UK's Art. 50 response to EU

At first listen, the tone and words used by Donald Tusk, European Council President, seem helpful and conciliatory but listen again.  The EU response to Britain’s triggering of Article 50 is a poisoned chalice.

There are three main strands to this response.

Firstly, the EU seeks a ‘divorce settlement’.  The figure that has been bandied about is £50-60 Billion.  The EU, which is the shorthand phrase I shall use for Germany, says that they want this resolved before moving on to any deal on the future relationship between the EU and a freed Britain.  In a ‘conciliatory’ frame of mind, they say that they only want to see progress on this matter – so the general terms of reference based on what the UK should pay – rather than an actual number. 

This though is a trap.  ‘Progress’ will not be made on anything that the UK proposes which takes account of prior contributions, for example. 

In the past 40+ years, the UK has contributed a net £500 Billion plus to the EU.  That is a net number – money that has flowed from Britain out to the EU.  That is money that has been ‘invested’ in farm support payments to French, Italian and Greek farmers but also much investment has been made into roads and buildings across the EU.  These represent the ‘assets’ of the EU and Britain’s contribution to these needs to be recognised.  Since the talk is of a ‘divorce settlement’ think of these as the main home and second homes that the British spouse has contributed to.  In a divorce the value of these would be considered.  The EU only wants to consider their own future expenditure and Britain’s contribution to that.  So, ascribing no value to the past contributions. 

So, in the eyes of the EU, the more than €24 Billion that Britain invested in the European Bank for Reconstruction and Development (EBRD) is ignored. (Oh, and that is not part of my earlier quoted £500 Billion number!).  Neither is the €39 Billion invested in the European Investment Bank (EIB).  Nor are the amounts invested in the EU offices that have spread around the globe.

Second part of the response is the Spanish sop.  Essentially, the EU is seeking to make a condition of a deal, that Spain should have a say regarding Gibraltar.  The same Gibraltar that voted 99% to 1% to want to remain a British Overseas Territory, in a recent referendum.  Spain has long coveted Gibraltar, which fell under British rule back in 1713. 

I think of this part of the response a ‘false flag’ Something to get us to focus on this and become highly irate so that eventually, when the EU give in on this, it can be dressed-up as a major concession.  Simply put, the EU, Spain and the UK know that this isn’t even on the table.  It is though an irritant and one that the EU know will be seen as so.

The third part of the response is the most critical.  The EU seeks to control Britain’s post-Brexit taxation and regulation policies.  The EU is a typical bureaucratic entity.  They look for uniformity so that no country stands out and can attract investment or set policies that are appropriate for itself. 

Britain already has a pro-enterprise approach to Corporate taxation and, if it can silence its internal socialist envy-peddlers, will have a personal income tax policy that promotes individual rather than State growth. 

The EU know that Britain will continue down this pathway.  They are seeking, by the dangerous third component to their response, to stifle this.  Should they succeed, then parts of the Brexit Referendum Project Fear will be fulfilled. 

What kind of country, other than a client state, (which is increasingly how we must see the relationship between Germany and the other EU ‘nations’) cannot control its own levels of taxation and regulations?  What would be the point of Brexit if we are controlled by Brussels (Berlin on the Zenne)?

So!  The response from the UK Government needs to be as follows:

Dear President Tusk,

We have heard of your proposals regarding our invoking Article 50 of the Lisbon Treaty.

In order to facilitate discussions, I advise, on behalf of the UK Government, that we will not accept any discussions about or inclusion of the status of Gibraltar in these discussions and most specifically will not allow any talks of a bilateral nature between Spain and the UK, to be a part of such discussions.

In a similar vein, the UK Government will not allow the EU to have any say or competency over Britain’s taxation or regulatory regimes once we exit the EU.

Finally, as a gesture of goodwill, the UK will not pursue a refund of its share of contributions made to the EU, during the course of its membership.  Linked to this is an understanding that the UK will make no further contributions to the EU, from the day that the UK’s membership of the EU, actually ceases.

Yours sincerely

Theresa May

On behalf of the UK Government

I have no doubt that such a letter would be found, by the EU-favouring Foreign and Commonwealth Office, to be lacking in diplomatic finesse.  That is intentional.  A very clear message needs to be sent.  Very clear.  When Theresa May said ‘no deal is better than a bad deal’ this wasn’t rhetoric.  She was speaking on behalf of the UK.  We do not expect to spend two years discussing issues on which we simply will never concede.  The EU need to understand that, immediately.  The gloves need to come off.  Diplomatic niceties are not what is needed, plain talking and backbone are. 

We would look for a partnership with the EU but a partnership of equals. If that is what the EU wants then they should start seriously negotiating and they should cease with  their delaying tactics which they know will not be conceded. 

Oh and yes, regarding the thinly veiled threat concerning security cooperation.  The EU and its apologists within the UK, need to understand that Britain doesn’t do anything for free and the contribution to Europol and security matters, from the UK is far superior to that from other member states.  Theresa May was absolutely right to put this on the table.

Europe - too little, too late

Given the continuing crisis in Europe, I must, once again, return to the subject.

Belatedly, EU politicians are coming to the realisation that the best way to tackle the issue of Syrian refugees, is to do so, at, or close to source.  So they are talking about granting further aid to Lebanon, Jordan and Turkey.  This will certainly help – indeed, this is the policy that has been advocated by the British government – a policy for which the liberal left and EU elite castigated Cameron’s government.

However, this solution only has the opportunity to address the Syrian element.  Many of the swarm of people now invading Europe’s soft underbelly, come from places other than Syria.  They come from Iraq – even though many areas of Iraq are under government rather than Daesh control.  They come from Eritrea – presumably these are in opposition to the government?  They come from Pakistan and Bangladesh, from Somalia and Ethiopia, Nigeria and Kenya .    These people are getting swept-up in the mass and all are being labelled as ‘refugees’   Plainly that is wrong but the EU solution does nothing to address this. 

Nor does it do anything to address the mass of immigrants that are seeking to illegally enter Europe, from Libya.   So hard luck Italy – Germany finally feels imperilled by the swarm coming in from the south-east and so action must be taken.  France is feeling destabilised by these immigrants and so, to hell with the Italians.

Donald Tusk, President of the European Council (being a European position, quite naturally, unelected), laid out the new policy last night, after long talks with EU member states.  These talks followed on from the issue of a ‘diktat’ from the European Union that forces most of these ‘sovereign’ nations to accept a quota of immigrants (a few countries, the UK among them, are not affected because they have an opt-out).    There has to be a strong question mark over whether or not any of these nations can really continue to be called ‘sovereign’, especially when they can be forced to accept policies that they very clearly don’t want to.

Consider also, that Spain has been told it must accept 19,219 migrants.  Portugal must take 4,775.  That is the same Spain with unemployment currently standing at more than 22% and youth unemployment at more than 48%.  The same Portugal with unemployment at close to 12% and youth unemployment of more than 31%.  So these already suffering and impoverished countries must accept people who will naturally be an immediate and long term welfare burden.

Tusk and the EU elite have come to the realisation that they must undo the effects of German Chancellor Angela Merkel’s at best naïve, and certainly very stupid open invitation to ‘refugees’.  Merkel’s invitation has been likened to those teenagers that post a ‘party at my house, tonight’ notice on FaceBook or Twitter and then wonder why hundreds or thousands of people turn-up.

Tusk advised people that it is time to ‘correct the policy of open doors and windows’   He also warned that the greater part of the tide (is that the Polish word for swarm?) was yet to come!

The EU will also need to strengthen its borders, according to Tusk.  Yes, that’s right, the EU needs to do the very thing that Hungary has been so pilloried for.  Hungary builds a fence – very bad.  EU builds fences in border states, including Hungary – that’s okay!  A fiction writer wouldn’t be believed if he or she wrote such stuff!  I suppose though, that is the price that is paid, when a nation surrenders its sovereignty.

 

Memo to SkyNews and BBCNews – Maybe do some background checks on those Syrian professionals that you interview?  Yes they can appear quite eloquent and well-spoken but maybe ask yourself  how, in what Sky and the BBC insist is an oppressive regime, led by Assad, did they manage to have such a very good, middle class lifestyle?  Were they maybe, until very recently, staunch supporters of the regime, who have ‘read the writing on the wall’ and are getting out, with their wealth, before Assad falls?  Wouldn’t that make them economic migrants rather than refugees

One intriguing prospect of the EU’s crass mishandling of the migrant invasion is that this is seriously strengthening the hand of the Brexit  campaign.  What kind of country would Britain be, if Eurocrats and ministers from other EU countries can simply dictate how many immigrants a company must take?  What kind of a country would Britain be if its borders were to be protected, not by  its own troops and border services but by an EU Border Force (the creation of this supra-national body is the latest idea out the EU Project)   One has to wonder if this is by some kind of design.  Has Brussels and Berlin decided that the British can never be ‘brought to heel’ (history should have been a good guide here!) and so the only way that the Euro-Project can progress, is without the UK.  Have the Germans and EU elite spoken to Obama’s US administration and reached an understanding to isolate the UK?  Will they be ‘bigging up’ Nicola Sturgeon and the SNP, so as to create division within the UK?

Watch this space!

See also Europe - A Refugee is for life.

Europe Immigration - A solution

A Swarm

Action required

 

EU Immigration - The solution

The European Union is facing an unprecedented invasion, right now.

Hundreds of thousands of immigrants from Africa and the Middle East are swarming into the EU, or are poised to do so.  Germany is said to be facing an influx of more than 800,000, this year.

This solution might work for some of them.

Many of these migrants are Muslims, fleeing war in Syria and Iraq or in Somalia or Eritrea or Ethiopia or Afghanistan.

Surely it would be far, far better for these migrants to be re-housed in a culture that is more in keeping with their own?

So why don't the EU authorities turn these people around and send them to Saudi Arabia or Iran - depending upon which Islamic sect, they follow.

Both are rich countries, both are strongly religious and won't persecute the migrants for practicing their religion - so long as they chose the right country.  Both are large countries with plenty of room for settling large numbers.  Saudi Arabia has a large population of immigrants from the Indian sub-continent - mainly Pakistan, it could simply replace these with the immigrants that are most in need.

This solution would reduce the burden on European countries and stop the indigenous people from feeling swamped and for their ailing economies being even more strained.  Plus, it gives the Saudis and the Iranians the opportunity to show charity and compassion to their co-religionists.  Win/Win really!

This would also take away the opportunity of those in Europe to say that these are merely economic migrants - just looking for a better life in Europe, than they can achieve at home.

If this is successful and these masses of Muslims could be accommodated within these two stalwarts of the Muslim community, then perhaps those Muslims that have migrated to Europe, during previous upheavals, could also leave and settle there, as well.

Too simplistic?  Consider how many Greeks and Turks moved in opposite directions when those nations moved apart in the 1920's.  Consider how many Muslims moved from what was to become India to what was to become Pakistan, in 1947 (and Hindus in the opposite direction.)  Mass migration can work, indeed has worked but has been most successful, when the people moving, move to an area with which they are culturally familiar.

Maybe the Americans could try this with their non-Mexican immigrants?  Let them stay in Mexico rather than take them into the USA and put them, (in an effort to disperse the large numbers) into alien environments.

If something isn't done though, watch for the further rise of far Right parties in Europe.  The French National Front is already in the ascendancy and will only be stopped from taking the French presidency by a coalition of Socialists, Communists and Conservatives.  We see, in Spain, Greece and Germany, a backlash building.  Even in my beloved UK, the UK Independence Party garnered a lot of support, in the last General Election, because of it's anti-immigration policies.

Doing nothing, isn't really an option!

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.................

EU Politicians - How much is enough?

Greece's government is, not surprisingly, asking for more time to implement further budget cuts. 

It is in the balance if the real masters of Greece, the German dominated EU and the IMF, will allow for such time.  There is much speculation that contingency plans have now been put in place to allow for an 'orderly' exit of Greece, from the Euro. 

While this will cause additional pain for Greece, allowing their new currency the freedom to float (yes, it will sink initially but will then find a sustainable level), will get the Euro boot off of their throat.

And then what? 

Spain is still fragile and my expectation is that as we move into September, both Spain and Italy sovereign debt offerings will come under increasing pressure.  The current lull, is just that.  the storm is right around the corner.

Things is, I don't see how Spain can 'tighten its belt' any further.  They have initiated public spending cuts, how much more can they do, before they too throw in the towel? 

Think about those Spanish unemployment figures.  25% unemployment!  That's one in four people who are actively engaged in the workforce.  It doesn't include stay at home mums and dads, nor retirees, nor students.  No, just people who are eligible for employment.  I think the true number would be one in three Spanish persons.  Look around you!  Imagine every third person being unemployed (don't do this if you work in the UK Public Sector as even though you are under-employed, you are still, technically, employed (for now!)).   

Greece's numbers are no better.

We see TV shots of families living rough and scrounging around for food.  These aren't lazy people, they're not people from the less developed world who are suffering because the rains didn't come.  These are people living in the heart of a very rich continent who are being punished because their politicians have continuously lied to them and stolen from them and now try to tell them, it is their own fault!

The UK is outside of the Euro but is still feeling the pain of its never-ending misery and has its very own spending issues (more on that later) but maybe the time is coming for not just thinking about the break-up of the Euro but a complete re-assessment of the whole EU project, for all of the EU?

At what point does one stop squeezing a lemon - common sense says when all of the juice has been extracted but I get the sense that Frau Merkel just likes squeezing and her French poodle has to go along with her because maybe, just maybe, he senses that the markets just might see how fragile is France's economy and borrowings.

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?

EU Finger Pointing, Deficits and Projections

As 2011 draws to a close let's take a look at the EU financial situation.

The 17 EuroZone countries plus an unknown number of other EU countries, but not the UK, have agreed a new financial treaty.  Amongst other things this limits deficits and borrowings.  Worryingly, from a democracy perspective, EU bureaucrats will get sight of and review national budgets, of those that sign-up before the sovereign parliaments.

Yes, I know what you are thinking.  This borrowing limit was agreed to back at Maastricht when the same countries signed-up to the Stability and Growth Pact.  This was intended to keep the Germans on board as they gave up the Bundesbank control of their currency.

Guess who broke the rules first?  Yes, you're right - Germany!  Who else?  Everyone!  Though Spain broke the rules least, it is now suffering 20+% unemployment and a trade deficit of more than 4% and its labour costs are more 30% above what they were in 1999, when the Euro started!.  France's labour costs are 25% higher and Italy's on a par with Spain.

Good news though is that Germany labour costs have barely moved since 1999!  That contributes to a German trade surplus of close to 6%, while France and Italy all endure the consequences of 2-4% deficits, alongside Spain.

Very communitairre!

So 2012?
Maybe Germany needs to leave the Euro (Netherlands also?) so as to allow for a devaluation and reduce the labour costs in the other countries?

Other countries, outside the EuroZone,  will start to look at the recently agreed-to 'fiscal accord' and this will likely start to unravel.

If Germany doesn't exit the Euro, then look for Greece to do so maybe also Italy and/or Spain.

Germany, France and the European Central Bank will try for a managed devaluation of the Euro but the markets already scent blood and will be pushing for more and for faster.

Step in the credit rating agencies - and cherished gold-plated ratings are lost.  France will be mortified and loudly proclaim an Anglo-Saxon plot but won't look at their own precipitous growth in public and private debt, in the last ten years! 

The trigger (s)? 
Could be the weather - a cold snap forces people out of their unheated homes, onto the streets in protest.   A Greek default - there is only so much they can do and that isn't enough. 
Italian indigestion? - brought on by trying to take medicine from a technocrat.  

Oh, and a recession in case you thought you could ride-out all of the above.

Have a healthy 2012 - I would normally say prosperous but........