Van Rompuy Fails to Impress

The talk given by Van Rompuy at Chatham House at lunchtime was exactly as expected. A series of bland statements in order not to frighten the horses (he was in England after all) but reading between the lines the message that was being pumped out was the inevitability of a United States of Europe for the benefit of all europeans since, you know, we are all the same and have the same experiences, history and so on that makes us all a part of a homogeneous whole. Statements about how Europe now attends G8 meetings and how countries were using the EU embassies instead of their own and consulted with Brussels before setting out their own foreign policy were all made to emphasise that we are one continent. No irony here but doesn't the continent begin at Calais and where exactly does it end? In typical politician manner he failed properly to answer any question he was asked which luckily for him and boring for the rest of us were all asked from a sympathetically pro-european stance. No one got a chance to ask a question about the euro or why the EU needs a foreign office or why the budget is increasing or anything remotely controversial and the event was brought to an abrupt halt before those who had been told they would also be allowed to ask questions were able to do so. There was one question he was asked though which was of more interest than the rest and which was whether he thought he should be elected by popular vote rather than being appointed. He thought that if he had to win an election it would change the role of the President of the European Council since anyone standing for election would have to have an agenda whereas his role is that of a negotiator to try and help the European Council comprised of the various member heads of government reach a satisfactory compromise on those issues put before them. It was interesting to note on leaving Chatham House that Van Rompuy had a full blown motorcade with police motorbike outriders waiting to whisk him off to his next meeting. I would have thought that no one would have recognised this great personage and that if he merited any security at all it would have been a couple of Community Support Officers on bicycles. A truly disappointing event.  

Van Rompuy

The euro soap opera continues with the usual lies being propagated about how if Greece leaves the euro it will cause all in the EU unmentionable problems. This is what is being fed to the Irish ahead of their referendum on the fiscal pact tomorrow. How will the unmentionable problems if Greece were to leave the eurozone be any worse than the unmentionable problems of staying in? The one advantage of leaving the eurozone and a compelling one at that is the ability to devalue. As we all know the Icelanders devalued their currency when they had their financial crisis and look where they are now. Why would Greece leaving the eurozone and devaluing be any different? It wouldn't be and hopefully the Irish will vote 'no' tomorrow despite all the scaremongering they are being subjected to. One of the scaremongers is Van Rompuy who is giving a talk at Chatham House tomorrow and I shall attempt to ask him why a Greek exit from the euro followed by the devaluation of the drachma would not achieve the same result as in Iceland. I would also like to ask him why the EU, which is not a state, needs its own Foreign Office and why its budget is increasing when member countries are being asked to reduce theirs. Van Rompuy comes from an excuse for a country and yet has somehow managed to get himself elevated to be president of the European Council. It is a bit much that no ordinary elector has voted for him and yet he exercises considerable power. I wonder how he squares his conscience whilst exercising that power about the huge democratic deficit in Europe or whether it disturbs him not a jot.  

St Tropez

Phew it's hot or rather has been. Hotter I understand in London than it was over the weekend in St Tropez where I was lurking for a few days. Each evening the heavens opened down there and I don't think the temperature ever rose above 220. There was a lot of talk amongst those I met about their recent Presidential election. The overwhelming message seemed to be that there is great dissatisfaction with the EU and the euro, that this adversely affected Sarkozy's chances of winning, that Hollande was not popular and would not have won if more of those who voted Le Pen in the first round had voted Sarkozy in the second round and that depending on whom the UMP chose as leader that person would be elected President in 5 years time. The people I spoke to were anxious that Fillon should become the UMP leader. Someone else I spoke to set up and runs a charity in France for abused children and has relied entirely on donations from wealthy donors to keep the charity going. The lady concerned has decided to close down the charity since she believes it immoral to ask those who will be paying the new 75% tax rate to donate on the scale they have been doing hitherto. The lady concerned also believes fewer of her donors will be able to donate in the way they have previously anyway as they simply will not have the means to do so. If I understood the lady correctly it seems that there is no tax relief on charitable donations in France and that none is expected to be introduced. Socialism provides for all by reducing everything to the lowest standard and of course by stopping individual acts of kindness. The rumours of the wealthier French seriously considering moving to London, Brussels and Geneva certainly seemed to be based on fact if the conversations I had were anything to go by. Furthermore there was a general consensus that no politician knows anything about anything other than how to talk and that their arrogance, ignorance and stupidity in forcing the euro on an unsuspecting public was criminal. Despite the disaster that is the euro it is still desperately over valued. A small piece of goat's cheese, a moelleux and a demi pression came to £25 in a small back street bar.       

Damp Squids and the Tobin Tax

Cameron's 'muttering idiot' remark thrown at Ed Balls yesterday showed him in confident mood as did his interview late last night following the EU summit at which the other EU leaders tried to sandbag him into agreeing a financial transaction tax. His statement on that tax was robust. He said that the financial transaction tax is a bad idea, that it would put up the cost of people's insurance, put up the costs of people's pensions, it will cost many, many jobs. He went on to say that it will make Europe less competitive and that he would fight it all the way. He is absolutely right and as Iain Martin has said in the Telegraph today rather than dealing properly with the emergency at hand the other EU leaders would rather fiddle about with spiteful anti growth measures to punish the City of London. Sorry but the politicians, as we all know, are just as much to blame for the crisis as any banker. We were there when boom and bust was supposed to have been eradicated for all time and when spending outstripped Government revenues. We were there at its introduction when we were told the euro would be a great success and again a few years later when we were told it had become one. I agree with Iain Martin's analysis that the main actors on the continental stage are incapable of resolving the crisis competently. The uncertainty is almost unbearable and is beyond a joke. The only sensible thing to do, contrary to Clegg's bovine view, is for the euro to be disbanded. If some of the countries want to have another go later then they will know the pitfalls to avoid which were so bleeding obvious the first time that even whilst the  euro was being set up the Treasury spotted them. Where is the continental European statesman when you need one? Probably the nearest we'll get is Merkel. Certainly Hollande has not shown the hauteur supposedly associated with French Presidents and supposedly loved by the French. He seems a bit of a damp squid.

The Muttering Idiot

Cameron had a great line in the Commons at Prime Minister's Questions today when he called Ed Balls that 'muttering idiot sitting opposite me'. He had to withdraw the word 'idiot' as the Speaker unsurprisingly ruled the word unparliamentary. Cameron replaced it with 'the man who left us this enormous deficit and this financial crisis.' It seemed to me that for once Cameron did not lose his temper and came across all the better for it. The muttering idiot phrase will live in history. Ed Balls is wholly unprincipled since even he must know that spending money we do not have and thereby piling on more debt is going to make us all poorer even if the debt is used to finance capital projects. Balls calls for more debt in the hope it makes him popular but he is deceiving others if not himself by pretending it will gives us real growth. Every pound spent on public works either has to be borrowed and repaid or paid directly out of taxes and thus reduces the amount available for the private sector to use. More debt will not give us growth though a reduction in taxes by leaving more in our pockets to spend will certainly do so. The more money individuals have the greater the amount paid in taxes will be. The  more money individuals have the more they will spend thereby creating more jobs to service the greater demand. Rocket science it isn't and yet why can't our Government see it? It is this which the Chancellor should concentrate on and it is this Cameron should be banging on about at this evening's EU summit meeting. Cameron should also bang on  about the euro's basic design fault (that no currency can survive without a common economy) and that if the eurozone is unable to sort it out then it must be dismantled quickly and in an orderly fashion. I remember meeting someone from the Treasury shortly after the euro was introduced who said they predicted that the euro would collapse in around ten years. A better prediction than they normally make.

Better and Indifferent News

The IMF and the OECD seem to have given the UK a thumbs up if only a qualified one. Lagarde said she shivered to think what would have happened to the deficit if the policies adopted by Osborne had not been put in place. The deficit was at 11% of GDP whereas now it is at 8% of GDP. The OECD's Padoan implied in answer to Jeff Randall this evening that the UK is in the top third of EU countries in dealing with its economic woes. Padoan also said that although inflation is currently higher than wage increases at least the gap is reducing and should be eliminated in the next 18 months meaning people will then have more money in their pockets to spend.  It was clear Padoan thinks the UK is on a slow but sure upward trend. One does not often hear such comments and one hopes that Paduan is right. In the meantime the Greek fiasco continues but Tsipras now seems to be toning down his rhetoric by saying that if he wins the election he will talk to the ECB and so on but the view that the Germans will blink first in the standoff between them and the Greeks is spreading. Tsipras says he wants to stay in the euro but that Greece can't repay what has already been lent to it. From a purely economic standpoint Greece should leave the euro but from a political point of view the Germans are keen for them to remain because if the Greeks leave they will lose the truly huge sums of money (billions) they have invested in the euro succeeding. Until someone takes a lead to resolve this mess it can only drag on and the more it drags on the worse it will get whatever the outcome.

The Curse of 'Disrespect'

No doubt they will say they were 'disrespected' and that they had every reason therefore to kill Luke Fitzpatrick who if his friend Ricci is correct was not a part of the ruckus that led to the stabbing and that therefore the perpetrators got the wrong man. The BBC, of course, do not mention that the attackers were black. What is it about those who go around with knives, black or white, who think that to 'disrespect' someone can lead to only one result, death. Killing someone is the ultimate 'disrespect' and thus clearly far greater than any imagined insult. Why don't these knife carriers get it? Logically for their 'disrespect they should be hung but I imagine that they are against corporal punishment and there is the bleeding heart issue that you cannot hang 17 year olds - the age of the two youngsters arrested for the murder. This violence was generated around a football game although I have read no mention of what the initial ruckus was about. This is not the first time that an issue as trite as football has resulted in a death but even more serious matters like the euro crisis have their victims. In the case of Greece of course it has been suicides. Greece's best chance of getting out of the mess it's in is to leave the euro but the firebrand Mr Tsipras doesn't want to leave the euro as he wants the conditions relating to the Greek bail outs to be relaxed presumably because without the bail out money Greece would still have to cut government expenditure whilst it grew its economy by selling cheap holidays. Greece in any case would do well to follow the suggestions proposed in the 2020 Tax Commission Report which our Government should adopt lock, stock and barrel. Will Osborne have the guts to do so? Even if what is proposed does not meet the expectations of the Report's authors in every respect the results will without question provide us with a better system than the one we have now and will make all of us better off.