Greek justice and the EAW...

I have commented often about the outrageous European Arrest Warrant, but rather to my surprise a number of people here actually supported it.

So here is an account of the consequences that can occur when it is used by s corrupt foreign Government to drag British citizens away to their kangaroo courts. I stumbled across it in my archives and have forgotten the origin.

In August 1999 two British citizens, Michael Tonge and Lee Yarrow, went on holiday to Crete. They were returning to their villa one night when Michael alleges he was attacked by a group of local youths. During the struggle members of the gang sustained minor injuries and Michael was stabbed. The pair managed to get away and returned to their apartment. Police arrived shortly after with about 20 local youths.

Michael and Lee were arrested while the youths ransacked their apartment and allegedly took several of their belongings. The police stood by and watched. During a five to six hour police interrogation Michael and Lee were punched, slapped and threatened with death unless they admitted their guilt. They were told to sign statements in Greek (a language they did not understand), no lawyer was present and they were not allowed access to a doctor despite their injuries and Michael needing stitches. After four days Lee was released on bail, but Michael was kept in custody where he claims that he suffered further ill treatment at the hands of the Greek police. Michael reported that he was beaten, kicked, flogged with a rope, and denied food and medical treatment for his injuries.

Michael’s allegations led Amnesty International to call for a ‘prompt, thorough and impartial investigation’ into the mistreatment.  Despite this international concern it appears that no such investigation took place. Michael and Lee were both charged with attempted murder. After four months on remand Michael was released on bail and returned to the UK. In January 2001 Michael and Lee were summoned to stand trial for attempted murder and lesser charges relating to the incident. With the summons they received a letter from the Home Office stating that under UK law they were not obliged to comply with the warrant. Michael and Lee sought legal advice and decided not to return to Crete, fearful that if they did so they would be subjected to further ill treatment and not be afforded a fair trial. Michael and Lee were tried and convicted in their absence for the lesser offences in June 2005.

On the 21st June 2005, 6 years after the original incident, the Greek government issued a European Arrest Warrant seeking the extradition of Michael and Lee to Greece to stand trial for the outstanding attempted murder charges. The matter was heard at City of Westminster Magistrates’ Court15 on the 4th October 2006 and granted the extradition request despite the evidence of police abuse at the time of the original incident and the pair’s fears that they would suffer similar abuse if returned to stand trial. An appeal to the Court of Appeal was unsuccessful, and within ten days Michael and Lee were handed over by the British authorities to the Greek police in December 2006.

Following a trial in May 2007, Michael was found guilty of a "misdemeanour" and sentenced to three-and-a-half years. Lee had charges against him dropped, and was able to return home. After an appeal, and with time spent on remand taken into consideration, also Michael was to be released some months later.

The wheels fall off the Chinese wagon

As I predicted, the wheels are coming off the Chinese juggernaut with a vengeance.

The recent protests about land-grabs endorse my earlier point about the need for wholesale land reform that will establish the sanctity of tenure. Chinese agriculture is extremely inefficient and under-productive because in the absence of security, farmers have no incentive to invest and no means of borrowing to invest (a point I have made many times about Africa).

Outstanding property loans have risen 100% in 5 years, and the price/income ratio of housing in Beijing is an almost unbelievable 19.

It is hugely reliant on exports, especially to the US and would be badly hit by another severe downturn, which looks increasingly likely. This short-term vulnerability is a symptom of a longer-term worry: a failure to progress from growth fuelled by resources and cheap labour to growth driven by higher productivity. As wages rise manufacturers often find themselves unable to compete in export markets with lower-cost producers elsewhere; yet they still find themselves behind the advanced economies in higher-value products.

Now even Chinese businesses are beginning to relocate to lower cost countries like Indonesia.

Like Germany, its savings rate is far too high with not enough money going into people’s pockets to unleash a badly-needed consumer boom. The ratio between exports and domestic consumption is badly skewed.

Officially, debt is only 15% of GDP, but as we all know, you can torture statistics to confess anything. China’s are notoriously unreliable. When hidden debt is taken into account i.e. that of other public entities, the true figure is more likely to be 100%. China could spruce things up by cutting the banks’ debt/asset ratio but this might not work in a post-Lehman Brothers world.

I have long maintained that China will eventually collapse under the weight of its own contradictions. It is a Communist regime running a vast capitalist machine, a contradiction in terms if ever there was. A free economy, without which growth can’t continue forever, depends on the rule of law, the independence of the judiciary, the legal enforceability of contracts, sound and transparent property title, the integrity of intellectual property, none of which applies in today’s China.

And Mr Chin is making himself hugely unpopular in Africa. The President of Zambia memorably said that he would prefer to have the British back; they brought justice, education, hospitals and much else that was good. There, he has gained an appalling reputation for cheating, underpaying the labour force, allowing dangerous conditions in their mines despite strict safety regulations, firing shot-guns at strikers, crowding out local businesses, and all manner of bad behaviour. We hear of local factories being bankrupted by cheap Chinese competition, of barter deals that are dishonoured like the Benguela Railway that should have been restored a couple of years ago in return for Angolan oil but no work done yet, shocking quality workmanship -  a hospital that and to be demolished two months after completion a trunk road that washed away in the first rainy season, and much more besides.

The recent protests and demos show that China is becoming more middle class and less deferential. When the Communist dam breaks there will be a cataclysmic deluge.

The sleeping dragon is stirring.

Girls: Japan v England.

The nice thing about the Japanese girls here  is they are always smiling, always very friendly, well-turned out, slim, fit and amazingly polite (and very pretty – reminds me of the old song ‘I’m glad I’m not young anymore’)

Now put 6 English girls around this table. What would you find?

Sullen, discontented, scowling faces?

Off-hand or over-familiar?

Dressed as if they bought their clothes at Oxfam, showing too much flesh around the back, belly, arms and boobs, covered in chav-stamps?

Some grossly obese, others anorexic?

Not fit enough to do two rounds with a revolving door?

Rude, abusive and using f******g every other word, with not even basic manners?

Yes, I know this is hyperbole, but there is so much of it about I wonder when the English became quite so degenerate. When I see sixty-year-old women with their boobs almost hanging out,  bare midriffs,  tattoos on every spare exposure of pallid flesh, fat as prize porkers, and with more rabbit than  Watership Down, it must have been some time ago

English

Affirmative action Obama?

A recent article in the Washpost attacked Obama in most venomous terms as an 'affirmative action' President. It was a very nasty piece that it was only his colour that got him elected.

Let me begin with a principle of American politics that is continually forgotten and neglected. Namely, American presidential elections are popularity contests. You know this. We are not like the UK and Europe and their strong party/ideology base. but rather like the audience of the X Factor voting for the candidate that best takes possession of us. Granted, we don't always get it right, but often our choice is not the best of the best, but the best of less desirable candidates.

To be sure, O grabbed our attention. He was the candidate of the moment and the moment was historical. He offered America the opportunity to make serious history, i.e. the election of the first black president. He did this by exercising his personality skills to demonstrate that he was decidedly not a home boy with black talk, hip hop, rap, and palpable chips on his shoulder. So, we experienced some mass hysteria, not his fault, but ours.

The author makes the point that O got through the ivy league and entered politics on the back of various positive action programs. OK, let's accept that as more or less true. So what? It is not as if we took someone like Michael Jackson, Sonny Liston, Mohamed Ali or other popular black figures and cultivated them. Indeed, O was selected because he had some content and was a likely prospect for success. I sometimes wish that some benefactor had discovered me and offered opportunities to socialize with the elite.

Who says that community development is a second class job? OK, it is not glamorous, but it is a real job and we have many of them and some CO's excel in what they do. I get the impression the author wants to equate this profession with that of a security officer patting down fliers in search of contraband and taking the odd grope. Also, the CO position gave access to American grass roots politics. In this case, in a riot torn, criminal, alienated and impoverished black ghetto. Did not Martin Luther King assume a similar role?

O had a poor legislative record. The author's first point of substance. I am not sure that making a big name for oneself is permitted among junior legislators in Washington, but never mind. I accept the point.

Next, let's discuss O's troubling associations, namely Jeremiah Wright and Bill Ayers. Granted, O's slipped through the dragnet with respect to the witch hunt that followed exposure of his relationship with Wright. I cannot explain it, but I believe  there are explanations. I have some fanatical friends, but as a package deal, they offer me more insight and knowledge than their quirks. I also find it odd that as a non-religious person, O is so heavily branded as an acolyte of Jeremiah Wright. Lastly, there are some truths in Wright's preaching. We remain a largely racist society. What we have learned over the past two decades is that racism includes not only whites but blacks, Hispanics, Jews, Muslims and other minorities including Mormons.

Bill Ayers was quite a piece of work in his youth. So was I. We shared a distrust of government, antipathy toward those who would have us fight in Viet Nam, larger than live social values about fairness, equality and civil rights. Bill went far in his expression of these beliefs; I did not. Does the author expect that O would behave like Uncle Tom? If so, he would most probably be doing menial work in Hawaii. O managed, so far, to walk the very precarious line between improving the lot of black Americans and appealing to middle America.

Another thing, the author calls upon the  "incomparable Norman Podhoretz" as an authority on O's weaknesses. I suggest you read Wikipedia's synopsis of Norman. He is a hawk, favorite of George Bush, likely Neo-con and generally right wing. What would one expect Norman to say about O? Also, I suspect his strong links with Israel feed Norman's dislike for O.

A few American Presidents entered the White House with fixed ideas about reforming our relationship with Israel. These ideas tend to go in the direction of relaxing ties enough to allow America enough breathing space to credibly speak about the need to compromise over Palestinian issues. Most such presidents quickly abandon these fixed ideas in favor of  strong, unqualified support for Israel. I cannot explain this, but suspect it has to do with the strength of Jewish influence in Washington. O's decision to give a bit more space to the Palestinian perspective seriously offended Israel, particularly Bibi Netanyahu and his Likud Party. I am of the opinion that O, considering his family background and race, decided to give greater latitude to the Palestinians and Muslim countries than was previously the case. This could be construed as a huge tactical error, but it could also be understood as an offer for a new dialogue with the Muslim world. This in itself is not condemning.

My favorite example of trite criticism is that O uses a teleprompter. So effing what? Big deal. Winston Churchill read some of his speeches. I suspect he would have used a teleprompter had they been discovered in his time. I can personally attest to the clarity and quality of impromptu speeches on O's part. I have also seen him stumble, hem and haw. I cannot abide the many critics who condemn O's use of the teleprompter. He gives countless speeches and delivers his messages well. Full stop.

Bad boobs and banning Merry Xmas

I will have to learn to live without our Dear Leader.

The media is abuzz with idle speculation over multiple scenarios concerning North Korea's stability. One consensus is that Kim Jong-Un is not up for the job. His vomitous appearance and cloned image of his father convey a sense of decadence with a hint of perversion. Whomever is in control, they at least possess the firepower to keep their enemies at bay.

The conventional wisdom regarding firepower is that a nuclear arsenal, however small, is obligatory for self preservation. Witness Libya who surrendered their plans to build nukes and Syria who had their nuclear program blown away by Israel. Both  these nations were rendered powerless as a result. While we would love to take out North Korea, we will not because of their arsenal and because they have the perceived will to use it. The same goes for Iran. And we walk around Pakistani issues like a cat on a hot tin roof owing in part to their weaponry. In Pakistan's case, we have the added problem of their weapons falling into the hands of terrorists, fanatics, fundamentalists or what have you.

Sad news for less well endowed ladies who found a new life in prosthetic breast implants from the south of France. The silicon used was of industrial quality and poses a high cancer risk. I believe we are talking numbers in the 100s of thousands, mainly from Europe and the UK. Unbelievable that in this day and age the manufactures would flaunt sub-spec prosthesis. This will become a major issue both legally and for who will foot the repair bill.

We have a raging battle over employment tax. It is a bit complex. Some time ago and in an effort to stimulate spending, our Congress and its Democratic majority passed a bill temporarily suspending payroll deductions for social security purposes. This was madness as our SS was already in deep trouble and could ill afford any reduction in contributions.

The term of the bill has elapsed and O wants to renew it for another year.  O wanted to compensate for the lost income by assessing a surtax on the super wealthy. This got right up the nose of the ultra right wing, gazillionaires, tea party members and the like . After some debate, it was proposed to extend the bill for two months. Further debate yielded argumentation over the time period with the Senate agreeing to let the issue remain unresolved while they went home for Christmas.

Is it any wonder that the US estimation of Congressional effectiveness is in single digits?

To further complicate matters, the pipeline bill came into play. This bill goes far in ensuring US approval for an oil pipeline from middle Canada to the refineries in the Houston area. O says wait until the environmental impact assessments are completed before we reply yes or no. In the meantime, Canada says to us 'get cracking lads' or we will build our own pipeline to the Pacific and sell the oil to China.

Approval for the pipeline bill was tacked on to the employment tax bill. In short, the House said they would approve extending the term for not paying social security deductions from payrolls if Government would agree to approve the pipeline project. Now, everything is on hold until after the holidays.

Never mind, our government will sort it all out. Indeed, they just decreed that all official US correspondence shall refrain from using the term 'Merry Christmas' or any other facsimile. Fortunately, we can suggest that addressees may 'have a happy holiday' just as long as the type, nature and content of the holiday in question is not defined.

 

It's over....isn't it?

‘But what became of it at last?’ quoth little Peterkin.

‘Why that I cannot tell’ said he,

‘But t’was a famous victory,

So it’s over.

Nine years after a war that was expected to last 6 months the last of the American military has marched out of Iraq. I watched the flag lowering ceremony that was boycotted by all the movers and shakers including the President of Iraq. It was not a triumphal occasion. It was very sad.

It cost the lives of 4,500 US servicemen and women, with more than 20,000 wounded, many of them blinded or crippled for life. 62% of wounded had brain damage; 25% of the whole force have required medical or mental health treatment. The Iraqi death toll was in excess of 100,000. There were 1.8 million refugees.

The US Marines lost a quarter of its strength through death and injury.

The US Government says it cost $800 billion. Actually, the true cost is more like $3.5 trillion when hospitalisation and pensions for the wounded are taken into account, and mostly on borrowed money.

So what do they leave behind?

A country that is 172 out of 185 on the Transparency International corruption index.

A country racked with ethnic and sectarian strife and divisions that under Saddam was noted for religious and ethnic tolerance as long as you kept your nose out of politics..

A country of shattered lives, bereaved families, missing relatives, physical destruction, and a ruined economy.

A country at war with itself.

As Dubya said ‘Mission accomplished!’

So what was it all about?

I was working in Jamaica in the build-up to ‘shock and awe’. With total confidence I assured my Jamaican friends that it was all a game of bluff to keep Saddam in line. Iraq under him was the only secular state in the Gulf and a war would only open the door for the Islamists to walk through. Saddam had been rendered harmless to the West after we destroyed his ability to wage war in Gulf 1. There was no Iraqi connection with Al Qaeda; in fact Al Qaeda was the antithesis of the Iraqi regime. Saddam had nothing to do with 9/11. There was no casus belli.

We shall probably never know for sure what motivated Dubya to get into this morass. I guess that partly it was because after 9/11 he needed to frag some Arabs – any Arabs, no matter where they came from, and partly because he decided to carry on where his Dad left off. Blair joined in to polish his apple with the Yanks; he was adept at pissing up your back and telling you it was raining, so he had no problem about lying in his teeth to the House of Commons.

So the pair of them invented the WMD scare and all the crap about British bases in Cyprus being 45 minutes away from nuclear attack or some such porkies. But we might nab you yet, Tony. Leave of appeal has been granted to plead for an inquest into the strange death of Dr Kelly.

A luta continua!

And the jihadis have won important victories. They have cost us many of our basic freedoms through masses of anti-terrorist laws that are never applied for catching bombers but always for other reasons (i.e. the hopelessly one-side extradition treaty with the US that does not require prima facie evidence that an offence has even been committed let alone that the person named in the extradition warrant has committed one; as for the European Arrest Warrant, don’t get me started).

There is the scandal of Guantanamo Bay, and now Obama has signed through detention without trial of anybody suspected of terrorism (which simply means ‘anybody’ full-stop). Step forward, Joe McCarthy.

They sowed the wind and we reap the whirlwind.

We are still bogged down in a purposeless war in Afghanistan against people who have never done us any harm to get rid of Al Qaeda who decamped to Yemen and Somalia yonks ago.

The fat lady ain’t singing yet!

The EMU shambles made simple......

Quote of the week.

"Fitch has concluded that a 'comprehensive solution' to the eurozone crisis is technically and politically beyond reach."

At dinner the other night, my friend Martin (a financial journalist whom I have known for over 50 years) and I launched into a debate as to whether the EMU crisis was a supply-side problem or demand-side. He maintained that it was only the first, with people and governments borrowing too much money to support an unsustainable lifestyle.

My contention is that it is both. It is, of course, beyond peradventure that the Greeks and Irish got in the poo by over-borrowing money that was far too cheap for their own good – the ‘one size fits all’ fallacy.

At the same time Germany suppressed wages and costs by threatening to import cheap labour from Hungary etc. It then stuffed away huge sums into non-productive investments like US sub-primes and Greek bonds.

This suppressed demand because German companies were making huge profits but it was not being shared with the workers to spend on goods and services and thus create consumer demand.

My analogy is that if all in our neighbourhood earned big bucks but stuffed it in the bank the only poor person would be the shopkeeper because we weren’t buying his stuff.

However, the shopkeeper wants our lifestyle, the bank is full of our money that it needs to lend so offers our shopkeeper huge cheap loans which he grabs without any immediate prospect of it being repaid, hoping, like Mr Micawber, that something will turn up.

The day for redemption arrives, shopkeeper can’t pay, and bank can only repay half our deposits. The bank turns to the government to bail it out, so they issue blanket guarantees underpinned with borrowed money. Nemesis arrives when they can’t repay either.

Result: misery!

So what really caused it?

Speculation by Anglosphere speculators, as the French, in one of their many flights of fantasy maintain? Do me a favour!

The Club Med funding a sybaritic lifestyle with other people’s money? Partly.

Irresponsible banks? In the good old days, building societies were owned by their depositors, and lent their money to other members as mortgages on very conservative terms – a 10% deposit at least on one salary only. Then they decided to demutualise and become proper banks. They employed CEOs who often had no experience in financial services but who saw the chance to get up there with the big boys (especially their bonuses).

So they threw caution to the winds. They began funding their lending by borrowing from other banks. They gave 125% mortgages so that they and the borrower were in negative equity from the start.

They assumed that the good times would never end and happily gave remortgages so that their borrowers could also have the good life,  breaking the basic rule they you do not use capital to fund consumer spending (that’s what broke the City of New York all those years ago, built people have short memories).

Then the wheels came off. The sub-prime (i.e. can’t pay won’t pay) mortgage funds went tits-up and the market panicked. The US government came to the rescue but let Lehman Brothers fail, executed by Hank Paulson as Treasury Secretary who came from Golden Sacks, Lehman’s biggest rival.

The banks stopped relending so we had the credit crunch. Northern Rock and others suddenly found that they couldn’t meet their repayment dates.

The ‘one size fits all’ EMUS shambles? You better believe it.

German excess savings sucking the European market dry? You betcha!

But the root cause has so far not been mentioned by our financial gurus.

The second most powerful human emotion.

Greed.

Lotus-eating at the Golden Cupids

So here we are again, ensconced for the next 3 months in our private Shangri-la, the Golden Cupids in Chiang Mai (www.goldencupids.com; this gives you a virtual tour)

The Golden Cupids defies type-casting. It has its own unique style and ambience. It is not so much a hotel as a permanent country house party. We see many of the same people every year. There are no surnames. It is run entirely by ladies – Peppe, the adrenaline-fuelled owner, hostess, maitresse de cuisine and mentor at her cooking classes, tour-guide, chauffeuse, and fixer. She is also a fine judge of character –she always addresses me as ‘Charming’. Then Jan, manager, receptionist, gardener, accountant, programme-planner. She lent us her welding mask to observe the eclipse of the sun, so goodness knows what else she gets up to – safe cracking, maybe? And the small but beautifully formed Moon, who is chef, gardener, driver, dress-maker, artist and masseuse (see picture).

Multi-skilling? You ain’t seen nothing yet!

Then there are Tuum, Peppe’s daughter and Head Chef ( with husband Toon who has a day job as a top cop – don’t mess with him!, Took , Lala and Ben.

Tung the handyman and Si the gardener are the only men around.

The rooms are huge with every mod-con including free Wi-Fi (please note, Holiday Inn, Novotel and other rip-off artists). The service is warm and impeccable. The food is marvellous, the surroundings tranquil.

It is #5 in the Trip Advisor list of over 300 hotels in Chiang Mai, way above all but one of the super-luxe hotels but with a rather different room-rate. It is one of the two best 3-star hotels.

This is a birdwatchers paradise. I can sit on my balcony where a tamarind tree touches it. The tree is heaving with bulbuls, mynas, thrushes, olive-backed sunbirds, magpie robins, and the rest almost within touching distance. We also have a resident pair of Burmese striped squirrels that resemble chipmunks. At the Water Garden Restaurant not only do we get some of the best Thai food anywhere but we also have a daily visitor to the fishpond only feet away, a Chinese water heron. So far we have identified 51 species and several others not identified. The paddy fields abound with several species of egret, herons, swallows, swifts and waders. We have the noisy drongo and the equally noisy coucal that looks a bit like a pheasant. And that damned telephone bird that has you reaching for your mobile. The other day we watched three mynas playing leap-frog along the swimming pool wall!

The Cupids is pretty full at this time. I am the only male. The other guests are all pretty Japanese girls.

Eat your hearts out, fellas!

And it’s actually cheaper than living at home – no heating costs, no fuel costs, no big shopping bills, no electricity bills, beer at a £ a throw, cigs a bit more for 20,  whisky at about 12 quid for a 1.5 litre bottle in Tesco.

What’s not to like?

Immigrants: rip-off Britain

Immigration is perhaps the most difficult and controversial issues of our times. Without quite knowing the figures, there is a general feeling that we are being ripped off and that immigrants are living high o n the hog at our expense.

So before I get involved in the complexities of the whole subjet (that will need at least one whole blog) here are some facts supplied by one of my many sources

OAP

Weekly allowance: £104

Additional  weekly Hardship allowance: £ 25

Weekly spouse allowance: £0

Total weekly benefits: £6708

Immigrant

Weekly allowance: £250

Additional  weekly Hardship allowance: £ 225

Weekly spouse allowance: £100

Total weekly benefits: ££29,900

The average national wage is about £24,000, and the minimum around £10,000.

Nice non-work if you can get it!

EMU: Dave's Falklands moment?

Once more it’s déjà vu all over again. The French and Germans have had another Tory hand-bagging. Is this Dave’s Falklands moment that will win him the next election?

So what’s it all about?

The simple truth is that the Eurozone countries are in denial. Looking for someone to blame other than themselves, they put the whole crisis down to Anglosphere speculators and City of London bankers. Sarko is out to destroy them.

We in the real world know that there were two main causes.

First, the Eurozone created a mountain of debt. The ‘one size fits all’ nature of the Euro unleashed a torrent of cheap money which led to property bubbles in Spain and Ireland (a friend of mine visiting Ireland recently was offered an €850,000 house for €200,000 in a village where an entire development of 87 houses is standing empty and rotting away).

It encouraged Greece to live high on the hog without bothering to collect taxes.

Italy has had no growth since 1998,  and its labour costs are 25% above what they should be.

Euroland created lavish welfare, ‘social Europe’, medical, social, retirement benefits, without providing ways of paying for them.

Governments vastly increased the size of the state by expanding the public sector work-force in a monstrous bribery of socialist voters and trade unions. The increase in UK alone under the Blair/Brown elective dictatorship created nearly 900,000.

When all this started to go tits-up in 2007, the recession caused tax revenues to fall and welfare payments to rise because of unemployment. And billions were poured into the rescue of bad banks.

The second cause was the opposite of debt – excessive savings. If this sounds like a contradiction, it is not. Throughout most of the lifetime of the Euro, the developed economies – Germany in particular – have squeezed wages and production costs that enabled them to build up huge surpluses. Instead of shifting them into productive investments they preferred sub-primes and Greek bonds. This led to unsustainable imbalances between the north and south. In effect, the Club Med had the life sucked out of it. Real growth is productivity with reducing unit costs. Suppressing wages when consumption  is what supports growth is poor economic management.

This is what Ambrose Evans-Pritchard has to say in the DT:

‘the disaster was caused by current account imbalances (Spain's deficit, and Germany's surplus), and by capital flows setting off private sector credit booms. They have to whip up a witchhunt against somebody, so why not Anglo-Saxon bankers? Nasty reflexes are at work. German and French politicians in particular should be very careful about inciting populist hatred against a group that makes such easy prey. We have been there before’.

The fix that Dave walked away from does nothing to solve the problems of the Eurozone. It attempts to deal with fiscal issues when these are not the problem. Only Greece is truly insolvent. The other members of Club Med have been running budget surpluses.

What Sarko, facing electoral defeat, and Angular can’t accept is that all the remedies are too unpleasant to contemplate.

Here are a few.

1.     Having a bloody great war has been the solution in the past. It was WW2 not FDR that got the US out of the Great Depression. But that won’t work because most of the 27 have no armies to fight with.

2.     Inflate your way out, thereby reducing the real value of EMU bonds. But this has failed in Japan.

3.     Default. Ireland will probably do this at some stage. Greece should be allowed to depart from the Euro and default on its sovereign debt. This would be a political and socio/economic disaster, but the Greek economy is tiny in relation to Europe. The bond ‘haircut’ destroyed investor confidence, so that the contagion rapidly spread elsewhere.

4.     Sustained austerity to pay down debt. But this may be counterproductive. It depresses economic activity at a time when growth is sorely need. It causes hardship, bankruptcies and unemployment, which lead to further loss of tax revenues. The IMF prescription is ‘devalue and tighten your belts’. This can’t be done in EMU.

5.     Admit that EMU has been a disaster, destroying wealth, jobs and whole economies. And then the solution is obvious.

And as we all know, Emus can’t fly!

Why the Assange case is important.......

 Assange has now got leave to appeal to the Supreme Court against his extradition to Sweden on allegations of sexual offences.

So why is this of exceptional importance to all Brits, and not merely as a running news story?

At the outset, let me make it clear that the appeal process has got nothing to do with the merits of the case, guilt or innocence. For the court to consider the case there must be an important matter of law at issue.

That matter is whether a European Arrest Warrant can be issued by a State Prosecutor or only by the court seeking the extradition. If it rules the latter the case against Assange falls to the ground, because the EAW was issued by the Swedish prosecutor. If the former it puts us all at hazard.

The essence of the EAW, which makes it so vile, is that the country seeking extradition does not have to produce prima facie evidence that any crime has been committed. Any jurisdiction can issue an EAW against any citizen of any EU member state and  it is duly executed. Naturally this includes states such as Bulgaria and Romania that are a by-word for corruption in the legal system. The power itself is bad enough. The fact that it can be exercised sitting in an office in Athens or wherever is seriously worrying.

There have been horrendous examples of miscarriages of justice arising from EAWs, one of the worst being the young student from London who was arrested on suspicion of manslaughter at a Greek night club after an altercation. The prosecution could not even produce evidence that he was at the scene of the crime. It was thrown out in the lower court.

But unbeknownst to the accused, the prosecutor appealed against the verdict and won, although the accused was not even notified of the appeal proceedings. He was duly arrested on an EAW and taken back to Greece. He was imprisoned for over a year whilst the prosecution got around to preparing the case. He was then held on bail in Greece for another 2 years. The Greeks then dropped the case. By this time of course, all his fellow students had graduated and he was back at square 1.

So how does this affect all you out there in cyberland?

My T is a free-speech site. We can express any view however extreme (and many do, every day) subject to the normal rules of legality and decency.

One of you supporters of Islam decides to blog that the holocaust never took place. This is picked up in Austria and the next thing you know is that the Old Bill is knocking on your door a 6 a.m. bearing an EAW from the State Prosecutor in Vienna and then you are on the next flight in handcuffs charged with holocaust denial.

But, you protest, I have never been to Austria. Tough luck; that is irrelevant.

But I haven’t committed any crime in English law! Hard cheddar, matey; so is that.

But I’m not a citizen of a European country! So what?

One disgraceful case involved an Australian academic who was en route from the US to Australia when he was arrested on an Austrian EAW at Heathrow Airport whilst in transit, for holocaust denial. Fortunately the Appeal Court exercised a bit of common sense for a change and he was released, but only after a lengthy and deeply unpleasant (and expensive) experience.

After a year or so in the slammer, your case comes to trial and you get a prison sentence. If you are lucky, the sentence is no more than your detention so you can go home with your grasp of the German language much improved.

So if Assange wins, the prosecutors are knocked out of the loop. Why is this so important? Because the vast majority of EAWs are issued by them, not as result of a court ruling, and they are also responsible for almost all of the trivial cases such as refusing to pay a restaurant bill.

It will not be a total solution. That will only come when Cameron gets us out of the EAW.

Don’t hold your breath.

Get off the field and strengthen the side.....

Passing through Terminal 3 at Heathrow on the day of the Great Strike made me wonder what all the fuss was all about. LHR was the quietest I can remember. Immigration and security staffs were brisk, efficient, very courteous and friendly (especially the drop-dead gorgeous young lady who chided me with a big smile for leaving something in the tray). We were relaxing in the business-class lounge within literally minutes.

My reflection was that if this is how it works without the strikers it is a case of get off the field and strengthen the side!

Being an inveterate believer in all politics being either cock-up or conspiracy, my take on the public service dispute is that it is a perfect example of both. I have no doubt that it is a transparent trap by the Tories to fix the unions. The intention is to strengthen the law on strikes so that whenever they ballot for a strike, the unions will have to have a ballot for each one-day stoppage instead of getting a blanket approval for a series – hugely expensive. My guess is that larger majorities will be called for, maybe a majority of the members whether voting or not. Only about a third of members voted, so the number in favour was far short of a majority.

We shall see.

That’s the conspiracy. The cock-up is that the unions have walked right into the trap.

We have been here before. The classic example is the miners’ strike. The Tories had spent years planning to fix the eejit Scargill. And they did, big time.

During the Winter of Discontent in 1979, Ford workers went on strike. From memory it lasted a long time, from late 1979 into early 1980. I remember having a drink with a line-worker from Ford Tractors. He told me that the last thing the workers wanted was a strike, at that time of year especially. He said that if he worked until full retiring age he could never make up his lost wages, but the union was bent on a power struggle with management. Except Ford was hugely over-inventoried and needed a freeze on more production. So the union fell for that one, too.

At the same time, I had my one and only strike (not bad during the 1970’s and ’80,s when striking was a national pastime). The strikers were the building etc maintenance workers. But you can’t do too much outside maintenance work in January so I was in no hurry to do anything about it, and in any case it was a national stoppage so I claimed no status in it. The savings on my budgets were very substantial and at that stage in the financial year, suited me nicely.

When I judged that it was time to get back to normal, I took a calculated risk on what the final settlement would be. I then offered a 9% rise on the understanding that if the national settlement was for more, they would get the increase. But if it was less, they would keep the 9%. The settlement was for 9% or a little more. If it had come in less my career might well have ended somewhat earlier than it did.

So what’s it all about? Let’s consider public service as a career compared with the private sector.

When I entered the public service more than 50 years ago, the career motivation was doing a job that mattered to people rather than to shareholders. Pay was substantially below private sector norms. But the compensations were job satisfaction, a much higher level of job security, long holidays, a degree of public esteem, good conditions all round on matters such as sick-pay, the knowledge that your employer wasn’t going out of business ever, and, especially in today’s climate, an index linked pension based on 50% of final salary payable after 40 years service at age 60.

The pension fund was contributory at 8.5 %. I was in a very well run fund, so the employers’ contribution was only about 1%. In other words, we pretty well funded our own pensions, which was possible in a financial climate of rising stock markets and pension fund tax breaks (abolished by you-know-who).

So where are we now?

Almost all of those conditions still apply, with one exception.

Average public sector pay is substantially more than the private sector. Many top salaries can only be described as obscene. In my day the top pay of a local authority Chief Executive was about equivalent to that of a Deputy Secretary in the Civil Service. Not anymore. Some not only exceed the PM’s   stipend but exceed £200,000 a year. Elsewhere in the public sector there are 7-figure salaries. There is no justification for this whatsoever, and tends to make the paying public believe that their servants are no better than grasping bankers.

Here is what I imagine to be the Government’s side:

Because of longevity and cost, pensions at their current rate are simply unaffordable.

Pension age must be increased because 60/65 is no longer justified; when these were introduced the average lifespan was 48.

Pensions are underfunded therefore the employees’ contribution must be increased.

Final salary pensions are also unaffordable and rare in the private sector, so we must switch to average salary basis.

At bottom, I think what the Government is saying is that what is on the table now may not be quite what the public service has become accustomed to, but private sector employees would snatch your arm off for these terms. As the outgoing Secretary to the Treasury memorable wrote to his successor ‘Sorry, matey, we’ve spent all the money’ (or words to that effect). There is no money to sustain the present and future pensions liability.

The union position is that it has no option but to fight a move by the employers to reduce their members’ conditions. They are only doing their job. In particular, the increased employee contribution together with the proposed 1% pay freeze is a substantial reduction in take-home pay, especially at a time of relatively high inflation. It is particularly vindictive towards those on the lower end of the pay-scale (it should not be forgotten that low paid employees suffer from much regressive taxation i.e. that is proportionally higher relative to income for them than for high earners –VAT, fuel duty, Council tax etc).

So what to do?

At the end of the day everyone will have to accept that the current pensions regime is unsustainable. This is so all over ‘social’ Europe, where horrendous problems are building up for the future as pensions liabilities increase and the working population falls. The inevitable must be faced.

I would immediately withdraw the proposed increased contribution for the low paid. I would change the basis of the employee contribution to a sliding scale so that it increases with salary level. A person earning £200,000 a year could easily afford 15%. A person earning £16,000 a year can’t afford a 3% increase.

And I would reduce the sheer size of the payroll by getting rid of the 800,000 new jobs created by Blair/Brown.