure European. Or our common project will not survive.”

But what was his remedy? More Europe. What a surprise!! With the UK headed for the exit door, the loudest opponent to the establishment of an EU army has been removed. “It is time we had a single headquarters” for the EU’s military missions, he said. “We should also move towards common military assets, in some cases owned by the EU. And, of course, in full complementarity with NATO.”

Surprisingly, there was little mention of the UK referendum.  “We are even faced with the unhappy prospect of a member leaving our ranks, ” he said. Just one sentence.

On Friday (16th) Mr Juncker will travel to Bratislava, Slovakia, to meet with the 27 heads of State. Mrs May will not be going. In view of the manifest differences of opinion within the leaders of the Member states over the refugee crisis and the path of future integration – not to mention the possibility that Greece could re-ignite the Eurozone’s woes, it is hard to imagine  she will lose any sleep over the lack of an invitation.

An open letter to a high-profile remainer

If we all write to our opponents, they may start thinking a bit more seriously about future membership of the European Union, giving us a far better chance of winning the coming referendum.

The following letter highlights risk management. There is a strong case for spreading its message  because we traditionally are far better at risk management and the EU is a failing political/bureaucratic experiment that encourages irresponsible behaviour and mutualises the resulting problems making them far worse.

Dear Mr Cameron,

I read with some concern a transcript of your recent speech (9th May on strength and security) which supported remaining in the European Union (EU) and highlighted the risks of leaving.  Whilst to paraphrase Mark Carney on the Andrew Marr Show, 16th May, highlighting risks is necessary in order to mitigate them, nothing is being said about the risks of remaining.  Could this be that whilst we traditionally are rather good at risk management, the risks arising from remaining within the EU are beyond our capabilities of risk management or mitigation? Thus the Public could be unaware of serious risks of remaining which cannot be effectively mitigated, whilst also being fearful of leaving under an erroneous impression regarding its riskiness?

I find developments within the EU, as reported recently in the Daily Mail  and the Daily Telegraph, rather alarming; hence my raising the subject of risk management and mitigation. We are not being asked to remain in the EU as it is now, but an EU which is highly unstable and on a trajectory to create a superstate.

From a risk management perspective, the EU, by extending its powers and adopting ‘one size fits all’ policies that apply to all member states, faces serious risks whereby some Member States will be extremely adversely affected. Some examples of this are the €uro and mass migration. Also there is a tendency to mutualise local issues or problems to all Member States making the results far worse, where previously these problems did not exist, such as with certain ECJ rulings.  It would appear, then, that the EU is inherently much poorer at risk management and mitigation than we are.

Can the EU become much better at risk management or even reform?  Professor John W Hunt, concluded on the basis of his studies of organisational behaviour in the EU and other international bodies, that reform always gets pushed to the bottom of the pile. He noted: “International bodies rarely have a power base of their own….. To justify themselves, these highly paid, often initially idealistic staff spend their time developing yet more ideas that can’t be implemented. The result is the worst of all worlds, there being nothing more cynical than a bunch of rich, demoralised ex-idealists.” Thus it is reasonable to assume the EU will largely remain unchanged, unreformed and poor at risk management.

I would be happy to discuss this further because we really do need an intelligent debate on all the serious risks not just those of leaving (which can be mitigated), but also those of remaining (which cannot).

You should, after an examination of all risks and their risk management, including those of remaining, heed the words of a great former Conservative Prime Minister, Lord Salisbury:- ‘The commonest error in politics is sticking to the carcasses of dead policies. When a mast falls overboard, you do not try to save a rope here and a spar there in memory of their former utility. You cut away the hamper altogether. It should be the same with policy, but it is not so. We cling to the shred of an old policy after it has been torn to pieces, and to the shadow of the shred after the rag itself has been torn away.

Peer says PM is ‘grossly overstating his powers’ in claiming that the Britain will never join the euro

THE PRESS OFFICE OF                                                           

The Lord Stoddart of Swindon

(Independent Labour)                                                                                          

News Release

 

29th March 2016

 

PM is ‘grossly overstating his powers’ in claiming that Britain will never join the euro says Peer

 

The independent Labour Peer, Lord Stoddart of Swindon has taken the Prime Minister to task for claiming that ‘Britain will never join the euro’, pointing out that Mr Cameron is ‘in no position give such an undertaking because it is not supported by our constitution, which makes it perfectly clear that no Parliament may bind its successor.’

In a written question to the Government, Lord Stoddart had been asking whether Parliamentary approval would be required for any decision to join the eurozone and why the Prime Minister has stated that the UK will never join.

Replying for the Government, Lord O’Neill of Gatley said:  ‘As set out in Protocol 15, the United Kingdom is under no legal obligation to adopt the euro as its currency. Under the EU Act 2011, a decision by the UK under Protocol (No 15) leading to a decision by the Council under article 140 (3) of the Treaty on the Functioning of the European Union would require an Act of Parliament and a referendum result in favour before a Minister of the Crown could support it.

‘The Prime Minister has been clear that Britain will never join the euro.

Lord Stoddart said:  ‘I am not sure whether the Government either understands or respects the constitution.  The constitutional position is clear – no Parliament may bind its successor.  It is perfectly possible for a future government, of whatever colour,  to repeal the EU Act 2011 and take Britain into the euro, without even bothering to hold a referendum.

‘For the Prime Minister to categorically state that ‘Britain will never join the euro’ is palpably untrue and grossly overstates his powers.  Therefore, despite what Mr Cameron says, there is no question that remaining in the EU is a serious threat to the future of the pound.’

Ends

The full text of Lord Stoddart’s question and the Government’s response, is as follows:

Lord O’Neill of Gatley, HM Treasury, has provided the following answer to your written parliamentary question (HL6811):

 Question:

To ask Her Majesty’s Government whether parliamentary approval would be required for any decision to join the eurozone, and if so, why the Prime Minister has stated that the UK will never join the eurozone, in the light of the fact that one Parliament cannot bind its successor. (HL6811)

Tabled on: 08 March 2016

Answer (22nd March 2016):

Lord O’Neill of Gatley:

As set out in Protocol 15, the United Kingdom is under no legal obligation to adopt the euro as its currency. Under the EU Act 2011, a decision by the UK under Protocol (No 15) leading to a decision by the Council under article 140 (3) of the Treaty on the Functioning of the European Union would require an Act of Parliament and a referendum result in favour before a Minister of the Crown could support it.

The Prime Minister has been clear that Britain will never join the euro.

European Electorates reject the EU

Among the European Union’s (EU’s) ruling élite, concern is growing as their EU superstate project – to merge the nations of Europe into a federal superstate governed largely by unelected bureaucrats – continues to unravel. Across Europe, disillusioned electorates are responding against this cruel reality being imposed without their consent.

In this country, Prime Minister David Cameron has begrudgingly agreed to a referendum which gives the electorate the opportunity to leave the EU and for the UK to regain independence, sovereignty and democracy. The EU’s increasingly disastrous mistakes, however, are worrying voters in other countries too. Ironically, it is not just in the South of Europe, where a generation and more of young and old have been made unemployed and without hope by misguided EU policies, notably the straitjacket of the Euro, but in the North and the former Eastern bloc countries where enthusiasm for the EU is crumbling.

Danes retain “Opt-Outs” from EU control
In December, the Danish electorate rejected their (pro EU) government’s proposal to end the country’s opt-out from EU domestic and judicial policies. Following its rejection of the Maastricht Treaty (extending the EU’s powers) in a referendum on June 2, 1992, Denmark obtained four “opt-outs” which pertained to the single currency, the EU’s foreign, security, domestic and judicial policies, as well as naturalization laws. Consequentially, Denmark has not joined the Euro, does not participate in the EU’s military policies, and has preserved a certain margin of manoeuvre for its domestic policies beyond EU directives. However, the ECJ has overruled Denmark’s EU agreements at least 79 times despite explicit agreement to the contrary!

This referenmdum delivered the “wrong result” as far as the vast majority of Denmark’s ruling élite was concerned. They still support their country’s complete submission to EU policy. This should come as no surprise. Mr Cameron and our ruling élite take a similar line here – namely, EU rule for their own benefits, not for us, the people who voted them into office.

Euro exit by Finland?
In Finland, the EU project is also becoming increasingly unpopular, thanks largely to problems with the economy. Although the UK’s recovery from the Great Recession has been rather sluggish, at least we have been out of recession for several years now. By contrast, Finnish GDP has dropped 0.6 per cent in the last quarter of this year – more than in Greece. Finnish economists, looking to neighbouring Sweden and Denmark, point out that without the Euro, the crisis could have been prevented.

A citizen’s initiative, campaigning for a referendum on exiting the Euro, has garnered more than 50,000 signatures. Next year, the Finnish parliament must consequently debate returning to the Finnish Markka.

France – the charge of the ‘fringe’ Eurosceptics
The first round of France’s regional elections saw Marine le Pen’s Eurosceptic Front National top the polls in six of the country’s 13 regions and gain 28% of the overall vote – ahead of both the ruling Socialists and former President Sarkozy’s Les Républicains. In the Nord- Pas de Calais region, the FN polled over 40%. The two EU-fanatic establishment parties responded by creating an unholy alliance to keep the FN from power, with the socialists standing down in two regions and, encouraging their supporters to back ‘arch rival’ Sarkozy’s party. Voters may, however see there is little to choose between the two establishment parties, and many chose to vote for Mme le Pen.

France’s system of having a two-stage election prevented the FN gaining power in any region and will prove an even greater obstacle to winning the Presidency in 18 or so months’ time. However, Marine le Pen’s alleged “dédiabolisation” of the party since replacing her controversial father as leader has paid off. Her party may still be seen as a pariah by the leadership of two establishment parties, but much less so by voters. Although she failed to win a region, she gathered over 6 million votes. Whether it still is a “nasty party” is impossible to judge, especially given the enthusiasm of some sections of the media to apply the “far right” label indiscriminately to any political party with an ideology any major distance to the right of Jeremy Corbyn or Josef Stalin.

It is clear, however, that the FN’s anti-EU stance along with its calls to return to the Franc, for tighter controls on immigration and the need for a more cohesive society are clearly seen as necessary by many French voters and economists.

Eastern European and German worries
Pegida, the anti-Islamification movement in Germany, has enjoyed a renaissance since the attacks in Paris. Indeed, Pegida has spawned similar groups in other countries, including the Czech Republic where the country’s president Miloš Zeman spoke at a meeting of a political action group called ‘Bloc Against Islam’. This is part of a trend in several former Soviet bloc countries, including Hungary and Poland, where parties from outside the pro-EU “mainstream” are either in power or are gaining support, with worries about immigration and Islam being major factors.

In the Spectator, Rod Liddle wrote perceptively about Europe’s ruling élites: “It is an irony that the liberals are being vanquished as a consequence of their support for that least liberal of ideologies, Islam.” The growing anti-establishment mood across Europe engendered by fears of terrorism and Islamification will do nothing to bolster support for the European Union, which disingenuously tries to portray itself as rooted in liberal democracy. There is no democracy in the EU whatsoever, as we all know.

In summary, if the voters in an increasing number of member states are either looking at parties other than the fanatical Europhile “mainstream” or else are turning away from “more Europe” altogether, for how long will they and their worries be ignored?

For how long will repressed Western Democracy stay subjugated? When will the tax revolt commence? When will the people cease to co-operate and the member countries cease to permit themselves to be so enslaved that they become ungovernable as they reject the tyranny of Brussels?

The Euro And Schengen: Common Flaws And Common Solutions

This article, written by Professor Paul de Grauwe of the London School of Economics, was brought to our attention by Dr Anthony Coughlan of Dublin.  It illustrates the threat to national sovereignty that both the EU’s flagship projects pose.

What do the Euro and Schengen have in common? Both are projects that have the same flaw: they’re unfinished business. And therefore they risk falling apart.

The Eurozone is a monetary union, with one currency, the euro circulating in the Union and managed by one central bank, the European Central Bank. What’s wrong with that? One may ask.

The fundamental problem of the Eurozone is that national governments have their own budgets and issue their own debt. When recession strikes, the system gets into trouble. During a recession government budget deficits automatically increase. Countries that are hit hardest by the recession show larger budget deficits and debt increases.

Financial markets that are fully integrated in a monetary union are lurking, ready to strike when observing signs of weakness. Countries hit hardest by the recession experience “sudden stop”: investors massively sell the government bonds, raising the interest rates and pushing these countries into illiquidity.

The other countries in the system profit from this, as investors in search of a safe haven buy these countries’ government bonds. Thus during recessions, free capital movements destabilize the Eurozone and plunge the weaker countries into a “bad equilibrium” of ever deeper recession and rising unemployment.

What about Schengen? As the Eurozone, it is an unfinished project. The residents of the Schengen area move freely within the area. The problem is that the architects of that area forgot to integrate the police and the intelligence services. Moreover, they forgot to transfer the authority to control the external borders to one European body.

As a result a problem arises in the Schengen area that is similar to what happens in the Eurozone. Criminal gangs move freely within the area. They commit burglaries in one country and flee to another one. In contrast police forces have to stop at borders. Terrorists are planning from Brussels how to attack Paris and escape from the radar of the national police forces and intelligence services. National police forces and intelligence services are not integrated and can no longer guarantee the security of their citizens.

The danger of unions that are unfinished is that they will disintegrate. Without a fiscal union free capital movements will create great instability when the next recession strikes the Eurozone. In the long run, governments that can no longer guarantee a minimum of economic stability to their citizens will be tempted to leave the Eurozone.

The choice we have today is simple. If we want to keep the Euro we will have to create a fiscal union. This implies that a significant proportion of national budgets and national government debts will have to be centralized. A formidable transfer of sovereignty from the nation states to European institutions. If we want to preserve the Schengen area, we will have to integrate police forces and intelligence services while creating a joint control at the external borders. Failure to integrate further dooms both projects, the Eurozone and the Schengen area.

The Eurozone and the Schengen area have fundamentally weakened national governments while nothing has been put into place at the European level to offset this loss of power of nation states. The Euro and Schengen can only be saved if we create European institutions that can do what national governments no longer can do, i.e. to ensure economic stability and security for the citizens of Europe.

 


The CBI’s foolish games

Towards the end of the 1990s, during drinks after at a debate at Bath on joining the euro, Mr Idris Francis, a long-standing supporter of withdrawal from the EU, asked Kate Barker, the CBI’s chief economist at the time, why she had not produced any calculations on the effects of joining the euro. She replied, in front of several others, that, “There are so many effects subject to such wide margins of error that it is impossible to know what the consequences of joining would be.” But he then asked her “But do you and the CBI want to join anyway?” to which she replied “Yes.”

Mr Francis quoted this exchange at several later meetings. At one Labour-organised meeting in Bournemouth, he was threatened with eviction by a senior figure in the Britain in Europe campaign. He also received a letter from Kate Barker, objecting to him quoting her words, but at the same time she confirmed what she had said.

Kate Barker must now be regretting her foolish support for the Euro. The CBI was thankfully dissuaded from supporting it as far back as 1999, thanks to the Business for Sterling campaign group. However, it has certainly not changed its policy of supporting our membership of the EU, come what may.

The Vote.Leave campaign recently gained access to the leaked minutes of the CBI’s president’s committee in July 2015, where former Chairman Sir Michael Rake told the meeting, “It is important not to overplay our hand in the negotiations with Brussels, like Greece, and that [the] CBI should be strong in making the case for competitiveness within Europe”. The meeting was attended by Lord Maude, Minister for Trade and Investment, as well as other government officials.

It should be noted that this is the same Sir Mike Rake, who was the deputy chairman of Barclays Bank, which was fined £284.4 million by the Financial Conduct Authority over “brazen” currency rigging.

It seems from his comments that no lessons have been learnt by the CBI in the years following its misjudgement on the Single Currency. Indeed, it is frightening to think that the CBI will almost certainly end up supporting another leap in the dark as untried and as doomed to failure as the Euro – namely UK associate membership of an EU. This will place the UK permanently in the EU’s powerless second division while the First Division  – the Eurozone members  – call all the shots.

It is so obviously a bad solution ot the UK’s “problems” with the EU, but it is almost certainly what  David Cameron will be offering us in the forthcoming referendum, aided and abetted, no doubt, by the CIB. It is sad indeed that an organisation claiming to be “the voice of business” dopes nothing more than play silly games.