Wednesday, July 08, 2009

Me no understand

Ambrose has an alarming (or alarmist) story in The Daily Telegraph today telling us that the EU is "considering a voting structure for its new apparatus of financial regulation that would make it almost impossible for Britain to block measures, even if they pose a major threat to the City of London."

We are thus told that the commission is mulling a simple majority system (SMV), making it far harder for the UK to mount a "blocking minority" with like-minded allies. Malta or Slovenia would have the same voting weight on financial regulation as Britain, the world's banking capital.

On the face of it, this does not seem possible, as voting procedures are defined in the treaty and cannot be changed willy-nilly by the commission, or anyone else. But it is not at all clear from the story as to the context in which this system is supposed to apply.

However, Ambrose tells me that the commission hopes to use the procedures within the technical committees for the three new regulatory authorities, which of course is a devious piece of Monnet salami tactics. The regulators, therefore, will be able to impose their rule over the heads of the British government – if this procedure is approved.

In fact, says Ambrose, it makes little difference whether it is QMV or SMV. The key moment was when the member states agreed to binding EU powers at the Ecofin meeting in May and then at the June summit. That entailed the transfer of ultimate control over the City from London to Brussels. The rest is detail.

That, in many ways, defines the EU – submerged in technical detail and complexity which lacks clarity and defies understanding. However, we are also told that, "The City is very seriously concerned about this," which is no bad thing. If the money men are seriously worried about the depredations of the EU, then we might see some increased resistance to the evil empire and more pressure on the Conservative Party.

On this, though, it would be unwise to rely. City financiers, in our experience, tend to be extraordinarily naïve when it comes to dealing with the EU, believing they are dealing with a rational organisation with which it is possible to have sensible negotiations. They will learn in time, but not before the City has largely been destroyed by a welter of regulation and procedures that no one understands and which are too complex to report in a popular newspaper.

Any which way though, even if it is not this issue in particular which does the damage, the one constant is that we are going to get shafted, with the City shackled by a ball and chain of perverse regulation. When it happens, we will probably not even realise how it is has been done. A thought thus occurs that between the Taleban and the EU as enemies, the former are possibly preferable. At least we can shoot the Taleban.