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.