Cameron's dodgy dossier

Fed-up with all of the contradictory forecasts and statements about the referendum on Britain's continued membership of the European Union?  You probably should look away.

I would like to see another forecast - I know, that suggests either some kind of a weird fantasy obsession or that maybe I am just sad but let me explain.

The UK Treasury have been burning the midnight oil and going into 'spreadsheet frenzy' to produce forecast after forecast that shows how much the UK economy would suffer if the UK electorate had the nerve/courage to vote for Brexit.  So I am not alone in wanting forecasts!  Maybe not even sad.

The latest forecasts suggests a 12% decline in the value of Sterling, an increase in unemployment of up to 820,000, house price declines of 10-18% and a deep recession as a result of the shock to the economy, from a Brexit.

Now, these Treasury economists are supposed to be smart and I suppose that the reason that they are getting the same 'results' as other forecasting bodies is because they are all using the same economic model.   So rather than being independent verification, as is being touted, we instead have a reiteration of the same result because the 'domesday' data input and the model used is largely the same.  The surprise would be if they came out with a different result.

I would like to see a forecast that looks at the impact of a Brexit, not on the UK economy but rather on the economy of the remaining EU countries.

The doomsayers include in their forecasts projections that immediately a Brexit vote is achieved the four horsemen of the apocalypse will descend.  We will have Pestilence, Famine, Death and of course War.  Additionally, overnight or close to it, the strongest growing economy in the EU will dive into recession.

But...

What about the effect on Germany?  Or on France or the Netherlands?

In 2015, the Germans exported US $100 billion of their excellent cars and other goods and services to the UK.  They then imported just US $46.5 billion from the UK and so enjoyed a surplus of US$ 53.5 billion.

In the same year, France exported US$41.5 billion and imported $27 billion, so having a US$ 14.5 billion trade surplus.  The position for the Netherlands was exports to the UK of US$50.7 billion and imports of $34.2 billion, so a trade surplus of $34.2 billion.  I am not sure if that Netherlands import figure includes items that are 'imported' as part of a trans-shipment process through the Rotterdam super-port but you get the drift.

Now - still with me?- If the Sterling exchange rate did fall by 12% (why not 10% or 15%?) then this would make UK exports cheaper and if proper WTO duty rates, of around 4%,  were used, rather than the extremely high rates used in the Treasury model, then the falling exchange rate would completely eliminate the effect of any duties and would still provide an export boost.

Problem is though, that this 12% fall is one-sided.  It supposes that the other global economies would be okay and stable and only the UK would suffer from a Brexit.  Consider though the effect of the UK retaliating against Germany, France and the Netherlands, if they and the rest of the EU imposed  onerous customs duties on the UK.  If the UK did exactly the same and applied the same rates of customs duties, the economies of these countries would undoubtedly suffer and this would ripple on and impact the Euro exchange rate.   So maybe that 12% decline in Sterling's value is incorrect.

Let's suppose that the USA also followed the EU lead and imposed similar level duties.  Then the US economy and the US $ exchange rate would also suffer as they have a small trade surplus with the UK. Albeit not too much but the impact would not be benign.

We all know D'Israeli's saying about 'lies, damn lies and statistics' however, what we are being presented with are one-sided forecasts that simply serve the UK government's position.  In none of these 'forecasts' do we hear the impact of Britain's reduced contribution to the EU.  This is variously estimated at £55 million per day! Again, this would positively impact Britain and negatively impact the EU.  Those particular coins, unsurprisingly have two sides.  Nor is any of the positive effect of reducing the mountains of 'red tape' that strangle UK and EU business, shown.

Also consider that a fall in house prices would be a boon for all those young people trying to get on the housing ladder.  Yes it would negatively impact those people who speculate in the housing market - foreign flight capital, members of Parliament, etc., but overall, the effect would be positive.

In the past, UK Prime Minister, David Cameron spoke of presenting the case around the referendum to the British people and letting them decide.  Instead of doing this, he and his Chancellor, George Osborne are becoming ever more outrageous in the claims and use of data.  Indeed, they are starting to make Tony Blair's 'dodgy dossier' look like a respectable, sober and credible document!


George Osborne, speaking when he established the Office of Budget Responsibility, said that the need for this organisation, independent of the the government, was because in the past, HM Treasury forecasts were found to be biased and dubious because of the political interference.  So when we see the drivel now emanating from Osborne's Treasury we know that we need to filter any forecasts through the prism of number manipulation so as to achieve a pre-determined outcome.  In other words, don't trust or set any store by what they say - they say what their master - George Osborne - wants them to say.

To close, another forecast.

David Cameron has said today, that the cost of Brexit could add £230 to the cost of a holiday in Europe, for a family of 4.  Of this is a 'could' rather than a 'would' and of course this figure is 'supported' by the usual dodgy statistics and calculations from the widely discredited forecasts publishers.  However, let's say that this time, the number is right, does £57.50 a head sound a high price to pay for the restoration of Britain's long-held democratic traditions?  Britain has paid a far, far higher price to defend its democracy, in the past.  A price in blood and lives, not in £ sterling.

Jean-Claude Juncker, the unelected 'President' of the European Commission, who hails from Luxembourg, has threatened the UK by saying that 'deserters' can expect no assistance from the EU.   Well Mr Juncker, I suggest that you hit the history books.  Go back to the history of the second World War.  In 1940, after the fall of EU members France, Belgium and Netherlands, at the hands of the Nazi hordes, Britain, aided by its colonies and Commonwealth allies, stood alone against the Nazis.  Britain didn't desert Europe's people in 1940 and we won't desert them now or in the future.  Brexit will provide a liberating example for those Europeans now trapped within an anti-democratic EU.  Brexit will allow those countries that suffered under post-war Soviet domination, to experience true freedom and democracy, when the inevitable collapse of the EU occurs.

£57.50 a head for freedom - bargain of the century - where do I send my money?

Vote Brexit, shake off the yoke of anti-democracy which is weighing us down and restore Britain's freedom

EU half-truths

Have you received the propaganda leaflet from the UK government yet?  What did you do with it?  Straight in the bin? Read it?  I tore mine up and sent it back to the Conservative party at their FreePost address.  That way, Cameron’s party can pay 70p for the privilege of getting my response to their one-sided  and factually dubious document.

If you do bother to read this, you will immediately notice the innuendo and half-truths that run throughout.

The document states that 3 million jobs depend on the EU.  That is simply not true.  It has been estimated that 3 million jobs are dependent upon trade with the EU.  The fear that this so called ‘fact’ seeks to generate is that these jobs will disappear if Britons vote to leave the EU.  This is complete poppycock, utter rubbish, totally false – choose your own understanding.  As stated, these jobs are based on trade with the EU.  They are not dependent on membership of the EU.  The EU nations who trade with the UK do so on the basis of merit not charity.  They buy goods and services from the UK because those goods and services are offered at an acceptable level of quality and price.  If you read this leaflet you won’t find that in there.  You will just find the hint that these jobs will suddenly disappear if you vote leave.  This is shoddy and unbecoming a UK government.

The UK has attracted £540 billion of foreign direct investment over the last 10 years.  This  investment came about because of the UK’s pro-business policies not because of the EU. Policies that encourage businesses and allow for things like ‘zero hour’ contracts.  Policies that have led to a diminishing of union power, such that strikes are now a rarity, most obviously within the private sector.  Policies that allow for a reasonable relationship between employer and employee.  In certain EU countries, an employer doesn’t so much employ a worker as adopt them – it can be next to impossible to terminate employees when times get hard.   The UK is also moving towards a low company tax position, which also helps investment, though, meddling with other ‘taxes’ might erode this plus point.

The leaflet suggests that on balance and on the judgment of the UK government, the UK gets a good deal from the EU.  Consider, the UK contributes £350 million each week to the EU budget.  Of this, something less than half returns as grants and subsidies.  That means that around £175 million stays in the EU.  This pays for the fat cat tax free salaries and very generous pensions of the Eurocrats in Brussels.  It also subsidises certain EU industries, particularly otherwise inefficient ones, such as agriculture.  Irony alert.  The EU subsidises EU agriculture and puts trade barriers in the way of imports from developing countries.  Then because these countries, in Africa, for example, cannot export to the EU, their farmers suffer and so the EU then gives them aid.  Lewis Carroll couldn’t have dreamt up such idiocy!

Suppose that this £175 million was instead spent in the UK.  Or rather used to pay down the UK National Debt.  This currently stands at £1.6 trillion.  In a year, the UK could reduce this by £9.1 billion – not a huge amount but a start.  Further reductions could be made, because NHS spending and spending on schools and housing and welfare, would not need to be an increasing spiral to meet the demands of a rapidly rising immigrant influx.  This surely is the best way to secure the future for our children and grand children.  Far, far better a solution than shackling our country to the EU where, in countries such as Spain and Greece, youth unemployment is in excess of 50% - is that the future we want?  The EU is failing the old, failing the taxpayers and failing the youth and future generations.

Much is made by the UK government and various international organisations and of course the world’s former darling, President Obama, of the risk to the world economy from a ‘leave’ vote.  Inflation in the UK is threatened because of the instability.  At other times and when not discussing the EU vote, inflation is being positively encouraged by economists and world leaders as a cure to the stagflation that is facing world economies.  Go figure!

As per the leaflet, supposedly losing the UK’s full access to the EU’s Single Market would make exports to Europe ‘harder and would increase costs’.  Note the conflation of Europe and the EU.  The EU is not Europe it just contains a number of European countries, not all of them.  Note also the certainty.  Not might make exports hard but definitely would.   How on earth can anyone say that?  No discussions on a post-Brexit settlement have been undertaken so how can anyone say with such certainty that this would be the case?  Pure and simple, scare-mongering.

Then the leaflet claims that the rise of budget airlines and cheaper flights is down to the EU.  Even if it were true (and I seem to recall that the USA and Asia have such low-cost carriers without the aid of the EU), does anyone really believe that post-Brexit, airfares throughout Europe will suddenly increase and we would be back to the highly inefficient state-run monopoly airlines, of the past?

Now look at the benefits of the renegotiation that Cameron’s government ‘achieved’.

The UK now has a ‘special status’ in a reformed EU.  This special status means that we will not have to join the Euro.  We will not be part of further political integration, we will be able to impose ‘tough (their words, not mine) restrictions on welfare immigrants who have not contributed to the UK social security system and there is a commitment to reduce ‘red tape’.

When I read of the victories and major concessions I seethe.  That we have come to this.  The UK is allowed to not join the Euro or follow further political integration.  The UK is an independent sovereign nation.  The UK has been such an entity for hundreds of years before many of these countries existed!  But now we are to be allowed.  Excuse me if I sound less than grateful.  The UK doesn’t need to be allowed such concessions.  We have them by right.  They have been hard-won and paid for in blood through wars and struggle.  I hate to hark back to the second world war but the UK then stood alone in Europe, against the Nazis.  Without the UK and its allies from its colonies and dominions, Europe would have been under the Nazi boot, for ever.  No bureaucrat in Brussels or newly established democracy can give us these rights.  Nor can they take them away.

This document has cost something like £9.3 million to publish and distribute.  Cameron’s government spuriously claim that it is not unfair to publish this at taxpayer expense, because the ‘government has a view’ and wants to push that view.  Can you imagine the outcry there would be if, going into a General Election, which is a referendum on the governing party, the government of the day, published, at taxpayer expense, a defence of its policies and its future political programme?  Everyone would see it for what it is.  Government propaganda more usually associated with tin-pot dictators in banana republics.

This leaflet shames British democracy.   In a recent poll by YouGov, 53% of those people that expressed a definite opinion, said that the government’s actions were unfair.  Much is made of Cameron’s public school education (Eton) – well he doesn’t seem to have picked-up the sense of fair play that is supposed to epitomise such institutions.

I suppose, as an ever more committed ‘Brexiteer’, I should be happy.  This document and the secondment of government officials to bolster the ‘In’ campaign speak to the desperation of that campaign.  Lies aren’t working, unfair play isn’t working.  No matter how they bend the rules to try and achieve an ‘In’ vote, the people are stubbornly sticking to their guns.  At the moment, Brexit and In are neck and neck.  More immigration stories and such and the argument swings more and more in favour of the UK regaining control of our country, once more.

The only choice now, is Brexit.  Use your vote and use it correctly.

Cameron's wrong demands

We learn today of the issues which David Cameron is pursuing in the renegotiation of the UK's membership of the European Union.  They are, as quoted in the Sunday Telegraph:

1. Forcing Brussels to make “an explicit statement” that Britain will be kept out of any move towards a European superstate. This will require an exemption for the UK from the EU’s founding principle of “ever closer union”.
2. An “explicit statement” that the euro is not the official currency of the EU, making clear that Europe is a “multi-currency” union. Ministers want this declaration in order to protect the status of the pound sterling as a legitimate currency that will always exist.
3. A new “red card” system to bring power back from Brussels to Britain. This would give groups of national parliaments the power to stop unwanted directives being handed down and to scrap existing EU laws.
4. A new structure for the EU itself. The block of 28 nations must be reorganised to prevent the nine countries that are not in the eurozone being dominated by the 19 member states that are, with particular protections for the City of London.

That's it.  Nothing on the key issues that are impacting Britain's relationship today.  Nothing, for example on the subject of immigration and the free movement of peoples.  Nothing on the refugee crisis.

Let us though, examine these in more depth.

Why do we need any kind of 'explicit statement' from Brussels?  Is Britain a sovereign nation or not?  Does Britain really need the permission of the European Union to not join in the 'European Project' for ever closer union?  Who exactly could force us into a European superstate?   I seem to recall that the UK has stood against 'ever closer union' a few times, already in history - Waterloo, 1914-18 and 1939-45 spring immediately to mind.

The reality though is that any such statement will be meaningless.  The whole modus operandi of the EU is to achieve movement towards ever closer union by any means possible.  Don't believe me?  Consider, what were Britons told about the first referendum that was held, in 1975?  We were joining a Common Market.  This was a trading bloc.  No mention that we were signing-up to an EU Foreign Service or an EU army or EU anything but that is where we have come to.

So, 'an explicit statement that the Euro is not the official currency of the European Union'.  We are demanding, banging the table, crossing our arms and refusing to talk about other things unless the European Union issues a statement of the bleeding obvious.  Really?  We are going to stamp our feet in order to get the EU to confirm what anyone with access to the internet could establish in a couple of nanoseconds - as I just did!

ec.europa.eu › European Commission › Economic and Financial Affairs7 Aug 2015 - The introduction of the euro in 1999 was a major step in European integration. It has also been one of its major successes: more than 337.5 million EU citizens in 19 countries now use it as their currency and enjoy its benefits. The euro is not the currency of all EU Member States.

The euro - European Commission

Of course, I would seriously question - along no doubt with more than a few Greeks, Irish, Italians, Spaniards and Portuguese  - the Euro being a 'major success' but that's another discussion.

With demand #3 we are starting to get somewhere.  This is a demand that is an absolute must. The United Kingdom has to have the power to pass its own laws - and only the democratically elected government of the UK can pass these laws.  Not at the behest of or on orders from the European Union.  Only when the UK parliament has debated and voted and decided upon proposed laws, should they become the law of the UK.  Not because the unelected bureaucrats from Brussels say that a law must be passed but because the elected representatives of the people of the United Kingdom vote for it.  I half-apologise to those pro-EU readers who will be offended by that four-letter word - vote - but until the EU adopts democracy, I have to keep using it as in my view, Britain and not Greece,  'invented' democracy (Take a look at Daniel Hannan's excellent 'How we invented freedom and why it matters') 

The fourth demand - relating to a revised power structure simply follows on and is an absolute requirement, from #2.  Since we know very clearly, that the Euro is not the official currency of the EU, then obviously the power  structure and organisational apparatus has to reflect that.

I gather, that David Cameron will, if he gets his own way on these four demands, consider that he has 'batted well' for Britain and he will then campaign for a Yes vote, for Britain to remain in the EU.  Not me though. Since the demands are largely false, to begin with and, let's face it, should be extremely easy for the other EU members to accept (#3 probably less so) then the whole re-negotiation is seen for the farce that it is.  

I know that the Euro federalists consider that the free movement of labour is a condition sine qua non of membership.  They equally want an EU superstate and they are not going to get that.  So, this free movement issue needs to be discussed.  

In the recent refugee crisis, Angela Merkel had indicated Germany's willingness to take in 800,000 refugees.  A few days afterwards she started to row back on this but the message was received very loudly and very clearly by the invading hordes in Turkey, Lebanon and Libya.  What often gets lost in the consideration of this story is that these refugees almost 100% want resident status.  This then means that they can travel to and work in any other EU member country.  I am not suggesting that all 800,000 will come to the UK, but it absolutely cannot be right that any of them, should be able to come to Britain.  Clearly this would call for discussion on the creation of a different category of resident - native resident - born in the particular EU country prior to 2000 or to parents born in an EU country prior to 2000, say, and temporary resident which would include all of the refugees and economic migrants.  This latter group would not have the rights for free movement.  If Mrs Merkel wants to take in 800,000 refugees, fine, but don't expect the UK, Netherlands, Italy, Spain etc., to become economically or in any other way responsible for Germany's lunacy.

Another issue that needs to be negotiated is for the UK (or any other member state) to be able to conclude its own trade treaties with nations outside of the EU.  Also, its own military alliances.  In brief, to be able to act like the independent sovereign nation, which it is.  

I opened this piece by talking about Cameron's four demands.  For me the question is much simpler.  One simple requirement (well, simply stated, anyway).  The return to the UK of all of those powers that have been ceded to or taken by, the EU since we joined back in 1973.  To those who will say that it is unfair for Britain to have the advantages of EU membership without having to follow the rules, I say.  I agree!  Britain needs to comply with EU regulations but only, repeat only, when and where those regulations have been implemented by the UK parliament (and post referendum, all such directives and rules, laws and regulations, must be voted upon, again.)

For me, timing is also important.  Part of these negotiations must include a timeline.  If the decision is taken to leave the EU, then this must be implemented within 12 months of the date of the referendum.

Finally, given the EU's reluctance to accept the will of the people and past referenda, there can be no re-run at the behest of Brussels.  If the British people vote to leave, we leave.  

What think you? 

Financial diarrhoea

I suggest that it wouldn’t be unreasonable to say we are all occasionally, act in a hypocritical manner.  We call ourselves law-abiding and then drive over the speed limit  or we call ourselves Christians but don’t publicly bear witness to Christ the Redeemer, etc..

It seems to me though that when it comes to hypocrisy, governments practise this on what might be called an industrial scale.  When the ‘government’ is the European Union, the scale increases exponentially.

Let me explain.

For a few years now, European governments and conservatives in the USA have been preaching the virtues of living within ones means and the need for austerity in order to get the country back on track, etc., etc..

How many times, in the last five years, has UK Premier David Cameron or his Chancellor of the Exchequer, George Osborne, spoken of the need for austerity and that cuts, in public expenditure,  have to be made?  How many times has German Chancellor, Angela Merkel or any number of other German, Dutch and Finnish politicians, lined up to lecture the Greeks, Spanish, Italians, Irish and Portuguese (the so called (and rudely so) PIIGS countries), of the absolute and dire need to reduce their government expenditure and to make swingeing cuts in public service provision and pensions, etc., etc.?  Cast your mind back and recall the same sort of comments coming out of the IMF and the World Bank.  Indeed, I also seem to recall some similar comments, in relation to Greece, coming out of the hallowed halls of Goldman Sachs.

Don’t bother ‘googling’ the subject, we can take it as read, that these members of the governing elites have spouted this ad nauseum. 

The cannier politicians ‘humanise’ this by putting this into a family context.  The line runs something like this:

Imagine that the UK (Greece, Ireland, etc., etc., ) is like your family household.  You have been living beyond your means for years – spending more money than you have been earning and filling the gap by borrowing more and more money each year.  You are now in a position where you owe so much that a not insignificant part of your earnings is just used to cover the interest payments on your overdraft or credit cards.  As a responsible family, you decide that this is unsustainable and things need to change.  So you abandon the 2-3 foreign holidays a year – you stay at home or holiday in your home country.  You eschew the latest electronic gadgets and curved wide-screen TVs and make do with what you’ve already got.  No more weekend shopping excursions buying impulse items, where your flexible friend (your credit card) takes the strain.So you stop the monetary bleeding by cutting off your expenditure or rather, dramatically reducing it – maintaining only that which is necessary for the basics of life.  Then you start to pay down the debt and get your finances on an even and sustainable keel.  After time, you develop a habit of avoiding debt and only buying for cash rather than on credit and all of the family accept that while the journey to where you now are, was hard, it was worthwhile as we didn’t drown in debt, which was a very real prospect.

And this is where the hypocrisy comes in. 

Those very same politicians ‘talk the talk’ but don’t ‘walk the walk’.  While they have been mouthing-off about the need for austerity, they have continued to spend taxpayers money like a drunken sailor.  Indeed, I do drunken sailors a dis-service.  When a drunken sailor runs out of money, he doesn’t rush off to the printers and ‘magic-up’ some extra bank notes.

And that really is the core of the hypocrisy of these governments.  Like the above mentioned family, they have been over-spending for years.  The 2008 financial crisis supposedly caused these governments to realise their wild spending sprees had to end and so we entered the times of austerity.

  

Except, we didn’t  - governments continued to borrow more and more money and interest payments continued to mount.  For the UK, interest payments on national debt is running in excess of £47 billion  (US$71Bn) each year – that is, more than the UK currently spends on defence or on education. 

There have been significant cuts in government spending in Greece and the other PIIGS countries  and these have directly impacted on people – so, using the family analogy, the multi –holidays and wild spending have been cut back but because earlier spending and borrowing in countries like Greece was so very far out of control, these cuts, severe as they are at the human level, are really insufficient.

Going back to the family analogy,  the family would have declared personal bankruptcy and the lenders would have taken a loss on the overwhelming part of their reckless lending.  That’s not the case here in Greece and the other PIIGS countries. 

The lenders - major international financial institutions and banks - have seen their assets - the loans to the Greek and other PIIGS governments - protected and their interest payments - income or revenue for the banks - continuing.  This was achieved by these PIIGS governments implementing austerity and creating major problems for their own people.   Youth unemployment in some of these countries is in the 50% region!  Ireland has seen an exodus, mostly of its young, that the 'celtic tiger' thinking back to the days of the potato famine, had thought was banished from its memory.  Not so!

In the other EU countries, bankers and their Central Bank ‘masters’ then came up with the wheeze of using  Quantitative Easing or QE.  This is the process whereby the country’s Central Bank ‘prints’ virtual money which it then uses to buy bonds issued (to fund the country’s deficit or overdraft, if you will) by the same country’s Government and its financial institutions.  The rationale is that this helps the local economy.  The reality is that this means that those preachy countries don't have to make the same cuts - which by rights they should be making - and could carry on spending beyond their own means.  It also supports those banks and financial institutions who can shore-up their balance sheets with good and reliable government debt - it's not as if those countries are going to default, is it?

A kind of quid pro quo if you like - large banks get their governments and the IMF, EU and World Bank to force austerity upon these really over-extended/borrowed countries and the banks then agree to not cry default on the loans that they have outstanding.  This helps the banks - they don't have to write-off their uncollectable loans - and it helps these more powerful governments - by not having to face the effects, of the extremely poor lending policies of these banks, on their own local economies, and it also keeps sacrosanct, a phoney currency like the Euro.  Then these banks use the money, that they can borrow ever so cheaply from their own governments, to buy the bonds issued by their very own governments.  Their own governments can issue cheap loans - essentially interest free - because the money is not real, it is virtual, created out of this air!  The banks' governments then have sufficient 'money' to avoid those austerity cuts that they have forced upon the PIIGS.

Yes that is all very confusing but that is what 3-card monte or a shell game is all about - it's a con!  The pea is never under the shell and the queen is never on the table except when the dealer wants you to see it!

And, dear American readers, please don't think that you have been above such reproachful behaviour.  You can expect any  US Government led by the likes of President Obama, Nancy Pelosi and Harry Reid to have absolutely no morality when it comes to economic matters.  They haven't in any other policy arena, so why would they have it here?  Also the US does have some rather large, and aggressively so, banks and these could not be allowed to suffer the consequences of their reckless lending decisions.  So QE was invented in the US and America needed to defend its leadership in the field by issuing a staggering $4 Trillion of phoney money.  Now, in fairness, the US economy has recovered - kind of.   America's GDP is growing but unemployment remains stubbornly high.  Some Americans believe that this isn't really so but then these people choose to ignore the individuals that have removed themselves from the jobs market which make the unemployment statistics look better.  The reasons for leaving the jobs market are manifold but it is strongly suspected that many people have just 'given up' looking for a job!

Not to be outdone, the European Central Bank has now decided to get in on the act.  They are to issue QE to the value of Euro 1.1 Trillion over the next couple of years.  This will stave-off any need to address the economic malaise in Europe by this act of financial ledger-de-main.  They will continue to allow Europeans, even in the strong economies of Germany, Netherlands and Finland, to live beyond their means, to enjoy short working weeks and extensive holidays and unaffordable welfare programmes but at some point (I guess in two to three years) the game will be up and things will start to unravel.  Indeed, given the large budget deficit already being seen in France (at more than 4% it already exceeds the 'allowable' level, set by Europe) we may have to amend the acronym to FIGSIP.

These countries, those in the European Union, the USA and UK, have managed to get away with these acts of devaluing their currencies, by the virtue of all doing the same thing and them being major currencies.  The Chinese Yuan is not traded widely in international markets and so people can only use, US$, £ or Euro and while all these countries practice monetary diarrhoea the devaluation isn't apparent - relatively speaking, there is no change since they get measured against each other.  

Except, Switzerland, which is above such financial shenanigans has removed its currency's peg against the Euro and immediately saw its unsullied Swiss Franc soar in value against the Euro - and that was before the ECB decided to switch-on the 'printing presses'.

In the elections that come-up in the coming months, don't be fooled by claims of one party being in favour of austerity and so support us because we care and don't support it  The current reality is that all of the major parties in all of the major economies are in favour of continuing, to a lesser or greater degree, the current over-spending and  reality-avoiding policies which store-up problems for our children and grand-children.

Not a good start to 2015!   

Scotland's currency

Once again, I return to the subject of what currency Scotland will use, if the Scottish people vote Yes in the upcoming referendum.

It is no good expecting an answer from Scottish Nationalist politicians.  Here is a link to a BBC interview with Nicola Sturgeon, the deputy First Minister of Scotland.  Watch and listen to how many times she is asked if there is a Plan B.  http://bbc.in/1lQIVm9

The reason that a Plan B is needed is because all of the leading UK-wide parties have stated their opposition to an independent Scotland entering into a currency union with the rump UK.  Nationalist politicians insist that this is just 'bluster and bullying' from Westminster and so they have no need for a plan to face this potential situation.  However, surely prudence suggests that it would be an idea to have some kind of policy ready just in case it isn't, don't you think?  I realise that the honesty of politicians is usually suspect!  Their keeping of promises is not one of their strongest points.  However, surely the SNP must put something in front of the Scottish people that says 'we do not believe that the rest of the UK will not allow us to enter into a currency union but if that is the case, then this is what we will do......'

Too much to ask?

Of course, this all pre-supposes that an independent Scotland will have the authority to make such a decision, anyway.

The SNP have made a big play of their belief that an independent Scotland will be able to remain or automatically become a member of the European Union.  Let's suppose that this is valid (though the Scottish government refuses to publish the legal advice it has received (presumably received on behalf of the Scottish people?)).  Why would the European Union allow any new member the choice of what currency they can follow?  Does anyone seriously believe that the EU wouldn't simply say, like they do to aspiring members, you must adopt the Euro as your currency?  Why wouldn't they?

I would suggest that no matter what the rump UK says, the EU will demand that Scotland adopt the Euro. The relentless advance of the Euro-project requires this.

I suspect that the EU, while making this an absolute condition, will not set themselves as the 'lender of last resort' for Scotland.  That seems to be what the SNP wants to get from a currency union - the remaining parts of the UK providing a financial guarantee for Scotland's debt.

As the referendum date draws nearer, we can rightly expect to see more and more questions being asked of the Nationalists and answers not being forthcoming, just bluster and bullying.

I am in favour of the Union and opposed to Scotland gaining 'independence' but have become reconciled to the need for a referendum.  However, the post referendum period also needs to be addressed.  If the answer is Yes, then apportion debt and assets between the two countries and separate.  If the answer in No, then no further concessions or granting of additional powers to the devolved government  are to be given.  Also, the independence question needs to be put away for at least 25 years  - enough already!

2012 blogging

I have just passed the 12 month anniversary of my first blog and, since we are approaching the year-end thought I would look back over the past year.  Don't worry, there will be no slow-motion clips, a la BBC Sports Personality of the Year!

First though a thank you to the more than 12,000 people who took the time to look through this.  Even if you didn't agree with what you read I appreciate your participation in the dialogue!

So...

Scotland and the independence vote was a much-written about topic for me and for those that comment on my musings/rants.  As Hogmanay looms, the people of Scotland know that they will have a vote and it will be a yes or no type of vote and in late 2014 but that's about it.  They have stories and counter-stories about whether they will remain in the EU or not and thus use the Euro or £ Sterling.  They have still heard little to nothing about how Scotland's economy and public spending will manage without the UK subsidy (making the EU membership question that much more important).  Hopefully, 2013 will bring some reasoned arguments to the debate.  I am encouraged by Alistair Darling leading the anti-independence side of the discussion.  I get the sense that he will also pick-up sympathy votes for having had to live and work with Gordon Brown for so long!

The topic that brought the most comments was the Government's plans for so called 'gay marriage'.  Many of the comments accused me of being homophobic.  I don't believe I am but I do recognize that that is the way that debate gets stifled.  Mention immigration and you are suddenly a racist BNP supporter, for example.  The Government conducted a sham public consultation exercise, where their view was already made-up and they will now push ahead with legislation and it will include certain safeguards including not allowing such 'marriages' to be conducted in Anglican churches  This is a meaningless sop to try and buy-off disgruntled and bemused Tory MPs and voters.  The government know that that part of the legislation will be challenged by homosexuals under Human Rights legislation.  Commenting on pro-homosexual  legislation that was passed in California, back in the 1970's, the comedian Bob Hope, said that he would soon have to leave that state, before they made homosexuality, compulsory.  I often wonder if that is the goal of the so called charity  Stonewall and the whole host of media that champion 'gay rights' to the detriment of the non-homosexuals in society?   The question I repeatedly posed - what does this legislation give homosexuals that they do not already have under the Civil Union act - remains unanswered.

Europe and the Euro were popular.  Time to confess that my predictions of  Greek exit from the Euro have been premature though I do believe that the whole project is still very precariously balanced and in jeopardy.  The big question though, is will David Cameron recognize the need for getting off of the fence and offering the electorate a clear In/Out vote on continued membership of the EU?  If he doesn't and Labour beats him to the punch then those people who have defected to UKIP can be counted on staying away from the Tories in 2015.

Then there is the UK political scene and particularly the pussy-footing way that the Tories deal with their supposedly junior coalition partner.  From dithering on Europe to pandering on 'gay marriage' to sparing the knife on public spending cuts, the Tories have bowed and scraped to the Lib Dems , time after time.   Taxes still remain high - Income, VAT, National Insurance and the phoney Green Taxes - and so does Public Spending - welfare payments still make low paid work uneconomic to take-up and many middle class receive tax credits and other stipends back from the State,  that they have just paid over in taxes!  And then there is the poor management of news!  The March Budget became focused on pasties and grannies just at a time when we needed the hard questions to be addressed.  It seems that can-kicking is not only done by the Left!

If you ignore rank hypocrisy and pure political opportunism (just for the sake of politicking) then Labour has had not too bad a year.  They were aided by the ineptitude of the Tories (see budget above) but Ed Miliband has come into his own this year.  He still grates when he talks and then there is what he says but, he has done better than I expected.  Fortunately, the other Ed, Balls that is, has had a bad year.  One senses that his heart isn't in it anymore.

I don't want to get on to Leveson as that comes back to Tory stupidity - we have a problem with the press, let's appoint a judge and commission a report for some time in the future!  Why would we expect anything less than a restrictive response from a British judge?  At the end of the day, judges, like politicians, think they know better than us, what is best for us!  Think not?  Think of how many times you have heard of a ruling and thought - No way, that's just crazy (Abu Qatada ring any bells??)

So to close out - I wish you and yours a blessed Christmas and hope that 2013 brings health and happiness to you. 

Spanish thoughts

Just as Spain seems about to embark on seeking a bailout of, some say 480 billion Euros (but don't call it a bailout as the Prime Minister doesn't like that word and said he wouldn't ask for one!), I thought to share some observations from my recent trip, to the country.

Employment
The unemployment statistics talk of a rate of 25% unemployment but I don't think that British readers will fully appreciate what this means because in Spain, it is the Spanish that work.  The waiters in restaurants and hotels are Spanish, the street sweepers are Spanish as are all of the hotel and shop workers.  These jobs are not filled by grateful East Europeans, as in Britain but by locals.  Perhaps it is the far less generous Spanish welfare system that obliges the Spaniards to take jobs that are 'beneath' their unemployed UK counter-parts?  Or maybe it is just that the Spaniards understand the dignity gained by working rather than just taking State hand-outs?

What I see as worrying though, for Spain, is that this means there is no 'slack' in the system that can be used to swap migrant labour for locals.

Construction
I have been traveling in the Alicante/Granada/Malaga triangle and apart from one or two road building projects (and I mean one or two) there seems to be next to no activity on the many unfinished construction sites that one sees.  What activity there is, is essentially 'hand to mouth' where a property is finished simply so that funds can be obtained to keep things just ticking over.

Given that construction has been such a large employer in the past, it is easier to understand the unemployment numbers, when you see so many dormant building sites and idle crane gantries.

Talking of construction - what roads there are in Spain!  Great carriageways that allow you to be transported distances at speed and in comfort.  And what nice looking and modern, public buildings!  I am supposing that the ten years of access to very cheap Euro money was used to finance these but have to wonder if that has been money well spent?  We all hear of stories of un-visited 'cultural and arts centres' and airports where no planes land but I don't understand why nobody is called to account for this.

Loss of spirit
Not quite sure how to say this but on this trip (I have had the pleasure of visiting Spain on a number of occasions, before), I have noticed that the Spanish seem more subdued or resigned.  Maybe it is because it is not the 'high season' for tourists or because we went off of the beaten tourist trail but that Spanish zest for life just didn't seem to be there.  If you have visited Spain before you may know what I am getting at.  That boisterousness and vitality seems to have been sucked out of the people - something that won't show up on any Euro-based study or statistic or ever be used to bolster the (failing) Euro project but a great shame, nevertheless.  

I promise not to bore you with vacation snaps but this has been a mixed trip.  Good from a personal perspective but worrying to see how a Franco-German obsession with a fatally-flawed and doomed project can bring once proud sovereign nations to their knees and just plain suck the life out of the place!  What a shame!

Finally
One thing Spain might want to think about - the Siesta.  Maybe it is time to end this?  I know about this but it is still frustrating to have stores closed when you want to look around and maybe buy something.  I know that there is more to life than retail but.................

Greece and Spain - Opportunity or risk?

How do you feel about Greece maybe exiting the Euro?  Are you relaxed about the implications for the economy of the EU and maybe the World?

What about Spain?  While exit from the Euro may be a little further away (or did I speak too soon!!) broadly the same economic conditions prevail and, like Greece, can austerity piled upon austerity work here?

Note also how the spotlight has moved from Greece to Spain and Ireland and Portugal have, for the time being, been skipped over.  I think though that they will come back to haunt the Euro and EU, again.

I guess I am conflicted about the whole thing. 

Part of  me expects that the Euro must collapse under the weight of its inherent contradictions and I would look forward to that as it would, I believe, lead to a much required re-evaluation of the whole EU project and may, just may, give the people of Europe a say in what they want.  I do not believe that anyone who knows anything about Europe and the EU, can say that the current set-up has any democratic legitimacy.

On the other hand, I worry about what would be the knock-on consequences of a major default or banks collapsing, in Spain.  I think that Greece is essentially 'priced in' for the financial markets (even if the non-austerity parties eventually form a coalition).

Spain though is another and much bigger 'kettle of fish'.  The ripples from a banking sector collapse, in Spain will have much more impact and France will not be unaffected, by any means.  Latin America will also not escape unscathed, is my belief.

So what a choice -

Hope that people can accept that 'living within your means' (that is what austerity really means!) and will undertake the hardships to travel that journey

or

Hope that the weaknesses of the Euro project lead to its demise and a complete re-assessment of the EU - its purpose and its legislative reach and equally importantly, its lack of democratic accountability.

Any thoughts?

France and Turkey

So typically French!
French MPs are pushing a bill which would criminalise the denying of an alleged/disputed genocide of Armenians in 1915/16.

Ask yourself this.

If you were a French MP, what would be your top priority as you head into 2012?
Tackling the Euro Crisis?
Addressing the structural deficit in the French economy?
Wondering how to reduce French bank sovereign debt exposure 
Attacking the British?
Continuing to alienate a faithful ally like Turkey?

Okay, since you are pretending to be French, you can have two priorities.

If you are doing it right, neither of your priorities relate to the Euro crisis or the French economy.

If you didn't get it right, then in time-honoured EU tradition, you can have another vote and keep on doing so, until you get it right.  Bien? 

Fiddling while Rome burns comes to mind.

Getting less isolated

So the UK has been invited to the table.  Maybe Cameron wasn't, as has been claimed, so naive, after all.

Interesting (and worrying) to see that this accord looks like it may yet unravel. 

The fundamental flaws in the Euro have not been addressed and the politicos and Euro-Crats just don't understand the need for a speedy response and for one that actually addresses the real issues. 

Waffle from Belgium is best served with whipped cream and maple syrup.  When it isn't (and last week's meeting produced a confection  but an inedible one) the financial markets know it and act accordingly.

The Euro-dictators can currently ignore and fail to consult their electorates but they cannot control the financial markets (that's not to say that Canute-like they won't try!).

Continue to watch this space.