Showing posts with label Europe. Show all posts
Showing posts with label Europe. Show all posts

27 June 2016

Brexit: An opportunity that could be wrecked by politicians

So the UK votes to leave and the PM decides to leave, but not now.  The Chancellor of the Exchequer hides, and beyond the Bank of England printing a few billion, nothing else happens.

The EU has already decided to play tough and has its own position, which is essentially "fuck off, the walls are going up, deal with it".  Although Germany is being much more nuanced.

The Conservative Party has to find a new leader, and from that a new Cabinet and a policy on negotiations.  Labour meanwhile is going the same way.  It is likely a new Conservative leader/PM will call a General Election on a manifesto of leading the UK into a new open, free-trading world with a new free trading relationship with the EU.   Leaving the EU requires the UK to initiate it formally, which the EU is begging for, but the Government would rather delay because it changes its bargaining position.

Yet that could be problematic, not least because a key plank of those fighting to leave the EU is to end free movement of people with the EU, and all countries in the EU Single Market (including non-EU Norway and Iceland) all have signed up to free movement, and even non Single Market Switzerland has, although it does have extensive restrictions on new residents having access to any government provided services.

Meanwhile, leftwing nationalists have jumped on an opportunity.  Sinn Fein wants a referendum on Irish unification, but the Northern Ireland First Minister has said no.  Scottish First Minister Nicola Sturgeon is flailing about wanting a second referendum on independence, but wont discuss:

1. The EU only lets non-members join, not current members split into joining and non-joining;
2. Joining the EU means joining the Euro;
3. 90% of Scottish trade is with the UK, Scotland in the EU would mean any EU trade barriers with the UK also apply to Scottish trade with the rest of the UK.

Spain, showing it really hasn't turned as far from Francoism as it would have liked, is demanding co-sovereignty over Gibraltar.

Meanwhile, the young leftwing social justice warrior types (Generation SnowFlake some have called them, for their "safe spaces", being "triggered" by hurt feelings and constantly protesting about what is offended) feel "betrayed" about the old "ruining their futures".  However, the truth is that the majority of the young didn't care enough to vote as revealed by Sky News below.

Whinging about democracy when it doesn't go your way, whilst embracing it otherwise, is beyond the pale, as are some of the hate filled attacks on older votes coming from those whose own identity politics is supposed to decry hate speech.  The truth being that the so-called liberal leftwing anti-hate, anti-violence activists are full of hate and quite happily embrace violence to get their "own way".  It's emotion laden petulance, of the kind you would have only seen from the fringes of the far-right and conspiracy theorists had the vote gone to Remain. 

So what should happen now? (notwithstanding who the PM and Government is)

1. The Government should announce the key planks of a new relationship with the EU around trade, investment, movement of people and co-operation, that it seeks to adopt.  It should clarify to the entire country that it is not going to be a UK of isolationism, but one of openness.

2. The Government should make it clear to all EU passport holders in the UK that no-one will be deported, except under existing arrangements for threats to national security or criminals.  No EU residents need fear this, nor will their property be affected or businesses, and if anyone threatens them they should go to the Police.

3. The PM should make it clear that there will be no referendum on Scottish independence this side of Brexit, but that the Government will consult with the Scottish government and parliament on the deal it seeks with the EU.  It is precipitous to talk about Scottish independence until Scotland sees the new deal negotiated with the EU.

4. The PM should make it clear that there will be no referendum on Northern Ireland joining Ireland unless the preconditions of the Good Friday Agreement are met, but that equally it cannot happen until the new deal with the EU is negotiated AND negotiations are concluded with the Republic of Ireland.

5. The PM should go to Dublin and discuss the future relationship and reassure that no border controls will be reinstated.

6. The PM should go to Germany and talk, extensively, about how to make this work, and then go to all other EU Member State capitals, and the EFTA Member States too. 

7.  The Government should go to the WTO to discussing reviving membership.

8. The PM should visit USA, China, Japan and other trading partners and say that it wants to have open, freer trading relationships and the UK will be open for business and people.

9. Finally, the PM should make it clear that there wont be a second referendum on membership and that those who want to claim it is unfair, that this is democracy and the task now is to bring the country together and work for a new relationship with the EU and the world that demonstrably proves the claims of the Remain activists wrong.

Oh and ignore Nicola Sturgeon.  The Scottish Parliament can't "veto" the British Government any more than Lambeth Borough Council can stop the UK having nuclear weapons.

24 June 2016

EU truths and untruths

With the UK now voting as to whether it remains in the EU or stirs up what has been described as "the biggest change in European politics since the fall of the Berlin Wall" (although the war in Yugoslavia and the first genocide since the Nazis ought to come close), I thought I'd run through some of the claims of both sides that are intellectually dishonest.

Remain

3 million jobs are linked to trade with the EU: Well yes, but then nobody is saying trade with the EU will end and nobody campaigning to leave wants inferior trading conditions.  The European Free Trade Association provides free trade with the EU, with Switzerland, Norway and Iceland all members.  The idea that leaving the EU means 3 millions jobs are at risk is a gross exaggeration.   However, if the EU is bloody minded and puts up tariff barriers equivalent to what it does for the rest of the world. it is a 4% average tariff on UK trade to the EU, which is negative for jobs, but hardly a huge risk. 

If the UK leaves the EU, you might need a visa to visit the EU: Nonsense.  You don't need a visa to visit the EU from the US, Canada, Australia, NZ or any of the EFTA member states.  What would change is having the right to live there.  Given those wanting to leave mostly want to end the free movement of people, that could be a concern for some. 

Leaving the EU will create a recession: No it wont.  The worst estimates are a small reduction in economic growth, but the long run estimates are a 6% long term slowing of growth if the UK gets the most inferior trading conditions likely with the EU (and assuming the UK has no free trade agreements with any other countries, like the US, Japan and China).  It also assumes the UK does not cut any EU regulation out at all.  In short, the Treasury estimates used by the Government of a recession are based on leaving the EU, and not taking advantage of the new freedom to trade and freedom to relieve the economy of EU Directives that impose costs on growth.

The EU means food, petrol, flights, energy and mobile phone charges are lower: Unmitigated rubbish, quite the opposite.  The EU Common Agricultural Policy inflates the price of food in the EU by 17% over market prices.  The EU legally requires all Member States to tax petrol by at least around 32p/l (but the UK government taxes it at 80% more than that).  The Single Aviation Market goes beyond the EU, with many non-EU countries as participants.  Norwegian Airlines has grown rapidly in the past couple of years, expanding long haul flights between the UK and US.  Norway is not in the EU. The EU inflates energy prices, by requiring minimum levels of taxation on gas and electricity bills, and imposing renewable energy obligations on member states.  Yes mobile roaming in the EU is lower than it would have been had the EU not enforced it, but it's clear EU protectionism and "normalisation" of regulations imposes costs on consumers. 

The £10 billion paid into the EU is "returned' many times over: No it's not.  What is returned is free trade, which should never be at the cost of paying for farming subsidies or infrastructure investment in other countries.  Leaving the EU doesn't mean an end to trading with the EU. 

The EU has 50 trade agreements we lose access to:  Many of which are with micro-states/territories, like San Marino, Andorra, Liechtenstein, Faroe Islands, Guernsey.  The only significant economies with deals are Mexico, South Africa and South Korea.  The UK could readily negotiate during the transition deals easily as good or better, as the main forces for protectionism in trade are the likes of France.

Staying in means reform:  That's highly unlikely.  David Cameron couldn't even get all the reforms he asked for with a threat of Brexit (which clearly the EU saw through as being unlikely), why would it happen after a vote to Remain?  The UK holds 9% of the MEP seats in the European Parliament, and although it is a significant contributor, reform is sclerotic.  The EU hasn't significantly cut back any of its activities and always finds new ones.  It is a political project of integration, and shows little sign of ever caring what is thought of it.

David Cameron's deal means unemployed EU migrants can be deported:  No, they can't. EU citizens can't be deported from Member States unless they are a threat to national security or criminals.  

Leave

Leaving the EU will fix the immigration "problem":  Assuming the problem is too many immigrant, and the failure of the Government to cut annual immigration to less than 100,000 people, leaving the EU will enable the UK to ration EU immigration like it does for non-EU.  However, non- EU immigration is already over 150,000 per annum.  Nobody is saying Brexit means deporting immigrants (thankfully).  Most concerns over immigration are perceptions about access to taxpayer provided services, and more often than not reflect the bankruptcy of the world's biggest health bureaucracy, which is treated as a religion never to be reformed (NHS), the bizarre legal obligation of all local authorities to ensure anyone who lives in the UK has housing (including rooms in hotels paid for by taxpayers), the open access to compulsory education and the sclerotic way the UK restrains supply of housing and roads.   Leaving the EU wont solve any of that, but then those wanting to stay in the EU are also devoid of responses to what are more fundamental problems.  

Turkey is joining soon: No it's not.  Notwithstanding David Cameron's hypocrisy over the issue, it is difficult to see Cyprus accepting Turkey until there is settlement over northern Cyprus, or Greece accepting Turkey until Turkey secures its southern borders with Syria and Iraq.  However, Serbia, Montenegro, FYR Macedonia and Albania will all likely be members within 10 years.

Money saved will be spent on the NHS:  Well the half that is a rebate and is current subsidies wont change, although there is a chance to make some serious saving there.  The rest?  Well it can go on many things, but there is a case for simply cutting the deficit by £10 billion a year.  After all, despite George Osborne's platitudes, the UK government is still overspending.  What happens with the money is up to the government.  The Leave campaign is not the government.  Yes leaving the EU wont save £350 million a week, more like half that, but the rebate is not set in a treaty, and the spending 

UK will be drawn into the Euro and ever closer union: The UK has a treaty opt-out of the Euro and has to agree to treaties for ever closer union, but it wont mean it doesn't face the costs of ever closer union.  That will depend on future negotiations.

The UK can get trade access as good as the Single Market without free movement of people:  This is unlikely, simply because it would mean the Single Market is undermined and would be a massive backtracking of the principles of the EU.  Signing up to EFTA or the EEA will mean some compromise on this.

21 June 2016

NZ Herald wrong about EU referendum

The NZ Herald has decided that it thinks the UK should stay in the EU, but its editorial on the issue is  woeful, it misses the point and is dotted with errors.  There is nothing in the editorial about the key problems with EU membership, around how EU laws are developed undemocratically (introduced by the European Council, MEPs can't introduce legislation), how the EU is inordinately wasteful including on policies that harm New Zealand's economy (including the Common Agricultural Policy) and harm developing countries.  Nothing about the protectionism of the EU slowing the ability of the UK to trade freely with growing economies in Asia and Latin America.  

New Zealand has full control over its trade policy, its domestic regulations and immigration policy, but the UK does not have the same at all.

It's not true that no country has ever left the EU, Greenland did.  Now that's not anything remotely on the scale of the UK.  Of course, neither did the NZ Herald point out that Switzerland, Norway and Iceland all have thrived outside the EU.  The EU is not Europe as much as it likes to think that it is.  

It's true that Brexit could encourage a break up of the EU, but is that necessarily a bad thing? An unwieldy arrogant technocratic organisation that failed miserably to deal with the refugee crisis, was paralysed by the breakup of Yugoslavia, unable to agree on acting until the US intervened to stop Serbia deporting Kosovan Albanians.  The spectre that European countries will wage war on each other when they have functioning liberal democracies with extensive trade and travel with each other. 

Yet the Herald editorial paints the picture that Brexit somehow increases the chance of Russia invading the EU? Why?  NATO provides the security guarantee for its members, it isn't weakened by the UK leaving the EU - at all.  Why would it matter?

The claim that Scotland will leave the UK after a Brexit vote is also rather fatuous.  Polls on Scottish independence still say 55% would vote to stay in the UK, and there is little reason why the UK Government would hold another referendum on Scottish independence.  It's highly presumptive to think Brexit means Scottish independence.

Finally, yes it is immigration that is motivating many voters to want to leave the EU, but not immigration from outside the EU, it is concern that free movement will overcrowd the country, keep down wages and overwhelm government provided services. 

However, for me, it is because the EU is a sclerotic unaccountable project that keeps the UK in chains, it also subsidises unfair competition to New Zealand producers in world markets and restricts sales of many NZ products into the EU.



10 June 2016

Libertarian position on the EU Referendum

On 23rd June, the UK will vote on whether to remain in or leave the EU.  I'm voting to leave the EU, and believe that, on balance, those who believe in individual liberty including free trade should strongly support leaving the EU.

Bizarrely, Prime Minister David Cameron, having campaigned for a referendum, is now claiming that a vote for the UK to leave would trigger recession, economic catastrophe and even risk future war.  He’s been asked why he bothered putting the UK through such a risk, particularly since only months ago he said the UK would “do ok”.    Now both the Tory Government, most of the Labour Party and virtually all Liberal Democrats, Scottish and Welsh Nationalists and the Greens are all campaigning to remain in the EU, whereas the campaign to leave is led by Boris Johnson,  Michael Gove, nearly half of Conservative MPs, a handful of Labour MPs and UKIP.

The two main planks of the Remain camp are first that leaving the EU Single Market would damage the economy, and they cite many economists, the IMF, World Bank and OECD who all support this, along with some major business leaders and companies.  The second claim is that leaving the EU “lessens Britain” and isolates it, and means the UK loses influence. 

The Leave campaign has a few key messages.  One is that it will save £350m a week from not contributing to the EU (although that excludes receipts from EU programmes to the UK and Thatcher’s rebate, which could be removed at any time).  Secondly, is that leaving the EU will return sovereignty to the British Government, rather than the EU, which passes laws, even if all British MEPs oppose them, imposing them on the UK.  Thirdly, is concern that immigration cannot be effectively controlled whilst there is free movement and full rights for all EU citizens to reside in the UK.

For a libertarian, the EU referendum does mean a trade off.   Indeed, the only two elements of the EU that are pro-freedom are the single market and free movement of people.

EU Membership does provide a single market of over 550 million people, for goods if not for services.  However, it is a customs union that is highly protectionist, and has for decades been one of the biggest objectors to global free trade in agriculture and in many services at the WTO, particularly because France is consistently resistant to trade liberalisation.   Much is made of the EU signing “trade deals” with other countries, but it rarely includes services and never includes agriculture.   Nick Clegg likes to describe the many years and reams of paper needed for the EU to reach trade agreements with the likes of Canada, as if this is the norm (and a burden the UK would have to bear with other countries if outside the EU).  Yet this is quite unnecessary.  New Zealand and Australia agreed on free trade (CER) in less than four years, with a relatively simple agreement.  The only reason free trade agreements become complex is when one of the parties wants exemptions – not actually wanting free trade. 

The second libertarian element of the EU is the free movement of people.  The ability to cross borders virtually unimpeded is of significant value, but it is unconditional.  No EU Member states have the ability to shut out other EU citizens if they have been convicted of any serious offences.   I am not from the camp that believes that free movement within the EU is inherently bad, but I do believe countries should be able to exclude foreign nationals who are proven violent criminals.  The UK's immigration problems are in part, its own fault.  Its health system is the world's biggest civilian bureaucracy that makes feeble attempts to restrict non-national usage and asks nothing of users in terms of financial contributions.  Anyone with legal residency in the UK has access to the welfare state (including generous tax credits for low income workers and child benefits), to taxpayer funded education for their children and access to publicly subsidised housing (indeed there is a "legal right" to housing in the UK, paid for by others).   

In short, the UK has a welfare state edifice that is attractive to migrants with low skills, especially coming from much poorer countries with inferior health, education and housing provision.   If it wants to reduce immigration, it ought to look in the mirror.

Furthermore, as journalist Rod Liddle said at a Spectator hosted event on June 13th, eastern Europeans don't pose an existential threat to western civilisation or to the values of individual freedom that give cause to be concerned about Islamism.  As much as some are concerned about Polish migration to Britain, they integrate, they embrace the values of a developed Western liberal democracy, they set up businesses, they are not demanding media not offend them with threats of violence. Notwithstanding the distortions caused by the UK's wider welfare state, I am not concerned about migration from eastern European, as long as prudent measures are made to exclude convicted violent criminals.

However, the freedom of movement and freedom of trade within the single market do not, for me, outweigh what's wrong with the EU:

- It is a massive exercise in regulation and legal control on almost all areas of the economy.  The EU has over 10,000 Directives on anything from standards for fruit and vegetables, to blowtorches, to light bulbs, to employment.  It is a huge corporatist system that imposes major compliance costs on businesses, restricting new entry and restraining innovation.  Most explicitly, the EU has prohibited the use of genetically modified organisms in agriculture, ensuring that research and development of GM technology outside laboratories is based in the US and Asia, not Europe.

- Its budget is dominated by the protectionist racket known as the Common Agricultural Policy (CAP).  The CAP inflates the price of food for Europeans by heavily restricting imports from more efficient producers from many countries, including New Zealand, and subsidises overproduction in Europe which is then exported undermining market prices in other countries including poor producers in developing countries.  The CAP impoverishes farmers in poor countries, whilst the EU engages in pious virtue signalling about how much it cares about inequality.  The CAP itself isn't even equal in Europe, as it would have gone bankrupt had eastern European producers been subsidised at the same rates as those in western Europe, so perversely farmers in the EU's poorest countries (e.g. Bulgaria) receive subsidies one-third lower than those in its richest countries (e.g. Luxembourg).

- The EU takes £10 billion a year of British taxpayers' money more than it returns (and most of what it returns is to prop up farmers, to fund research projects or pious regional development projects).  That is money currently borrowed from future taxpayers.  It should end to help balance the budget.  The ludicrous idea that this is the "price for accessing the single market" is absurd.  Free trade does not need to be accompanied by massive subsidy schemes for small parts of the EU economy or politically motivated infrastructure, research or vanity projects (such as Galileo - the EU's complete duplication of the US GPS system, under the nonsensical basis that the US might "shut it down one day").  Furthermore, the majority of EU Member States are not net contributors, and until the past three years neither was France (primarily because it takes so much back in subsidies to prop up its 19th century farming sector).

- The EU is fundamentally authoritarian in instinct, having contempt for the democratically expressed choices of EU Member State voters (the EU President recently said that certain political parties would "not be allowed" to have power if they won elections in EU Member States, such as the Freedom Party in Austria).  The EU's utter failure to provide any discipline on spending in some Euro-member states and contempt for popular revolt at the resulting economic collapse reflects its distance from the concerns of Europeans.  Notably, it has taken few steps to address Hungary's creeping authoritarianism as its government subverts much of its media to support its own propaganda.

- Members of the European Parliament have no powers at all to introduce new legislation including legislation to abolish existing Directives.  Only the European Council can introduce draft legislation into the European Parliament, and the Council is comprised of people appointed by Member State Governments.  The closest the EU gets to accountability is that MEPs can vote to oppose the passage of draft directives, but none can propose their own new legislation.

- The European Commission budget has been found to be materially in error every year for the past 18 years, most recently by 3.9%, or around €5 billion.  This is in part because of the complexities of its spending programs there is considerable scope for fraud and mistake.  Never mind, the EU just keeps asking for more money.

- The EU never cuts its budget, ever.  Every year it asks for more and more, it never ceases to undertake any functions, it never seeks to hand back powers to Member States.  It grows inexorably.  Ten years ago it didn't have a common Foreign Policy, it is now discussing haviuniong an EU Army.  Bear in mind this growth continues in spite of it telling the likes of Greece and Spain that they need to cut spending to balance their budgets.

- The EU falsely claims it is responsible for peace in Europe amongst its Member States, ignoring not only the role of NATO in deterring war with the Soviet Union, but also the more fundamental principle that liberal democracies don't go to war with each other.  The EU got in the way of addressing the war in the Balkans in the 1990s as it opposed letting the Bosnian Muslims arm themselves to respond to the Serbian ultra-nationalist genocide being led by Radovan Karadzic, it has been divided over Ukraine.

- The EU attracts mediocre political appointees to have considerable power over us all.  The UK supplied the second Foreign Minister, Catherine Ashton, a Labour Party member, unionist and former peer (i.e. never elected) who had no foreign policy background.  Failed UK Labour Leader Neil Kinnock built a long career for himself and his family in the EU.  

- The EU has attacked free speech by requiring Google to remove content from searches that EU citizens specifically request as being the "right to be forgotten" .  More recently it has sought to have a common approach to "hate speech", including a call to restrict "disrespectful public discourse".  Fuck off you arseholes.

- The EU project's ultimate end game is a European superstate with power over taxation, national budgets and a massive programme to "harmonise" the regulation of all industries and sectors as one.  This superstate will not be interested in reducing what it does, granting more freedoms to its citizens and reducing its burden on taxpayers, rather the contrary.

Supporters of the Vote Leave campaign have produced this movie below, which is being freely distributed.




I have already cast my postal vote to leave and no, I don't take the views of President Obama, John Key, the IMF, World Bank,  UN Secretary General or others into account.  I don't expect any government or any international organisation to risk their own trade and relationships with the world's largest economy (the EU) by supporting the UK leaving.   Most bizarrely, it is odd that President Obama would ask the UK to stay in a political union that the US itself would never bind itself to even if it could, given the US itself refuses to sign up to many international treaties because it doesn't want its sovereignty restrained.

However, let's be very clear what leaving the UK does not mean:

The campaign to leave the EU is not led by those who want the UK to be isolated and protectionist: Unlike the opposition to the UK's original EEC Membership in 1975, those who lead the campaign to leave the EU now are not primarily socialists who feel threatened by foreign competition.  They are advocates of free and open trade with the rest of the world.   They are dominated by concerns that UK's national sovereignty is eroded by the EU and that the EU is wasteful, sclerotic, inefficient and dismissive of individual freedoms and people's concerns about it.

Leaving the EU is not "ending co-operation": Over 160 countries in the world co-operate on a vast number of matters.   Switzerland, Norway and Iceland are not in the EU, all trade freely with it and work with it and each other and other states, without being tied to the EU project.

Leaving the EU is not racist:  By illiberal-leftwing standards, the EU itself may be deemed racist with its trade policy that harnesses protectionism and European taxpayers' money to harm producers in developing countries.  Those advocating for Brexit want an immigration policy that does not favour EU citizens from non-EU citizens, which would appear to be anything but racist.

Leaving the EU is not "leaving" or "turning our back on Europe":  The EU is not Europe, it is a political-customs union project.  The UK has been at the heart of advocating values of freedom, civil liberties, liberal democracy, rule of law and separation of powers in Europe for much longer than any other countries in Europe.  It is understandable why some countries with recent totalitarian pasts would see the EU as a project that may enable them to move on from unspeakable horrors and oppression, but the UK does not have such a path.  UK outside the EU would trade, travel and work closely with European countries, with continued migration and investment, it simply wouldn't be shackled to how the EU wants Europeans to interact.

Leaving the EU is not seeking a return to a "golden age": Far from it, it is seeking to regain full sovereignty over UK laws to create a more dynamic, outward looking Britain that isn't dependent on the EU for freer trade with the rest of the world.  No one harks back to Empire, some say Brexit will enable trading relationship with the Commonwealth to be revitalised, but few see a future of self-sufficiency and exclusion.

So I have voted to Leave.  I know if it happens, the pound will drop, the FTSE100 will drop and there will be panic.  I also know that there are strong calls for Brexit to mean a significant toughening of immigration policy, which I largely oppose.  I also know there is chance the UK will be blocked from the single market for some time, as the EU and major EU Member States seek to punish the UK for leaving, rather than look at themselves as to why that might be.

However, I am also hopeful and optimistic that the world's 5th largest economy can be more outward looking, can liberalise its economy, can reprioritise its net contribution to the EU by cutting its budget deficit and replacing the subsidy programmes it receives now and phase them out.  I am hopeful that the UK can show the EU that it should be more dynamic, open and prosperous, stimulating the sort of reforms EU Member States desperately need.  I am also hopeful that the charlatan, the PR spin doctor Prime Minister, David Cameron, can finally retire, and the UK can have a government that doesn't look like the Labour Party stayed in power after 2010.

26 January 2015

Greece votes for a dream, and it is only that

The news that Greece looks like getting a far-left government let by the soft communist Syriza Party has excited some commentators, but what is perhaps most deceptive is the claim that it is a "rejection of austerity", as if the choices to Greek people were like a menu.

In fact, the choices are far more stark, because what Greek politics is and has been ever since it joined the Euro (indeed one could say ever since it joined the European Economic Community), is an exercise is mass deception and reality evasion.

The troubles of the Greek economy are not due to "the Germans", nor are they due to "the bankers", they are due to the peculiar, though not unique, mismatch between the part of Greek society that wants money from the state (and protection for their businesses or jobs), and the part that doesn't trust the state at all, to the point that it egregiously evades taxation on a grand scale.

This mismatch used to be managed by stealthily stealing from most ordinary Greek people through continual devaluation of the drachma. 

Then it was covered by structural adjustment transfers from the EEC/EU, as Greece gained money to build transport, energy and civic infrastructure, and of course the ongoing subsidies for its agricultural sector.   When it joined the Euro, the Greek government gained access to easy borrowing in a hard currency at low interest rates, so it ran further deficits.  The OECD describes Greece's economy as thus:

In Greece, economic difficulties go deeper than the direct effects of the recent crisis and fiscal consolidation is urgent. Difficulties have been brewing for years, so when the crisis came, Greece was significantly more exposed than others. Besides the severity of its fiscal problems, Greece has, over the past several years, gradually but persistently lost international cost competitiveness, resulting in widening current account deficits, a deteriorating international investment position, and a poor record of inward foreign direct investment. 

Greece has a highly regulated protected economy, with a bloated state sector. 

Syriza wants to protect the economy even further, increase the state sector even further, cut taxes and thinks that banks in other countries, supported by taxpayers in northern European Eurozone states, will help Greece out.

There are, in effect, two paths.

Either a renegotiation of existing loans to be written off or extended is achieved, and Syriza quietly folds its promises on state sector pay, free electricity (indeed any further giveaways), and Greece remains in stasis.  or

Greece defaults on debts and leaves the Euro.

In the former scenario, it looks like at best Greece might get some easing of terms of debt repayment, but the idea that it will get half of its debt written off again, is unlikely, given the previous deal saw private Greek government bondholders accept a 50% write down of debt.  There is little real chance the Greek government could get anything from the private sector, so any further loans will be government to government.  

If Greece gets the sort of deal Syriza hopes for, it will set a precedent that Spanish, Italian, Portuguese and even French and Belgian governments will want to replicate.  At that point, you would have to wonder how much tolerance voters in Germany, the Netherlands, Finland would have for propping up their profligate southern neighbours (let alone the former communist bloc countries that went through much more radical and painful structural reforms than Greece should be facing). 

The real risk is that voters in those countries eject governments that agree to bail out other governments with their money.  After all, who wants to be seen to be bailing out Italy?  German guilt over the war can't be stretched that far.   It threatens unravelling the Euro and even the entire EU project, as parties like Syriza effectively want a fortress Europe that looks closer to the former COMECON than a customs union.

The latter scenario has seemed less likely, but I'm not so sure.  A deal gets offered to Greece that extends the terms for existing loans, in the hope that Greece engages in reforms, but ultimately Greece will run out of money.  At that point, it faces either not paying its pensions or public sector workers, or issuing a new currency, and then the Greek economy finally collapses under the weight of its fundamental contradiction.  A western European standard of living cannot be sustained with an economy that is akin to a wealthy developing country, 

The only solution to this is to reduce the costs of doing business, address the corruption within the regulatory/subsidy/state contract/tax system, remove protection for existing businesses (and jobs) and to cut the role of the state, while enabling the state to be more effective in carrying out its core responsibilities.

However, the outgoing Greek government only made modest progress on this, and Syriza is philosophically opposed to making life easier for the private sector.  Syriza believes in the state owning larger businesses and licensing/protecting smaller businesses.  It believes in a generous welfare state and public sector, and wants lower taxes on everyone except the "rich", who of course have either already left or have at least set up their accounts in a way that they are away from the hands of the taxman.

Even if Syriza does get a deal that avoids a default, it will only delay the next crisis.  An anti-business, anti-free enterprise party will continue to strangle Greece just like similar policies have done for many years.  

What's bizarre is that Greece's northern neighbours have faced much more serious levels of reform and restructuring in the past twenty years than it needs to, but they did it.  Bulgaria and Albania are both much poorer than Greece on a per capita GDP basis, but have economies in much better shape. 

The tragedy is that too many Greeks have voted for a dream that they too can convince taxpayers in other countries to buy them a standard of living they don't earn themselves, and that they can convince banks and other private investors to risk their money with a government that is unwilling to pay them back.  It is a dream, and it is about to become a nightmare. 

What I wrote before about Greece, two years ago, remains true.  










06 June 2014

Britain matters to Germany

One of the reasons given as to why many in continental Europe do not understand the British lack of enthusiasm for the European Union is that no other country in the EU was bound by being the victor in World War Two.  The war, and being on the right side, was and remains a common cause of pride and identity for the UK.  Not for the UK is there a smidgeon of guilt over what happened in World War Two.  

Compare that to Germany, which has spent the post-war period being reminded that it was the land that started two wars in the 20th century and committed the world's first modern industrial level form of genocide.  Whereas other states on the continent were either allied to the Nazis, neutral towards them or defeated by them.  Unlike Britain, the idea that the EEC and then the EU would ensure that these countries would never fight each other again, is powerful and is fed, in part, by a sense of national guilt that their ancestors either didn't do enough for peace, or were themselves cheering on the militarism that consumed the continent.  The UK can firmly be sure that it didn't start the war, it wasn't neutral and it wasn't defeated, even if geography helped that (Ireland remained neutral, as it was solipsistically focused on its own bloody independence, rather than seeing the evil on the continent).   

Don't underestimate the different psychological effect that Britain takes for granted, in having its war veterans appear on D-Day, telling their stories, with pride and heroism.  Feeding the nationalist pride of just victory, is not something that happens on the continent.  At best some resistance fighters, at worst those who fought for fascism, genocide and totalitarianism, denies the strength of identity based on such history, refocusing pride on more benign identity points, such as language, older history and post-war culture, and the EU as the antidote to the guilt.

It understandably, is never discussed.  Indeed, the new EU Member States that once lay under the jackboot of the USSR have similar issues, with so many in those countries who were a part of systems that oppressed their fellow citizens.

So when Angela Merkel yesterday said "What would have become of Europe if the British people had not found the strength to put their existence at risk in order to save Europe?" it was a welcome sign that, despite the arrogance and smug self-satisfaction of the EU, some in continental Europe will say what is known - Europe today would not be free if it had not had the UK (and the USA) to fight against Nazism and keep Stalin behind an iron curtain.

There is no need to be repeatedly grateful for winning the war, after all most of those alive across Europe bear no responsibility or guilt for what their ancestors did.  I didn't win the war or do anything to help, so I shouldn't claim any esteem from what happened.  

However, it would do well for others in Europe to note the differences in history, and the reasons why the UK does feel confident about its own national sovereignty, history and ability to avoid declaring war on its neighbours.

26 March 2013

Financial Transactions Tax fails the test of reality... again

Financial Transactions Taxes (also known as Tobin taxes) are the fond friend of the banker-bashing left, believing that there are vast fortunes of money swirling around the ether that, if only they could take a tiny cut of it all, they could save the world.

It has been advocated widely by the likes of Paul Krugman, Bill Gates, Resource intensive fat capitalist dickhead hypocrite  Michael Moore, Greenpeace, Oxfam, WWF, Occupy Wall Street and Fidel Castro

So the EU proposed one, and it has been getting introduced in 11 EU Member States.

It appears to be failing to deliver ... and the Swedes would rightly say, having been there before, "told you so".

25 March 2013

Capital controls - the tool of the statist

"An economic and political disgrace" is how City AM editor, Allister Heath, describes it.

I call it theft.

Capital controls, a euphemism for banning you from taking more than a sliver of your property out of a particular country.

They are motivated by concerns over the "public good", over "the long term stability of the economy", when in fact the mere fact of introducing them speaks volumes about the latter, and is contrary to the former.

It is the logical end point of the moral turpitude of statists, whose fundamental belief is that private property, really, doesn't exist, but is tolerated and can be confiscated, controlled and shared as long as it fits the big picture, the grand plan.

The plans of politicians who think they know best how to run your life.

Cyprus has no future as a financial hub.  Confidence is utterly destroyed, as depositors, regardless of whether they individually will lose part of their savings as part of the bailout, will abandon its banks.

It's over.  Runs on banks happen because people panic about their property and their savings.  That money is their's, and they frequently worked hard and took time to make that money. 

They rightfully seek to protect it, withdrawing it from institutions that might take it from them, because money is an extension of the self.   It is the product of people's minds and labour, translated into a universal medium of exchange, and a means of storing that value.

Being able to take it out of a country is an extension of the right to leave, the right to take your life includes taking your possessions, includes your bank account.

Of course, banks are not foolproof.  In a free market, people rightfully take a risk in deposits with banks, particularly given virtually all banks engage in fractional reserve banking, lending much more than they take in deposits.  If a bank fails, then depositors should become unsecured creditors effectively being a segment of the new shareholders of the bank.

However, it is quite another thing for a sovereign state to do this, to restrict ALL capital flows out of a country.

You see the primary reason why a government does that is because it knows it has lost the confidence of its people, because it is about to steal from them in one way or another (in this case not through devaluation/QE of the kind propounded by Paul Krugman, Russel Norman and Robert Mugabe).  

It is a sign of failure, the tool of the statist and the act of a scoundrel.

22 March 2013

Cyprus in a nutshell

This is my go at summarising this.  Obviously, if someone spots something fundamentally wrong with my analysis, please leave a comment.  I don't profess to be an expert on the Cypriot financial sector.

Cyprus took a light regulatory touch to financial services, so its sector grew.

It gained a reputation for providing only the minimum level of scrutiny needed to comply with European banking rules, hence it tended to attract substantial deposits from Russians keen to keep their money away from Russian authorities.

Cypriot banks grew from this, but invested heavily in Greek public debt as a “safe” investment.
Greece approached bankruptcy, and the Eurozone (Germany) and Greece agreed on a bailout plan that meant its bond holder (those who lent money to the Greek government) would take approximately a 50% cut in their bonds.   This shared the burden between Greek taxpayers and Greece’s creditors.

Cypriot banks have been hit by this “haircut” in their investments, effectively being on the edge of folding without ongoing liquidity support.

The ECB is willing to provide some of this, but is demanding that investors in Cypriot banks take their share.  However, Cypriot banks issued few bonds, so simply demanding Cypriot bondholders take a cut wouldn’t be enough.  So the suggestion was made to take a cut from those who loaned money directly to Cypriot banks – in the form of depositors.

This runs contrary to the pan-Eurozone  guarantee for depositors up to 100,000 Euros.  

The reason given for wanting to confiscate Cypriot depositors is because “most of them are Russian” and “we don’t know where their money came from”.   Concerns that never translated into legal action, and which are at worst racist suspicions.

So now the Cypriot government faces its financial system collapsing.  It is happening now because the previous, communist led, government kept its head in the sand until the election it knew it would lose.
The Cypriot government itself does not have high public debt or a serious budget deficit.  It is not due to rampant overspending, but rather a banking sector that can’t cope with the bailout package for Greece demanding it write off substantial assets.

The Cypriot government is looking to the Russian government to save it, which from the ECB’s point of view means it wouldn’t be willing to provide ongoing liquidity, which means a real risk of a Euro exit, unless Russian support is substantial indeed (to the point where Russia would be the central banker for Cyprus, just think about that for a moment).

To get ECB support, it needs to find money from somewhere and could get it from a levy on deposits over 100,000 Euro.  

If no solution is obtained by Monday and the ECB stops providing liquidity, Cypriot banks will collapse and the Cypriot government may choose to print its own currency to cover spending, meaning a disorderly exit from the Euro by a country that – in itself – did not have a budget.  

Conclusion?

Cyprus’s financial sector is finished, regardless of what happens.   Local and foreign depositors wont trust its banks in most scenarios.

1. If Russia saves Cyprus, and it remains in the Euro, then it will likely mean a substantial withdrawal of deposits from Cypriot banks.  They will shrink, and Cyprus will have a bunch of effectively Russian owned banks operating within the Euro.  It is hard to see the ECB being willing to support this.
2. If Russia saves Cyprus, and it is forced to exit the Euro, then Cyprus will have a nearly worthless local fiat currency that does far more harm to depositors than a levy on Euro deposits.  It is over for Cyprus’s financial sector, but it will become remarkably cheap to holiday and buy land in Cyprus.
3. If the ECB saves Cyprus, along with Russia (providing the Cypriot share), then Cyprus will have a shrinking financial sector. Russians will be looking elsewhere to put their money.
4. If the ECB saves Cyprus, with a bank deposit levy, then Cyprus will see a massive run on its banks, and the financial sector will be effectively finished.  
5. If neither the ECB nor Russia bail out Cyprus, the banks will default, depositors may lose most of their money, it will be forced out of the Euro, and faces considerable civil unrest.

Who to blame?

- Greece, for being fiscally incontinent and being unable to pay back its debts.
- The Eurozone, for being unwilling to guarantee to Cypriot depositors what they guarantee to other Eurozone depositors, on grounds that it was never willing to address in the past.
- Cypriot banks, for being profligate lenders
- Cypriot depositors, for trusting the Eurozone and its government to ensure they avoid moral hazard.
-       Authors of the Euro, for not anticipating the inevitable credit bubbles a pan-economic fiat currency, driven by German economic performance, would fuel.

What to watch?

Monday.  The Cypriot Parliament and the ECB.

My bet is that Cypriots will be dealing entirely in cash in a week's time (they already increasingly are).

The Prodigal Greek has a great summary of the measures taken or soon to be taken, that will ensure this.

27 February 2013

Italy's long decline

So Italians have voted primarily for the socialist, the corrupt philanderer and the comedian (whose main joke is that he isn't even standing because he has a conviction for manslaughter).   The socialist opposes austerity, the philanderer opposes it too, promising to reverse tax increases and give everyone their money back (nice try) and the comedian wants to halve the working week and give everyone free internet access.  For Italians to have bothered supporting any of these buffoons is comedy extraordinaire.

Italians don't trust politicians or bankers much, but also are averse to change.  It's why on the one hand public debt in Italy is over 120% of GDP its private debt is very low.  Around 30% of Italians don't have bank accounts, because of a history with a Lira that past government simply inflated away, so they don't trust their savings with banks.  Italians don't take our credit to pay for a holiday or a car, they save, they have tightly integrated families.  There is a lot to be said for not borrowing to consume, and the tradeoff of the intact families is a female employment rate 12% lower than the EU average.  Whether the stability of families offsets the loss of economic and human potential from low employment of women is a moot point.

However, on the government side Italy is a disaster.  It has had fiscal incontinence for many years, so needs to get spending under control.   Mario Monti was the man appointed by the European Commission to sort the country out - and he was punished for that by his party coming a distant fourth.  Not, because he is not respected, but because he was a tool of Brussels.  The European Union, the great arrogant entity that proclaims whenever it can that it kept the peace in Europe, now has on its record the imposition of rule from Brussels upon a Member State.  That wasn't going to last.

Yet Italy's problems are deep and cancerous, with endemic corruption, of which Silvio Berlusconi is only the leading figurehead for.  Of a labour market that would make unions in the UK, US, Australia and NZ groan with envy, but which effectively makes it nearly impossibly expensive to make people redundant, and so keeps so many Italian businesses just below the threshold for such a law to come into place.

11 February 2013

Five big issues - five government responses - five libertarian answers

The UK has had high profile news items all week, so I thought I'd quickly summarise the issue, what the government said and what it should have done...

The issues being:

Gay Marriage
EU Budget
NHS deaths
Horsemeat
Paying for long term care of the elderly



25 January 2013

The victor vs the guilty and the scared : UK in the EU

David Cameron has laid it plain - if elected as a majority government in 2015, the Conservatives will offer a referendum on membership of the EU in 2017.

The intention as described in his speech today, is to renegotiate the UK's membership in the EU, with more openness, more flexibility and a relationship with more direct accountability, so that a referendum would mean that a "yes" vote was for a new EU relationship.  "No" of course, would mean departing the EU.  What isn't clear is what would happen if there was not to be a new EU relationship that made a substantive difference to the status quo.

David Cameron is obviously driven by politics.  He wants to sideswipe UKIP, so that its primary policy is, essentially, his.  Why vote UKIP (and risk putting Labour in) when you can vote Conservative and have your say on EU Membership?  Labour leader Ed Miliband has made it clear he doesn't support a referendum because of "the uncertainty" it creates, and the beleaguered Liberal Democrats have long had a love affair with the European project.

However, there is more to it than that, he wants to send a clear message to other EU Member States that  they better negotiate a good enough deal for the UK that he can sell it to UK voters, or those voters will say "no".

You see voters wont be choosing between the status quo and a new relationship that has yet to be negotiated, they would be choosing between a new relationship and leaving the EU.   So something will have to be negotiated.   That puts pressure on those Member States keen on the UK remaining to compromise significantly, for the consequences of failure would be considerable.

It's telling though that the consequences of a "no" vote remain vague.  For most campaigners for a UK exit from the EU, in UKIP, don't want to abandon the single market, they just want to abandon the customs union, EU law and the financial transfers to support EU programmes.  They want to keep open borders for trade and investment.  However, to say "no" to membership of the EU doesn't actually say that.  It is throwing it all away and starting from scratch.  That's a strawman that suits supporters of the EU, but isn't what UKIP wants and isn't what almost all opponents of EU membership argue.

However, what is this all about more fundamentally?  Why is there such antipathy towards the EU in the UK?  Why is there such a different attitude on continental Europe?

It all goes back to history and how it is taught at school to children in Britain and on the continent.  

The British view of history before the EU is fairly simple.  The UK fought and won World War 2 (yes with American help), as such it contributed to being a bulwark against Nazism and subsequently against the threat of Soviet invasion from behind the iron curtain.  Deep in the British national psyche is this belief in the justice of this win, that Britain protected Europe from freedom.   Britain doesn't and didn't see the European project as doing that for Britain, but as being a way of opening up markets and allowing trade and travel.  Britain didn't see it as a way of sharing its welfare state with those from far poorer countries.  

The countries on the continent think quite differently.  The citizens of the countries that believe they were victims of World War 2, i.e. France, Belgium, the Netherlands, believe that the European project is about peace, and is about defusing centuries of nationalist tensions and rivalries.   It is seen as protecting their freedoms, bear in mind these countries all endured years of Nazi occupation and fighting in the streets and fields of their countries.  Britain had the Blitz, but it was never occupied.   The strong belief that the EU is the foundation of keeping the peace in Europe endures because there are generations still alive who can tell tales of horror and poverty of how it was before.   That tale isn't told in the UK which won, rather than was occupied.

The citizens of the countries that fell on the wrong side of the iron curtain think differently again.  For them,  the war was followed by over 40 years of tyranny and totalitarianism.   For them, joining the EU (and NATO) is about turning away from Moscow and turning towards the West.  Notwithstanding the money that comes from EU cohesion funds for being the poorest countries in the EU, the likes of Poland, Romania and Latvia see the EU as part of their process of civilising government, of tackling corruption and promoting core principles such as the separation of powers.   Their view of the EU is understandably different given the darkness from whence they recently emerged.

Finally there is the guilty. Germany (and it wouldn't admit it, Austria).  Germans have hammered into them war guilt, Holocaust guilt, combined with part of the country also carrying relief of having emerged from the same totalitarianism as its eastern neighbours.  For Germany the EU is a way of doing good, of fueling prosperity, human rights and values of freedom, secularism, tolerance, productivity and accountability.  Germany embraces it as salving its conscience over what happened in the war, and what happened in the countries that were occupied.   

So Britain comes from it differently, and has done so fairly consistently.  Britain has long been critical of the Common Agricultural Policy, and gained a partial rebate of its contribution as a result.  Britain has long pushed for reforms for greater transparency and accountability for EU budgets for controls on major projects and scepticism over the growth in EU regulation and spending.

However, it is now coming to a crunch.  There is a profound widespread opposition among many in the UK to EU Membership, not because of free trade, not because of free movement to travel, but because of opposition to petty regulations, opposition to EU spending not only on a profligate polity and bureaucracy, but to well-heeled industrial farmers in France, to spendthrift Greek infrastructure projects.   There is opposition to people from poorer EU Member States claiming welfare benefits, free health care and education, having paid no tax in the UK.  There is opposition to mass uncontrolled migration from those countries.  

Some of the fears are genuine, some of them are beat ups, and there is a lot of bluster about how much the EU costs the UK budget, lots of nonsense that the European Convention on Human Rights came with EU Membership (it comes with being a member of the Council of Europe) and that all the EU brings is regulation (when it also brings prohibitions against governments subsidising businesses that compete with those from other EU Member States).

However, EU Memberships is a constitutional matter.  EU law is supreme in the UK, the UK government is bound to implement most EU law (it needs to negotiate a specific opt out or conditions otherwise, which it also needs agreement on).   The EU takes a small portion of national VAT revenue to spend on the Commission, and the European Parliament is not sovereign, the European Council is.  So imagine a supranational government where the elected representatives of the citizens are not in charge.

It is right for the UK to renegotiate its membership of the European Union, and I will write about why later.   What is wrong with the EU is plenty, what is good about the EU is few, but significant.   I believe it would be great if the UK could renegotiate EU Membership and indeed the European Union on grounds that would be outward looking, liberal, and working towards less laws, except those to bind the economic and social freedoms that Europe should be famous for.

However, I don't believe that this can happen, I don't believe any UK government can remotely negotiate EU Membership that can deliver more freedom and less government (because they don't believe in it at all), and I don't believe the EU is compatible with that.

15 October 2012

European Union peace prize?

Oh how I laughed, so much, when I read that news.

Whilst I understand why the Nobel Committee gave the EU the Nobel Peace Prize, it is, quite simply, wrong.

The peace in Europe since 1945 was due to the following:

-  The complete unconditional defeat of Nazi Germany by the US, UK and USSR (with a little help from partisan resistance groups);
-  NATO (and France outside NATO). Keeping the USSR and the Warsaw Pact at bay, especially after the Berlin airlift;
-  The economic integration of Western Europe since 1945 facilitated by the USA through the Marshall Plan, followed by the forerunners of the EU and the GATT/WTO.

There would have been no EU without the unconditional defeat of Nazi Germany, or rather no peace unless you would have counted a unified Europe under Hitler.  

There would have been no EU without NATO deterring the eastward roll of the Red Army by Stalin, using strategic and tactical nuclear weapons.  There would have been no peace either.

There would have been no EU without the commitment of West Germany's post-war leaders to economic reconstruction, a business friendly environment, and to face up to what happened.   To that end, for Greek protestors to fly swastikas because they don't like being told their government might want to keep spending within limits of what it raises in revenue, are dead wrong.

There would have been no EU without the United States providing the aid, providing the foundations of NATO, providing the bulk of the nuclear deterrent, providing support for the GATT (now WTO) to force open global markets in manufactured goods (the core of the Western European economy in the 50s and 60s).


Yes, the EU has helped bind former warring states together, it has also enabled there to be some recognition of mutual values  (however flawed they are in interpretation and application), of free speech, freedom of religion, belief in open liberal democracy, belief in the separation of powers (judiciary, executive, legislature and police), and a broad acceptance of liberal values that reject state racism and sexism, but overwhelmingly are opposed to authoritarian rule.  Yes, there are many ways that is flawed and inconsistent, but compare it to Asia, the Middle East, Africa and Latin America.  Compare it to half of Europe before 1989.

But as the Saturday Daily Telegraph said, it has hardly got a glowing record when faced with major threats to peace and security.

The Nobel committee’s citation explicitly referred to its work in Yugoslavia. Yet Europe largely wrung its hands on the sidelines, until the US ended the bloodshed and forced a peace, as it later did in Kosovo. More recently, in Libya, it was Britain and France, not Brussels and Baroness Ashton, who acted as liberators – again with America’s support.


The EU did not bring down the Berlin Wall, the people of east Germany did after Gorbachev made it clear the USSR would not support east Germany continuing to oppress its people, and east Germans had spent decades watching West German TV and listening to radio from West Germany, the UK and the US.

In Yugoslavia it took US military action against Serbia for the genocide to cease and for Milosevic to stop "ethnic cleansing" of Bosnia, parts of Croatia and Kosovo.  However, it is important to note that one reason many Europeans, in continental Europe, support the EU, is because they have relatives who in living memory endured occupation by the Nazis, or lived under fascism of one kind or another, and have been sold the idea that the EU has stopped all that.  Conveniently, of course, whitewashing out the key role the United States has played, in money and lives, in keeping half of Europe relatively free and staying steadfast to allow almost all of the rest to be relatively free now.

On economics, the liberating movement of the EEC/EU in bringing down barriers among members have been somewhat matched by new barriers with the outside world.  The Common Agricultural Policy, essentially a scam that enabled France's antiquarian farming sector, propped up by grotesquely generous subsidies to pacify (and avoid a perceived fear of Marxist revolution in the countryside), to survive thanks to German, British and Dutch taxpayers, meanwhile dumping subsidised produce on the rest of the world, shutting out efficient producers beyond quotas and tariffs and contributing to environmental degradation and higher food prices in Europe.  The EU maintains massive programmes of vanity projects, like Galileo to replicate GPS and more recently efforts to replicate US, Japanese and European state programmes for earth observation satellites.  It dares demand austerity in the Eurozone whilst seeking annual increases in its own budget beyond inflation.   It's own politicians and senior officials, partly hand picked by national politicians engaging in patronage, enjoy lavish lifestyles travelling in luxury, feeling self important, whilst being ever so distant from those who pay for them.

Now it is printing money, demanding some Member States eviscerate their own private sectors with tax rises whilst trimming their public sectors with spending cuts, stating that the Euro -which should simply be a currency - is not an economic project, but a political one.  

I'll let the Telegraph editorial finish my thoughts on this:


Yes, Europe has been transformed over the past half-century – in the committee’s words – from a continent of war to a continent of peace. But that came about largely through the establishment of trade links, the free movement of people, the knitting together of an economic union rather than a cultural one. The irony of yesterday’s announcement is that the single gravest danger to that peace – provoking riots in Spain, demonstrations in Italy, the rise of far-Right movements in Greece – is arguably the European project itself, as it exhausts the Continent’s treasuries to prop up a crumbling currency union. 

The good news is that there is still time for Europe to pull itself out of this grim spiral, to rediscover and reaffirm the shared freedom and shared prosperity that made it such a beacon to the impoverished or imprisoned nations on its borders. If it can do that, it might even deserve such a prize. As it stands, this bauble feels more like a decoration for the headstone of a once noble ideal.

I would say the EU doesn't deserve it, but then given how debased the Nobel Peace Prize is (and has been for decades), then I wouldn't really wish it on anyone unless I was wanting to mock them.  It has become a caricature of what it is meant to stand for.

What's only funnier is the EU-crats, politicians and their lackeys thinking how very deserving they are for their great efforts.  Yet if it continues to be a barrier to prosperity in Europe, if it continues to expound the socialist view that the successful striving saving nations should pay for the deficit ridden corrupt and spendthrift ones, the only thing keeping the EU together is the good will, of Germans, who don't want to be thought of as being like the Nazis.   Right now, they are willing to let a lot of their taxes and some of their savings, be taken for their reputation.  How long that continues, depends on how many of them remain in jobs, remain immune from inflation and turn a blind eye to being called Nazis despite their hard work and generosity.

It is the USA, NATO and West German/reunifed German political leaders that have produced a legacy of peace.  It is the EU that arrogantly presumes that this legacy is immutable.