Saturday, January 12, 2013

Mali a New Trial for the EU

The Presidency of France is arguably the most powerful elected constitutional post in the Western world. This was strikingly illustrated by President Hollande's brief TV address to the nation yesterday afternoon, when he announced his country's forces were in action in Mali and that his Parliament could discuss it if they wished after the weekend, namely three days ahead on Monday.

Well that once was the case, but what now with the EU and the complications of the ESM Treaty now in force for about three and a half months, summary here, while a more detailed explanation here. The Mali engagement by French forces will inevitably impact the French deficit, debt, credit ratings and thereby its ability to meet its ESM Treaty obligations!

A fascinating dispute between France and Finland has only just arisen which illustrates the coming problems very well, read one report here. Essentially Finland has lost a contract to build a large Caribbean cruise liner in Turku to French competition in St Nazaire, apparently due to Finlan's reluctance to match the level of Government subsidy offered by France. How much more difficult has this dispute become as France's African venture brings ever closer the moment when France, instead of being the second largest contributor to the ESM, instead is forced to call upon it for funds and thus partly reliant on Finland's AAA credit rating for lower interest rates. 

Ironic, is it not that, such lower interest costs and higher credit rating are owed to the sanity of the Finnish Government, the sacrifices of its people given from living within their means and consequent reluctance to dish out grotesque subsidies of wasted taxpayers money for otherwise non-competitive industries?

This blog has repeatedly quoted the nonsense of the contribution percentages written into the ESM Treaty as begging belief, with both Spain and Italy being due to contribute large portions of the funds they seem to be among the most likely to need. Let me try another analogy on the ESM, think of it as a Christmas Club, where with all in full employment they all agree to cough up X% of their wages for a celebratory bash every year. How many need to become unemployed and broke before such a club folds? The ESM, of course, was only formed when several of its founders were already in a state of relying on the formation of such a Club for themselves to avoid bankruptcy!

Let us return to Mali, however, for even more absurdities of the EU will soon appear as a result of France's colonial legacy, the costs of which seem to be about to be partly defrayed by that country's Euro Group partners non-consulted members.

My Great Aunt, Margery Perham, was something of an Africa expert and in 1932 debated the contrast between French direct Colonial Rule with Britain's indirect methods with the then Governor of Chad, Jules Marcel de Coppet, who explained it partly in my Aunt's paraphrase - to the lingering dislike of local government in modern France,'a hangover from strong feudal power and an obstacle to centralization'. In addition, the French experience in Africa had been, from the start, more about military and imperial control than anything else, objectives backed up by the dominant French colonial paradigm to the north, represented by Algeria. (Into Africa, C.Brad Faught, Publisher I.B.Taurusp.80)  

Such is the situation (perhaps I should say potential quagmire) into which the EU, or at least the Euro Group has put itself this morning, complicated even further by the coming into force of the Fiscal Compact a mere eleven days ago.

I will, of course, be returning to these complex issues quite often as the date of PM Cameron's landmark speech on Britain and the EU has now been fixed at 22nd January in the Netherlands, a clear signal that Deputy Prime Minister, Nick Clegg's influence is clearly already heavily at work. The worldly maritime view from Holland and Spain will be now badly needed, rather than the dreadful EU embedded corporatism so far evident in all Clegg's actions.  The very unworldly and frankly almost naive David Cameron is going to struggle to rise to this occasion, especially with Clegg in his team and the likes of Michael Heseltine already loudly interfering from the wings, read here! 


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