Britain and its influence on the world stage

CIB wishes to congratulate CIB member Michael Clark on his letter to The Times 

Sir, President Obama has said Britain must remain in the EU to provide confidence in the strength of the transatlantic union and its strategic partnership with the US. He also says we will lose influence on the world stage if we leave the EU. Can we really consider this as a logical analysis of the present position facing America’s closest partner?
Britain has already lost a major part its influence in Europe as only one among an EU membership of 28. The political EU has subsumed Britain’s sovereign power and influence way beyond the original Common Market that we joined forty years ago.
How can Britain, stripped of its constitutional integrity and weakened by the ever increasing vacuum in the Westminster Parliament, retain or even gain more influence by continued membership of the EU?  This organization is in crisis and can but move towards a federal United States of Europe in order to maintain the eurozone.
I submit that Britain at this time needs to stand back from and if necessary, leave the EU, this in order to save Europe from itself — something we have done more than once over the past eight centuries.
MICHAEL CLARK

Photo by Ethan Bloch

Greek crisis gives a boost to left-of-centre euroscpticisim

The Eurozone has survived its most serious crisis to date. While the formula of late-night sessions, high drama and final compromise, grist to the mill in so-called EU “summits” usually has an element of theatre about it, on this occasion, the Greeks came within spitting distance of the single currency exit door before agreement was finally reached on a third bailout for the stricken country amid some pretty angry scenes.

Some sort of deal always seemed more likely than “Grexit”. That is how the European Union works. Even more predictable was yesterday’s vote in the Greek parliament in support of austerity measures. There was plenty of huffing and puffing, plus a number of resignations – including that of the colourful finance minister Yanis Varoufakis who handed in his notice several days before the final Greek capitulation, but the outcome was never in doubt. Against his better judgement, Prime Minister Alexis Tsipras has signed up his country to a deal which goes against everything in Syriza’s election manifesto. He promised to end austerity; he has instead been forced to implement a harsher austerity package than his predecessors. The rejection of austerity by the Greek electorate in a referendum earlier this month counts for nothing.

Ignoring the will of the people when they vote the wrong way; reneging on your promises in order not to conflict with the desires of your fellow Europeans. This is all grist to the mill to the European project. Nevertheless, the protests die down after a while and things move on as normal. Or do they?

It is quite possible that in a few years’ time, the Greek crisis will just be a footnote in the history of the EU and that the project towards a federal superstate has continued on its merry way with only a few minor ripples on an otherwise smooth surface. Equally – and perhaps more likely – it is quite possible that the crises affecting the European project will become more intense, especially if the bailout fails to restore the Greek economy to growth. It may take a while before the whole edifice comes crashing down, but the humiliation of Greece has left a bitter taste in the mouth of many erstwhile supporters of the EU.

A search through the internet or the daily papers will yield comment galore on who are the real villains of the piece. The Germans, so say some, for insisting there can be no debt relief for Greece and imposing impossible terms on a nation that is, to all extents and purposes, bust. Others blame Syriza for promising the impossible in the mistaken belief that Germany would blink first rather than sacrifice the irreversibility of the single currency. Maybe it’s six to one and half a dozen to the other. Richard North pointed out in his blog out how Greece has been an incredibly corrupt country for decades. Less important than the finer points of the economic arguments, however, is perception. The EU is, after all, a political project to which economics are always subservient and the political damage to the EU project may be as great as the economic damage to Greece.

As far back as February, this blog predicted that the rise of Syriza might result in a growth of left-of-centre euroscepticism. This prediction has proved accurate. The perception of a concerted effort by the centre-right German Chancellor to crush Alexis Tsipras out of a desire to emasculate the left has generated a great deal of anger. A most interesting article in the Guardian by Owen Jones claims that as a result of the Greek debacle “Britain’s left is turning against the European Union, and fast.”

Jones quotes a few examples: “Everything good about the EU is in retreat; everything bad is on the rampage,” writes George Monbiot, explaining his about-turn. “All my life I’ve been pro-Europe,” says Caitlin Moran, “but seeing how Germany is treating Greece, I am finding it increasingly distasteful.” Nick Cohen believes the EU is being portrayed “with some truth, as a cruel, fanatical and stupid institution”. “How can the left support what is being done?” asks Suzanne Moore. “The European ‘Union’. Not in my name.” He then claims that there are senior Labour figures in Westminster and Holyrood privately moving to an “out” position too.

Ambrose Evans-Pritchard picks up on this theme in his column for the Daily Telegraph. Although no socialist himself, Mr Evans-Pritchard expresses considerable sympathy for these emerging left-of-centre eurosceptics, for what he calls the EU’s “scorched earth treatment” of Greece is totally opposed to everything socialism has historically stood for. A left-wing government – indeed, one of the most left-wing governments elected by popular mandate in Europe since the end of the Cold War – is being forced to implement a radical privatisation programme and to cut pensions and other benefits at the diktat of politicians of a different political hue in a different country. He points out that the historic social democratic parties of Europe have become so sold on the European project that it supersedes their loyalties to traditional socialism. There can be no better illustration of this than the action by Martin Schulz, the President of the European Parliament, to ignore an amendment which rejects one of the most controversial features of TTIP, the EU-US free trade agreement in a series of votes in the European Parliament. Schulz, by all accounts a thoroughly unpleasant man, is a member of the SPD, the German Social Democratic Party. The SPD, along with most other socialist parties in the EU, including the UK’s Labour Party, is a member of the PES (Party of European Socialists) group in the European Parliament, which will tolerate no eurosceptics among their MEPs. I can recall meeting a Parliamentary assistant from Malta during my time working in Brussels who told me how the Maltese Labour Party, which had opposed EU membership, had to change its tune quickly after the country voted to join the EU, with all its eurosceptics relegated to the sidelines so it could join the PES grouping.

And herein lies the irony of the PES sellout:- Right-of-centre free market withdrawalism is to all intents and purposes a UK phenomenon. Opposition to the EU has historically come largely from the Left. Indeed, in this country during the 1970s and 1980s, Euroscepticism was far more prevalent in the Labour Party than in the Conservatives. The late Tony Benn was a consistent and unbending supporter of withdrawal and the 1983 Labour Party election manifesto included a commitment to withdraw the UK from the EEC, as it then was. Supporters of the Free Market feel uncomfortable about the pressures exerted on the EU institutions by big business through the army of lobbyists. Socialists have no less reason to dislike the EU’s corporatism, but the mainstream social democratic parties have been at best muted in their criticisms. It is hardly surprising that recent years have seen the emergence of more radical parties like Syriza or Spain’s Podemos, which have challenged and in some cases, even superseded the mainstream social democratic parties. Furthermore, events in Greece are now causing these new parties to turn not only against Europe’s bankers and big multinationals but against the single currency too. Costas Lapavitsas, a Syriza MP said, “It is now perfectly clear that the only way out of this is to break free of monetary union.” According to the Greek media, Panagiotis Lafazanis, the energy minister and a member of one of the most far-left of the factions within Syriza, has publicly advocated bringing back the drachma. To many in Greece, the Euro is a symbol of their European identity and support for staying within the single currency remains astonishingly high given the damage its inflexibility has done to their economy. However, with the International Monetary Fund rightly casting doubt on whether the agreement negotiated in Brussels can ever lift Greece out of its debt trap, a further flare-up in Greese’s financial crisis looks very likely and when it happens, calls for Greece to quit the Eurozone may not be confined to a handful of peripheral Marxists.

To return to the UK, the re-emergence of left-of-centre Euroscepticism – and indeed, outright withdrawalism – comes at a time when the Labour Party is going through a period of soul-searching following its defeat in the General Election. None of the four leadership contenders are openly withdrawalist although the left winger Jeremy Corbyn could be called euro-critical. The late Bob Crow, general secretary of the RMT trade union, was a supporter of withdrawal and even launched a left-of-centre withdrawalist party No to EU – Yes to Democracy, which contested the European Parliamentary elections in 2010, winning 1% of the popular vote. While this was hardly an earth-shattering result, it is an indicator that left-of-centre withdrawalism has never totally died out in the UK. It has only been dormant. Greece’s “rescue package” appears to be the catalyst which is bringing it back to life. In his Guardian article, Owen Jones points out how a socialist agenda would now be impossible to implement because of the EU. Renationalisation of the railways and the Royal Mail would be impossible, he claims. Keynesian economics has been outlawed by the Lisbon Treaty and he fears that TTIP, if implemented, would lead to the permanent dismemberment of the NHS. An additional concern for Jones is the growing support for UKIP among the white working classes, which he feels can only be countered by a revival of left-of-centre withdrawalism. Whether this is possible within the Labour Party or whether we will see the formation of a British equivalent of Podemos or Syriza, but with a commitment to withdraw from the EU  remains to be seen. Certaionly something is happening, although quite how much momentum the withdrawalist left is going to build remains to be seen. We must, however, get used to hearing a lot more of a new term Jones has coined – Lexit – Left support for withdrawal. Indeed, even if our personal political allegiance does not lie with socialism, the more we hear of it in the run-up to the referendum, the better.

 

Photo by rvw

Making a drachma out of a crisis

A letter from our Chairman, Edward Spalton, to the Derby Telegraph

We would be suffering a similar fate to the people of Greece if our politicians had taken us into the euro as many of them wished. We were and still are lumbered with massive government and private indebtedness but have been able to dodge many of the ill-effects because we still have our own currency.

The so-called “bail-outs” are essentially transfers of unrepayable debt, owed originally to German and French banks but now transferred to the public sector. Whatever the result of yesterday’s referendum, the outlook for Greece is bleak.

They already have real austerity. In the Greek NHS, infant mortality has increased massively – up 40%. With the return of the drachma, there would be a prospect of fairly rapid eventual recovery but probably even more hardship in the short term. So it’s a hard choice.

The euro is a political project to create political union. To avoid more countries threatening to leave like Greece, the countries of the Eurozone will have to form themselves into a single, economic, monetary government – in effect becoming one country with a permanent majority of votes within the EU. Such a treaty will take around four years to conclude under EU rules, so could not come into force before 2020. It will make permanent and formal the UK’s existing status as a second-rate member, paying a first-class subscription.

To repatriate any powers from the EU to a member state requires treaty change. Mr Cameron appears to have dropped this demand. Harold Wilson dressed up some very minor administrative alterations as a fundamental renegotiation” in 1975. It was enough to win him his referendum. No doubt Mr Cameron will follow that example.By the second half of 2017, the UK will hold the presidency of the EU and be in charge of issuing all the press releases which follow EU meetings, giving much increased scope for media manipulation. This is the reason for the Government’s abolition of the “purdah” rule, which prohibits it from using its resources to influence the outcome of the referendumThe best he could hope for is that other member states and the EU Commission promise to take his concerns into account when they make their big treaty some time from 2020 onward. This is not a happy precedent. Mr Blair surrendered some of Mrs Thatcher’s rebate in exchange for a promise to reform agricultural policy. That reform never happened.

So Mr Cameron’s referendum is not really about giving people a choice but a manipulative ploy to lock us into the EU permanently in advance of major, impending, centralising change of which he must be well aware.

A despatch from Athens

There is no shortage of media coverage on Greece’s current financial crisis. This piece, however, paints a different picture from most. It is written by Thanasis Laskaratos of EPAM, the Greek People’s movment. EPAM is a cross-party campaigning organisation, similar to CIB.

Alexis Tsipras, the Greek Prime Minister, announced a referendum on creditor’s bailout demands, and even called for NO. It has been at least 30 years since Greece last held a referendum, so the decision was welcomed by the majority of Greek people.
Two days later the government decided to impose capital controls by shutting banks for a week and imposing limit on cash withdrawals (60,00€ per cardholder, per day).Public officials were paid normally on the 27th and the 28th of June, unlike pensioners, who need to line up at specific banks, open exclusively for them, to withdraw a maximum of 120€. The private sector was equally left at its fate. The ECB embargoed Greece but the government didn’t take any measures whatsoever to calm down the people who were left suddenly without any cash or to find a solution for paying the country’s pensioners.
To ordinary people voting YES equates to staying within the EU and Eurozone and NO equates to the opposite. This is indeed the real meaning of this referendum despite the Greek government’s intentions and efforts to persuade people otherwise. No wonder why the percentage planning to vote NO, although initially standing at 54% at the beginning of the week. has tended to fall these last few days according to the EuObserver newspaper. Unsurprisingly, there is an unprecedented amount of propaganda in favour of YES by just almost all media within the country as well as by a bunch of singers (like Nana Mouskouri), actors, university professors, TV-starlets and other celebrities.
As expected, the tactics of the YES campaign have been characterised by fear and distortion of the truth. There were two big rallies in Athens last weekend – on 29th June by NO supporters and on 30th June by YES supporters. The NO gathering received 8.43 minutes of news coverage as oppposed to 46.83 minutes for the YES gathering. No one in the media wil admit that voting YES means more unemployment, more suicides, more taxes, more homeless people and more misery. They just call it the bail-out program’.
And meanwhile, what has the government done? Besides letting the pensioners line up at the banks – thus causing deliberately panic – it has offered extra guarantees of 1.91 billion Euros to Eurobank and another 4.92 billion euros to Ethniki Bank. So on the one hand, the government is happy to protect bankrupted banks at the taxpayers’ expense, but on the other, when it comes to pensions and salaries the government does nothing.
At the same time Mr. Tsipras has submitted a new proposal to the creditors. The new proposal aims ‘to settle the ESM financing so that the debt becomes sustainable while emphasis is given on the growth perspective’. In other words, Greek taxpayers will pay off the IMF with ESM’s money at at least double the interest rate, thus putting Greece under ESM, a mechanism that works like a super-state which is able to dismantle the entire country.
For all his efforts, Mr. Tsipras really sides with the YES campaign even though he publicly supports NO. IN this , he is just like the communist party, KKE, who suggest spoiling the ballot papers. This coming referendum will make many masks fall down and reveal where the politicians and their parties really stand.
Thanasis has also confirmed a report that the Greek government destroyed its printing presses in the run-up to joining the Euro. If it is forced to return to the Drachma, the banknotes will have to be printed in the UK or France.

Photo by Kristoffer Trolle

What planet is he on?

As Greece prepares for a referendum which could determine whether it leaves the single currency or not, Sir Richard Branson, well known for his enthusiastic support for our membership of the EU, said that he was “not particularly” happy that we were out of the single currency. “I think that if we were part of the euro right now our currency would be a lot cheaper,” he told the Andrew Marr show. “Great Britain would be doing that much better in trading in Europe because the pound is a lot stronger than the euro, it makes it more difficult for us.”

Here, Branson once again proved the point that for business, the only real issue as far as our EU membership is concerned is trade. He also revealed his ignorance of the flawed nature of the single currency project. Had we been part of the single currency, we could not have cut interest rates to rock bottom at the height of the Great Recession allowing our currency to depreciate in value in relation to those of other nations. That is how things work with a “fiat currency” – i.e., where there is no peg to an asset such as gold. Countries in financial difficulty are encouraged to rely on exports (which will become cheaper with a weaker currency) as a way of rebuilding their economy. It is the textbook approach of the International Monetary Fund. Unfortunately, it is not an option available to Greece at the present time because it does not have control of the interest rates set for its currency – the Euro. If we had been part of the single currency, we would not have had that option either during that critical period five years ago.

So while UK goods might indeed be a bit cheaper now if they were denominated in the euro, which has fallen in value against a number of other major currencies recently, they would have been too expensive during the critical period when the recession was at its worst and a boost to our exports was desperately needed. We would have been entirely at the mercy of the European Central Bank. In other words, the exchange rate for the currency we would have been using would have been ultimately determined by decisions made in a foreign country and not therefore seeking the optimal rate for UK business. Perhaps the pound may be overvalued at the present as far as Branson’s business empire is concerned, but this is a price worth paying to preserve the freedom to control interest rates and thus – to a degree, at least – exchange rates. The terrible recession in Greece is an object lesson to the tiny handful of influential people who bemoan our absence from the single currency. Branson, however, is not alone. Martin Sandbu, an economics writer for the Financial Times, maintained that Greece would not have suffered its current crisis had we joined the Eurozone, as we would have ensured that the financial discipline written into the Maastricht treaty and thus prevented earlier Greek governments from over-borrowing when money was cheap. A rebuttal to this rather fanciful idea was provided by Raoul Ruparel of Open Europe. Even this pro-EU think tank has sufficient wisdom to see the lack of substance to Sandbu’s argument. With the UK experiencing economic difficulties some time before the Eurozone, “the UK would have found itself in a similar position to Ireland, with the rest of the eurozone (which had yet to be hit by the sovereign crisis) lecturing it on economic and financial policy”, said Ruparel. “The fallout would probably have been the UK leaving the euro and possibly the EU, precipitating a potentially even deeper crisis for all involved. In the end the fundamental flaws in the Eurozone, clear for all now to see, would probably have been exacerbated by having another large country with different needs inside the single currency.”

Yes, the single currency is a flawed project. Professor Tim Congdon highlighted the vulnerability of European monetary union to depositor runs on the banking system (such as we have seen recently in Greece) over 25 years ago. “When I spoke to them at conferences, dinners and such like, the euro’s architects….. dismissed my concerns as of no importance”, he wrote recently. Branson and his ilk regrettably remain as blind to these flaws as ever. Indeed, his blindness to the nature of the whole European project is quite staggering. During the same interview with the Andrew Marr show, he also said, “If we go back to being Great Britain again we will have our hands tied behind our back and I think Europeans will rightly punish us and we’ll be back to where we were fifty years ago.” Branson clearly has no concept of the EEA/EFTA exit route – the so-called “Norway Option”, which, far from tying our hands behind our backs, would be a benefit to our trade in the longer term. He then repeated a really basic howler in claiming the EU had helped preserve relative peace in Europe. Oh really? What has it done to preserve peace in Ukraine? It has in many ways fermented the conflict. What about Serbia? What did it do to end the conflicts with ETA or the IRA? The credit for over seventy years of peace within Europe belongs to NATO, not the EU.

Branson then claimed it would be “catastrophic” if we left. Nonsense; it would be catastrophic if we didn’t leave. It would be the end of our great country. It would be the final nail in our Common Law legal system and the sovereignty of our Parliament. Deceived by our political leaders, we made a wrong turning over forty years ago and locked ourselves into a project which we have never really supported. The referendum offers us a chance to right a great wrong.

Branson is no politician and should keep his big mouth shut over issues about which he is plainly pig-ignorant. He should instead stick to being an entrepreneur, which he clearly does very well. After all, his Virgin empire even includes a commercial space travel programme, Virgin Galactic. While it appears on the surface to be a long way from offering space travel for tourists, judging by the silly words he spoke to Andrew Marr about the EU, which seem so far removed from reality, one is tempted to wonder whether Branson does already inhabit another planet, if not some parallel universe.

EU debate disappointment at TPA’s post-election conference

The Taxpayers’ Alliance, in conjunction with Conservative Home, Business for Britain and the Institute for Economic Affairs, held a post-election conference in London on 11th May. The four-hour event covered a number of topics, including Scotland, the election campaign itself and the prospects for change in the EU. Although three of the four organisations co-hosting the event would claim to be cross-party, the meeting had a very strongly Tory flavour to it, with most of the keynote speakers being Conservative Party members.

Dr. Liam Fox was one of those who addressed the conference and his speech sounded a distinctly EU-critical note. He was particularly concerned about further possible calamities within the Eurozone, calling the Single Currency “an economic pass-the-parcel; a time bomb which they all hope will go off when someone else is holding it.” He claimed that senior figures in Brussels live in a parallel universe, quoting Mario Monti, a former Commissioner and Prime Minister of Italy who said recently “We have done so well with the Euro”. Dr. Fox appeared somewhat sceptical about the prospects of any meaningful renegotiation, especially in the light of recent comments by José Manuel Barroso, a former President of the European Commission, who stated that he would support renegotiation “as long as it is compatible with the objectives of the European Union.” Given that the main objective of the EU is “ever-closer union” and the logical end-point of “ever-closer union” is “union”, this does not sound promising for Mr Cameron, said Dr. Fox.

The panel for the debate on reform in the EU consisted of Douglas Carswell, UKIP’s sole MP, Matthew Elliott of Business for Britain and Laura Sandys, the former MP for Thanet South and Chairperson of the European Movement. For someone such as myself who had attended CIB’s rally and the recent presentation on “Flexcit” by Dr Richard North, the level of debate appeared pretty puerile by comparison. Admittedly, with a time slot of only half an hour including questions from the floor, there was not going to be long enough to do this subject justice, but it was particularly frustrating that neither of the other panellists took Laura Sandys to task for repeating Cameron’s statement that we had to stay in the EU to be “at the top table”. This shows a sad ignorance of how the EU now works. So much regulation landed on us by the EU does not originate in Brussels at all. The EU merely acts as a conduit for various organisations such as the World Trade Organisation, UNECE (the United Nations Economic Commission for Europe) and other global bodies. These are the real “top tables” and we do not have our own seat here. The EU represents us, but not just us. It represents all 28 member states. We would have far more clout in influencing legislation as an independent country, especially given that these bodies are not so keen to see national vetoes surrendered as the EU. (Your scribe attempted to raise this subject when the debate was opened to questions from the floor, but there was insufficient time for all those who raised their hands to be given a chance to speak)

Douglas Carswell stated his belief that David Cameron would try and repeat Harold Wilson’s trick of 1975, trying to sell a piffling concession to the electorate as a major triumph of renegotiation. With that one would agree. His endorsement for Business for Britain and its importance in the forthcoming referendum is a different matter.

Matthew Elliott said that remaining in under renegotiated conditions was better than the status quo. However, his contribution was most disappointing. He clearly shows no understanding of the EEA/EFTA option which would satisfy the concerns of businesses he claims to speak for while opening the door to a much better future. It would be by far the best way of satisfying on the one hand, a desire for a looser trading relationship with the EU while on the other ensuring a seamless exit. One was left with grave doubts as to whether he really does want to see our country regain his liberty.

However, given Laura Sandys’ senior role within the European Movement, it is apparent that fear, uncertainly and doubt are the only real weapons available to those who support our membership. She said that the pro-EU movement had failed to make the case for the positive role played by the EU. To which one must reply that it is because it hasn’t actually played a positive role; it has done far more harm than good. Supporters of our EU membership really don’t have any convincing arguments. Their arguments are very weak and easily refuted, Unfortunately, although right is on our side, we have a long way to go to win the argument irrevocably. Withdrawalists are still not at all clear what to do with the aces in our hand which, if played correctly, should finally persuade the public how much better life will be on the outside. I therefore left the meeting with a mixture of hope and frustration.