Stirring up the EU.....The British/German axis

Things are stirring in the EU.

 

According to the FT and Open Europe, Dave is getting into cahoots with the Germans and Dutch to flesh out his ‘All change in  Europe’ manifesto. Most importantly, there is a hurry-up component; the Germans are saying that Europe must move on this immediately after the EU elections in May. This will suit Dave perfectly because he will be able to trail his plan in advance of the General Election next year and give him two years to sell it to the referendum – on the assumption that he is still in No 10, which looks increasingly likely, especially if Miliband keeps his job.

 

Getting the Germans on side is a formidable achievement for Cameron. It is now a ‘given’ that the EU must change by reforming its governance and sorting out the Eurozone tangle.

 

Germany accepts that there must be further moves towards achieving the single market especially in services, a tricky one for them, as there are many vested interests and protected professions in Germany. But it could be worth something approaching £300 bn. to the EU economies, especially to UK as the  largest service-sector economy by far. And it seems to be in favour of Dave’s position on the Eurozone, that non-members must not be discriminated against.

 

Treaty change is now definitely on the table, a score for Cameron, since received wisdom has had it that  that it was forbidden territory.

 

But Dave will find it tough going to get acceptance of all his keynote aims.                       

 

Removing the commitment to ‘ever closer’ union is perhaps the most difficult. This is enshrined in treaty and it is to be expected that the Brussels nomenklatura will fight any change tooth and nail. Needless to say, the French will give it a ‘non’, as ever.

 

One plan that should please even Farage is the ‘red card’, giving one-third of members blocking power on EU draft laws that they don’t like. This could require treaty change but the Dutch feel that it could be implemented by simple agreement between the members

 

Then there is another tricky one. Dave wants a ‘reverse flow’ of EU roles and to dump the ‘ever closer union’ cant. This piece of mischievous waffle is enshrined in treaties, and the prospects of getting agreement on this is pretty remote. But there is an alternative. Masterly inactivity, allowing it to fall into desuetude.

 

The ‘reverse flow’ would involve tackling regional policy and the repeal of damaging measures such as the Working Time Directive and the widely-abused European Arrest Warrant. The role of the ECJ is not mentioned.

 

Particularly attractive to the British and Germans, if not to dirigiste France, is Dave’s ambition to make a bonfire of business regulations. The problem here is where to start; nobody really knows how much EU regulation has been imposed on British law, except it is far too much. He is also pushing for the Free Trade Agreement with the US to be a priority.

 

And one proposal should appeal even to the French; reforming the Free Movement Directive and Social security regulations so that immigration from new members is controlled and state benefits are restricted and not exportable. Dave is in a strong position here because the admission of new members needs the unanimous vote of all members.

 

Which countries will join the UK/German/Dutch axis? Probably all of the North; the Club Med will ask ‘What’s in it for us?’, and the French will try to block every change, naturellement! The prospect of the EU’s second largest cash-cow might leave the EU altogether should have a considerable effect on some waverers.

 

It is too much to expect that all of Dave’s proposals will be accepted, but there’s a good chance that enough of them will get through to enable him to go before the referendum voters and say ‘This is my package; yes or no?’. ‘No’ would mean Brixit; whether the majority is prepared to take that leap in the dark we will find out in three years’ time.

 

 

After the Crimea, where next?

Putin has driven not so much a horse-and-cart as a T34 tank through the established world order that tries to ensure that disputes between nations are resolved by diplomacy, negotiation and international law, but there will be no dramatic response by the EU or the US. Instead there will be very limited visa bans on the kleptocracy close to Putin, and the main thrust will be to attack Russia’s ambitions to be increasingly influential and respected in the world by freezing it out of bodies such as the G8, and projecting it as a gangster state. Russia longs for respectability and to become a super-power once more, but the Crimean adventure has scuppered that.

 

America maybe more enthusiastic about economic sanctions than Europe because it has not much to lose. By contrast the City is the largest international financial centre in the world, and Russian business is massive. Action against it would be very damaging to the British economy, and could see an outflow of money to competing centres such as Hong Kong, Singapore, and Dubai. European trade with Russia is ten times America’s.

 

Using the economy as a political weapon is very dangerous strategy. World economies are intertwined and mutually-dependent. Using its energy resources as retaliation for Western measures will cause long-term damage to Russia as foreign customers seek alternative supplies. Stand by for a rapid rise in American gas exports.

 

One great benefit arising from the crisis is likely to be an added stimulus for fracking, as the west attempts to reduce reliance on Russian energy.

 

Where next? The Sunday Times is speculating Latvia.

 

Not a chance. Entering a NATO country really would mean a shooting war. Putin will concentrate on his ambition to create a Eurasian Trade Zone, mirroring the ECM. He will look east to the various ‘stans’ of Central Asia plus Azerbaijan. So the focus will be Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan, a pretty doleful bunch.

 

Kazakhstan is the best of the lot. It is a major oil producer, the world’s largest source of uranium, and generally has a sound economy. It also has corrupt elections, which would suit Putin very well. About 25% of the people are Russian-speakers.

 

Turkmenistan is the 4^th largest producer of natural gas and has 700 million tons of oil reserves. It is also a major exporter of electricity. It is to all intents and purposes a one-party dictatorship, ranks only after North Korea for suppression of press freedom, and is thoroughly corrupt. Again, this ticks all Putin’s boxes.

 

Uzbekistan is a Soviet-style authoritarian state. It has gold, oil and uranium. Its human rights record is abysmal. It is a Third-World country, with a GDPppp of a mere $3800. 

 

Tajikistan? Not much to offer there; the poorest of the Central Asian republics with a large drugs production and not much else. It has a GDPppp of only $2500. It is heavily dependent on foreign remittances from migrant workers in Russia, so it will do whatever Putin says.

 

He may soon gobble up Moldova, Europe’s poorest country.

 

So that moth-eaten collection would be the new Russian empire.

 

And now that Putin has asserted his ‘right’ to seize the Crimea because the majority population is Russian, will the same principle apply to Chechnya where only 2% of the population is Russian? I thought not! But he might have opened the door to potential trouble between India and Pakistan, India and China, China and  Japan, China and South Korea, all of which have simmering boundary disputes.

 

The back-story is that Putin is in deep trouble at home. The economy is lop-sided and will be badly affected if oil falls below $80 pb. The rule of law is non-existent. There are frequent human rights abuses and corrupt elections. The demographics are awful; the fertility rate is below replacement rate; male life expectancy is 64 years largely caused by too much vodka. Russians are not happy. So he is falling back on the old diversionary tactic of causing trouble abroad.

 

Putin’s legacy may well be the unleashing of the Russian Spring that will sweep him away, together with his coterie of crooks.

EU, Ukraine, meddle, muddle.........

 

The blundering incompetence, ineptitude and downright stupidity of the EU in its  handling of the situation in Ukraine is a master class in how not to do diplomacy. It was Brussels, not Moscow, that created this crisis in the first place, when it started its courtship with Kiev. Ukraine falls within Russia’s sphere of influence. The Crimea is of vital strategic importance to Russia. Would the US allow a similar encroachment? The Cuban missile crisis answers that question.

 

The economy was in dire straits, partly due to the leaders milking the Treasury ever since independence. Russia was prepared to help out with a mega-billion aid package. Then Brussels stuck its oar in, but with no cash on offer.

 

The outcome for Russia could have been very damaging. The EU is not a free trade area. It is a customs zone. The effect of EU membership would be to erect tariff barriers between Ukraine and Russia. But since the Lisbon Treaty, it is now also a mutual-defence alliance. Did Brussels imagine that for one moment Russia would assent to restrictions on its trade with the Ukraine and at the same time tolerate the EU, and possibly NATO, at the gates of its most important naval base?

 

The EU has no internal borders; there is freedom of movement between member countries. But former arrangements with non-members for  free movement cease on accession. Ukraine would be closed off to free movement with Russia.

 

After the break-up of the Soviet Union, the EU lost no time in pushing across the former Iron Curtain into Central Europe. It brought into membership countries that have little in common with western Europe – in political tradition, rule of law, economic strength, even religion. Bulgaria and Romania are 68^th and 76^th respectively in the world GDPppp league table. They will be forever takers, dependent on EU money (British and German, actually), with nothing to offer except immigrants - Roma, dole-bludgers, and cheap labour.

 

So apart from aggrandisement, it is difficult to see what closer relations with Ukraine and eventual membership would bring  to the party. Its GDPppp ranks 106^th, below Namibia. It has nothing to offer the West. Cui bono?

 

What next? The prospects of serious sanctions is out of the question. In the first place, there is almost no prospect of agreement amongst the members of the EU because interests vary widely. A ban on Russian energy exports would not bother the UK or France, but it would be a disaster for some. Germany has huge trade with Russia that it can’t possibly prejudice. Politicians facing election (unlike the Brussels nomenklatura) are not going to sacrifice votes for dubious action ‘in a far-away country of which they know little’.

 

So far, the EU has totally failed to appreciate that ‘Putinism’ is not least about restoring the greatness of Russia. This entails bringing former Soviet Union countries back into its orbit, mainly through the creation of the Eurasian Customs Union. One tactic will be to use Russian clout to intervene in other countries to ‘protect’ Russian minorities. The precedent has now been set, thanks to meddle and muddle from Brussels. Putin projects ‘hard’ power; he has little time, as an unreconstructed old-regimist, for the ‘soft’ variety. Brussels can’t project anything else.

 

The EU is no longer simply inept. It is dangerous.

Where does Dave stand on sorting out the EU?

Recently there have been two top-level contributions to the debate on the future of the EU; the first a speech from Angela Merckel, the first time that German had been heard in Parliament, despite many previous attempts. It has now been largely forgotten.

 

The second was from David Cameron, largely under-reported.

 

The Chancellor was on the side of both reform and gradualism. She accepted that the status quo was not an option. A regime must be created in which all EU policies are directed at increasing the economic strength of the whole Union. She supported a bonfire of unnecessary regulations and a war on red tape that stifles enterprise.

 

Although defending the freedom of goods, services and labour, she supported restrictions on  access to benefits by immigrants. She called on the EU to be more internationalist, in particular by swiftly approving the Free Trade Area deal with the US. She said little about the democratic deficit, which seems to be of greater concern in the UK.

 

The overall significance of her speech is that change is not an ‘if’ but a ‘when’, and she needs Britain, the second largest economy in the EU, to support her.

 

The second was an op-ed piece in the Daily Telegraph, in which Dave has sought to forward the debate by setting out seven key areas for reform. They are:

New controls to stop “vast migrations” across the continent when new countries join the EU;

Tighter rules to ensure that migrants come to Britain to work, not as tourists planning to cash in on “free benefits”;

A new power for groups of national parliaments to work together to block unwanted European legislation;

Businesses to be freed from red tape and “excessive interference” from Brussels, and given access to new markets through “turbo charging” free trade deals with America and Asia;

British police and courts liberated from “unnecessary interference” from the European Court of Human Rights;

More power “flowing away” from Brussels to Britain and other member states, rather than increasingly centralising laws in the EU;

 

Abolishing the principle of “ever closer union” among EU member states, which he says is “not right for Britain”.

Not much to argue with there, but somebody should tell him that the ECHR has nothing to do with the EU. It is the child of 47 members of the European Convention on Human Rights. Perhaps he was thinking of the European Court of Justice, which has little to do with the administration of justice by the UK courts.

But it’s still waffle. He will need to put a lot more flesh on these meager bones before 2015. What does he mean by ‘excessive’ interference from Brussels?   Who determines what is excessive? ‘Interference’ unqualified will suit us quite nicely, Dave. Which powers should flow away from Brussels? How are you going to limit immigration without ditching Schengen? How is it proposed that national governments would work together to block unwanted legislation? And so on…..

And not a word about the ‘democratic deficit’. This is a key issue; the British hate laws which have not been passed by the unelected.

Crimean crisis.........another voice.

Unsurprisingly the doomsayers are out in force over the Crimea crisis; even the normally sensible Janet Daley in the Telegraph is comparing the situation at Munich as the precursor to war. Another leading commentator reckons we are one step away from the Cuban missile crisis and two steps from war.

 

They say that it’s all Obama’s fault; that Putin’s aggressive stance is because Obama is pusillanimous, irresolute and weak.

 

But Putin’s previous adventure was when he launched a major invasion of Georgia. And who was POTUS at the time? Why, none other than George W ‘shock and awe’ Bush.

 

It might be helpful to understand the situation from Putin’s standpoint.

 

He says that a democratically-elected government, which polled 1 million votes in the Crimea was overthrown undemocratically, and he is correct. The fact that the government was a criminal kleptocracy that stole everything that wasn’t nailed down and much of what was does not alter that fact.

 

He implies that the new regime, which downgraded the Russian language as one of its first moves,  is hostile to the Russian-speakers in the Crimea. So what’s wrong with a referendum? Nothing (provided it is under international supervision); after all, it’s good enough for Scotland.

 

He has seen the Russian Empire disintegrate not only with the loss of the modern European and Central Asian countries but also parts of the ancient Motherland. The Russian Federation is a shadow of the USSR. The Central European countries – Poland, the Baltic states, Hungary etc. – have aligned themselves with the West and in most cases joined the EU.

 

Some have joined NATO. Small wonder if the Russians became increasingly perturbed at NATO creeping ever closer to its own borders. The potential flashpoint is the Polish/Ukrainian border. If NATO deploys there in force, expect Putin to send the150,000 troops, that have recently been carrying out manoeuvres, into the Ukraine. That will be the time to start worrying.

 

Let’s not delude ourselves. This crisis was not caused by Russia. It was brought on when the EU tried to detach the Ukraine from the Russian sphere of influence. The motives are unclear. The EU has no special interest in the Ukraine, and clearly there was neither appreciation of the likely Russian reaction not any contingency plan in the event of it all going tits-up. It was bluff, no more.

 

It would be the greatest of ironies if the EU, created to avoid war in Europe, became the cause of another big one.

These Disunited States............

Our political scene is best characterized by 'same old, same old'. Whatever little interest Americans express in the Ukraine debacle is precipitated only be their utter boredom with the Washington debacle.

 

One characteristic of second term presidents is the tendency to 'cocoon' or keep within a highly guarded and confined personal space that permits entry only to those practiced in flattery and partisan spin. American presidents in this category become enamored with their own hyped-up accomplishments and status accorded them by fawning underlings. They are blind to political realities, powerless to administer change and victims of their own propaganda.

 

Subordinates are afraid of anything at all controversial or outside the party line. Hence, we get situations where bright and talented individuals like Susan Rice, former Ambassador to the UN, telling porkies to the American public about the origins of the recent attack on the US Consulate premises in Benghazi, Libya. The likes of Susan are crafted into 'yes-people' serving as staff, advisors and diplomats whose talents are relegated to mediocrity owning to their willingness to ride the presidential wave regardless of its content, direction, ethics and palatability to the public.

 

Some such people are easily persuaded if not voluntarily fighting mini-wars using their departmental mandates to undermine, discredit and even scandalize the political opposition. Witness Kathleen Sebelius' antics as Secretary of Health and Human Services divulging so many distortions about Obamacare that she loses all credibility. Or take Lois Lerner, IRS Director for Exempt Organizations targeting conservative non-profit organizations with federal tax audits way out of proportion to audits for similar, non-Republican, groups.

 

Such deception and harassment prevails throughout the Obama administration and makes one wonder the toll they take on the democratic process.

 

Obama himself appears to be totally aloof about his failures and has yet to take responsibility for any of them other than uttering some butchered phrases about potential regrets. He shows contempt for a contemptuous Congress with his nose thumbing antics implemented by Presidential Decrees, especially those with substantial policy and political content.

 

Traditionally, Presidential Decrees were issued to conclude minor administrative matters while substantive issues were decided together with Congress. Under the circumstances, union with Congress is a pipe dream and is by all accounts likely to remain so until after the next presidential elections.

 

Should the elected opposition under the next president choose to behave like those currently in office, the US will become even more moribund, emasculated and incapable of making major decisions. We should not expect any reform legislation until 2016 and possibly afterward in the areas of education, immigration, health care, debt levels, and fiscal and monetary policy in general.

 

Meanwhile, the US will muddle through until the legislative logjam is broken apart. This could well take a long time and could well be our undoing of the principles of governance that have served the US so well in the past.

 

 

'Small war in Crimea; nobody hurt'.

The news is all ‘Ukraine and Putin’; Wikipedia must have had record hits as the chattering classes became overnight pundits on the Crimea, and Major-General Armchair  pontificates with Jon Snow.

 

Are we on the brink of WW3? Nope. Is there going to be war? Nope. Is Putin going to annexe the Crimea? Nope?

 

Is the West going to do anything about it? Nope.

 

Sanctions? Hardly, when EU trade with Russia is worth $460 billion (US trade with Russia is only a tenth of this). The EU has a heavy energy-dependency on Russia; Russia is Germany’s largest trading partner and there are 6000 German firms operating there; FDI between UK and Russia is huge; billions of dollars are invested in Russian business and industry by GM, Ford, Boeing, BP, the leading European vehicle manufacturers. Russia has the world’s largest energy  reserves, and a foreign exchange stash of $500 billion.

 

None of the chatteratti seems to have worked out what is going on.

 

But it’s simple. It’s the old ploy of when in trouble at home, stir up trouble abroad.

 

Putin is amassing a lot of discontent. He heads a coterie of about 1000 mostly ex-KGB who have got their fingers poked deep into the cookie jar. They have mega-apartments in the most expensive neighbourhoods in London and elsewhere. They live the life of the uber-privileged. And the people are getting very fed-up with it; fed-up with the looting of GAZPROM; fed-up with one of the most miserable standards of living in the developed world despite Russia being the 4^th biggest economy on a Ppp basis.

 

They dislike being in a kleptocracy, a gangster state where there is no justice, no rule of law, rigged elections and corrupt politicians, and Putin has no intention of being another Saddam or Assad.

 

And Putin holds pretty well all the cards.

 

No-one is going to start another major war in a far-away country of which we know little, so force is out.

 

The West has huge commercial interests in Russia, so sanctions are out.

 

So apart from gestures and hand-wringing the West won’t and can’t do a damn thing.

 

 

Time to bid the BBC 'bye,bye'?

If old Auntie Beeb was a horse, they would shoot it.

 

It is an anachronism, maintaining the absurdity of a broadcasting system financed by a compulsory licence fee whether watched or not (increasingly ‘not’). It is facing its ‘Kodak’ moment when it becomes an irrelevance also. It is the terminally-ill ‘Guardian’ in pictures and is going the same way.

 

It seems to be unable to do anything right. Never mind the scandals of the annus horribilis. It now transpires that its business management is totally inept. In a survey of Britain’s most and least admired businesses, the BBC comes last in the management of corporate assets. It comes second from last for quality of management, although the number of top brass earning 6-figure salaries has increased when we were promised that the fat cats would be culled.

 

It manages to stay 1 place overall above the worst 10 duds against some pretty stiff competition in the race to the bottom – Irish Banks, First Group (the operator of appalling railway companies), with Ladbrokes coming in last.

 

The reward for this miserable showing  has been a rash of pay-offs above and beyond the Beeb’s contractual obligations.

 

There was a time when its moral standing was unimpeachable. That has been irretrievably lost by the Savile scandal and the accompanying denials, prevarication, and general duck-shoving, when it is abundantly obvious that BBC bosses must have known all along what was happening.

 

BBC News used to set the standard for objective and unbiased reporting. Its dedicated partiality towards the EU and Palestine, its determinedly leftish stance on politics, its anti-Israel bias have now resulted in viewers leaving in droves to Al Jazeera.

 

Until very recently  some of the former quality could be seen on BBC World. It carried excellent documentaries, business programmes for the Middle East and South East Asia, the outstanding ‘Dohar Debate’ and other top quality material. Now peak viewing time in SE Asia comprises mostly of rolling news; much of the quality stuff is still produced, but it is transmitted at GMT, which means that ‘Asia Business’ hits Singapore or Bangkok at about 4 a.m.

 

On the entertainment side, a minute scrutiny of the programme schedules is need to find anything worth watching, except where tastes run to potty-mouthed ’comedians’ and irrelevant sex scenes.

 

BBC programme warnings never say ‘adult or pornographic content’,  ‘foul language’, or ‘gratuitous nudity’. But they do say ‘may contain flash photography’.

 

Perhaps they should also say ‘contains nuts’.