Tuesday, August 31, 2004

Romania ready for EU accession?

According to an official EU survey, most Romanians believe that their own government officials are improperly diverting European Union funds meant to help the country adapt to EU standards. Most, in this context, means ninety percent of a poll of a thousand respondents.

In a country where the average monthly salary is 6 million lei (€150), corruption is endemic at all levels of society, so the perception of corruption in the handling of EU funds is hardly surprising.

In one of the more publicised cases, Hildegard Puwak, the minister for European integration, resigned last year after being accused of misdirecting EU funds to close family members. The Romanian media revealed that two companies run by Puwak's husband and son had obtained 150,000 euros in EU funding to operate business training schemes after she was appointed to her job in December 2000.

In another incident, Octavian Ionescu a Romanian ex-soccer star turned businessman, alleged that government advisor Virgil Teodorescu and local officials at a Romanian holiday resort had embezzled five million euros of EU money, a case in which a senior government adviser was said to be involved.

However, such high profile cases are extremely rare in a society where journalists are more at risk from exposing corruption than are their targets; where state-owned companies will only place advertisements in pro-government media; and where commercial TV stations rely heavily on government funding.

Neither is exposure helped by the fact that most of the people now in politics are over 50, in the main people who already held some authority before the revolution in 1989 and have skeletons in the cupboards. And, to keep the political elite under control, it seems that the main rule in Romanian politics is never promote someone who cannot be blackmailed.

Altogether, its seems as if Romania is now eminently qualified to join the EU.

Putting out the flames

Dozens of people were injured, including more than 40 police officers, during clashes which erupted in the town of Acerra, near Naples, on Sunday, according to a BBC report. A spokesman at a local hospital said 82 people had been treated for injuries, including the mayor of Acerra.

Nothing particularly unusual in that, you might think, except that clashes were over protesters trying to stop work on the construction of an incinerator.

Naples, according to the BBC, is in the throes of a crisis over how to dispose of waste in one of Italy's most densely populated regions. There has been sporadic unrest in the Naples area over the summer as hundreds of tons of garbage remained uncollected in the streets.

Furthermore, the unrest has not been confined to Accera. In June hundreds of demonstrators, protesting about plans for an incinerator in another town south of Naples, lay down on the railway tracks, blocking all railway links between central and southern Italy and Sicily for four days.

Officially, the story is that all available waste landfill sites around Naples are full and new incinerators are the only way to deal with the waste disposal crisis. But the real story is somewhat different. There is actually no shortage of landfill sites – what we are dealing with here is the fabled EU Landfill Directive, which effectively requires domestic waste to be incinerated.

Before putting these protests down to excitable Italians, consider for one moment what is in store for us here. To comply with the provisions of the Landfill Directive in the UK, the DETR has estimated that between 28 and 165 new incinerators (over and above the 10 currently in operation) will be needed, assuming incinerators with an average capacity of 200,000 tonnes of waste per year.

Furthermore, it is estimated that capital investment of between £1.4 and £6.9 billion will be required by 2016 to meet the targets of the Directive, with the government admitting that it has no idea where that investment funding will come from. there are also serious doubts as to whether so many incinerators could ever receive planning permission within the timescale required by the Directive, without direct intervention by government.

In order to meet meet its EU obligations, therefore, it seems almost certain that the government will have to over-ride planning laws, as it has already done with its wind farm programme and the notorious PPS22. Should this happen, the prospect of mass protests in these sceptred isles is by no means far-fetched.

Perversely, tomorrow has been declared by the Global Alliance for Incinerator Alternatives (GAIA) as the "Global Day of Action on Waste" aimed at countering the "continued obsession with incinerators", as a means of waste disposal. This will be "celebrated" by over 100 organisations and groups in 35 countries, but no more so than by groups in the Philippines where the use of incinerators has been banned, and in Taiwan, where opposition parties are fighting government proposals to build a "strategic ring" of six massive incinerators around the island.

The slogan of the global anti-incinerator campaigners is "putting out the flames", something which the EU had better pay heed to. Otherwise it will risk fanning the flames of civil unrest which may be somewhat less easy to extinguish than local demonstrations in Naples.

Another fudge in the making

In January of this year, when the commission decided to refer the failure of the Council to censure France and Germany for failing to abide by the Growth and Stability pact, I was interviewed by BBC News 24, and asked what would happen to the pact.

My suggestion was that the commission would somehow fudge it, changing the rules to make it easier for the errant countries to comply. I remember the interviewer’s response very well: "I thought you would say that", she said.

And so it comes to pass that the commission is on Friday to unveil proposals to reform pact, with monetary affairs commissioner Joaquin Almunia keen to stress that he is not just making the rules more flexible. In other words, he is making the rules more "flexible" – and a fudge is in the making.

It seems the proposals will allow for debt levels and policy decisions to be taken into account when applying the rules, with a new definition of “exceptional circumstances”, which will allow defaulting countries to claim economic stagnation as a reason for not balancing the books in the short-term, provided they promise to balance them in the medium term.

Surprise, surprise, Germany – with its deficit likely to end this year above four percent - is likely to benefit most from this re-definition and will slip gracefully off the hook on which it is impaled, and which it devised in the first place.

As for the growth and stability pact, this was actually devised to underpin the credibility of the euro but all this latest proposal might achieve is to confirm the ingenuity of the commission in bending the rules when it finds that the bigger players can't – or won't – obey them.

Three bald men…

Clearly intrigued by the spectacle of two bald men fighting over a comb (see previous Blog), Lib-Dim MEP Christopher Huhne has joined in the spat between Bill Cash and Digby Jones over parliamentary scrutiny of EU legislation – to make three bald men fighting over a comb.

In a letter to The Times today, Huhne actually argues against the British parliament having the power to reject parts of EU legislation on the grounds that, if every one of the parliaments in the 25 member states could do so, there would be very little left of the legislation by the time every one of them had finished with it.

You can see where Huhne is coming from with his comment that, "for those of us who also want to stop EU red tape from impeding British business, but see that the EU delivers peace, prosperity and the power to tackle problems outside the reach of nation states, there must be other solutions". Therein lies the essential fantasy of the Europhile: "peace, prosperity and the power to tackle problems outside the reach of nation states".

Tell us more, Mr Huhne, tell us how the EU has brought us peace and prosperity… And is subordination to a supranational government really the only way to "tackle problems outside the reach of nation states"?

Anyhow, within the limited scope of Mr Huhne’s thinking, he identifies three origins of bad EU law. The first, he writes, "is a poor EU Commission proposal". His remedy is "to insist on thorough and independent impact analysis", but he does not seem to get his head round the concept that, in many areas, the EU should not be legislating at all. How, for instance, would he deal with the proposed "Commission Directive on Foods Intended to Meet the Expenditure of Intense Muscular Effort (Sports Foods)"? (see previous Blog) and how would a "thorough and independent impact analysis" improve matters here?

His second "origin" is the "failure to amend the proposed law in the European Parliament or the Council of Ministers" yet, as far as the European Parliament goes (of which Huhne is a member), I think there are only four occasions in the history of this institution where the parliament has actually rejected a commission proposal.

As to the Council of Ministers, Huhne sees the failure here arising out of the tendency of British ministers to delegate key decisions to officials. "Because ministers are not properly held to account by the Commons", he writes, "there is no personal advantage to their greater involvement in the EU legislative process. Nor is there any personal disadvantage in laziness or mistakes".

Actually, he completely misses the point here. Because of the huge volume of legislation going though, delegation is an absolutely essential part of the system – the very thing that makes it work. No one person – and especially a busy departmental minister, with domestic affairs to deal with as well – could possibly hope to keep track of all the legislation being processed.

What happens. therefore, is that proposals are discussed between commission officials and the national civil servants who form the little-known Committee of Permanent Representatives (COREPER). The bulk of legislation is agreed between these two bodies and then goes to the Council on what is known as the "A-list" to be approved by ministers without a debate or vote. Only where there is disagreement amongst permanent representatives is a matter ever referred to ministers and even then, the civil servants instruct their ministers on "the line to take".

If ministers actually took an interest in everything going through in their name – assuming they were capable of so doing - they would actually bring the system to a halt - but they would also cease to function as ministers.

This notwithstanding, Huhne's "third source of failure" is when the provisions of a directive are transposed into British law and Whitehall either adds its own provisions, or interprets the directive in a convoluted manner. But, as has been pointed out in a previous Blog, because the commission now relies more on framework directives and regulations, this is considerably less of a problem that it used to be.

But Huhne wants to maintain the fiction that the problem is one of "scrutiny", hence his closing comment that, "Until ministers are held to account by the Commons for their actions in the council, MPs will continue to be shocked by some of the sloppy decisions nominally taken in their name".

What this man does not want to deal with is the real issue – that in many or all cases, the commission has no business legislating at all, and Britain should have no part in accepting legislation produced by an undemocratic, unelected body. Our parliament should be producing its own legislation, not scutinising that made by another body.


Even with a calculator, it seems this Blog (i.e., me) can’t add up. In the previous posting about the Olympics, I mistakenly put the number of athletes sent by the EU-25 as 4198. The correct figure is in fact 6298.

This of course puts the EU-25 performance in an even worse light, producing 1.30 percent golds and 4.5 percent medals overall – a truly pathetic performance. How typical it is of the commission to crow about it, since it is quite used to crowing about its pathetic performance in other sectors – viz the Lisbon agenda.

One hopes, at least, its addition is better than this Blog’s, although we can claim to have got it right – eventually.

It would be nice to know what the French really think

It seems that both President Chirac and Foreign Minister Michel Barnier have temporarily suspended the traditional Franco-American hostility. They both made speeches last week to the annual conference of French ambassadors and both refused to criticize either the United States or the war in Iraq.

This could have something to do with the fact that France is hoping to secure a few lucrative deals with the new Iraqi government or with the fact that both Chirac and Barnier have suddenly realized that the Americans mean what they say about the restructuring of their defence policy. Or it might mean, in M Barnier’s case that he is anxious for the world to know that he is not Dominique de Villepin.

M Barnier is possibly the most European-minded of the leading French politicians. In his speech on Thursday he made his preoccupation quite clear:

“The first reflex, I say bluntly, must be European. I know that this evolution is not inscribed in the long and prestigious history of our ministry. But the influence of our country depends on it.”
M Barnier called on France not to be arrogant. Well, pigs might just manage to take off from the nearest airport.

Apart from that, M Barnier’s speech was notable more for what it omitted than what it contained. There was no mention of the United States, of Russia, of NATO, of the Middle East or of the war against terrorism. That covers most of the important foreign affairs issues.

Instead, he talked of the great diplomatic challenges facing France today: attacks on the global environment, health epidemics like AIDS and poverty. This must have perplexed his audience, the 150 ambassadors. Presumably, they had had no special diplomatic training for dealing with AIDS.

The three problems are really one, poverty in the Third World. It is hard to forget the efforts France has been making in solving it, whether it be financial and political support for corrupt and oppressive tyrants, like Mugabe or refusing to open up trade in agricultural goods. (see A Rapacious Predator)

President Chirac’s speech to the same audience on Friday was less cautious but also rather emollient. He stayed away from criticizing the United States and explained that France was looking forward to having a fruitful relationship with the new Iraqi government. As fruitful as the dealing with the old Iraqi government of Saddam Hussein’s, presumably.

Not mentioning the United States has its up sides as well as down sides. He could not openly express his usual disdain for that country; on the other hand he could congratulate the United Nations for organizing the hand-over of power in Iraq and suggest that France was somehow participant in the process.

His desire to help Iraq did not extend too far, though. Chirac has notoriously and bad-temperedly enough to be criticized by his own media, refused to allow NATO troops to train the army or police in Iraq, particularly if that involves French troops coming under American command. Since there are not all that many French troops available, the question is purely academic.

Nor is Chirac prepared to go as far as other countries in writing off Iraq’s debts. The US has proposed 90 per cent, Britain and Japan 80 per cent. In his speech, after the flowery general statements, the French President proposed 50 per cent.

Getting away from generalities, both Chirac and Barnier have had to deal with a vexing problem. A militant Islamic group in Iraq has kidnapped two French journalists, Christian Chesnot and Georges Malbrunot, and has threatened to kill them if France does not rescind the recent legislative ban on pupils wearing headscarves to school.

This is a most extraordinary mess for the French government to get into. The number of girls who insist (or whose families insist) on wearing scarves is very small. But the French state that has fought a long, vicious and, ultimately, victorious battle with the Catholic Church for education will always consider the display of religious symbols a challenge to its own power.

At the same time, there is a belated and very slow understanding that the many millions of Muslims in France are dissatisfied with what they justifiably see as a second class citizen status. Whether antagonizing the entire community over the question of the headscarf is sensible, remains to be seen.

In the meantime the French government and the French people have had to come to terms with the fact that fierce opposition to the Iraq war does not make them immune from attacks by Iraqi militants. The two journalists have appeard on Al-Jazeera, pleading, in English, curiously enough, with the French government to rescind the law in order to save their lives and with the people of France to come out in demonstrations.

The deadline has been extended by 24 hours. Michel Barnier is in Egypt, hoping that the Egyptian government will be able to negotiate a deal for the release of the hostages. The French government has refused to rescind the law and thousands of people have demonstrated across France, particularly in Paris, in solidarity with the journalists.

In Egypt Barnier has made a heartfelt plea:

“These two men of goodwill have always shown their understanding for these people and their fondness for the Arab and Muslim world.”

“I call for their release in the name of principles of humanity and respect for the human being which are at the very heart of the message of Islam and the religious practices of Muslims.”
It is a little hard to know what those comments mean and even harder to understand President Chirac’s reference to France’s stance over the Iraqi war:

“France ensures equality, the respect and protection of the free practising of all religions.”

“ These values of respect and tolerance inspire our actions everywhere in the world ... They also inspired France's policy in Iraq.”
How very odd. Was implicit support for Saddam Hussein and a refusal to allow any international policy at all that might result in his deposition really inspired by values of respect and tolerance?

It seems that the French government will be forced to recgnize that the world is a somewhat more complicated place than had appeared before. Apparently, the Americans are not the only “baddies” even as far as France is concerned.

A reality Czech?

The first of the new member states has announced that it may well have a referendum on the Constitution. The Czech Prime Minister, Stanislav Gross having barely survived a confidence vote in Parliament, has speculated that there might be a referendum in June 2006, possibly at the same time as the national elections.

Mr Gross has a problem. His ruling coalition is at sixes at sevens and, like numerous European governments, is not very popular. In the European elections they were trounced by the ODS, who oppose the Constitution, as do the Communists and the President of the Republic, Vaclav Klaus.

Parliament would have to pass a special law to allow a referendum, since there are no provisions for one in the Czech Constitution. Mr Gross has admitted in his annual speech to the ambassadors (do they all have them?) that it will not be easy to get the Czech people to approve the Constitution, but expressed confidence that they would probably vote ‘yes’, “if they are given sufficiently trustworthy information”. Oh boy, is he in for a shock!

An ironic possibility?

Although Turkey has high expectations of being accepted as a pre-accession country – able to conduct entry negotiations to the EU – with a decision expected in late autumn as to whether this status will be confirmed - the government seems to be going out of its way to complicate issues.

Announced yesterday – to the outrage of the main opposition and women's groups – was its intention to make adultery a crime. Furthermore, this is supposed to be part of the package of reforms of the penal code, aimed at meeting EU criteria.

The outrage stems from the fact that although the previous adultery law, abolished six years ago, was applicable to men and women, it was used mainly against women, leading to "gender inequality".

Apparently the EU is also objecting to this new law, although it is not clear whether this is a principled objection, or whether it is concerned about the "gender equality" issue. If the latter, and the law were applied equally to men and women, presumably it would allow Turkey to go ahead.

However, if adultery were made a crime, some EU parliamentarians could be in serious trouble. But while the MEPs could invoke parliamentary immunity, unless their co-criminals were of the same status, we could see their partners being convicted while the MEPs walked away Scot-free. And how would unfaithful "gays" be treated?

Altogether, Turkey's accession is already something of a "can of worms". But it would be ironic if this was the issue over which its application to join foundered.

Monday, August 30, 2004


If its petty-minded nationalism you want, listen to the crowing of the EU commission hailing the "European" sporting success at the Athens Olympics. "The European Union swept the floor at the Olympic Games," said chief Commission spokesman Reijo Kemppinnen, at a press conference in Brussels.

Kemppinnen even had the nerve to seek to seek a round of applause for "Europe's success" from the assembled hacks, then expressing the hope that at the 2008 Olympics in Beijing, the expanding bloc will "threaten the dominance" of Asian countries in some sports.

This shameless triumphalism is based on the collective record of the teams sent by the 25 member states of the EU, which together won 82 gold medals and 286 medals overall. This compared with "only" 35 golds and 103 medals overall for the United States, 32 and 63 respectively for China and 27 and 92 for the Russian Federation.

However, while it does indeed look as if "Europe" had "swept the board", the commission has conveniently ignored a few minor little details that rather change the picture – the sizes of the respective teams.

The USA, which topped the league for gold medals, actually fielded 1,418 athletes; China fielded 774 and the Russian Federation 826. By contrast, the EU-25 sent a massive 4,198, including 749 from Italy, 711 from Greece and 706 from Germany.

Clearly, the medal-winning score is not only a function of sporting excellence, but also of size of team. By this reckoning, the EU-25 did not do well at all. In terms of gold medals, China's athletes delivered 4.13 percent; Russia 3.26 percent; and the USA 2.46. The EU-25, however, only managed 1.95 percent.

Comparisons with all results give a similar picture. Russia comes out on top with 11.1 percent; China 8.1 percent; and the USA 7.3 percent. The EU-25 trailed with a mere 6.8 percent. By these measures, therefore, "Europe" was the worst performer of the four major population blocs.

Britain, by contrast, actually did quite well on the team-size comparator. With 355 athletes, it produced nine golds and 30 medals overall, giving medals ratios of 2.53 and 8.45 percent, better than the USA in gold/overall performances and coming second after Russia in the "overall" stakes - easily beating the EU-25 on all counts.

Such performance, of course, went unremarked by the commission but at least Kemppinnen had enough sense to deny any plans for competitors to enter the Beijing Games under an EU flag, although his guarded "not yet", clearly betrayed the ambition. But no such caution from Prodi. In a message issued later in the day, he declared "In 2008 I hope to see the EU Member State teams in Beijing carry the flag of the European Union alongside their own national flag as a symbol of our unity", he said.

Unity it may signal – but that is unlikely. Performance it will not. Hubris? Most certainly.

Modest aspirations

According to The Times today (actually, a re-run of a story published by the Guardian three weeks ago) Nick Clegg, the former Lib-Dim MEP – described as “one of Charles Kennedy's brightest politicians" (but let's face it, he doesn't have a great deal of competition) - has urged the Liberal Democrats "to adopt a more critical tone towards the European Union".

If they do not, Clegg warns, they risk being seen as out of touch with ordinary voters.

Showing how much he himself is in tough, he notes that the Lib-Dims "are too easily caricatured as doctrinaire supporters of the EU who are unwilling to admit its failings". Apart from the "caricatured" bit, he is spot on.

Clegg's recipe for success is that his Party should "listen to and articulate the doubts and complaints of the majority of people who are neither for nor against but agnostic about Europe". The party should be as critical of decision-making in Europe as it would in any other forum.

However, this is not being "Eurosceptic" – oh no… "Being pro-European is perfectly compatible with legitimate doubts", says Clegg (tell that to MacShame), who then goes on to argue that some powers should be returned from Brussels to Whitehall: chiefly responsibility for social policy and labour market regulations, regional aid and the Common Agricultural Policy.

All this and more is set out in a book due to be published next month, called "The Orange Book: Reclaiming Liberalism", written by party frontbenchers. Amongst other things, it stresses the importance of voluntarism, self-help and self-government above that of the state. The aim is also to show that the Liberal Democrats are now a grown-up force in British politics.

Amazingly, the idea is also to demonstrate that the Lib-Dims have "a front bench that is the intellectual match of the Conservatives".

We knew things were bad in British politics, but even we had no idea that the Lib-Dims had such modest aspirations.

UKIP goes international

As the ballyhoo around the various Olympic achievements (such as the stadium in Athens surviving and the Games coming to a peaceful conclusion) dies away, some of the stories go on rumbling.

Let’s get one of them out of the way first. There is a great deal of mutual back-slapping and congratulation going on. Wasn’t it all a huge success despite the misgivings? Well, naturally, it is wonderful to witness amazing achievements by various sportsmen and sportswomen (and, by the way, contrary to the impression the British media might give, there were some non-British achievements, too). Those who were not disqualified for use of drugs, had their medals taken away for cheating or dropped out of races because they were not going to be in the first three, did amazingly well and it was a pleasure to watch them.

As for how wonderful all the organization was – this sort of self-congratulation happens after every Olympics. As far as anyone can remember the media was full of it even after the 1972 Games that had witnessed the kidnapping and murder of the entire Israeli team.

Well the tents have been folded and the caravan has moved on. What now? The first thing that will happen is that Greece will realize that it is more seriously in debt than it had been before (latest estimate of cost is 12 billion euros, double of the previous estimate, in itself double of the original and we have not finished yet).

Athens will be left with a lot of buildings that cannot be used for anything else, including, probably, that famous stadium. The politicians who had created the ballyhoo will be long gone while the problems will still be there.

That is certainly what other cities have found. Who remembers the originators of the Sydney Games as the city tries to decide what to do with the various Olympic constructions that are still there as expensive unused eyesores?

Who were the politicians and media followers who sold the idea of the Games to Montreal, for which the city is still paying, thirty years on? People who were not even born when the Games took place, are paying taxes to bring the city back into the black.

Do we want this for London? No, said UKIP London last week and the repercussions of that announcement have been far-reaching. In the first place, Mayor Livingstone’s highly paid minions have still not managed to produce the evidence for his statement that 79 per cent of Londoners support the bid for the 2012 Games.

Nor have they been able to answer (what do they do all day?) the very specific questions about the economic, social and environmental aspect that UKIP London has posed.

Meanwhile, the campaign has been picked up by the media world-wide. UKIP has truly gone international.

Damian Hockney, leader of UKIP London, displayed his linguistic talents in a debate with a French official in his own language on French TV. His great moment came when he challenged the official to hold a referendum in Paris to find out whether the Parisians wanted to have the Olympics there in 2012. Zut alors, la democratie, c’est quoi? The fonctionnaire exited spluttering.

Then New York chimed in. The previous blog about UKIP’s campaign was noted in the well-known and widely read fornightly periodical National Review. The columnist Andrew Stuttaford was so taken by the idea of a referendum that he thought New York should have one, too.

Amazingly enough, even the Jerusalem Post thought the subject worthy of mention. Describing UKIP less than accurately as extreme right wing but more accurately as the party that wants Britain to withdraw from the EU, Pinchas Landau discussed the arguments against holding the Olympics in London, but came to the conclusion that these would not mean much to people in general. No city, no country, he thought would be able to withstand the glitz and glamour of holding the Olympic Games.

We beg to differ. The glamour, on the whole is long tarnished, and the glitz may be attractive to cities that do not see themselves as being important and would like to change that situation. London has no need of that sort of glitz. London is important. It is one of the great cities of the world in every sense of the word and not even Mayor Livingstone’s attempts to turn it into a grey, organized, boring place where only quangos, City Hall inspired events and lobbying organizations (of the correct political hue) flourish, can change that. UKIP may well win this debate and turn itself, in the process, into an international political force.

Ditching the European dream?

First Blair, then Chirac and now – possibly – Schröder, the third of the "big three", looks like he may give way to a referendum on the EU constitution.

The hint comes from president of the SPD, Franz Muentefering, who has agreed with his coalition ally, the Greens, to seek a change in the basic law that would permit a referendum. Muentefering is also appealing to the opposition Christian Democrats to support any change in the basic law.

All this comes at a time when demonstrators are turning out in record numbers to protest against Schröder's economic reforms, with opposition particularly strong in East Germany, the chancellor's electoral heartland.

Today, Schröder faces a massive protest in the eastern city of Leipzig, led by former ally, "Red" Oskar Lafontaine. Once Schröder’s finance minister, he resigned in 1999 and disappeared from mainstream politics but now, as the German leader dips in the polls, with his party scoring a mere 26 percent, Lafontaine is re-emerging.

With Lafontaine taking a more active role, it now looks as if the SDP/Green alliance is beginning to unravel, leaving the SDP fatally weakened. Practically the only popular policy that Schröder could now adopt it to go for a referendum, which attracted 81 percent support in a poll in July, as a last ditch effort to hold together the alliance.

The chances are, however, that this would bring only temporary respite, as voters would almost certainly use a referendum as an opportunity to express their disapproval of Schröder’s domestic policies. However, with a key regional election in Brandenburg on 19 September – where the SDP is challenged by former communists of the Party of Democratic Socialism (PDS), the chancellor needs every advantage he can gain.

As we draw closer to the signing of the EU constitution, due in October, and enter the ratification period, therefore, it looks like the embattled chancellor might be prepared to ditch the European dream in favour of domestic salvation.

This all goes to prove the point that my colleague made recently, that despite the enthusiasm for European integration, when it comes to a conflict between European and national politics, there is no contest.

Sunday, August 29, 2004

Eurozone economies diverging

Taking over the Economic Agenda slot in the Sunday Telegraph, Liam Halligan, Economics Correspondent at Channel Four News, asks "Is the euro forging a unified Europe?".

In short, the EU commission says "yes" – or words to that effect. Being the commission, it has learnt never to use one word when 16 will do, so its actual answer is "the available evidence is in line with a positive impact of monetary union on cyclical convergence".

However, as one has come to expect, the commission is telling porkies. The Deutsche Bank, it say "no". "We do not see that the euro zone economies have converged." Since 1999, when the euro was launched, Germany has grown only 7 percent in total, compared with 19 percent in Spain. Thus, GDPs are drifting apart. Furthermore, says Deutche, "there are currently no signs that growth differences across the region are narrowing". In fact, "there have even been signs of greater divergence".

This is confirmed by another financial heavyweight, HSBC, which finds "a great divide between France and Germany". Since 1997 (when members "locked" their economies prior to launch) France has grown on average by 2.5 percent annually but Germany has managed only 1.3 percent, while French inflation is 2.5 percent compared with 1.5 percent in Germany, against eurozone inflation of 2.4 percent.

All of this is good news for UK opponents of the euro. "That's because the less convergence there is between euro zone members, the harder it will be to prove - should the chancellor ever wish to - that these divergent euro members have all converged with the UK too", writes Halligan.

The row about Burma continues

In an effort not to scuttle the forthcoming summit between the EU and ASEAN (Association of South-East Asian Nations) over the presence or otherwise of Burma, a compromise has been suggested: instead of sending Prime Minister Gen. Khin Nyunt, Burma could make do with a junior official, said some Western diplomats.

This was immediately rejected by the Indonesian Ministry of Foreign Affairs, as being unacceptable.

In the past, ASEAN demanded that Burma be a full member of the event or the new, East European members of the European Union be discarded. More recently they have taken on the EU’s own vocabulary, talking of the need to “engage with Burma constructively”. That is likely to be as successful as the EU’s own “constructive” engagement with, say, Iran.

In the meantime the row within the EU continues. As we have reported before, although the EU has in the past called for all sorts of sanctions on Burma (Myanamar) and made all sorts of statement, when it came to summit, most of the member states decided that well, after all, what does one more tyranny matter. (They have a point. The EU routinely genuflects to all tyrannies – why should Burma be singled out?)

Britain, however, has persisted in what was supposed to be EU policy and has refused to allow Burma to take part in the summit. France has, on the other hand announced that the summit was more important than its component parts (or something like that) and, given the many things Europe and Asia had to discuss, the minor detail of Burma should not be used to undermine the meeting.

Clearly, human rights will not be one of those many issues, despite the fact that the European Union is always proclaimed to be the bearer of freedom, democracy and, yes, human rights in the world.

The Foreign Office seems to have become very undiplomatic and called the French attitude “craven”. Surely not.

The Greeks have a word for it

Secretary of State Powell had intended to go to Athens to attend the closing ceremony of the Olympic Games. A rather odd decision but no worse than Prime Minister Blair’s to attend the opening ceremony and stand around lobbying for London for the 2012 Olympics.

However, about 1,500 Greeeks took umbrage and marched to the American embassy in protest. Upon which (and presumably in response to a request by the Greek government who may have feared worse) Mr Powell has sent a message saying that he was, after all, too busy to attend and thanking the Greek government for providing such good security for the Games. Actually, much of the secuirty was provided by NATO but let that pass.

According to AOL News:

Many Greeks had wondered why Powell planned to visit this weekend, knowing his presence would likely provoke protests. Until Powell announced his visit, there had been none of the anti-American demonstrations that were feared in the run-up to the games.
Well, big of them.

It seems that both the Afghani and the Iraqi teams were cheered by the crowds at the opening ceremony, while the American team was considerably less well received, being representatives of a nasty imperialist power.

One does have very warm feelings towards the Afghanistan team, which consists of five athletes, two of whom are women. And it was delightful to see the Iraqi football team perform much better than in the past, when sportsmen who failed to do as well as expected were personally tortured by the psychopathic Uday Husseyn.

Among all that pleasure, would it not be a good idea to remember who made it possible for Afghanistan to have an Olympic team and for Iraq to send a team who could compete without any fear? And what sort of support did the coalition receive from Greece either in Afghanistan or Iraq? A great deal of abuse from the government and around 5 per cent support for the people.

The Greeks do, indeed, have a word for it. The word is hypocrisy.

Booker column

This Sunday, Booker in his column illustrates a baleful effect of the EU’s Common Commercial Policy, which is driving Bernard McQuiggan, owner of Mac’s Models, to distraction.

McQuiggan imports collectors’ scale models of American trains and has recently become a victim of the latest trade war between the EU and the USA. The EU is requiring him to add duty on his products at a rate on one percent every four weeks, in retaliation to US action in protect its own indistries affected by dumping.

The point that Booker makes is that this situation has arisen because Britain and all other EU countries have had to hand over all responsibility for international trade to a commissioner in Brussels. Interestingly, that portfolio now held by Peter Mandelson.

Booker also takes on the report of the Electoral Commission which states that no more British elections should be held on an all-postal ballot – with the solitary exception of the very next election to be held, the North East referendum on an elected regional government, due on November 4.

Especially interesting in Booker’s own report is detail of the government's latest "information leaflet" put out in eight languages to the North East’s 1.9 million voters. Although this paean of praise for the benefits of regional government purports only to be giving "information", the game is given away by its carefully staged illustrations. These contrast young, attractive, affluent-looking Yes voters, giving the thumbs up to an elected assembly, with "typical" No voters, such as an old man with a cloth-cap and a stick, a diminutive Asian shot in shadow and an Afro-Caribbean lady.

Booker remarks that this selection so blatantly angled it should earn Mr Prescott an interview with the Commission for Racial Equality. But it is also typical of the regional campaign and of EU propaganda generally – with which it has a great deal of common. Propagandists always takes great pains to project their respective projects as "modern", "forward-looking", "dynamic", "thrusting" – a choice of "positive" descriptions that aims to wrong-foot opponents as old-fashioned and reactionary.

However, what is "modern" about regional structures that were first proposed in the 1920s, to deal with the General Strike, were actually implemented during the Second World War and then abandoned by Atlee's 1945 Labour government, is difficult to see. As my colleague might say, they are "so last century".

Also dealt with by Booker is the latest twist of the O'Brien saga, dealt with also in this Blog, and he concludes with an amusing twist on the ongoing saga of the problems faced by various enterprising firms which have been told that they can no longer use "waste" materials ranging from cardboard to sewage, as fuel to generate energy.

According to UK environment ministers such as Elliott Morley, writes Booker, this is because EC rules forbid the use of ‘waste’ products for anything other than disposal, by incineration or landfill. Thus Scottish Water, unless it wins an expensive court case, faces the closure of a plant specially built to turn sewage sludge into fuel for power stations, which cost £65 million.

But a reader points out that the Government's leaflet "Preparing for emergencies", recently sent to all households, boasts that it is made from "75 percent post- consumer waste". Perhaps, Booker suggests, Mr Morley can explain why he is not going to prosecute David Blunkett and Mr Prescott for acting in breach of EC law?

Saturday, August 28, 2004

Nature, substance and quality

Perhaps capitalising on public interest in sports, engendered by the Greek Olympics, the omnipotent EU is currently consulting on a new draft directive aimed at regulating "sports foods", the consultation on which is due to end this week.

Needless to say though, the EU could not possibly be content with such a simple, easy to understand term. The name of the proposed law is "Commission Directive on Foods Intended to Meet the Expenditure of Intense Muscular Effort (Sports Foods)".

Aimed, as always, at creating a "high level of consumer protection", what this draft directive actually does is demonstrate in a particularly vivid way that we have a mad legislative machine, totally out of control. It also illustrates a conflict of philosophy on how to achieve effective consumer protection, which makes the draft directive an ideal subject for this Blog.

The idea of the draft is, of course, admirable, in that it seeks to ensure, in its own terms "that foods that are marketed on the basis that they address nutritional requirements associated with the expenditure of intense muscular effort are safe for use, are labelled clearly and adequately and provide guidance on healthy consumption".

The result, however, is a dire, unreadable 11 pages of legislation, to add to the many thousands of legislation already produced, comprising excruciating technical detail of what precisely can and cannot go into foods for which claims are made in relation to sporting activity.

No doubt its advocates – not least the worthies on the EU"s Scientific Committee on Food – who will have spent many thousands of hours discussing and formulating the standards, believe that they have done a good job but the central problem is that a new law is unnecessary. Furthermore, it does not add to consumer protection, as we have had a perfectly adequate law in place since 1875.

The law in question was the Sale of Food Act 1875, which established for the first time a particular offences in respect of sale to the prejudice of the purchaser a food not of the nature, substance or quality demanded. This was re-enacted in the Food & Drugs Act 1955 and again in the Food Act 1974 and currently survives unchanged in current UK food legislation. Furthermore, similar – and in some cases identical – law applies in most if not all EU member states.

Clearly, if a manufacturer makes specific claims of a food, in terms of it being "Intended to Meet the Expenditure of Intense Muscular Effort", and it does not conform with what would be considered reasonable expectations for such a food, then an offence would be committed.

The advantage of this approach, apart from enabling law books to be kept slim, it that the provision applies for all time and in all circumstances, dealing with current formulations but also allowing for changes in science and knowledge, without having to produce new legislation. In other words, it is a highly responsive, economic and effective way of producing law – and ultimately highly flexible.

However, one can see why it would be unpopular with the EU. Such simple economy would not keep the thousands of scientists, advisors, lobbyists and legislators in work, and would deny the EU a role in demonstrating how hard its was working to provide its "high level of consumer protection".

So, for the sake of the EU ambitions, we are to be saddled with this law, and thousands of others like it when, in fact, our own legislators were making perfectly adequate laws before even many EU member states were even countries. That is the measure of the parlous state in which we find ourselves.

A load of Bull

Fresh from the school of "you couldn't make it up", the EU commission is set to approve a 517 million euro French loan to its ailing computer company Bull, to allow it to pay off an illegal loan of 450 million euros that it received from… the French government.

Last November, the commission decided to take France to the ECJ for failing to force Bull to pay back the 450 million smackers lent to Bull in 2002 by a June 2003 deadline. The loan was illegal because, under EU rules, a company cannot benefit from state aid more than once in 10 years. Bull had already received 1.3 billion euros in state aid at the end of 1994.

But, since the new loan to pay off the old loan comes after 10 years since the first bail-out, it is now legal and the commission thus has "no major concerns" about it. Nevertheless, the commission is still proceeding with its case against France in the ECJ for failing to recover the loan from Bull which it has now lent Bull the money to repay.

As they say, what a load of Bull.

Looking in the wrong direction?

Whether the EU has a permanent seat on the UN security council has been a hot issue for some time now, with fears that the EU constitution would pave the way for this development.

But it could be that the threat here comes not from the constitution, per se, but from the UN itself, which is looking hard at restructuring the security council to include regional representatives from all the major regions in the world. This would mean that the EU would automatically become a member, and if it acquired its own legal identity through the constitution, it could then represent all 25 member states of the EU.

That, according to Italian foreign minister, Franco Frattini – speaking yesterday to the foreign committee of his parliament - is being considered by a panel of experts set up by Kofi Annan, which has suggested that the council could be expanded from 21 to 25 members to include a group of permanent regional representatives with a veto chosen by rotation among the largest states in the region.

Frattini himself is in favour of an EU seat on the security council, even though he is aware that there are partners who "don't even want to hear talk of an EU seat" because "it would cause conflicts in Europe whilst the constitution is yet to be approved". Hence, it appears that those "partners" wish discussion to be suppressed until the constitution is ratified.

That is certainly the case with the current Labour government, with Denis MacShame who, as late as 24 June this year was writing to The Independent to state that:

The UK will retain its permanent seat on the UN Security Council. There will be no EU seat; the EU is not and cannot be a member of the UN or take our seat on the Security Council. The EU constitution cannot override the UN charter, which allows only states to be members of the Security Council, and nor would we wish it to.
However, despite MacShame’s careful choice of words, he does not rule out the possibility of the UN itself – through its members – changing its own charter, to allow regional members of the security council, in addition to the current members.

Nevertheless, Frattini sees problems in the UN approach as different regional structures, such as the African Union and the Organisation of American States, have different integration levels. Thus, he does not believe that an EU seat is a realistic prospect in the near future.

However, as Frattini clearly demonstrates, the idea is very much on the agenda, and is being pursued through the United Nations. Therefore, although we need to keep an eye on developments inspired by the EU constitution, when it comes to the real threat, we may be looking in the wrong direction.

Friday, August 27, 2004

A mixed blessing

It is now officially recognised that this August is the wettest on record in certain parts of the country. This has caused massive problems for farmers, struggling to get their harvest in.

So bad has been the weather that, weeks after the harvest should have been finished, current estimates are that only 30-35 percent of the national winter wheat crop has been gathered. Many farmers are seeing their crops begin to sprout and, with weather conditions still poor, are facing a total loss.

On a national scale, the total grain harvest may well drop about a million tons, down from an expected 16 million tons to fifteen.

But for those who have managed to bring in their crops, their problems are only just starting. The high moisture content – up to 25 percent in some cases – means facing massive drying costs or a delay of several months in selling their crops while they are allowed to dry naturally.

Furthermore, because the harvest is late, wheat in particular has been harvested after it has peaked, bringing protein values right down, and with it the prices, costing farmers £20 a ton in lost value.

In a closed market, that loss would not occur for, as shortages bite, prices go up which in some way compensate for loss of quantity. "Unfortunately", remarks Farmers Guardian, there are more than enough supplies in the rest of Europe and further afield (for the moment) and, owing to our membership of the EU, these supplies have free access to our market and serve to keep prices down.

In fact, the rest of Europe has had a bumper harvest, with the French wheat crop alone up by 9 million tons, so prices are stable and are unlikely to rise. This may be good news for the consumer but it is bad news for farmers.

Furthermore, because of the EU competition rules, national governments are not permitted to pay additional subsidies, just supposing this government was inclined to. All farmers can hope for is an advance payment on their standard CAP subsidies, normally due in December, to help ease their cash flows.

While this Blog would in no way advocate additional payments, or import protection to keep prices high, the issue here is that since the 1960s, British farmers, and especially the large arable growers, have been in favour of our membership of the Community, because of the subsidies it brought with it.

But, as they reckon up their shrinking income this year, they may also pause to reflect that, had Britain not joined the EU, the effects of the current bad harvest might not have been so devastating. Membership, after all, is proving to be a mixed blessing.

Rearranging the icebergs

In The Times letters today, Digby Jones – he of the CBI – has had a return swipe at Bill Cash, the latter having had a go at our Digby for complaining that MPs are "asleep on the job" when it comes to scrutinising EU laws.

But if ever there was an argument to bring to mind the description of "two bald men fighting over a comb", this has to be it. Scrutiny is hardly the issue when, for the main part, if the legislation was not produced in the first place there would be no need for such oversight.

Digby Jones complains in his letter that scrutiny committee is not adequate because it "operates in a parliamentary atmosphere where EU laws do not appear on the radar early enough", but the point is – and he must know this – that by the time an EU legislative proposal reaches the formal stage of a draft regulation or directive, it is virtually set in stone.

And even where the scrutiny committee does do its job, as we described in a previous Blog, the government can (and routinely does) ignore it.

For some time I have been struggling with an appropriate analogy to describe the process – to avoid using the over-worn cliché of "rearranging the deck chairs on the Titanic", which effectively describes the process of fiddling with tiny amendments to draft legislation.

For a time I toyed with the idea of the process being similar to allowing a committee of concentration camp inmates to redesign the shower heads in the gas chamber, but this was far too insensitive to be used, even if it perhaps more adequately mirrors what is going on.

So, rearranging the deck chairs it is, with Cash and Jones arguing about who does it and how well it is done. Meanwhile, in the manner of icebergs bearing down on the ship, the commission continues to churn out its legislation.

Perhaps if this pair were more concerned about rearranging the icebergs rather than the deck chairs, we would all be better off.

I don’t buy it

Loathe as I am to disagree with Ambrose Evans Pritchard of The Daily Telegraph, I simply don't buy the headline of his latest story: Despair in Paris as British take top EU positions.

However, maybe there is no disagreement as Ambrose would not have written the headline and journalists often do not see the headline until they see their own story in print.

Nevertheless, Ambrose's thesis is that "British bureaucrats are racking up one success after another in securing coveted posts in the new European Commission to the chagrin of the French, who have traditionally dominated it".

Admired for a no-nonsense style, British fonctionnaires have secured a high profile as chiefs of staff in the team put together by José Barroso, the commission president. The quiet summer coup by the British has set off a fresh bout of soul-searching in Paris, where angst over lost influence at the heart of the European Union has become a part of daily discourse.
That is as may be but, in fact, that British civil servants may be in high positions is not necessarily any cause for rejoicing as so many of them are notoriously Europhile. There was, for instance, some crowing when Sir John Kerr was appointed secretary general to the EU constitutional convention but, for all the difference it made to the draft, it might just as well have been a Frenchman.

But then to call in aid Jean-Pierre Chevènement to support the claim of loss of influence is somewhat thin. Considering his long-term opposition to the “project” (see previous Blog), this is rather like quoting Bill Cash to support an argument that Britain is losing influence in Europe.

For sure, French influence has been diluted with the current round of enlargement, but then all the existing member states have lost out. And it is all too premature to expect that the accession countries will necessarily support British ambitions, or an Atlanticist agenda, especially as Blair seems to be intent on getting into bed with the French over defence.

Furthermore, one worries when the myth is continually perpetrated of France losing out because it only gained the transport portfolio on the commission. It cannot be said enough that this is a very powerful post, with huge opportunity for patronage (see earlier Blog). In many ways, it is far more powerful and influential than Mandelson’s trade position.

And, contrary to some reports, Michel Barnier, former commissioner and now Chirac’s foreign minister, is actually taking a robust line to counter claims – which come largely from opposition politicians – of France’s loss of influence.

"Cessons de nous dénigrer!" he angrily told Le Monde, pouring scorn on "this strange collective psychoanalysis" on the topic of decline . "We are very well represented in the European institutions, often with prestige functions", he said. This is also the case in the European Parliament, where French MEPs have obtained five committee presidencies. “France”, he said, has a place and a role in Europe: it defends the project and its ideas. It takes part in all the policies, their design and their implementation. It is a leading force in economic matters, justice, the police force, common defence".

As for Barrot, Barnier called him "a man of conviction, experiment, courage". He will be one of the five vice-presidents. "This is a position of influence which one should not neglect in a team of twenty-five members, where the need for co-ordination and teamwork will be greater than in the past".

France will be right there in the thick of it, defending its interests. Reports of its demise are being greatly exaggerated.

"Alarm bells ring" about Duisenberg

Wim Duisenberg, the former Governor of the European Central Bank, who had been edged into retirement by the French government in defiance of the provisions made in the Maastricht Treaty, has been raising eyebrows. This time the problem is not his wife, a colourful figure, to put it at its most polite, but his eccentric interpretation of the rules of engagement.

The ECB, as all financial institutions, requires a “cooling off period” of a year from all its board members , to prevent possible conflicts of interest. This rule, apparently, was scrupulously adhered to by former Vice-President Christian Noyer, who waited that year before becoming Governor of the Bank of France.

Not so Mr Duisenberg. Seven months after leaving his position with the European Central Bank, on May 14 of this year, he was appointed as a strategic advisor to the German banknote printers Giesecke & Devrient’s board of directors. A month afterwards he joined the boards of Rabobank and KLM/Air France.

There seems to have been some disquiet in the ECB governing council at such blatant disregard of the rules, though the spokeswoman loyally defended Duisenberg. The only one of those jobs that had needed formal approving was the one with Rabobank and that had been applied for and given. The other two positions were personal ones and did not need any clearance by the ECB. Most people would regard this as a piece of sophistry.

The chairwoman of the European Parliament’s economic and monetary committee intends to raise the subject in their first session with the present Governor of the ECB, Jean-Claude Trichet. Though what M Trichet can say beyond a Gallic shrug, it is hard to work out.

A new book

News reaches us of a forthcoming publication by Polity Press: The European Dream: How Europe's Vision of the Future is Quietly Eclipsing the American Dream. It is by Jeremy Rifkin, who describes himself as a best-selling author and, indeed, with a little hard thought I did remember his previous publications on the new business and new economy and new social structures. All of which is, like, so last century.

In the blurb to his book he explains the following:

The American Dream was based on economic growth, personal wealth and independence. It was synonymous with love of country and patriotism, frontier mentality and the unbridled exercise of power. Yet what were once considered prime virtues - cherished and idealised not only in America but throughout the world - are increasingly seen by many as drawbacks and even impediments. But while the American Dream tires and languishes in the past, a new European Dream is being born. Today we see a new set of values emerging which are focused on sustainable development, quality of life and multilateralism. More cosmopolitan and less concerned with the brute exercise of power, the European Dream is better positioned to accommodate the many forces that are propelling us into a more interconnected and interdependent world.
How quaint, thought I. Here is someone who still believes in the European Dream. I wonder who he might be. Well, the one thing he is not is a European. In fact, he is an American, who has, on his own account, advised many politicians and business leaders, and has exerted a great influence on the formation of American public policy. Not recently, presumably, since I cannot quite see Mr Rifkin hitting it off with Mr Rumsfeld or even Secretary of State Powell.

When it comes to particulars, the only leading politician, whom Mr Rifkin mentions as a recipient of his advice, is Romano Prodi, possibly the least successful President of the European Commission for a very long time.

Let us look carefully at what Mr Rifkin is saying. The most interesting thing is that while the American Dream is described in very precise practical terms: independence, economic growth, personal wealth, patriotism, even exercise of power, unbridled or not, the European Dream is soemwhat vague and frilly at the edges: sustainable development, quality of life, multilateralism. What on earth does any of that mean? How do you define quality of life that is not economic growth and discards personal wealth?

Who is actually buying into the European Dream? This week we heard of another leading chemist, a Nobel Prize winner, no less, abandoning Britain to go and work in the United States. The number of people who try to get into that country is colossal. The number of people around the world who try to emulate the American way of life is even greater, though, one must admit, many of those spend all their time running down America.

What of that sophistication that characterizes the European Dream? Well, it is the sophistication that has given us such policies as the persistent call for lifting the arms embargo on China, the "reunification" of the two Chinas in such a way as to extinguish the budding democracy of Taiwan, persistent support for Yasser Arafat to the detriment of the situation in the Middle East and the clear disadvantage of the Palestinian people, support for every tin-pot dictator all over the world, and especially Africa, and so on.

The most recent exercise of that sophistication has been the "dialogue" and engagement with the Mullahs of Iran, which resulted in a proudly proclaimed agreement signed with France, Germany and the UK. Last week Iran gleefully announced that it had broken the agreement and built nuclear reactors. Not a great success for sophisticated multilateral dialogue.

What does Mr Rifkin think of the sophisticated EU policy in the Balkans that has facilitated a ten-year long war? Was he shaping American public policy, when President Clinton finally sent in American troops at the head of NATO, in order to bring some kind of a peaceful settlement there?

Does Mr Rifkin think that it is European sophistication that has led so many players on the European scene to an involvement in the food-for-aid scandal and consequent support for Saddam Hussein?

One can go on asking questions like this for ever. No doubt, when the book comes out it will appeal to some would-be sophisticated media hacks, who will feel somewhat flattered to see their rather crude and unintellectual anti-Americanism praised in those terms.

The rest of us may look at his tired cliché about Britain having to make up its mind which side it is going to be on: the exhausted American one or the forward looking European one. Mr Rifkin’s arguments, despite his clarion call for the new political culture of the new millennium, are really old-fashioned:

But in order to exercise any real influence in world affairs, Britain must choose to be part of a larger political entity. In a globally connected world, no people can exist any longer as an island unto themselves. The only question for Britain is whether it will make its home with America or with Europe.
My goodness, I haven't heard anything so crude, silly and unsophisticated for years.

Spam sham

There are possibly few more irritating things for regular internet users than the growing volume of spam which clutters in-boxes and increasingly wastes precious time as we struggle to deal with it.

But one thing that may be more irritating is the EU's fatuous efforts to deal with it – in the only way it knows how to deal with anything: making a new law.

Even though all the experts warned that a law would have no effect whatsoever, the EU persisted with its Privacy and Electronics Communication Directive, which it passed last July, and which members states were required to implement by October 2003.

And, precisely as expected, eweek magazine today reports that it has made no difference whatsoever. In fact, seven months after the law had supposedly come into force in all member states, spam volumes reaching new heights, up 67 percent from the month previously.

Part of the problem, of course – and entirely predictable - is that most junk e-mail does not originate in the EU. The US is by far the biggest generator, followed by South Korea. Germany, France, Spain and the U.K each send less than two percent of the world's spam.

But such has been the lack of enthusiasm for the new law that, six months after the deadline, more than half of the EU’s member states had not implemented the directive, states which included the normally law-abiding Germany, Finland and Luxembourg, as well as the usual culprits, France, Belgium and Greece.

Needless to say, the UK has implemented the law, and was one of the first to do so. And had Stephen O'Brien chosen this as an example of "gold plating", he could not have been criticised, as the UK went further than the EU law required - not that anyone is actually objecting.

However, the Information Commissioner's Office, which is responsible for enforcement, has no additional funds to chase culprits and in any case complains that the enforcement procedures as so circuitous as to be unworkable.

It cannot force spammers immediately to cease operations while investigations are carried out, which may take many months. To that extent, the law may be doing more harm than good as US spammers are relocating to the UK to take advantage of what amounts to a period of immunity from informal action while they are being investigated.

As most of them are fly-by-night companies, they can close down known operations and move on as the regulatory net tightens.

The result is what was always predicted. European internet service providers (ISPs) are taking their own measures which, in the final analysis, were always going to be the answer to the problem.

Last Wednesday, a coalition of 150 UK ISPs launched a campaign to target companies who host a Web site with a reputable ISP, while promoting themselves via junk messages on a different network or through a third party. They have little faith that laws can make a significant impact on spam, and believe that, as it is they who are in the front line, they can response more swiftly and effectively.

Nevertheless, nothing of this has any impact on the EU which is looking at strengthening its own laws, oblivious to the fact that its efforts are and will continue to be fruitless. After all, why let that minor detail spoil the opportunity to make another law.

Thursday, August 26, 2004

More on gold plating

You would have thought that Stephen O'Brien’s views on gold plating, after having been so comprehensively demolished by the Today programme would have been quietly removed from the Conservative Party web site.

But no, there are still there in all their glory, including the ridiculous claim about the so-called "abattoir directive".

Since the Conservative Party so obviously still stands by Mr O’Brien’s claims, it is also worth reviewing some of the other examples of "gold plating" that he offered on the site - which actually reproduces O'Brien's press release.

Straight out of his own specific area (O’Brien is the DTI shadow minister), he argues that

examples of the UK's "gold-plating" culture include the section of the 2003 Modernisation Directive dealing with directors' communication which the DTI converted from a four page to a 132 page document.
The "Modernisation Directive" is in fact an interesting choice. It does in fact run to seven pages, dealing with the “modernisation and updating of accounting rules. Its full title is: Directive 2003/51/EC of the European Parliament and of the Council of 18.6.2003 amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings.

As can be seen from this title, it is an amending directive, which actually means that to make direct comparisons between the original length and any new regulations seems a little unfair, as the final length will also depend on the length of the original. However, the core directive 91/674/EEC runs only to 44 pages (Word format - the OJ entry is 25 pages), so the growth to 132 pages of the DTI document does seem more than a little excessive.

I tried this with a couple of colleagues, who took the impression that the DTI did seem to have gone "over the top", both of them assuming that the 132 pages referred to the length of the UK regulations.

However, their assumptions were wrong. The 132-page document is not a set of regulations but a consultation document. Entitled "A Consultation Document: Modernisation of accounting directives/IAS infrastructure", it was published in March 2004, with a consultation period ending in July. Thus, no regulations have yet been promulgated.

Looking at the document, it is in fact 133-pages – but that is a minor quibble. But the actual text is only 40 pages, in large print, setting out the terms of the consultation and, interestingly, drawing readers' attention to the fact that the directive does in fact offer genuine options as to implementation, thus setting out the DTI view and setting out the options on offer. It is hard to see how this could have been done in less than 40 pages.

As for the rest, these comprise annexes, in which the document helpfully reproduces the directive in full, a copy of a relevant Council regulation, details of the companies to which they will apply, and copies of the draft UK regulations. There are several, because different rules apply to different sectors, so the DTI has produced separate sets of regulations, the main set being: "The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004". It runs to ten pages, with 23 pages of schedules, setting out the detailed amendments to previous legislation.

It all, it is very hard to see how the regulations could be any shorter and, as to the document as a whole, with the detail, the lucid explanations of a highly technical subject, and the reprinting of the original EU law, the document could be considered as a model of transparency.

That apart, the main issue is that we are talking about a consultation document. Regulations have not yet been produced. Therefore, by no possible stretch of the imagination can O'Brien's example be considered as gold plating. His point is entirely spurious.

Non-news: Hungarians do something unexpected

When the last Hungarian Prime Minister, Péter Medgyessy, resigned last week because of a botched government reshuffle that had involved bad-tempered sacking of ministers and equally bad-tempered threats of withdrawal from the coalition by the Free Democrats’ Alliance, it was fully expected that Péter Kiss, a senior member of the Socialist Party and Acting Prime Minister would succeed him.

Hungarians are known as being somewhat unpredictable. In this case, the Socialist Party lived up to that reputation and by a considerable vote of 453 to 166 chose the Sports Minister, who is also a business tycoon, Ferenc Csurkány to be the new Premier.

Mr Csurkány’s aide has indicated that Finance Minister, Tibor Draskovics, who is widely respected by foreign investors, will be asked to serve in the new government. We shall see how that shapes up.

At least, skeletons are less likely to come tumbling out of the new Prime Minister’s closet. As he is only 43, he is unlikely to have had a sinister Communist past, unlike Mr Medgyessy or, some years back, Gyula Horn. Perhaps that is why he was chosen.

A real benefit of EU membership

Irish police (garda) are bitterly complaining that Ireland’s EU presidency – but also Bush's visit to Dublin – have led to a significant reduction in the number of speeding offenders being apprehended.

Unpublished garda figures show that the number of people caught speeding in the first half of this year was 21 percent lower than in the same period last year. Traffic officers were tied up providing escorts and security for EU officials and for Mr Bush and his entourage.

At last, we have detected a real benefit from membership of the EU. With the UK assuming the EU presidency on 1 July next year, perhaps we can look forward to reaping the same rewards – except of course that the magic effect is hardly likely to blank out cameras. Tough luck North Wales.

Don't ask silly questions

Confirming its reputation as the most grown-up part of the newspaper, the business section of The Daily Telegraph today offers a report about the contract for compiling Eurobarometer, the EU social opinion survey, having passed into British hands.

The survey, established by the European Commission 30 years ago to inform its policy-making, will be conducted by the market research group Taylor Nelson Sofres for the next four years under a 50m (£33.8m) contract.

However, the more interesting part of the report was a "retrospective" on previous Eurobarometer surveys, with a sideswipe at the findings over term. According to the Telegraph, "the survey suggests that the most democratic decision of all would be for the European Union to disband itself entirely".

Since the 1970s, more than half the population of the EU's member states have told Eurobarometer that they would feel either indifferent or very relieved if the EU was scrapped tomorrow. Of the Britons asked last year, only 16 percent said they would feel sorry if the EU ceased to exist.

The survey showed last December that less than half the EU population now supports the EU project. Earlier this year it showed that, for the first time in 20 years, there are as many people strongly against the UK's membership as there are in favour of it.
The most fascinating question though is what happens when Eurobarometer gets answers the commission does not wish to hear. The answer is quite simple: when the proportion of Britons interested in European affairs fell from 35 percent in 1975 to just under ten in 1994, the series was suddenly scrapped.

In fact, the Telegraph says, "those Eurobarometer series which provide the most EU-unfriendly conclusions suffer a suspiciously short life".

Another example is the one that tracked the number of people who would describe themselves as European, as well as their own nationality. This lasted just two years, from 1990-1992. It was pulled after it transpired that more than half those asked said they would never contemplate such an idea. In the UK, 71 percent said they never considered themselves European.

Similarly, Eurobarometer's survey on the single European currency also had an unhappy two-year life, after the number in favour of the euro was swiftly overtaken by those against it. The survey was cancelled in 1997, two years before the currency was given the go-ahead.

Clearly, the commission, which funds the survey (with money from the taxpayers of member states) has a very focused idea of what it needs to know. And, equally clearly – it appears - the one thing Eurobarometer mustn't do is ask silly questions.

Elimination of subsidies would be "utopian"

The Agriculture Commissioner designate, Mariann Fischer Boel has discarded suggestions that under her stewardship agricultural subsidies would be eliminated, a policy that would have the support of the majority of Danish politicians.

It is not that Ms Fischer Boel thinks there is anything wrong with phasing out subsidies, it is just that, well, the idea is “out of step with reality. It is utopian.” However, she assured the Danish newspaper Berlingske Tidend, agriculture’s share of the EU budget will drop from 45 per cent to 36 per cent by 2014.

This is possible, particularly if much of the new member states’ agricultural budget will be renamed as Cohesion Funds, as a result of a sharp drop in income and employment in the area. But it is not precisely reassuring.

Ms Fischer Boel has also reacted robustly to suggestion that there might be a conflict of interests because her husband runs a large farm in Denmark. It would be absurd, she fulminated, if a politician’s husband could not run a business. Indeed, it would be absurd. The point is not that he runs a business but that he receives large subsidies under the CAP provisions. In other word, she is in charge of a sector and a somewhat contentious policy, that benefits her husband and, one must assume, her and the rest of her family, very directly, indeed. The matter becomes somewhat less absurd.

What comes round, goes round

As British farmers struggle with one of the worst harvests in living memory, spare a thought for those poor benighted French farmers, who are going a little er… tomatoes.

Upset (if that can be the right word to describe French farmers) by falling income due to oversupply and imports, they are resorting, in the time-honoured way, to disruptive protests as a means of extorting support (i.e., money) from their government.

At the forefront are the tomato growers who have been hit by the double-whammy of poor weather – which means that the French have been eating fewer salads – and imports from cheaper countries such as Morocco that are undercutting their business through impossible-to-match wage differences.

But, in common with British farmers, they are also getting increasingly miffed at the disparity between the prices they are being paid and the prices of their produce in the supermarkets. Figures published in Le Monde have shown that French consumers have been spending increasingly more on fresh produce over the past four years, while farmers have been paid less.

Milk producers made their point by invading supermarkets in Lyon and other cities, putting stickers on milk cartons and bottles showing the prices they were getting paid versus the retail price. In Nancy, groups of farmers pushed shopping carts full of dairy products into the street without paying for them and handed them out to passers-by.

Farmers also partook in their more traditional sport of dumping tons of tomatoes, peaches, nectarines and melons in front of government buildings, this time in the south-western towns of Perpignan and Montauban.

All of this puts finance minister, Nicolas Sarkozy, on the spot. Much of the support for his UMP comes from the farming community and he is preparing his bid to become leader of the party.

In response to the farmers' ire, therefore, he has suggested imposing a minimum price of 0.85 euros per kilo - up from the current 0.30 market price – which wholesalers and supermarket groups would be obliged to pay. This has drawn the reaction from the head of the union representing tomato farmers, Pierre Diot, that such a move would be "suicidal" without state subsidies for unsold stocks.

But Sarkozy's problems are only just starting. Minimum-price arrangements and government subsidies would almost certainly fall foul of the EU competition rules, and could even fall foul of French competition rules – a particular embarrassment as Sarkozy also heads the state consumer and competition agency, the DGCCRF. Tactfully, it has so far not aired any public views of its boss’s plans.

Taking a historical view of Sarkozy's potential embarrassment, it is rather ironic that the rules for commodity payment scheme under the CAP were in fact devised by France, which forswore national payments in return for community funding, paid mainly by Germany and other member states.

Now that CAP funds are not so easily forthcoming, France appears to want to return to national subsidies. As they say, what comes round, goes round.

A strange bedfellow

There is some minor rejoicing in the Eurosceptic camp about the announcement that Jean-Pierre Chevènement, a former French interior minister and presidential candidate, has spoken out against the EU constitution and is calling for a "no" vote in the French referendum.

But, before the rejoicing gets out of hand – unlikely though that may well be – it is appropriate to reflect on the nature of this new-found ally.

Chevènement himself is something of a fixture in French politics, having been on the scene for over 30 years. He was an ally of Mitterrand in the early 70s and its widely regarded as the architect of Mitterand’s successful coup which brought him the leadership of the socialist party in 1971. He was rewarded with several Cabinet posts but, over the years, he seems to have lost faith with socialism and reverted to a more fundamental French nationalism.

His brand of nationalism brings him into conflict with the project of European integration, but he is also viscerally anti-American, having resigned from the government (not the first time) over French "subordination" to the Americans in the 1991 Gulf War.

In the autumn of 1992, in response to the Maastricht treaty, Chevènement left the Socialist Party and founded the Movement of Citizens (Mouvement des Citoyens — MDC) to champion French nationalism, which he believes transcends traditional left-right politics. But his loathing of European integration occasionally conflicts with his anti-Americanism: a fervent opponent of the euro, he has nevertheless grudgingly accepted it as a means of helping France assert itself against the US and its mighty dollar.

What is interesting and perhaps significant about his current opposition to the EU constitution, however, is that Chevènement seems to have found a way of reconciling his anti-Americanism with his opposition to European integration. Yesterday, he told Le Figaro of his "disappointment" with the Treaty for taking an overly liberal approach to the economy and for giving a "tool of vassalisation to the United States" in the field of foreign policy and defence.

Chevènement's fear is that France will be marginalised in the EU of 25 members, the majority of which, in his view, are loyal to the United States. The new Commission, in which France will only have one member for the first time, will be dominated by liberals and Atlanticists, he said. He thus wants his country to reject the constitution, as a precursor to negotiating a replacement – presumably one which is more in tune with French nationalist aspirations.

Thus does the constitution bring out the worst in French politics which, for British Eurosceptics, makes him a strange bedfellow.

A Flagship Integrated Strategy

If a horse suffered from this, they'd shoot it to put it out of its misery. But no such relief for the people of the North East. That is what they are going to get if the North East Region agrees to an elected assembly in the referendum on 4 November. So said Caroline Stewart, a member of the North East Environmental Forum, introducing a "Your Say" environment debate yesterday evening at the County Hall, Durham.

And that is the game they are playing. As does the EU promise environmental nirvana if we commit to further political integration, so does the "yes" campaign for the regions promise the same heaven if only people are wise enough to vote for John Prescott's construct.

"We want to give regions more decisions", echoes John Tomany, leader of the North East "yes" campaign. London is a "million miles away", so we want to bring decisions back from the men in Whitehall and give them to the regions.

Yet, not a mention did we hear from Tomany that environmental policy is an EU competence, and that all policy is decided in Brussels. And if London is "million miles away", how far on the same scale is Brussels?

But such trivia did not worry our John. He really does want to bring decision-making closer to the people, by creating a regional structure of 2.5 million souls, considerably larger than many countries in the EU, served by a mere 25 elected assembly members.

Many of us are old enough to remember the 1974 local government reforms, which broke up the matrix of rural and urban district councils, and created those vast and wholly un-loved second tier authorities which incorporate both town and countryside.

Their existence has presaged a continuous decline in popular support for local elections, to the extent that turnouts for council seats in some places fall below the ten percent mark. So we now have a situation where, as local authorities have got bigger and more remote, voters have disengaged from the political process. And what is the answer? Ah, create even bigger local authorities which are even more remote from the population.

This has to be the biggest no-brainer in the history of the universe. Next thing you know, they'll be wanting an EU constitution.

Darfur still on the agenda

The European Commission has announced that it will donate another 20 million euros to Darfur. This sounds very good but there seems to be no assurance that that money will be monitored.

So far numerous officials have gone into the area only to come back with ever more terrible stories of what is going on. Are we actually doing the right things by sending in commissions, trying to negotiate and sending in aid that may or may not be reaching those who need it?

Poul Nielsen, Commissioner for Humanitarian Aid and Development (maybe the two should be split rather than assume that development can come only through aid) is the latest official to come back with horror stories and a nice line in deadpan delivery:
"Continuing violence in the region has claimed the lives of thousands of people, and is seriously hampering the delivery of humanitarian aid."
15 million euros will will be used to support the World Food Programme and 5 million will go to various aid agencies. With this amount, the EU will have given 104 million euros since the beginning of the year. Without seeming too callous, it may be time to ask what has been achieved by that rather large sum of money.

Many of the funds have been and will be channelled through the EC Office of Humanitarian Aid (ECHO) in the Sudanese capital. It is, as is becoming very clear indeed, the Sudanese government that is preventing proper administration of aid in the province. Peter Holdsworth of ECHO, in charge of operations in Sudan has said, in what must rank as one of the biggest understatements of the year:
“The situation is still not optimistic from a humanitarian point of view.”
Poul Nielsen, on the other hand, not being on the ground, has called on all armed groups “to bring the violence to an end once and for all”. Seems fair to me. I wonder why they don't listen.

The WFP has said that despite Sudanese government claims, there is not enough food in Darfur but the organization was confident that they would be able to get sufficient supplies in. The whole thing is such a mess, one does not know what to believe. If the WFP is still only confident it can get supplies in, what has it been doing so far and what happened to all the funds that have gone to it? If it has not been able to get the food in, where is it and what makes anybody think the future will be different?

The EU has also donated 400,000 euros to support the peace process between the Sudanese government and the various rebel factions and 12 million euros to the African Union observer mission that is monitoring the April 8 ceasefire signed by the Sudanese government and the Darfur rebels. Could we, at least, have an account of that money? After all, nobody can pretend that it has achieved the desired aim.

Wednesday, August 25, 2004

Unexceptional measures

In its August bulletin the Bank of France has called for tougher, EU-wide measures to deal with exceptional measures to reduce their deficit. Well, being a bank, they said that they would like to see “an improved framework”.

Exceptional payments by firms, the bulletin said:

"cannot substitute for efforts in budgetary structural reform ... in fact only delays them several years, at the risk of giving the illusion that the deterioration of the public finances is being limited and to make, in this situation, the unavoidable adjustment more difficult to the countries
Equalization payments by firms to the state have, at best, no effect at all and, at worst, a negative one, according to the Bank of France.

France, as our readers will no doubt recall, is one of the countries with the most persistent deficit problem.

The Bank of France made its statement at a particularly apposite moment. The public electricity giant, Electricité de France is about to pay the French state an equalization payment, that will, according to the Economics Minister and soi-disant heir apparent, Nicolas Sarkozy, go some way towards reducing France’s deficit for this year below the magical 3 per cent.

EDF is expected to pay at least eight to 10 billion euros (9.7-12.1 billion dollars), or equivalent of about 0.6 percentage points of GDP.

Just exactly what kind of an EU-wide framework does the Bank of France envisage?

A battle lost

Wholly unrecognised by the media, for the last few weeks a major battle has been raging within the ranks of the Conservative Party, to define the territory over which the "Europe" issue will be fought during the general election. And the "good guys" lost.

These are the people who want the Party to take a confrontational approach to "Europe", taking back powers and restoring national control in areas of policy dominated by the EU. That is what the fishing issue has been all about – pushing Howard not only to repatriate the CFP but also to committing, in a letter, to using national legislation to achieve that end, in the event that negotiation fails.

At the time, we considered this a considerable breakthrough, as it would have been a direct challenge to the inviolability of the acquis communautaire, which in turn challenged the hegemony of the commission. The result would have been, eventually, to turn back the tide of integration and break the power of the EU.

On the other side is the Europhile wing. Led by characters such as Jonathan Evans, leader of the Conservative MEP group, its followers are absolutely determined to resist any attempt to weaken the historical commitment of the Conservative Party to European integration.

However, they recognise that the mood of the country is such that they must appear to be taking a Eurosceptic line if they are to have any chance of winning the general election and have, therefore, been crafting a careful line which appears to be Eurosceptic but, in fact, does not commit the Party to any radical action.

In that context, the "drivers of regulation" initiative has been far more important than at first realised. It turns out to be the visible part of this core strategy - a quite deliberate, cynical attempt to present the Conservatives as opposing EU regulation, carefully calculated to avoid confronting the key issue of Brussels control over our legislation or reining back the process of political integration.

There are two key parts to the strategy. The first is to present "gold plating" as the primary cause of burdensome EU regulation - by inference suggesting that the original legislation from Brussels is quite benign. The second, fall-back position is to suggest that if onerous legislation does somehow get through the system, this is because of "lack of scrutiny" by the UK parliament, which hasn't been doing its job properly.

Having thus focused the blame, there is no room whatsoever for allowing that the EU system is at fault, or that Brussels is indeed spewing out an ever-increasing volume of insane laws. If that is for one moment admitted, the game is lost because the Party will then have to admit that it is powerless to do anything about it, and has no intention of doing anything about it.

Thus, after O'Brien's comments on gold plating earlier last week, Digby Jones of the CBI was drawn into the "debate" with its complaints that MPs were "asleep on the job", not doing enough to scrutinise EU legislation. Thereby, the two foundation stones of the strategy were laid.

This second part of the strategy was given something of a boost today in The Times by Bill Cash who has blundered into the debate, firstly by defending the record of the British parliament on scrutiny.

He then argues that everyone should support his "Sovereignty and Parliament Bill", which would allow for all legislation, including that of European origin, to be re-examined. It would then authorise the repeal or amendment of "obsolete or unproductive laws", and require judges to give effect to British laws, even if they were "inconsistent with or conflicted with European laws or treaties".

With his undeserved reputation as a "leading Eurosceptic", Cash evades the central issue of repatriating powers, and thereby turning off the tap at source, instead opting for his own brand of fudge.

But the greatest aid and comfort to the Tory strategists came this morning not from Cash but from Lib-Dem MEP, Christopher Huhne. You know something is amiss when the Lib-Dems and the Tories find common cause, but there we had the egregious Huhne pontificating on the Today programme (6.52 am), to a gullible and uncritical Jon Humphrys that the problem was indeed "lack of scrutiny" by the House of Commons and "gold plating".

Huhne even called in aid the infamous "abattoir directive" claiming – quite wrongly – that the problem was the British insistence on full-time veterinary inspection of abattoirs, and the treasury required "real costs" to be paid, which massively increased their overheads put them out of business. That didn't happen in other countries, claims Huhne.

It really is quite intolerable to have these self-important politicians using this directive as a political football – given the damage they did to the industry – but one would expect Europhile Huhne to do anything he could to avoid having to admit that its was the original legislation at fault – exactly the same tactic that the Tories are adopting.

What happened was that – as distinct from the structural requirements which actually closed most abattoirs – there was a mismatch between the continental and British systems of meat inspection, and that the directive required the continental system to be adopted.

Contrary to Huhne's claim, the directive did indeed require full-time inspection, and the charging directive did require "full costs recovery". This was not an invention by the treasury.

The actual problem was that British vets are not trained in meat inspection, unlike their continental counterparts so, in addition to vets’ costs, abattoirs had to bear the costs of meat inspectors. That created the disproportionate burden, but it arose not through "gold plating" but through the insistence of the EU on "one size fits all" legislation. But this is something Huhne would never admit.

So, with the help of the Lib-Dems, the Tory strategy is underway, and this is going to be pursued right through to the general election. There is not the slightest hope now that the Party will change course and the way is now clear for its eventual defeat, as the British public recognise – largely instinctively – the strategy for what it is, empty rhetoric - a continuation of the Great Deception.