Bloomberg reveals leaked German papers demanding more austerity for Ireland.
A continuing chronicle of how democracy is being destroyed across the entire European Union.
This blog is henceforth exploring various means whereby democracy may now be restored within or to the EU's formerly independent nation states now that economic chaos looms following the euro currency's apparently deliberate self-destruction, as long predicted on this blog? (Changed 23/11/10)
Let us be clear: the Commission is not involved in this. The European technocracy and bureaucrats are not involved in this; they are utterly sidelined. This is about the raw politics of anger in Germany against Greece, and the raw politics in Greece against Germany. It is also about the raw politics of the Conservative party in this House, some of whose members rightly feel that all the pledges made by their leader, now the Prime Minister, on referendums, renegotiation and repatriation have not in any way been delivered. That is what is causing upset and concern in the House of Commons. I am sure that it was also raw politics in Ireland that led the Taoiseach to agree to the referendum there. We know that Monsieur Hollande has said that, if elected, he will renegotiate the treaty. We also know that Mr Rajoy, the new conservative leader in Spain, has said that he will not implement a Merkozy-type dose, because Spain could not take it.
We need a new approach in Europe, and in this country. I would have no problem if, after 15 years of wallowing in Euroscepticism, the Conservative party rejoined the real European world. I would like to see Conservative MEPs sitting with other centre-right MEPs, precisely to create the links that the hon. Member for South Northamptonshire mentioned. We need more engagement, and not in order to join some Euro-federalist nirvana—that is not on offer at the moment. We are living in not a two-tiered Europe but a multi-tiered Europe, and we have to be part of it. We are not at the moment, but I hope that the Government can change their course before it is too late.
Undoubtedly the speech of the day came from Conservative MP for Wokingham John Redwood, which I thus quote in full. It appears in the Hansard report from 2:07 pm:
It is a shame that the hon. Member for South Northamptonshire (Andrea Leadsom) is no longer in her place. I gather she is often referred to nowadays as the new iron lady—although I do not know who will get an Oscar for playing her in the future. I profoundly disagree with her that a multi-tier Europe is a good idea. During my four and a half seconds as Minister for Europe the BRIC economies—Brazil, Russia, India and China, and for that matter, Mexico—repeatedly told me, “It is essential that we know that we are dealing with a single market.” If we decide to cut up the single market, with lots of different tiers of different elements of legislative proposals, it will do us damage with the growing economies of the world. China is not interested in dealing with 27 different countries in Europe; it is interested in doing business in Europe. If it is going to be more difficult to do business in Europe, it will do business elsewhere—and we will have cut off our nose to spite our face.
I wholeheartedly agree with the hon. Member for Stone (Mr Cash) about the danger of technocratic Governments being imposed on other European countries. There has always been an element of democratic deficit within the European Union. In a sense, it is almost inevitable—unless we choose to elect a single President and Government of Europe, to which I would be wholeheartedly opposed because I do not think that there is a single people of Europe.
This debate is about the future of democracy itself. There can be no more important issue. We are considering a draft treaty that presumes to take substantial powers of decision over how much a country can spend, how much a country can tax and how much a country can borrow from the democratic choices of the member state to a centrally imposed system, which it is hoped will make the euro work better. This matter is of vital importance to the United Kingdom because we wish our neighbours to live in democratic prosperity for their own sakes, because we wish to trade with them successfully and because we wish to make sure that there is no danger whatever that our cherished freedoms and independence as a member state that has deliberately kept out of the euro could in any way be damaged by this treaty, which presumes to use European Union institutions to enforce a non-European institution will.
The peoples of western Europe are right to be mightily worried about the bad state of health of their respective democracies where they have adopted the euro. We see daily on our televisions or hear reported on our radios dreadful scenes from Greece, Spain and Italy, which are struggling with the common economic discipline and policy being imposed today. The German-led new treaty says that such discipline is not strong enough, that there needs to be more mutually assured deflation and that there needs to be a madness imposed on these countries to try to see whether the euro will work.
Ministers rightly say that they must not say anything in public or be seen to do anything in public that makes the difficulties of the euro area worse. I fully endorse that approach. They should never normally comment on the euro, because it is too dangerous, it is too difficult and it is up to those in the euro to say what they wish about how their currency is developing. But how it develops is of grave interest to us, so I urge my right hon. Friend the Prime Minister to ensure that, in private, when he is round the table, as he will be, with all the other leaders and with a right to a view, he speaks truth to their impotence. He should say to those assembled leaders struggling to get a grip on their recalcitrant economies and some stability into their very unstable currency, “This is not working.” He should tell them that, in truth, the treaty before us this afternoon cannot conceivably make the euro work. Other things can help to ease the pain of the euro, and in another debate we could discuss many other policies that could pull off the trick of getting many countries through and the euro out the other side, but this treaty is not the way to do it.
This treaty is deeply offensive to many democratic peoples in the countries of western Europe that will face it. It reinforces a German view of how to make the economies of western Europe work that clearly is not working. If part of the medicine for a country that has borrowed too much is to spend less and borrow less in the public sector—that can be the right approach, and I can think of countries where that could apply—at the same time a series of policies have to be adopted to promote growth in the private sector, so that there is some hope, there are some new jobs and there could be new tax revenue coming in.
Where the EU is proposing tax rises, it needs tax reductions on enterprise, business and success. Where it is proposing a bigger monetary straitjacket, it needs monetary ease. It is now creating a very big monetary easing across the eurozone as a whole by tipping trillions of printed money into the system to try to make it work, but that new money cannot possibly help Greece or Portugal, because they have frozen and damaged banks, they are under the austerity cosh, and representatives of the European Union are going in and treating them as if they are damaged economies that cannot conceivably pull through.
The euro scheme is damaging the confidence that Greece and Portugal need in order to see light at the end of the tunnel; it is putting people off investing there. Why would someone go to Greece to invest through euros, if they think that it may be driven out of the currency and forced into a big devaluation? Why would they seek to do business in Greece when the banks are frozen and they are not benefiting from the liquidity injection that is helping the corporate bond market and the Government bond market, temporarily, in Italy and in Spain?
Above all, our Prime Minister has to secure and protect the British interest. We in this House should be very proud of what our predecessors created, obtaining control over how much is raised in taxation, how much is spent and how much this country borrows and prints. We are rightly out of the euro, because those in it cannot conceivably maintain democratic control over those issues. I am grateful to my hon. Friend the Member for Stone (Mr Cash) for raising this issue today before the summit, but we are worried that—inadvertently, I am sure—the Government might get us dragged into much greater supervision of our economy by the European Union, in a way that signs us up to the very mad policies that we are rightly warning them cannot conceivably work.
Europe is at risk: jobs are being destroyed; economies are being gravely damaged; the people are on the streets; and the main political parties in these European countries are signing up to exactly same policy, so even where a general election takes place the popular will is thwarted, as people do not have a proper choice if they stick to the main parties. In one or two countries Governments are even being changed by the European elite without a single vote being cast and without the democratic view of the people and their parties being consulted. Surely everyone in this House is ashamed of that. Surely we all unite in saying that the thing that brings us together is our belief in the power of the ballot box, the voice of the elected representative and the right of people to choose and to say that a policy is failing. We are told by the European establishment that only its policy can work. There is no evidence whatsoever that the policy is working, but there is massive evidence of the damage it is doing.
....a key part of the treaty may already be in breach of European Union law. I refer hon. Members to article 8, which states:
“If the European Commission, after having given the Contracting Party concerned the opportunity to submit its observations, concludes in its report that such Contracting Party has failed to comply with Article 3(2), the matter will be brought to the Court of Justice of the European Union by one or more Contracting Parties.”
What that says is that the European Commission may end up enforcing requirements under the stability pact in direct contradiction of TFEU—the treaty on the functioning of the European Union—126(10).....
A further aspect of the treaty concerns me. Article 16 says that the treaty will be rolled into the TFEU within five years, so it will become part of the whole package of European Union law within five years. It is currently thought, though others may think differently, that it would not have been possible for this treaty to be brought in under enhanced co-operation. However, there is a school of thought that maintains that the ESM treaty which is awaiting ratification by Parliament would allow enhanced co-operation to be used, in which case this treaty could be rolled into the European Union’s treaties without the say-so of the House, under enhanced co-operation. We should be deeply concerned about that, not least—going back to article 8—because it refers to how countries may be fined...
Richard Drax (South Dorset) (Con):
I pay tribute to my hon. Friend the Member for Stone (Mr Cash) for securing the debate. He stands up for everything in which I and a lot of Members on both sides of the House believe.
I simply do not understand why we all look at this huge abyss, this black hole, this legal and financial federalist nightmare, yet go on pouring billions of euros into it in the hope that it will somehow recover. It will not. The political elite in the entire eurozone are betraying the very people they say they represent.
We are going to have tears over this. We have, unfortunately, already had riots in Greece: God forbid that we have riots in this country one day when the people wake up to realise that we have been, dare I say it, disingenuous—I will not say untruthful because I am not allowed to use that word in this House—to our electorate. We have to be truthful, and we have to base our politics on common sense and the law. I want us to have jobs, growth, wealth and mobility, but we will not get them under the current EU federalist state. We must renegotiate and start talking. I urge those on the Front Bench, please, for our party and our country, to say at the meeting, “Enough is enough: let’s sit down and find a more common-sense approach for the future.”
Labels: Crushing Greece
The Irish government announced on Tuesday the country would hold a referendum to endorse a new European fiscal pact which most EU member countries agreed in January. The pact aims to implement tighter spending rules particularly for countries that use the euro currency.
Irish Prime Minister Enda Kenny informed Parliament that the government's legal adviser had said the fiscal pact must go to a public vote.
"The Irish people will be asked for the authorization in a referendum to ratify the European Stability Treaty," Kenny told legislators. Kenny said the popular vote would be prepared over the next few weeks and argued that it would be in Ireland's interests to vote in favor of the accord. In January, all the members of the EU except Britain and the Czech Republic approved the pact.
Labels: Irish Referendum
"I do worry now that we were too keen to curry favour," the former Lord Chancellor said on Radio 4. "It's not remotely inconceivable that because the politicians thought it was okay to court News International, other public officials followed. I don't mean the explicit corruption that Deputy Assistant Commissioner [Sue] Akers described yesterday. I mean the much-too-cosy relationships that were formed where... what went onto the political agenda or what was reported about what the police did was determined by that relationship."
Labels: Greece default
The German constitutional court ruled that parliament may not delegate most decisions on disbursing bailout funds to a special committee meeting in secret, as Merkel had planned after a previous ruling bolstered lawmakers' oversight powers....
In a case brought by two opposition lawmakers, the court said a nine-member sub-committee created to approve urgent action by the bailout fund was "in large part" unconstitutional because it infringed on the rights of other deputies.
The judges said the panel may approve price-sensitive debt purchases on the secondary market by the EFSF bailout fund, since confidentiality was essential in such operations.
But they denied it the power to authorize loans or preventive credit lines to troubled states or for the recapitalization of banks.
While not a show-stopper, the decision means parliamentary deliberations on future rescue operations could be slower and more cumbersome, since the full 41-member budget committee or the entire 620-member lower house will have to decide.
In another blow to Mr. Murdoch, related this time to The News of the World, a lawyer for the Leveson Inquiry said Rebekah Brooks, a former Murdoch executive, was apparently informed by the police in 2006 that detectives had evidence that the cellphones of dozens of celebrities, politicians and sports figures had been illegally hacked by an investigator working for the newspaper.
The disclosure, contained in a September 2006 e-mail from a company lawyer to the editor of The News of the World, Andy Coulson, is highly significant. Until late in 2010, Ms. Brooks, Mr. Coulson and other officials at News International, the British newspaper arm of News Corporation, repeatedly asserted that the hacking had been limited to a single “rogue reporter” — the paper’s royal correspondent, Clive Goodman. The assertion was rendered implausible, at best, by the fact that the police had information that so many hacking victims existed, and that so few of them had anything to do with the royal family.
Monday’s disclosures could not have come at a more inopportune time for Mr. Murdoch. In recent weeks, morale at The Sun hit a low point after a number of senior editors and reporters were arrested on suspicion of illegally paying sources.
Labels: Greek Default
Labels: Atlantic trade
Following the lowering of the ratings on France and Austria on Jan. 13, 2012,
the rated long-term debt instruments already issued by the EFSF are no longer exclusively supported by guarantees from the EFSF guarantor members rated 'AAA' by Standard & Poor's or 'AAA' rated liquid securities.....
The negative outlook on the long-term rating on the EFSF mirrors the negative outlooks of France and Austria.
Akers said journalists paid not only police officers but also military, health and other government officials. One official received a total of 80,000 pounds ($126,912) over several years, Akers said, adding that police also are investigating whether officials were placed on retainers by newspapers.
She said "a network of corrupted officials" had provided The Sun with stories that were mostly "salacious gossip."
"There appears to have been a culture at The Sun of illegal payments, and systems have been created to facilitate such payments whilst hiding the identity of the officials receiving the money," said Akers, who is in charge of a police investigation into phone hacking and police bribery.
She said one journalist had "over several years received over 150,000 pounds ($238,000) in cash to pay his sources, a number of whom were public officials." She said payments to public officials went far beyond acceptable practices such as buying them a meal or a drink.
Is Mario Draghi now the most dangerous man in the world, and indeed is he still within anybody's control?When, say, a Greek auto dealer pays for a German car, the money flows from his home country to Germany. When a Greek bank receives a loan from a foreign investor, the money flows back.
However, since banks in ailing countries like Greece are no longer receiving money from private investors and the ECB is helping out instead, the TARGET2 deficit of these countries has soared in an alarming manner. Italy, for instance, now owes the euro system €180 billion -- compared to just one year ago, when it had a deficit of only €20 billion. "This is a bank run," says Ansgar Belke from the German Institute for Economic Research (DIW). "Investors have basically withdrawn their money from Italian financial institutions from one day to the next."
Germany, on the other hand, is currently owed around €500 billion within the TARGET2 system. In an interview with the center-right Frankfurter Allgemeine Zeitung newspaper last week, ECB head Draghi played down the significance of those imbalances. "There are no risks in a cohesive monetary union," he said.
But what happens if one or more countries actually default on their loans and leave the euro zone? Ifo head Sinn has no doubt: "Then the deficits would have to be balanced out." Germany would have to shoulder enormous costs as a result.
Link.“The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.” Daily Telegraph, 27/02/12
Labels: Bankrupt Britain
The non-partisan US Congressional Budget Office estimates that President Barack Obama will finish his first mandate with four consecutive fiscal years showing a deficit above $1 trillion.Earlier this month an administration official said Obama's budget for the current fiscal year projects a $1.3 trillion deficit, slightly higher than the $1.296 trillion in 2011.According to estimates from the International Monetary Fund, the US national debt surpassed the country's Gross Domestic Product in 2011 and should rise to more than 107% of GDP this year.
Labels: Cannes G20
Labels: Greek Bailout 2.0
Speaking to Sky's Dermot Murnaghan, the Chancellor said: "We are prepared to consider IMF resources but only once we see the colour of the eurozone money and we have not seen the colour of the eurozone money.
"Whilst this G20 conference, I think, has a lot of important things to discuss... I don't think you're going to see any additional IMF resources committed here because, quite frankly, the eurozone have not committed additional resources themselves, and I think that quid pro quo will be clearly established here in Mexico City."
Then during the questions there emerged a new phrase about the 17-member single currency: 'the 16 non-German members of the eurozone.'
Great. Europe is being divided into 'Germans' and 'non-Germans.' Last time I came across this kind of thing was in South Africa in the early 1980s when the doors -- and pretty much everything else --were designated for 'whites' and 'non-whites.'
Labels: Olli Rehn
The primary concern among Cabinet Ministers relates to the President’s comments about the possibility of summoning the Council of State if the Government proceeds to ratify the fiscal compact treaty by legislation rather than referendum.
Labels: Olli Rehn
Labels: Greek Default
Spain is supposed to bring down its deficit to 4.4 of GDP this year, but given the recession, the government is now trying to negotiate a five-percent target, the Financial Times reports.NB "Recent past shows that a change of government is not seen as enough of a reason to accept an adjustment in a country's agreed targets."
Madrid already missed its deficit target in 2011, when Rajoy disclosed that it exceeded 8 percent of GDP compared to the 6 percent declared by his predecessor, Jose Luis Rodriguez Zapatero.
Recent past shows that a change of government is not seen as enough of a reason to accept an adjustment in a country's agreed targets. When Belgium finally formed a government last year it still had to pass spending cuts within a tight deadline or face severe fines.
“We will work with the Spanish authorities and decisions will be taken once we have a full picture,” said Rehn referring to when the budget is drawn up and submitted to the EU commission in March. Rehn also said that his services will examine if last year's overshoot of the deficit target was a one-off and if the blame lies with the central or regional governments.
Labels: EU tyranny
Labels: English Democrats
Labels: Greek Bailout 2.0
The PM's quiet dignity
It is almost impossible to say anything good about anyone participating in the governance of the country right now.
We must, however, acknowledge the efforts made by Prime Minister Lucas Papademos over the past few months in order to ensure Greece’s position in the eurozone and to stave off a disorderly default.
Papademos achieved a fine balancing act between the political parties in his government, while also earning the badly dented trust of our international partners.
The first phase of his mission has been accomplished, but several tough weeks remain ahead.
However, even those who disagree with the agreement forged in Brussels should acknowledge not only the hard work put in by the prime minister, but also his quiet dignity and the moral standard he brought to the office he was assigned in such adverse conditions.
It has been during his tenure that Greece’s main political parties have really grasped the magnitude of the problems the country faces and as a result have begun to work together, something that seemed inconceivable last November.
Labels: Crushing Greece
Labels: UK Energy Security
Prime minister Mariano Rajoy has reportedly asked European officials to raise Spain's debt reduction target to 5pc, claiming that reducing it to 4.4pc will be impossible.The ongoing damage of the debt crisis – and the German-led austerity drive – could be laid bare on Thursday if the European Commission (EC) unveils a wholesale revision of the eurozone's growth forecasts, as expected. Experts said the EC is preparing to cut its growth forecasts following the radical spending cuts, tax increases and job losses across Europe.
An audience poll suggested that 75 percent were in favor of staying in the euro and less than 19 percent against. The problem, though, is that unless the situation improves substantially in the months to come, the question of whether Greece should use the euro or drachma may not be one that Greeks ever get the chance to answer.
GERMANY’S MINISTER for European Affairs has confirmed that European Union negotiators sought to design the euro zone fiscal compact in such a way to avoid a referendum in Ireland.
Michael Link, who was visiting Dublin yesterday for talks with Ministers, officials and members of the Oireachtas, added that Ireland’s constitutional requirements will also help to determine the drafting, at next week’s EU summit, of rules governing the role of the European Court of Justice in enforcing the new pact.
Labels: Mario Monti
Labels: EU Budget
It is understood that the disbursements for the PSI operation and the final decision to approve the guarantees for the second programme are subject to a successful PSI operation and confirmation, by the Eurogroup on the basis of an assessment by the Troika, of the legal implementation by Greece of the agreed prior actions. The official sector will decide on the precise amount of financial assistance to be provided in the context of the second Greek programme in early March, once the results of PSI are known and the prior actions have been implemented.
Labels: Greek Bailout 2.0
Spain's debt load is set to double from where it was when Europe's sovereign debt crisis began, eroding the economic advantages that distinguished it from the region's periphery and helped shield it from Greek contagion....
Investors give Spain a discount of just 31 basis points on borrowing for a decade compared with what they charge Italy, down from 200 basis points at the end of last year. Spain's 10- year yield is 5.25 percent, up 40 basis points since Feb. 1.
As three-year loans to banks by the European Central Bank underpin demand for government bonds, Spain has raised about 30 percent of its planned bond issuance for 2012, according to UBS AG. Still, the Treasury paid an average of 3.332 percent to sell three-year bonds at its most recent auction on Feb. 16, compared with 2.861 percent two weeks earlier, reflecting the 33 basis- point rise in yields on the existing 2015 bonds.
Labels: Now Spain
Labels: Euro collapse
Under the deal, Greece will have around 100 billion euros of its obligations written off via a debt restructuring involving private-sector holders of Greek government bonds.The private sector - mostly banks and insurance companies - will swap bonds they hold for longer-dated Greek securities that pay a lower coupon, resulting in a real 70 percent reduction in the value of the assets.The bond exchange is expected to launch on March 8 and complete three days later, Greece said on Saturday. That means a 14.5-billion-euro bond repayment due on March 20 would be restructured, allowing Greece to avoid default.The vast majority of the funds in the 130-billion-euro program will be used to finance the bond swap and to ensure that Greece's banking system remains stable: 30 billion euros will go to "sweeteners" to get the private sector to sign up to the swap, and 23 billion will go to recapitalize Greek banks.A further 35 billion will allow Greece to finance the buying back of the bonds, and 5.7 billion will go to paying off the interest accrued on the bonds being traded in.The overall objective is to reduce Greece's debts from 160 percent of GDP to around 120 percent by 2020 - the figure and timeframe that the IMF, ECB and the European Commission, together known as the troika, have established as sustainable.
Labels: Greek Bailout 2.0
Default, Exit and Devaluation as the Optimal Solution
"I don't think there is a majority to go a different way because a different way is enormously arduous and costs lots and lots of money."A bold statement indeed for a country already on warning that its triple A credit rating is in danger. It appears she believes that Greek Bailout 2.0 does not itself involve huge amounts of cash, or as she quaintly phrases it "lots and lots of money"!
Greece has invaded no one and committed no crimes against humanity. Yet the EU, which boasts that solidarity is its founding principle, is forcing it into destitution and chaos.....
Currency union is – self-evidently – a disaster. Admitting that would bring a loss of face too great for the European elites to bear.....
Europe does not seem pleasant, prosperous or peaceful today. When historians write about the end of its postmodern utopia, they will note that it was not destroyed by invading armies anxious to plunder Europe's wealth or totalitarian ideologues determined to install a dictatorship, but by politicians and bureaucrats, who appeared to be pillars of respectability, but turned out to be fanatics after all.
Labels: Crushing Greece
In the past year 56 senior officials - those in the highest civil service grades - shared £505,000, averaging £9,000 each. Junior staff were handed a total of £37.9 million, typically taking home £697 - meaning 54,375 of its employees received bonuses, a level in contrast to ministers’ intention that bonuses are not given routinely.
The highest level of bonuses were awarded to the Department of Work and Pensions, whose employees scooped £51 million. The Department of Transport paid out £9.2million, the Foreign Office £6.4 million and the Department for the Environment, Food and Rural Affairs £2.3 million. The Department for Education spent £1.9 million on bonuses, the Department for Health £1.7 million, the Cabinet Office £1.3million and the Department for Innovation and Skills £1.1million.
Labels: Civil Service Corruption
"The UK money supply tripled between 1997 and 2010, widening wealth inequality, raising house prices out of the reach of young people and reorienting the economy towards the City, the South East and housing. Arguably, such an inflation will have destroyed real capital too. Sadly, this chronic inflation has been going on for 40 years since the Bretton Woods monetary system broke down.
The bust is now producing unemployment and hopelessness. The measures taken by the central banks and the Government, including ultra-low interest rates, quantitative easing and soon “credit easing” are creating further problems including increased disincentives to saving, atrocious terms on annuities for those about to retire and further distortions to the structure of the economy. And all the while the Bank of England’s QE programme is propping up bond prices to keep long term interest rates low, we risk a bursting of that bond market bubble and a further economic shock."
Labels: Steve Baker
Labels: Hinkley Point