Euro Area

[Philippus Flavius Homovallumus]

Resurrecting our focus on the commonwealth would be a far better idea as if nothing else that would lead to diversified trade rather than all eggs in one basket.

True. More to the point though, all this talk of "punishment" and "marginalisation" is foolish. If they try to make Euro-transactions exclusive to the Eurozone this will be interpreted in the same way as any other protectionist measure, a sign of a severe lack of confidence. There will just be a flight to dollars and a to a lesser extent sterling.

Also, trade embargo? With your only bi-lateral trading partner? Uh, no. The attitude in the Eurozone is that if we are bullied we will fall back into line, and if there was ever something to turn me decidedly anti EU this was it. And it has, so congratulations Eurocrats, I now positively believe we would be better off out in every concievable way.

It will be interesting to see how the non Eurozone countries shift their positions, Britain having broken ranks looks marginalised right now, but I can't honestly see the Czechs or Scandanavian monarchies signing up to something that restricts their soverignty for the sake of a currency union they aren't in. Britain having refused to sign up at EU level gives them an obvious opt-out down the road and it will only take one other country to back out after having made a show of engaging for other to follow.

[Cecil XIX]

Cameron did the right thing. I imagine a good deal of the criticism against him in EU circles is driven partly by the fact that he is actually listening to his constituents, a habit which would destroy the EU if others followed suit.

[Nowake]

Yes, let me see *picks up the Political Leadership Compendium, turns a few pages*

Chapter VII: Statesmanship - Oh, no no no *turns a few more*

Chapter X: Vision - Certainly not! *searches page by page*

Chapter XIII: Populism - Ah, here we are, nicely put! It's the people's will and You are their Leader ergo You must Follow them!

[Cecil XIX]

Given that the changes in question would allow the EU to veto national budgets, and thus remove from the nation the absolute power to spend it's own money, Cameron's agreement would have been tantamount to signing away the sovereignty of the United Kingdom. That's something he has no authority to do in the first place.

[Nowake]

Simply because I love this quote: “Where there’s a will, there’s a way”.
Plus, your argument is false, there’s no binding legal argument to be brought forth.
If say, Nick Clegg was in power, it would’ve been signed, the Liberal Democrats made it pretty clear already – the whole coalition government is simmering because of the rift provoked by Cameron’s populism and corporate-servility: as the principal point of contention involved banking and financial regulations that Cameron felt would negatively affect the City.

[rory_20_uk]

The previous rules didn't allow countries to have debts of over 60% GDP and budget deficits of over 3%. Who bothered with that?

So, now the alcoholic promises really hard to obey the similar rules.

If a country is in breach and basically says "sod you" when the EU tries to reprimand them, then what? They get thrown out of the EU? I doubt it. Many countries are agreeing to this as they have no intention of obeying the rules if they happen to be in breach.

[Papewaio]

Cameron would have to be the head of state first before he could sign away sovereignty. I presume the very fact that sovereignty was on the table would have automatically stopped him from signing. After all he is first minister not President.

=][=

The EU is wobbling into a protectionist bracket.

I would as an EU citizen expect direct elections to the EU parliament. I would not expect that all of the highest tiers of state to be not directly elected. No representation with harsh economic reforms is a receipe for disaster. If the EU has been created to stop the next European war it's going about it the wrong way.

I'd much rather be in a poor econonmy with a bright future rather then a first world tinder box. Downhill is fine for skiing it ain't so great if it's your kids future.

[rory_20_uk]

Simply because I love this quote: “Where there’s a will, there’s a way”.
Plus, your argument is false, there’s no binding legal argument to be brought forth.
If say, Nick Clegg was in power, it would’ve been signed, the Liberal Democrats made it pretty clear already – the whole coalition government is simmering because of the rift provoked by Cameron’s populism and corporate-servility: as the principal point of contention involved banking and financial regulations that Cameron felt would negatively affect the City.

It's easy to say what one would have done when in the luxury of not having to live with the consequences of it - merely to say "things would have been better". How can people prove otherwise?

The UK has the city and it currently underpins a large part of the country. It would of course be better if we had a good R&D and manufacturing sector, but we don't. The 1970's ruined the sector, and the 1980's scrapped the dead wood. I don't hear Ireland willing to increase its corporation taxes either.

[Philippus Flavius Homovallumus]

Simply because I love this quote: “Where there’s a will, there’s a way”.
Plus, your argument is false, there’s no binding legal argument to be brought forth.
If say, Nick Clegg was in power, it would’ve been signed, the Liberal Democrats made it pretty clear already – the whole coalition government is simmering because of the rift provoked by Cameron’s populism and corporate-servility: as the principal point of contention involved banking and financial regulations that Cameron felt would negatively affect the City.

One of the things Cameron wanted was for banks to be required to hold a higher percentage of capitol vs assetts, the other major thing he wanted was for trading in Euro's to not be restricted to the Eurozone (Sarko particularly objected to this) and for financial regulation (read Tobin Tax) to remain either a veto issue or the preserve of national parliaments. None of that is contentious, this was about the "Anglo-Saxon bankers" narrative which is being used to disguise systemic flaws in the Euro.

We've been here before, except then banking houses like Goldmen Sachs were called "Jewish" instead of "Anglo-Saxon".

The UK is being deliberately scapegoated.

As to Cameron's decision, given the domestic political situation, he really had no choice. Signing a deal would have resulted in a no-confidence vote and his replacement by a hardline Eurosceptic, fracturing the coalition and triggering a general election; calling a referendum on the issue would have fractured the coalition and triggered an election, and possibly have resulted in a "no" vote anyway. It's worth pointing out that both paths would probably have returned majority Conservative governments and completely wiped out the Lib-Dems, so Cameron had a limited amount to gain from this manuavere, except time for the Eurozone to find a solution, which should quiet the coalition if it leads to a pick up in the economy.

In a round about way, this move is really the best one for Nick Clegg, not David Cameron.

As to Clegg signing, who say's it's a good idea anyway? A new "stability pact" won't solve the problem, only Germany standing behind the PIGS and Italy will do that, because until it is seen that selling Italian bonds and buying German ones will result in German money flowing into Italy investors will continue to bet on an eventual breakup, and buy and sell accordingly.

Cameron would have to be the head of state first before he could sign away sovereignty. I presume the very fact that sovereignty was on the table would have automatically stopped him from signing. After all he is first minister not President.

=][=

The EU is wobbling into a protectionist bracket.

I would as an EU citizen expect direct elections to the EU parliament. I would not expect that all of the highest tiers of state to be not directly elected. No representation with harsh economic reforms is a receipe for disaster. If the EU has been created to stop the next European war it's going about it the wrong way.

I'd much rather be in a poor econonmy with a bright future rather then a first world tinder box. Downhill is fine for skiing it ain't so great if it's your kids future.

Quite so, and "protectionism" is the word, as is "populist" with all this talk of "Anglo-Saxons" The EU is now flirting with Facist ways of "managing" its electorate.

[Beskar]

For the British peeps, there is a series on the BBC at the moment:
http://www.bbc.co.uk/iplayer/episode...ust_Episode_1/
http://www.bbc.co.uk/iplayer/episode...ust_Episode_2/

[Nowake]

Cameron would have to be the head of state first before he could sign away sovereignty. I presume the very fact that sovereignty was on the table would have automatically stopped him from signing. After all he is first minister not President.

Yes it was argued just above. Yet it is not true.

And the British did not even ask for an "emergency brake" clause or opt-out for financial regulation.

What they asked for was a protocol imposing decision-making by unanimity on a number of areas of regulation currently decided by majority voting. (If you want to be really technical, the choice is voting by unanimity or the special Qualified Majority Voting (QMV) used in the EU, which is a sort of super-majority system taking into account a certain number of countries and also their populations).

This amounted to a big winding-back of the clock for many EU leaders, setting a "horrendous precedent" that could unravel the single market. As they see it, common rules for the common market have been adopted (with few exceptions, such as tax) by QMV ever since the Single European Act approved by Margaret Thatcher in 1986.

The much-discussed Financial Transactions Tax issue already requires unanimity and therefore could never be imposed on the City of London without Britain's agreement. What is more, as was pointed out in Brussels with some vehemence, when it comes to financial services there have hardly ever been any cases of Britain being outvoted in the adoption of such legislation.

In simple terms, that means that Britain's request to move to unanimity was taken as a huge ask that had nothing to do with the subject at hand (saving the euro) or was a sign of bad faith (because it is driven by mistrust regarding future legislation).

It's easy to say what one would have done when in the luxury of not having to live with the consequences of it

True, proclaiming your europhilia is a campaign winning move in the UK /slap

[Papewaio]

But why should EU members who have a currency other then the Euro have to shore up the Euro? That and have the Euro not tradeable outside the zone ( if that is actually even the case... Given the amount of money involved a shell company would easily circumvent it).

Its essentially asking for EU members who are fiscally responsible to write a blank check for those who aren't. Something I for one would be loathe to do without direct representation.

=][=
As for being a pseudo- external observer IMDHO the EU had to be more transparent and accountable whilst being more open to trade with the rest of the world. No point making laws without the ability to enforce them. Also no laws should be morally binding without representation... Proxy and implicit is not good enough when talking of a first world meta-nation.

[phonicsmonkey]

I am English and I have always believed that it is in Britain's interests to remain a member of the EU (with all the benefits of being part of that 'liberalised' trading bloc and few of the costs thanks to Thatcher's hard line negotiations at the outset) and to stay outside of the Euro (to preserve the benefits of freedom of monetary and fiscal policy).

I don't think anything has radically changed in this analysis. Cameron could have signed the deal without over-stepping his powers - as Prime Minister he has the executive powers which are only nominally vested in the Queen and are in practice delegated to HMG. Instead he chose to hold out for concessions which never came and ended up with nothing. Time will tell whether or not this was a good move but as I alluded to above at least when Thatcher did the same she came home with a bag full of cash!

Also the contention that agreeing to this deal would have handed over sovereignty to Brussels is just plain wrong - it all comes down to whether or not it is enforceable and how. As someone said above if the fiscal rules are agreed to and then not followed what happens? If the answer is that the government has the option to leave the EU and break the treaty then it is still sovereign no matter what it has agreed to in the pact.

[Philippus Flavius Homovallumus]

Also the contention that agreeing to this deal would have handed over sovereignty to Brussels is just plain wrong - it all comes down to whether or not it is enforceable and how. As someone said above if the fiscal rules are agreed to and then not followed what happens? If the answer is that the government has the option to leave the EU and break the treaty then it is still sovereign no matter what it has agreed to in the pact.

You mean it's debatable. It would be enforcable if European institutions, such as the Commission or Court, were used and that would impact Britain because they are EU institutions.

How do you feel about my analysis of the political situation in Blighty? From where I'm sitting Cameron is in the opposite position to Thatcher because she was ousted for saying, "no".

[Cecil XIX]

As someone said above if the fiscal rules are agreed to and then not followed what happens? If the answer is that the government has the option to leave the EU and break the treaty then it is still sovereign no matter what it has agreed to in the pact.

If I'm reading you correctly, you're saying that Britain would not be handing over it's sovereignty because it can just ignore the law. Is that really any better? If you sign something because you think it's unenforceable, what do you do if it becomes enforceable in the future? Or what if it's not clear if it's enforceable? In fact, this is the same logic that the south used to justify seceding from the US and which started the Civil War.

[phonicsmonkey]

If I'm reading you correctly, you're saying that Britain would not be handing over it's sovereignty because it can just ignore the law. Is that really any better? If you sign something because you think it's unenforceable, what do you do if it becomes enforceable in the future? Or what if it's not clear if it's enforceable? In fact, this is the same logic that the south used to justify seceding from the US and which started the Civil War.

Cecil, I'm not saying they should have signed it because it wouldn't have been enforceable. I'm saying that even if they had decided to sign it, for whatever reason, that wouldn't have represented a handover of sovereignty because it's a treaty between nations which can be revoked by Parliament at any time.

Nation states enter into treaties all the time which impact on their sovereign powers (for example a mutual defence pact which 'compels' the nation to go to war under certain circumstances) without actually giving up sovereignty. As long as you can break a treaty you are still sovereign.

Interesting example of the US civil war. Under my analysis you could say the South was asserting its sovereignty and by winning the war the North asserted its own and removed the South's. In fact invasion (or surrender in the face of it) is really the only way to transfer or expunge a nations' sovereignty in the truest sense.

As it goes I'm not sure whether they should have signed it or not - a lot will depend on what position the UK is now able to occupy within the larger EU negotiating group and whether it can now secure outcomes in the UK interest. The cost to the UK of signing (tobin tax etc) might have been worth the benefit of being on the inside, might not - I don't feel able to take a position on that right now.

PVC, I'm not currently living in England and haven't for some years to I'm not best placed to comment on the party political situation, but it does appear that Cameron is being held hostage by the crazy right wing of his party (see John Redwood's leadership bid in 1995 and the living dead that supported it - these are the people currently in charge of Britain!) and that Clegg is better placed to put up and shut up...his protestations are merely grand standing for the benefit of his own party as he cannot afford to force an election and go to the polls.

[tibilicus]

Resurrecting our focus on the commonwealth would be a far better idea as if nothing else that would lead to diversified trade rather than all eggs in one basket.

Isn't this what was going wrong in the 60s before we joined the single market? Commonwealth trade simply wasn't viable?

[InsaneApache]

Isn't this what was going wrong in the 60s before we joined the single market? Commonwealth trade simply wasn't viable?

I don't know about that but I do know one thing. We joined a trading bloc. Confirmed by the referendum in 1975. We did not join a fledgling superstate.

[phonicsmonkey]

I don't know about that but I do know one thing. We joined a trading bloc. Confirmed by the referendum in 1975. We did not join a fledgling superstate.

Depends who you ask! Even among the Tory party there are those who believe in a federal europe. Arguably Ted Heath was one of them. (so was Winston Churchill by the way although I don't think he would have envisaged his 'United States of Europe' being quite so run by the Germans).

tibilicus - exactly, at that time the Commonwealth was not a fruitful ground for trade. However, with the rise of India, the coming emergence of Africa and the developing world more broadly and with the economic resilience of Australia, New Zealand and Canada in the face of this latest financial crisis, who's to say it couldn't be viable now? It's an interesting idea anyway. We should scrap the Commonwealth Games though...I mean, seriously who cares except the Aussies?!

[Philippus Flavius Homovallumus]

Depends who you ask! Even among the Tory party there are those who believe in a federal europe. Arguably Ted Heath was one of them. (so was Winston Churchill by the way although I don't think he would have envisaged his 'United States of Europe' being quite so run by the Germans).

A better question would be, did Churchill invisage Britain being part of the USE, I think he believed the Empire would endure but that we needed an ally (the USE) to counter our natural enemies, the USA and USSR.

[InsaneApache]

Not that old chestnut about Winston Churchill again. He did not want the UK involved at all.

And Heath was a traitor who should have been sent to the Tower. Same with Hesletine and Clarke.

[phonicsmonkey]

Not that old chestnut about Winston Churchill again. He did not want the UK involved at all.

And Heath was a traitor who should have been sent to the Tower. Same with Hesletine and Clarke.

Now I didn't say he wanted us in it! But as PVC pointed out he believed the Empire would survive.

As to your comment about traitors, all I can say is 'blimey'. This must be the measured debate the backroom is famous for!

[Beskar]

'United States of Europe' would be a good thing. First would be the destruction of the nation state, dissolving everyone into regional bodies. The dissolution of all the states into regional bodies would quell regionalism feeling such as Scania, Scotland, Basque Country, Catalonia, and a great many of for like across Europe. Great thing about this also is that a great many nations already have regional bodies already existing! Britain, France, Spain, Germany... so it would simply be the total eradication of a tier of government across the board. Great savings too! No need for 26 identical governmental departments, simply one, the European one.

Now, we revamp European Parliament system to make it at least AV, if not STV voting system, electing representatives across Europe from the areas they reside in based on population, then with a second house 'Senate' based from the local regional parliaments which would be the counter balance with the Parliament. There would be a constitution safeguarding the rights of the citizens of Europe. The areas are mostly autonomous in nature anyway, the nation/European parliament would only deal with issues that affect everyone as a whole such as Defence (Armed Forces), Foreign Office, and those typical departments you would expect.

Ultimately, the system is built in a way that people can simply get on with their lives without having to worry too much about what happens in Brussels as nothing really that meaningful occurs, other than the odd speech saying dictator x should stop being a naughty boy.

As for "Economical Policy", I think it is safe to say that it should be copied more from Germany and China than Britain or the United States. (Especially not Italy or Greece)

Ultimately even if people are refusing to accept it, Britain isn't some great powerful mystical nation, it is a husk of its former self, a complete joke in many regards and in the next decade or so, I doubt it would even be Britain anymore, it would simply be "England" with Scotland seceding and rejoining the European Union and Northern Ireland re-uniting with it's Irish neighbours and the Falklands being sold off to Argentina for the fraction of the price in efforts to 'Fix the Debt'.

[phonicsmonkey]

As for "Economical Policy", I think it is safe to say that it should be copied more from Germany and China than Britain or the United States. (Especially not Italy or Greece)

This is definitely not safe to say!

Hundreds of millions still live in poverty in China and vast inequalities of income are being created at a frightening rate as the government struggles to keep a lid on the rapid urbanisation of their population while pumping massive sums into capital projects like high speed rail and filling the state-owned banking system with loans of dubious quality. As a very wise Chinese ruler once said when asked his views on the French revolution (some two hundred years later) "it's too early to tell'.

Also, while the growth figures coming out of China are phenomenal in both absolute and percentage terms, it must be remembered that this is a developing country. The political system and attendant repression do not have at this point the flexibility or freedom within them to support the necessary innovation and entrepreneurship to keep a developed economy growing once it has matured. So a direct comparison to the US or Britain is really misleading. More relevant (but still worth little due to the anachronism involved) would be to compare China now with the US or Britain at their equivalent stage of development, the Industrial Revolution, when growth rates in those economies were comparable to Chinese GDP growth now. Or, for a more regional comparison, Japan in the 1960s and 1970s. Look what happened there as that economy matured and was not liberalised...stagnation for decades.

As to Germany, while it's true that an intentionally solid manufacturing base has benefited that country well in comparison to the economies of the US and UK, it's quite arguable that the Euro itself and the resulting artificially low "deutschmark" is mostly responsible for German export strength over the past years. Without the PIIGS to keep the Euro low, Germany would have found its goods far less competitive in the global market. Which is an irony when you consider your point that we shouldn't copy Italy and Greece, for without them there would be no 'Germany' in the sense that you mean it.

Let's see what happens over the next five to ten years before we all start worshipping the Bundesbank and Chinese politburo.

[InsaneApache]

As to your comment about traitors, all I can say is 'blimey'. This must be the measured debate the backroom is famous for!

And I do declare that no foreign prince, person, prelate, state or potentate hath or ought to have any jurisdiction, power, superiority, pre-eminence or authority, ecclesiastical or spiritual, within this realm. So help me God."

BILL OF RIGHTS [1689]

Still the law of the land even after 300 years. That's what makes them traitors.

[phonicsmonkey]

BILL OF RIGHTS [1689]

Still the law of the land even after 300 years. That's what makes them traitors.

That's just silly. An elected government has the power to enter into treaties with other nation states. Presumably along these lines you also think that the UN, World Bank, IMF and Interpol also represent treasonous endeavours? NATO?

[InsaneApache]

So the law is an ass eh?

It's still the law though and it should be upheld or removed from the statute books. One of the funny things is that it was exactly this law that MPs used to try and get away with fiddling their expenses, citing Parliamentary privilege. Talk about picking and choosing.....

That's just silly. An elected government has the power to enter into treaties with other nation states. Presumably along these lines you also think that the UN, World Bank, IMF and Interpol also represent treasonous endeavours? NATO?

You'll have to remind me of the last time that the UN, World Bank, IMF, Interpol and Nato last set laws in the UK.

[phonicsmonkey]

You'll have to remind me of the last time that the UN, World Bank, IMF, Interpol and Nato last set laws in the UK.

We don't have to accept any EU laws, we can reject them by leaving the EU or renegotiating the terms of our treaties. So strictly it's still the UK parliament that passes those laws set by the EU bodies.

And all of those other bodies set policy which impinges on UK 'sovereignty' to a greater or a lesser extent. Interpol has 'jurisdiction', NATO has 'authority'.

It's absurd to talk of treason in the context of a representative government entering into entirely voluntary arrangements, by negotiated treaty, with its neighbours. That was what I was attempting to highlight.

As for MPs expenses, a lot of gumph was spouted by the pigs with their snouts in the trough, none of it sensible and most of it disingenuous.

[InsaneApache]

It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism. And that, Ladies and Gentlemen, is how the bailout package works

[phonicsmonkey]

It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism. And that, Ladies and Gentlemen, is how the bailout package works

I like that! and there are circumstances like that in the markets...I remember a time when we had to find some bonds to settle a failing trade and it turned out that eight or nine counterparties each owed the next the bonds in a big circle. Just like that we closed the whole loop and everyone was happy.

If only it really was all one big circle..unfortunately the trails of debt go off in strange loops and dead ends, spirals and whatnot...