Osborne Refuse to Dole Out €31bn to Eurozone

Paul Donovan of UBS on Jeff Randall Live this evening stated that the EU needed to end its isolation from the UK. Sounds like a good idea to me and one which the likes of Germany would agree with since the German Foreign Minister spoke today of the need for his country to be part of a european project that we were a part of in order to cope with its past. I can understand that and would be happy to be part of a european project so long as that project was about free trade rather than the protectionism encapsulated in the CAP and the common fisheries policy. The first makes food expensive and the second destroys our fish stocks. We should say 'no' more often since after the orgy of abuse against us and attempts to make us the scapegoat for the failure of the eurozone members to solve the euro crisis the other EU members have never been so nice to us - apart of course from France. We have now said we will not contribute €31bn to the euro bail out fund which for dodgy legal reasons has to be paid to the IMF which will then pass it on to the eurozone countries which need it. Again the language against us is intemperate but we had made it clear all along that whereas we were happy to increase our sub to the IMF we would only do so if it were for the benefit of IMF members generally and not only or specifically to eurozone members. Funny isn't it that euroland fails to understand that when we make to statements we mean them but saying no on this second occasion may take longer to heal the rift although other EU countries may well be emboldened to follow a similar line. I have never understood why we should pay anything towards euro crisis suffering eurozone member countries when we warned of the consequences of joining the euro and when there was a solution at hand namely for Germany and the other strong euro economies to help Greece and perhaps Portugal (Dan Morris of JP Morgan thinks the fund being put together is far from enough and that . Ambrose Evans-Pritchard has a good blog on this here. 

A Funny Thing Happened at the EU Summit

I hear from someone with good Downing Street intelligence that at last week's EU summit Cameron had all other 8 non eurozone countries ready to say 'no' to the Merkozy proposal but that van Rompuy persuaded them after hours of debate to change tack as to do so would satisfy the markets that something was being done to save the euro and furthermore would result in the talks concluding within probably an hour but certainly in no longer than two hours. Cameron pleaded with the other 8 to stand firm with him as the markets would not be taken in for a moment and saying he would vote no anyway. Cameron was quite right about the markets but why has this story not been reported by the media? My guess is that Cameron does not want to embarrass the other 8 particularly as several of them now seem to be back tracking from the qualified 'yes' they gave to the Merkozy plan. Clegg's attitude to the events of last week get curiouser and curiouser. First he says he supports Cameron, then he says Cameron got it wrong and has left us a pygmy amongst other nations, isolated and without influence and now it seems he is saying we still have influence over the EU agenda and it is significant that we have been given observer status at talks about fiscal union. Clegg is clearly a hard man to pin down, rather like the Vicar of Bray. Perhaps the way the French have behaved has persuaded him that even LibDems would agree with normal people that the French need taking down a peg or two. Perhaps he is struck by the fact of Mrs Merkel calling Cameron since the events of last week in what is understood to be a friendly exchange. Clegg presumably knows the detail of what was discussed between Merkel and Cameron and realises things are not as bad as he thought them to be and that he went too far with his remarks on the Marr show last Sunday. Whatever, Clegg has demonstrated his irrelevance.  

Play Up! Play Up! And Play The Game!

The euro crisis descends into farce and will shortly reach its end. The so called plan evolved by Merkozy last week is no plan to save the euro. It is a plan for the future governance of those members of the EU who think there is benefit in joining a half cocked fiscal union. Already it is no longer 26 for and 1 against. Those against are growing as the politicians of those members now harbouring doubts realise that they might find it difficult if not impossible to sell the loss of sovereignty to their electors that a fiscal union implies, even a half cocked one. Cameron's stand against the nonsense of a fiscal union (let's believe that that was what he was doing in Brussels in the early hours of Friday last week) is shown to be more prescient as each day goes by. Even van Rompuy has realised that the madcap scheme will founder unless Cameron is seen to be involved in trying to get it off the ground. That can be the only reason why Cameron has been asked to attend the deliberations of the EU on the whole fiscal union subject. Cameron should make his attendance conditional on our getting what we want by way of treaty change and, it being too late now to save the euro at least in its present form, that for all our sakes an orderly wind up be agreed urgently. Maybe it is still possible for the euro to be split into two with France and the southern european states in eurosud and Germany and the northern countries in euronord. If not each country will have to return to its own currency. Cameron at the moment has centre stage (given to him in particular by the antics of Sarkozy, Noyer and Baroin) and has a chance in a lifetime to become a world  statesman of stature if he pursues the logic of what he's started and what this country wants. Clearly the europeans are crying out for the leadership that the two big beasts, Merkel and Sarkozy, have singularly failed to give them. Cameron must now come to the crease. He must play up, play up and play the game.  

French Mustard

The French are really quite extraordinary. Not only does Sarkozy call our Prime Minister an 'obstinate kid' if you read the papers or a 'petulant child' if you listen to the BBC but now the head of the Banque de France is saying that France's rating should not be down graded but that ours should be instead. What else are they going to throw at us? I know that earlier this year they were complaining how unfair our victory over them at Agincourt was as we had used weapons of mass destruction, i.e. longbows, that had apparently been ruled illegal by the medieval version of the European Court of Human Rights or something. As usual the French are exercising their ancient right of special pleading which of course they have always done whenever they have felt hard done by. Nobody likes being downgraded but the thing no Englishman has ever understood is why the French believe themselves to be so special. Are they cleverer than we are? Are they more inventive than we are, more cultured, more intellectual, better dressed, better educated, etc? Not really, if we're honest, although I have to admit I would not know how to measure these things. If we were to take the number of Nobel Laureates as a measure the French would lose. They have 58 and we have 120 - over twice as many as they have. This is a ridiculous comparison though and who cares other than the touchy French as demonstrated by the undiplomatic statement of that low flying frog about Cameron and the petulant remark by the head of the Banque de France. Perhaps it is our indifference to them that makes them unhappy with us. Perhaps it is because we look out to the world whereas they only look out of their backyard. Perhaps it is our easy going manner. Perhaps it is because we share a common heritage with the anglosphere which is of greater significance than the heritage they share with the francosphere. Whatever it is it is bemusing or would be if you wanted to waste time worrying about it. If it's any consolation to them we are still happy to drink their wine.

Better Isolation Than Integration

It is always interesting to know what our critics in the EU think of us. Not much it seems, certainly not after Cameron's refusal to play the Merkozy tune last week. If that pompous, arrogant, idiot Verhofstadt, MEP and head cheese of the Liberals in the joke European Parliament (a perfect partner for Huhne), is anything to go by we are to be punished for Cameron's action. Verhostadt's reaction just goes to confirm the view held by many Britons that the continent is governed by people who prefer rule by an elitist clique rather than by democratic mandate. The ultimate evidence supporting this view is the way the EU elite has forced Italy and Greece to replace their governments with an unelected council which of course reflects the way the EU governing body is itself constituted. Perhaps that is why the EU is disliked so much in this country on those occasions when people are forced to think about it and at other times just dismissed from the people's mind. The EU elite think we are a bunch of coarse vulgarians. Maybe they are right but so what. At least we are democratic vulgarians who believe in the rule of law. Having only been around for less than 7 decades in their current form it is uncertain how much the continentals believe in the rule of law. I would prefer a country where everything is possible rather than one where nothing is possible unless you are in some way attached to the elite. An American friend who has lived all of his adult life outside the United States and most of it in France but with stretches in the UK and other places has returned again from France to live in London. He had been living in La France Profonde and felt isolated there but did not want to live in Paris because Paris is a closed, non-cosmopolitan city and he prefers the worldliness of London. So much therefore for the insults thrown at us by the likes of Verhofstadt. Such insults reveal not only their hatred for this country but also their jealousy. Members of this elite seem to hate their own countries too. Are their own countries so awful that they have to deny them? Verhofstadt comes from that unnatural country Belgium so I suppose one can understand his desire to be a citizen of anywhere else.

Praise Where It's Due

At the time I would usually be thinking about writing a blog I was on the way to the Western Eye Hospital in Marylebone late yesterday afternoon to find out what was wrong with my right eye. On arrival I was walking to the receptionist's desk behind a little old lady when I and the little old lady, two feet away from the desk, were overtaken by a young woman with a friend running to get ahead of us. I told the young lady to get back in line and although she most unwillingly let the little old lady be dealt with first she certainly was not going to allow me to do likewise. Despite this irritating introduction to the Western Eye Hospital the rest of the experience was surprisingly easy. The receptionist in the 24/7 A&E clinic told me that I was lucky as there were so few people waiting to be seen.  I had to wait about 20 minutes to see a nurse who took the details and gave me drops. I then waited about 40 minutes to see the doctor who spent some time examining my eyes and who found a tear in the right eye's retina. He got his superior to have a look to see if he had made a correct diagnosis. They carried out one or two other tests and got me to sign a waiver for the laser procedure they wanted to carry out. There was then another 20 minute wait before the senior of the two doctors took me into a treatment room and lasered my retina around the tear. I have to go back in a week's time to get the all clear. All in all I was at the hospital about 2 hours forty minutes which passed quickly enough as I had taken a good book to read. No wonder a good percentage of those in the clinic were from overseas one of whom was absolutely amazed that she did not have to pay anything for the treatment she had received. "It was an emergency," the receptionist said.    

Euro Crisis? What Euro Crisis?

I had thought the EU Summit was to sort out the euro crisis but nothing was done to do so. Everything that was proposed is for the future. The euro is burning and yet those great captains Merkel and Sarkozy, who rule the eurozone, fiddle. Why is that not a surprise. It speaks volumes of the quality of the people involved. Not only of Merkel and Sarkozy but of the other EU member leaders too as well as of their advisers and of course of the eurocrats. They are acting like rabbits caught in the headlights, frozen into inaction. All they can do is to recite the mantra of Monnet or of whichever of the nuts it was who dictated that each crisis in the EU should be used to advance the integration of its members into another country called Europe. Their idea of fiscal union is to ensure that each country has the same tax rates etc. unlike the USA where each state has its own tax regime with a federal tax rate set by the federal government. Janet Daley has a good take on this point in the Telegraph here. By trying to set up a fiscal union where everything is controlled from Brussels by unelected eurocrats the europeans show their distrust of democracy. They are proposing a soviet style of government that I fail to understand how the more democratic countries in the EU are prepared to sign up to. Perhaps in the last analysis, when the full details of the fiscal union become clear, they wont. As for France and Germany, with their historical predilection for dictatorship, it is no surprise at all that they are prepared to propose such an undemocratic construct. Of course the fun will come when they have to comply with their own rules, for example the 3% of GDP deficit limit. We have been there before when they excused themselves from so doing    shortly after the euro was introduced. This is a mess we will be far better out of and thanks to Cameron we now have the opportunity to change our relationship with the EU. Not of course that Clegg and the LibDems are happy with what happened. Indeed it took Clegg only a day to change his tune from saying that he and Cameron had discussed the tactics to be taken at the Summit to complaining that Cameron blew the negotiations. Does Clegg want the financial transaction tax that Merkozy were insisting on? Talking of which it seems that Merkozy agreed that it would not be imposed on Ireland so the inference is that Merkozy don't really care one way or the other about the tax but that they were determined to make the UK the scapegoat for their own inadequacies in solving the euro crisis.

The Today Programme

I listened to the Today programme this morning and yet again found it in breach of its charter. The BBC is supposed to be impartial but odd isn't it that they interviewed in friendly fashion two europhiles, namely the idiotic editor of the Financial Times and the delusional Lord Heseltine. Heseltine made a reference to Churchill encouraging a United States of Europe to be set up but failed to mention that in his 1946 speech on the United States of Europe Churchill was not advocating UK membership. Heseltine implied that Churchill had done so though. It is quite clear from the speech that Churchill had done no such thing and saw our role as a sponsor of the United States of Europe alongside the Commonwealth, the United States of America and, he hoped, the Soviet Union. See the speech here. The BBC failed to point this out. The BBC then interviewed Osborne which as usual when it comes to a Tory was undertaken with maximum prejudice. At one point Osborne was put off his stride although he recovered later. Try complaining to the BBC about their systemic bias and all you get after  a week or two is some supercilious, dismissive reply. The attitude is appalling and it is impossible to understand why the government doesn't cut the institution down to size. Readers of this blog will know that I think the BBC should be abolished or that at least it should be split up so that part can continue as it is and the other part can be populated by those with a different political bias so that impartiality can be achieved that way. Antony Jay has written about cutting down the BBC in his foreword to Christopher Booker's report for the Global Warming Policy Foundation which foreword you can read in full in James Delingpole's Telegraph blog here.    

3 Cheers for Cameron

I have been critical of Cameron on a number of issues but to my relief and amazement he has come up trumps on the EU. This is a defining moment for him and one which the LibDems have to go along with or be annihilated in an election Cameron will call if the LibDems were to jump ship. Merkozy knew their insistence on castrating the City was a red line in the sand for us, Osborne had made this perfectly clear to them some weeks ago. So they had us lined up as the whipping boy from the off and for once our people sussed this out and prepared their ground accordingly. Cameron asked for the minimum he could ask for by way of protection for the City without creating an impossible position for the government back home.Merkozy clearly thought they had an opportunity either to crush us into submission or to get rid of us.  A win win situation as they saw it. They probably thought though on balance that Cameron would give in but they underestimated him. They will in due course come to regret their coup when we grow and they don't, when they are trapped in a currency that their so called fiscal union will not save and when it all comes to a disastrous end. A Swiss friend believes that in order for Europe to be anything in this world it must become a real country so that it can compete with not only the US but also the BRIC blocs. He is in favour of proper fiscal union, namely one treasury, one central bank and one government and believes that what Merkozy now propose is the next step on the way to a federal europe. I fear he will be disappointed as there are other countries who will not want to be subsumed into a Franco-German hegemony. The UK could never attach itself to such an enterprise. The UK longs for greater free trade and freedom from the CAP and the Common Fisheries Policy. If it needs to join an economic group it needs to look to like minded countries in the anglosphere. Let's not forget that our history in Europe grates somewhat with europeans particularly as some of us cannot but help remember it and allow it to permeate our attitude towards them. Merkozy basically dislike us for that attitude as they cannot treat us quite like the other members of the EU. Who can blame them but hey, who can blame us.

2485 Year Old Tree Rings and the Euro

The north wind doth blow and we shall have snow and what will poor Robin do then poor thing. The likelihood is he'll claim it's climate change of a man made kind but if he read Bishop Hill's blog yesterday here he might think differently about it. Bishop Hill refers to the Chinese Science Bulletin which has carried out an examination of tree rings for the past 2485 years taken from the Tibetan Plateau which appear to indicate that changes in climate are associated with solar activity which greatly affects the temperature and that cold intervals corresponded to sunspot minimums. How you date the tree rings I'm not quite sure but imagine fossilised trees must be involved. It is to be hoped that the research carried out by the Chinese is now taken into account in deciding our energy policy. best of all by abandoning it altogether. I have my doubts what with the likes of the idiotic Huhne in charge but surely there must be a review of policy in the near future what with windmills exploding in these hard windy times. It is difficult to exaggerate winds of 165mph but not difficult to exaggerate the what will befall us all if the euro collapses certainly not for politicians of the quality of Merkozy and the likes of van Rompuy and Barroso. It is difficult to believe anything they say and so one is left with the distinct impression that they doth protest too much and for their on self aggrandisement. It is increasingly clear that euro collapse will be tough in the short but that within two or three years thereafter we will be growing again. To continue with the euro will be to continue living in an unremittingly bleak world for longer and which can only end in bust anyway. Look at how well and quickly the UK recovered when we came out of the ERM. Look at how well Iceland is doing three years after its devaluation.

Contagion

Cameron had his feet held to the fire at PMQs today on the EU question and waffled badly. Pressure is mounting outside Parliament too with Boris now saying that any Treaty change either has to be vetoed or put to a referendum. Admittedly being in a coalition with a bunch of Europhile UK haters makes Cameron's job more difficult but for that very reason it must make sense to act like Pontius Pilot and wash his hands of any decision which would rile either the LibDems or the Eurosceptics and instead put the issue to the people in a referendum. The LibDems would not dare leave the coalition because Cameron allows a referendum to be held as they would be tainted for years afterwards as undemocratic particularly as the Conservatives allowed the LibDems a referendum on the AV question. Cameron may find himself unpopular with his EU colleagues for holding a referendum but so what. We know their attachment to democracy - we only have to look at the governments of Greece and Italy to remind ourselves how shallow democracy beats in the German and French breasts. Frightening. It is therefore good to see that Berlusconi's party is not prepared to vote for some of the austerity measures that Monti's government is proposing. As Dan Hannan says here by trying to sort out Greece's problems the eurozone has taken them over when it would have been more sensible to push Greece out of the euro and leave it to settle its own problems. Ironically the contagion the eurozone feared would not have happened if the pus of Greece had been cut out but is happening now by the eurozone having clasped Greece to its bosom. Fiscal union would work if it is proper fiscal union of the US kind. The kind of semi fiscal union proposed for the eurozone will be a disaster waiting to happen.       

Where is the Referendum

Iain Martin had a most interesting article in the Telegraph this morning, which you can read here. Although I think there is something in his assertion that Cameron is like Baldwin I think he is more like Macmillan. Macmillan was a good manager but believed the prevailing defeatist sentiment of the time that our great days were over and thus we had to accept gentle decline including over powerful trades unions, dispirited management, the welfare state and minimal ambition. There are of course differences and Cameron must take full marks for going ahead with the changes to the welfare state, education, policing and the local authorities. The disappointments include the economy where the deficit reduction is not aggressive enough and there are no tax cuts to encourage growth, the BBC which is to remain untouched in all its socialist glory, the NHS reforms which have been watered down and of course the EU where there is to be no referendum. I have no objection to a good manager, there are few of them in any government as our parlous state confirms, but the UK deserves more than that. We deserve a government with vision for our future, a government which treats its voters as adults rather than as idiots, a government which will set out all the arguments for the things it wants to do and is not afraid to put the issues to a vote. In other words a government that knows what we need out of the EU, which will tell the EU what our needs are if we are to remain a member, to walk away from it if we do not get what we want and to seek the authority in a referendum of the people to walk away. It won't happen of course and we shall drift gently further downwards until we get another Thatcher. Another Thatcher is not guaranteed though. So much better to bite the bullet and for Cameron to get on with the job himself.  

There is a Tide .....

Merkel and Sarkozy have had their little chat in Paris today which has failed yet again to deal with the euro problem and seems to have done little even to address the symptoms of sovereign debt and lack of banking liquidity. The rabbit they will produce from the hat on Friday at the EU summit meeting will be one suffering from myxomatosis which will survive at best say into the middle of January before the markets bury it. Germany and France are now quite openly running the show and as far as I can see we are in the humiliating position of being on the sidelines where matters that concern us are discussed and agreed behind our backs. That this country, which has saved Europe on various occasions, should be shunted into the twilight zone with little say in how the cosy club is run and yet is expected to pay for the privilege is shameful.  We have absolutely no need to be a member of an uncompetitive, rule ridden block and the next time the Americans ask 'who do we contact when we want a European response?' we should respond 'not us, for God's sake. We'll give you an answer though about how we feel on the subject if you want it.' "There is a tide in the affairs of men, which taken at the flood leads on to fortune; omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat, and we must take the current when it serves, or lose our ventures." Perhaps Cameron will baulk at taking advice from Brutus but the advice was good even if the fortune of which Brutus was talking involved acting in a manner rather more extreme than I am contemplating.  

Cameron's Moral Imperative

There were a couple of things which struck me particularly about the Charles Moore interview of Delors in yesterday's Telegraph. One was the comment that Britain, though not in the euro and thus not sharing the burden is just as embarrassed as the Europeans by the financial crisis. I would be astounded that we feel in the least embarrassed about the euro problem as we warned of the downside at the time it was being contemplated. So why would we be embarrassed? Delors obviously thinks we should be. The other thing that struck me was his self regard, "I think for Mme Thatcher I was a curious personage: a Frenchman, a Catholic, an intellectual, a socialist " as if she was in some way in awe of him and his superior background. Clearly he knew nothing of Mrs Thatcher and her earlier life in which she would have met Frenchmen, catholics, intellectuals and socialists and dealt with them all just the same. What a snobbish, pompous, egotistical little man and what damage he has done. He denies the euro would have been a failure if all his strictures about how it should have been set up had been followed but he would say that wouldn't he. Proper fiscal union is never going to happen so long as the EU is a group of separate states and it will never be more than that. Thus all the fiddling going on now is not going to solve the problem, which is the euro itself. The problem can only be solved if the euro is replaced by each state's own currency. Peter Oborne in an article for the Telegraph on Friday thinks that Cameron has a great dilemma in that either he does everything he can to help the euro survive, at least for now, and risks the wrath of his party's eurosceptics or he goes along with his eurosceptics and risks the wrath of the EU leaders and Obama. There is no dilemma. He has do do what is right for the UK. You don't jump into the water with a drowning man unless you know you can rescue him without drowning yourself. The euro is going to sink anyway so the only moral choice Cameron can make is to announce a referendum to withdraw from the EU, the eurozone members of which  have demonstrated beyond a peradventure that they are a bunch of losers.      

Tricolore

Political correctness has gone too far. The fuss over the remarks made by Clarkson about the striking Civil Servants are not only offensive but another nail in the coffin of freedom of speech. The Leveson Inquiry is fast becoming another nail in that coffin too. The odious Alistair Campbell, who many think was the cause of the death of Dr David Kelly, screamed when supposedly the press had underhandedly got hold of his evidence to the Inquiry and published it before he was due to present it - the main 'publisher' being Guido Fawkes. Leveson supported Campbell and ordered Guido Fawkes to appear before him to give an explanation of this dastardly deed. It then came to light that Campbell had sent copies of the draft to a number of people including journalists. Guido Fawkes was then told his presence was no longer required. This though did not stop Leveson from issuing some kind of gagging order against Guido Fawkes about the whole affair. Why? To save embarrassment? We should know, it is a question of public interest. These gagging orders have to go and whilst they're at it the laws of libel need changing so that all that can be awarded to the claimant is costs and a nominal sum - no more of the large damages awards.

Talking about odious people, Jacques Delors has been in the news today giving an interview to the Telegraph. Apparently he now admits that when we pointed out at the euro's inception that a currency without a state would be unstable we were right. The view over coffee this morning at the Golf Club was that we must leave the EU as we can no longer remain a party to an entity that has such different views from ourselves on free trade and competition. There was a desire to have an arrangement with the EU similar to the Swiss and to join an anglosphere free trade area as well. If the EU were to impose tariffs on us though by way of some form of punishment we should immediately impose huge tariffs on both the import of German cars and French wine.

One of the Golf Club members had just come back from India where he had been with a European Export Association. He found the Germans were the undeniable stars in the particular export field the Association supports. Another member who works in the defence industry though was not at all impressed by the export skills of the Germans. His company has been buying certain parts from Germany to incorporate in their products, a number of which they build for stock. My friend's firm ABC now has to have the parts made in China as the Germans require end user certificates from the ultimate customer before they will sell their parts to ABC. Not surprisingly when building the products for stock ABC has no idea who the end user is going to be.    
 

Unconscious Irony?

This whole euro business is becoming a farce. Mrs Merkel is reported as saying a treaty change is required to enable the imposition of a european debt brake and for EU institutions to be suitably equipped with powers so that rules can be enforced and fines imposed if they are not complied with. This clearly involves the loss of national control over its own economy by each member of the eurozone. France on the other hand seems to be saying that it will be the governments of each member which will negotiate the terms of fiscal union, decide how it is to operate thereafter and how it is to be policed, that any other solution would be undemocratic. In other words the Germans and the French are far apart on this issue. Whether France's stance would require a treaty change I'm not sure but there are those who claim that the current euro crisis could be solved simply by the ECB printing money, that the ECB is not constrained in any way from doing so and that although fiscal union thereafter makes sense there is no need to set it up now to solve the crisis. Fiscal union could therefore be put in place at other than breakneck speed. See for example Ambrose Evans-Pritchard's article here. In the meantime certain Central Banks have entered the fray to offset the inter bank lending squeeze caused by the euro crisis and which was one of the symptoms of the global credit crunch that began in 2007. Simon Miller has written an interesting article on this point in The Commentator here. It is the view of many, including myself, that Germany has done well out of the euro as the euro allowed it to sell its cars at a lower price than it would have done if it had stuck with the D-mark. This economic advantage for Germany has resulted in economic disaster for the southern countries of the EU and Germany should thus be prepared to do something to help them. Ambrose Evans-Pritchard doesn't agree with this although I do see the sense of and agree with his argument that Germany, Austria, the Netherlands and Finland should leave the euro - see his argument here. With the current euro fiasco, from which none other than the eurosceptics come out well, it is curious timing to say the least of it that the ECB would launch a patronising video in praise of the euro. Unconscious irony or what? You can view the video on Daniel Hannan's blog here.