Posts Tagged ‘European Union

20
Apr
12

Shut That Door

Alex Salmond

Alex Salmond

So Alex Salmond, First Minister of Scotland, has been feigning outrage at an Economist cover which portrayed Scotland as “Skintland” implying that, if Scotland left the United Kingdom, it would be worse off financially. It seems that Mr. Salmond is just as scheming and manipulative as any other British politicians. He also rejected the idea that, if Scotland did leave, they should accept any of the debt of the banks which were recently bailed out by the British tax payer. A bit rich since much of the bailout money went to Royal Bank of Scotland.

It seems to have been years that the Scots have been threatening to leave. In fact, didn’t they have a referendum a few years ago and decide to stay? I can’t remember. The Québécois carry on in the same manner in Canada. Constantly threatening to go but never quite leaving.

I am reminded of the mother of a friend from years ago. We used to go around his flat and drink beer and talk rubbish. His mother would visit and eventually get up to leave. She would then stand with the door open for hours talking away and saying “I must be off now” but never actually going. I think she really just wanted some attention but we were too young and inconsiderate and would just sit waiting for her to go or stay but please shut the bloody door.

Similarly with the Scots. Personally I think that the UK is better off for all of us if Scotland remains in the Union but if they want to go then they should feel free to leave. But PLEASE! Stop talking about it and go. It’s boring and there’s a draught.

Come to think of it, the Europeans must be sick of the British standing by the door while Eastern Europe is trying to get in.

Roses

Roses

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12
Dec
11

EU Veto, No triumph, no tragedy

Club Euro

Club Euro

It’s amazing the way the narrative of the European Union has changed over the last few days. For months economists have correctly predicted each successive domino which will fall if the leaders do not take decisive action and each time European leaders have failed. Greece, then Italy an now catastrophe is knocking at the door of France.

Yet, since the EU meeting where David Cameron vetoed changes to the EU treaty, the media is reporting that Britain is now locked out of EU decisions making as if the leaders of the EU have shown themselves capable of making decisions. As if the Euro area problems had been solved and the Euro become a beacon of stability.

The agreement by the leaders of the Euro areas last week intends to limit budget deficits by imposing penalties on governments which break the rules. Yet, to quote the Financial Times on the 6th December 2011:

..which two countries first broke the rule that deficits should not go above 3 per cent of GDP? It was France and Germany, back in 2003. What’s more, the two then united to make sure that they wouldn’t face sanctions for doing so – effectively destroying the rules (known as the “growth and stability pact”) altogether.”

It is not surprising that sanctions were not imposed and will not be imposed in future when you consider the circumstances in which a country runs an excessive deficit. When a country is short of money they are unlikely to cough up more money in fines to the EU.

Last week the Euro area stood on a precipice waiting to drag the world into oblivion. This week the UK has supposedly been snubbed by the best club in the world and the Euro crisis has evaporated into thin air.

The reality is that the press love hyperbole. It is unlikely that the Euro crisis will be the end of civilisation. Probably the saga will just drag on and on for a few years until something else becomes more important. Equally it is unlikely that Europe will power ahead leaving the British behind.

It may not make such great headlines but gloomy mundanity is a more likely prediction for the immediate future.

Artwork of Nigel Chaloner at Fine Art America

Artwork of Nigel Chaloner at Fine Art America

02
Feb
11

Democracy in the Arab world – Everyone’s a winner

She wont vote for militant Islam

She wont vote for militant Islam

This evening BBC Radio 4′s Moral Maze is discussing the unrest in Egypt. I usually find this program to irritating to listen to. The panelist seem to consider that it is their soul objective to be obnoxious and insulting to the “witnesses”.

In describing tonight’s program the BBC web site asks: “Is it morally justifiable to tolerate or support unpleasant, authoritarian, undemocratic regimes because we feel the likely alternatives might prove worse for the citizens of Egypt.”

My answer is simple: NO! No because it is wrong to support unpleasant, authoritarian, undemocratic regimes. NO because we cannot know what the alternative will be. And NO because we have experience of what happens when revolution finally breaks out in countries where the West has connived to suppress democracy. i.e. the people despise the West along with the dictator which they have just thrown off.

The classic example of this is Iran. In 1953 the democratically elected government of Iranian Prime Minister Mohammad Mosaddegh was overthrown in a coup d’état instigated by the United States and the United Kingdom. Mohammad Reza Pahlavi was installed as Shāh and propped up by the United States until the revolution in 1977.

From what I have read the revolution was initially backed by a secular movement but militant Islamists used the chance to grab power. Secular Iranians tried to resist but were crushed by the new regime of Ayatollah Khomeini. They could have received help from the West but having been responsible for 20 years of their repression we were not trusted and there followed a caustic division between Iran and the West that lasts ’till this day. That is an example of what happens when we support unpleasant, authoritarian, undemocratic regimes because we feel the likely alternatives might prove worse.

We should support the people of Egypt in ejecting their dictator. If they then elect an authoritarian Islamist government then more fool them. At least the responsibility will not be ours and when they are finally in a position to reject authoritarianism we will be in a position to help.

More optimistically I believe that Egyptians will have learned from the experiences of Iran and Afghanistan and will reject outright Islamist rule though Islamists may have some role in a coalition. It is possible that Egypt could finally break the curse that has afflicted the Arab world for decades and start to modernise.

Imagine a middle east of modern democratic countries right on the border of the largest trading block in the world. I am talking of the European Union. While the world obsesses over whether China will supplant America as the largest economy in the world they overlook the fact that the EU has an economy larger than both. With the Arab world modernising trade would take off and this would be great news for Arabs and Europeans.

The financial crisis has caused market uncertainty and companies have been nervous about initiating capital projects. Investors are also unenthusiastic as many assets appear overpriced; there is even talk of a Chinese asset bubble. Consequently some sectors, such as insurance, are awash with capital.

If democracy were to blossom then this capital could find it’s way to infrastructure projects in the Arab world. There was speculation in The Economist in 2009 of solar powered electricity generation in the Sahara with the electricity transported to Europe across the Mediterranean. That is not going to happen while the region is ruled by unstable dictators.

Lastly consider the effect on the Arab / Israeli conflict. Today the subtext of much of Israel’s argument is that the Palestinians are just Arabs who are used to being oppressed and the Palestinians are no worse off than citizens of other Arab countries.

Imagine if Israel were surrounded by thriving democracies. Israel would be forced to confront it’s oppressive and racist policies toward the Palestinians. Could The United States continue to support the siege of Gaza or the ethnic cleansing of Palestinians? Shame on them if they did.

05
May
10

Gordon brown, more Tommy Cooper than Napoleon

Global regulation - not bloody likely

Global regulation - not bloody likely

Today Gordon Brown warned “Either governments co-operate internationally or the unfettered markets will fail us again”. Funny that. He was quite keen on unfettered markets a few years ago. Then again, one has to follow fashion. How awful it would be if Mr. Brown wore big kipper ties or polo neck sweaters or advocated light touch regulation or declared that he had abolished boom and bust.

Ah, abolishing Boom and Bust, that was Brown’s last idea. He failed of course but he’s already forgotten about that and is  onto his next big idea: Global Regulation. Just today the Telegraph reported that: “The Prime Minister called for international co-operation on a ‘global solution’ to an economic crisis which he said was caused by the banks and not by governments. Meetings of the G8 and G20 in the coming months should agree common rules on banking liquidity, supervision and rewards.”

This goes to the core of why Gordon Brown is incompetent. This goes to the core of his neurosis. Mr. Brown is a narcissist. He believes he is one of histories “Great Men“. Remember the Freudian slip where he claimed that he had saved the world?

All economists know that the abolition of boom and bust is akin to the alchemists attempts to turn lead into gold. Any statesman should understand that getting global regulation for the banking system is also out of the question. Yes, Mr. Brown, we all know it would be a good idea for the United Nations to dictate fiscal policy to Greece. We all know that the UN should be able to ensure the liquidity requirements of China. But what if the UN wanted to dictate regulation to British banks?

The UK will not even join the Euro so we are not going to hand regulatory powers to any international body. Just last June the City Minister, Lord Myners, warned that “European proposals on banking regulation could hand greater political control of Britain’s vital financial services industry to the EU if left unchecked.” Yet Gordon Brown thinks he can reinvent The Man From Uncle. What next we have to ask? A perpetual motion machine perhaps?

Gordon Brown has a Napoleon complex but  he is more Tommy Cooper than Napoleon. Endlessly claiming he can perform miracles but endlessly cocking it up. Just like that. Just like Dostoevsky’s “Idiot” you just know he will knock over the Chinese Vase.

Mr. Brown has a massively over rated view of himself. He is impractical and lacks judgement because his vainglorious naivete always makes him go for an idealistic and unattainable solution. In short, the man is a fool.

Why the BBC is worth keeping

Why the BBC is worth keeping

Meanwhile the BBC, to my mind, are doing an excellent job covering the admitedly insipid election.

They have a web page with an “Election Calculator”. This allows you to adjust the share of the popular vote that a party might gain to see how that would “translate into seats” as they say. Of cousre this will be based on assumptions and algorithms but it is quite interesting that you have to wind the LibDems up quite considerably before they start getting any seats. In one scenario I ramped the popular vote up to 37.3% for the LibDems (Con:30.6%, Lab:24.7%) yet still the LibDems did not have more seats that the Tories or Labour. I’d say the electoral system needs to be changed.

I have been in favour of proportional representation in the past but I do think it would be a mistake to break the MPs link with their constituency. At least if all else fails it is possible to go and sit in front of your MP and harangue him. So these days I think that we should move to a Single Transferrable vote for the common and have PR for the House of Lords. However, I would have long terms for the H of L to allow them some independence from the party whips. I’d have the election at the same time as the Commons but only every other election would you get to vote for the Lords.




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