Thursday, June 30, 2005

Maybe they should all arrange their own kidnapping

A delightful, if trivial, story has emerged from the Colombian newspaper Cambio and the Spanish ABC [links are for our Hispanophone readers] via the EUObserver.

In April Carlos Ayala-Saavedra, a Bolivian turned Spanish national, who is the EU’s official in charge of development projects in Colombia, disappeared together with his girlfriend, Vergara Monsalve, in Cicuta, on the Venezuelan border. (Some reports described him as having a wife and four children in Spain, but that has never stopped anyone.)

With Colombia’s second largest rebel-group, the National Liberation Army (ELN), active in the area, kidnapping was suspected and there was an apparent demand for a ransom of €10 million from the EU.

EU officials negotiated with rebel FARC soldiers but refused to pay the ransom.

Things, however, were not quite what they seemed. On April 29, Ms Monsalve was found on April 29, unharmed and taken to Red Cross official. She was questioned by Colombian security officials.

Then, on May 22 in Los Tres Pajaros, in the state of Apure, Venezuela, Mr Ayala-Saavedra was found by the Venezuelan army. He claimed to have escaped from his kidnappers and walked to freedom through the jungle, though the soldiers and the Colombian security officers who flew in to talk to him, found it rather odd that he had not a scratch on him. It is rare for people to be able to struggle through the jungle, with no protective clothing and emerge completely unscathed.

It did not stop there. The Colombian authorities found numerous discrepancies between his story and that of Ms Monsalve.

Further investigation uncovered the fact that
“… Mr Ayala-Saavedra was being subject to an internal investigation over alleged misappropriation of funds from the Bogota office, and found documents proving that he had sold a Toyota Lexus with diplomatic plates, and pocketed the money.”
With what might be described as a very dry humour, a “source close to the Colombian investigators” told Cambio magazine:
“We got the feeling that his days as a European Commission official were counted.”
[Presumably, the EUObserver translator meant numbered.]

The couple’s joint account has been frozen, Mr Ayala-Saavedra has gone on “sick leave” and there is an internal investigation going on into what appears to be a common or garden scam. We shall see what it uncovers.

Leaving the opposition floundering

In what is a clearly co-ordinated plan to rack up the pressure on the EU budget issue, headlined in both The Daily Telegraph and The Independent, Blair and Brown yesterday linked CAP funding with their latest cause celèbre, poverty in Africa, demanding that the EU's agriculture policy be abolished in its entirety.

In so doing, they have not only gone further than any previous British government, they have managed to capture the moral high ground and discomforted the French. Even better, from a domestic stance, they have completely outflanked the supposedly Eurosceptic Conservative Party which, coincidentally, has just issued its programme for reform of the CAP , leaving the Party once again floundering.

The essence of the Blair/Brown message is that, as The Independent reports it, "Farm subsidies keep Africa in poverty". This was Brown speaking to Unicef, the United Nations Children's Fund (nice touch), in the run-up to the G8 summit at Gleneagles next week, declaring that developed countries could "no longer ignore" the "hypocrisy" of a regime that distorted world trade and held back Africa's poorest nations.

That was matched by a parallel initiative from Blair who, during Prime Minister's Questions yesterday, suggested for the first time that the CAP should be abandoned as part of a complete overhaul of the EU's finances. His official spokesman later confirmed the thrust of Blair's line in his routine press conference.

He was then supported by Hilary Benn, the international development secretary, who said the rich world had a "moral imperative" to achieve trade justice. He called for an end to EU and non-EU agricultural subsidies in which rich nations give their farmers £154 billion a year - 10 times the amount given in aid to Africa.

Compared with the "vision" of relieving poverty in Africa, all the Conservatives could offer was a series of higly technical and uninspiring changes, including "the compulsory decoupling of the Single Farm Payment from all production across all member states, as it is in England; the scrapping of EU support for tobacco production; and a cutting of tariffs to the point where export subsidies can be rapidly phased out."

This was the brainchild of Oliver Letwin, heavily influenced by the farming lobby which, as always, has completely lost the plot.

Thus, rather than go for the high ground, Letwin's recommendations include: "restricting EU market intervention and support mechanisms for use only in the case of major external shocks." But, to keep the lobby happy, he wants to keep the single farm payments system until 2012, then "increasingly switching its funding through compulsory co-financing; and ensuring that longer term support for farming and rural communities focuses on improving the environment and local amenities."

All good, worthy stuff and it will undoubtedly play well in the farming press, but to the other 98 percent of the voting population, the game goes to Blair. Even if the Conservatives now attempt to play catch-up, by also supporting the abolition of the CAP, they will look as if they are reacting to Blair, rather than leading the agenda.

The Independent has been assiduous in making the case against the CAP, with an article today headed: "How the CAP helps our poorest farmers", pointing out that The Queen gained £545,897 from agricultural subsidies last year, the Duke of Westminister £448,472, the Duke of Bedford £365,801, the Prince of Wales £225,465 and the Duke of Northumberland £450,740.

Never mind that much of this money actually goes to the estate tenants – many of whom are far from wealthy – this is a propaganda war being waged, and one which plays well with the public.

The game started in earnest this weekend with a piece in The Sunday Telegraph, which conveyed an allegation from former agriculture commissioner Franz Fischler that Blair had "vetoed farm reform to benefit the Queen" and another in The Observer which claimed that, "Danish MPs get millions in farm subsidy", retailing that four Danish cabinet ministers, several of its MPs and "even the country's EU commissioner" receive payments under the CAP running into millions of pounds.

Never mind that what Blair plans cannot be achieved. It is no more or less achievable that the Conservative plans, so if you are going to play the rhetorical game, you might as well go for broke, which is precisely what Blair has done.

Moreover, it has the doubly-delicious effect of seriously upsetting the French, who have reacted with predictable hostility. According to the AFX agency, this morning Villepin completely ruled out negotiation on farm subsidies, saying: "We are prepared to discuss but not to negotiate on this issue". Instead, he said, "I think we should urgently deal with this issue (the EU budget)."

Another major beneficiary of the CAP, Ireland, has also weighed-in, supporting the subsidy regime, with the Irish Independent citing agriculture spokesman Denis Naughten claiming that abolishing the CAP "would put food production at the mercy of factory farms, hypermarkets and dodgy imports which cannot be safely scrutinised." All of this looks so much like special pleading – which indeed it is – that it cannot help but aid Blair's cause, especially if, as the Spanish paper El Pais records, the Spanish government is actually tilting towards the Blair agenda.

Altogether, by upping the ante, Blair has played a blinder, which is leaving the opposition, at home and abroad, floundering.

Set a tranzi to catch a tranzi

Vice-President Siim Kallas, the Commissar of Anti-Fraud matters, no stranger to fraud investigations in his own country, has been very busy.

He was the fifth Commissar to travel to Ukraine since the setting up of the EU-Ukraine Action Plan in February.

According to the Commission’s press release:
“He met President Yushchenko, Deputy Prime Minister Bezsmertnyi in charge of administrative reform, Interior Minister Lutsenko, Justice Minister Zvarych, the Head of the National Security and Defence Council Poroshenko, the Head of the Parliament’s Committee on Organised Crime Stretovych as well as representatives of civil society.

A key topic of the discussions was the state of play in the implementation of the Action Plan adopted jointly by the EU and Ukraine on 21st of February in the framework of the European Neighbourhood Policy, in particular the reforms of the administration and the judiciary, and the fight against corruption.”
Well, quite. Who better to preach the need to fight corruption than a Commissioner of the European Union?

Still the man means business. He has announced that there will be an investigation of charities and NGOs in the EU as well.
“Citizens have the right to know how their own money is being spent, including that given to NGOs. Because an awful lot of money is being channelled through organisations that we hardly know in the name of ‘noble causes’.”
One of those organisations, if the fragrant Margot is to be listened to, is the Commission itself and we don’t always know how the money is being spent in the name of all sorts of causes, noble or otherwise.

The actual investigation into the 32 charities, NGOs and aid organizations, who are accused of “double dipping” is being carried out by OLAF, the anti-fraud office of the Commission.

It seems that these promoters of “noble causes” may well have asked for funds from the EU, the UN, the US government and the World Bank for the same project, submitting separate proposals and invoices.

The whole subject of aid giving by the EU is fraught with problems quite apart from the general difficulties to do with the subject of aid.

The Court of Auditors has lambasted ECHO the European Commission Humanitarian Aid Office on numerous occasions, generally and on the subject of specific projects.

As Ambrose Evans Pritchard’s article in yesterday’s Daily Telegraph said:
“European auditors still have no idea what happened to payments of almost €1billion in Russia over a seven-year period for cleaning up unsafe nuclear power plants.”
Or, for that matter, the money that was sent to deal with a non-existent food-shortage after the collapse of the rouble in 1998.

Other problems have arisen.
“Much of the EU's humanitarian aid programme to Zimbabwe has fallen into the hands of the Mugabe regime, since funds had to be exchanged at the vastly over-valued official exchange rate - going straight into the coffers of the central bank.”
The same pattern has been seen with numerous other aid programmes in Africa, but, one might argue, that is true with aid given by all governments and international organizations.

The ongoing problem of aid to the Palestinian Authority has been discussed on numerous occasions. In 1997 the Court of Auditors found that none of the projects that were supposed to have been built were anywhere near completion, some not having been started and the money had vanished either into the hands of the PA or those of EU officials. No proper accounts had ever been presented.

There have also been accusations that EU money has been used to finance terrorist activity and open anti-Semitic propaganda in schools in the Palestinian territory and various Arab states.

After due investigation that they were forced to carry out, OLAF solemnly reported:
“The European Anti-Fraud Office (OLAF) has closed its investigation into the European Commission’s Direct Assistance to the Palestinian Authority’s budget. On the basis of the information currently available to OLAF, the investigation has found no conclusive evidence of support of armed attacks or unlawful activities financed by the European Commission’s contributions to the budget. However, the possibility of misuse of the Palestinian Authority’s budget and other resources, cannot be excluded, due to the fact that the internal and external audit capacity in the Palestinian Authority is still underdeveloped.”
Nice way of putting hat, “underdeveloped”. One assumes it means, nothing was noted or could be proved anywhere.

But then OLAF itself has not been free of taint. In fact, the dishonesty and lack of accountability within its own office have been commented on adversely by the self-same Court of Auditors.

And it is OLAF, whose doings were recorded by Hans-Martin Tillack, the German journalist, which set into motion the various arrests, confiscations of material and persecutions by the Belgian police, at the instigation of the anti-fraud office.

So far Mr Tillack’s attempts to get back his documents, to prevent OLAF and the Commission from finding out the names of his sources and to stop various past and present OLAF officials from slandering him have been unsuccessful.

One can’t help looking forward with some anticipation to the final report produced from bunch of … ahem … not entirely accountable officials on another similar bunch.

Another helping of fudge

According to The Times and other sources, Italy has been given two years to cut its government borrowing to comply with the growth and stability pact. Berlusconi's government was also told to cut the national debt sharply. At 107 per cent of GDP, the debt is the second-highest in Europe.

For the past two years, Rome has also been running budget deficits above the 3 percent GDP ceiling permitted under the pact. Government borrowing is set to reach 3.6 per cent this year and is expected to rise to 4.6 per cent next year.

Joaquin Almunia, the EU monetary affairs commissioner, said: "In view of the current circumstances in Italy, notably the cyclical economic weakness and the size of the required adjustment to bring the deficit below 3 percent, 2007 is a more appropriate deadline."

So, another one gets away with it. After Germany and France got off the hook, though, it would have been very hard for the commission to have taken action against Italy, especially as Berlusconi is being very aggressive about the prospect of action against his country.

However, given that the Italian economy is a basket case, and no reputable economist believes it is going to do anything other than get worse, the idea that it can be brought into line by 2007 is beyond fantasy.

What we have here is another helping of fudge. Produced in such great quantities by the EU, perhaps if they packaged it and sold it on the open market, they could cure everyone's deficit problems.

Wednesday, June 29, 2005

Vile pen writes

In an extraordinary piece today, written for The Financial Times, Dominique de Villepin – temporary prime minister of France - sets out his "vision" for a "united way to a new political Europe".

He starts off with the thesis that "Europe is in crisis", thereby eliding the crisis amongst the political élites of the European Union with the condition of a continent – something which really does not stand up to scrutiny.

From there, however - in an obvious reference to the "no" votes delivered by his own countrymen and the Dutch – he claims that "never have its peoples so forcefully expressed their hope to see a Europe of values and determination, capable of addressing their social imperatives, being built." My comments about stakes through hearts applies here – these people simply cannot take "no" for an answer.

We then get some ritual burbling about globalisation, with the injunction that: "We must be able to defend our political, economic and social interests, presenting a united front." As the say, who is this "we" paleface?

Anyhow, the Vile pen recipe for success is that "we give ourselves the resources to build this new political Europe," or "we resign ourselves to making our continent a vast free-trade area, governed by the rules of competition." No guesses as to which he preferes, to which effect, he tells us, "we need ambitious projects."

His first is Prodi's old favourite - European economic governance. He proposes a dialogue between the eurogroup and the European Central Bank to define a genuine European economic government for eurozone countries. He also wants a debate on managing strategic oli reserves.

Secondly, of agriculture, he claims it has given Europe an independent food supply, made Europe the world's second-largest agricultural power, and given it huge economic power. At a time when the food problem is becoming urgent worldwide, we have to strengthen our agriculture while pursuing its adaptation. European consumers want to be sure they will not encounter supply or health problems and that prices will remain affordable: only the Common Agricultural Policy enables us to take up these challenges.

Third, he claims that, of innovation and research, there are not, on one side, "old" Europeans committed to the CAP and, on the other, "modern" Europeans defending the Lisbon strategy. We are all looking to the future, he says. But to address under-exploitation of European strengths in physics, mathematics and chemistry, he proposes the creation in France of one or two European research and technology institutes. They will be open to all European states wishing to participate. In France, he adds, we have decided to create "competitiveness centres" to bring together high-level, but widely dispersed skills: why should they not take on a European dimension?

Fourth: he argues that police co-operation, exchanges of intelligence and border controls form the basis of internal security (internal security?). On defence, he says, progress achieved must (note, the "must") serve as a basis for still-closer co-operation.

Fifth: European democracy. Identity has been forged through support for common values. Student exchanges under the Erasmus programme are strengthening this feeling, paving the way for the emergence of a European democracy. But this programme is confined to a limited number. The European voluntary service is itself embryonic. So I propose a debate on creating a genuine European service, which would give all young Europeans the opportunity of working in the humanitarian sector or emergency services outside their home countries.

With that stunning prescription, he then dives further into fantasy, claiming that "Europe's peoples have never been so close." Like France and Germany, he says:

…they want political leaders to come to find solutions rather than just raise issues. Mr Chirac paved the way at the Brussels summit by accepting a budget compromise, just as he had accepted a compromise on the CAP in 2002. Europe must take the initiative. Our peoples want a new political Europe, with a capacity for action, a conscience and a moral code. Europe has become the testing ground for new political, economic and social ideas.
With that, he concludes with the peroration: "Let Europe speak out." Funny that – I thought it had, and the bit that was allowed to express an opinion said "no".

You really can't parody this – it speaks for itself. But if Blair really thinks he can make a deal with this man or – more to the point – this mindset, then we need the men in white coats.

The trouble is that what Vile pin writes is so fantastic, it is almost unbelievable. It'll never happen, we think. However, we've been caught like that before. Vile pen, and his fellow travellers, undoubtedly do believe it – as long as it is a French-run "political Europe" of course. Beware!

Europeanisation by stealth

In July 2003, the Defence Procurement Agency of the UK Ministry of Defence announced that the BAE Systems Land Systems' (formerly Alvis) Multirole Light Vehicle (MLV) had been selected as the British Army's Future Command and Liaison Vehicle (FCLV).

The first procurement contract was signed in November 2003 for an initial 401 vehicles, with an option for up to 400 more. The vehicle was named the Panther Command and Liaison Vehicle (CLV) and is to be built during the period 2006 to 2009 and will replace a range of vehicles which are reaching the end of their operational lives, for example the Land Rover, Saxon, FV432 and a number of Combat Vehicle (Reconnaissance) Tracked.

So far, so good – a minor piece of news about a new piece of hardware for the Army, although the costs might make you suck your teeth. For something little more than a GT runabout, the total cost (without radios) for 401 vehicles is £166 million, equating to £413,000 each. A top-of-the-range Rolls-Royce would come cheaper.

But the significant thing about the announcement is what it does not say. Any casual reader would gain the impression that this was a British-made vehicle, for the British Army, produced by BAE Systems Land Systems, a British company. The only hint of foreign involvement is a single line in the announcement stating that the Panther is "based on a design by Iveco Defence Vehicles Division of Italy".

This impression is reinforced by the Defence Procurement Agency data sheet which, under the category "International Collaboration" reported: N/A.

Given that the vehicle is based on an Italian design, however, that claim did not ring quite true so Conservative MP Anne Winterton put in a written question to the Department of Defence asking what the design, manufacture and licence costs were being paid to Iveco and other non-UK contractors. She got the reply on 8 June, which was a model of obscurity.

Defence procurement minister Adam Ingram simply stated that the licence cost paid to Iveco and to non-UK contractors "is withheld given its confidential nature."

At this stage, there was still no indication other than this was a British-made vehicle. Undaunted, Anne Winterton put in another question, this time asking whether BAE Systems Land Systems and would be purchasing any of the body (excluding armour) and drive components for for the manufacture of the Panther. She also asked what difference there was between the body, engine, gearboxes, drive mechanism and wheels of the Panther, and the Italian Light Multirole Tactical vehicle, on which it was apparently based.

Ingram replied on 27 June, stating that there would be “no significant difference in the body, engine, gearbox, drive mechanism or wheels.” He then went on: "BAE Systems Land Systems will purchase a complete base vehicle from Iveco. This will include the drive components and the vehicle body but will exclude the roof."

In other words, it is not a British vehicle at all, but one of Italian design, made in Italy, all bar the roof. And hey presto, looking up the the Italian Light Multirole Tactical vehicle, made by Iveco Spa Defence Vehicles Division in Bolzano, Italy, what do we see? A Panther.

On the back of the MoD purchase of German MAN trucks, this is yet another major defence contract that has gone to a European supplier. But what is so remarkable is the lengths the MoD has gone to conceal the fact. This is Europeanisation by stealth.

Furthermore, it is perhaps germane to note that the US equivalent is the armoured HMMWV (Humvee) which - against the unit cost of the Panther of £413,000 – cost approximately $180,000 each.

One hundred and fifty years ago

The lead editorial of the first edition of The Daily Telegraph and Courier, 29 June 1855 (reprinted in today's Daily Telegraph):

The gradual improvement in the moral and intellectual condition of the great masses of people of this country, within the last half century, may be ascribed to the more general diffusion of knowledge and the extension of education among the lower classes. Beacons of hope have arisen in all parts of the kingdom, shedding the light of knowledge upon the aspirations of free-born reflecting men. The people, when once enabled to avail themselves of this boom, turned their thoughts upon analyzing the laws by which they were governed.

No longer kept in an ignorant state of serfdom, they were capable of reasoning, and the result of thought was a loud and determined, though constitutional resistance to that by which they had hitherto been oppressed. Step by step they manfully fought for that which was dearer than life – the altars of a free people. Their path to freedom had been cleared when the enslaving dominion of a foreign potentiate was hurled forth from these shores, when the lazy sanctuaries of bigoted priesthood were razed to the ground and a line of sovereigns placed upon the throne of the United Kingdom, whose chief claim to so great an inheritance arose from their acknowledging but one pure faith.

Abuse after abuse was pointed out, and the people insisted upon changes and so surely each wrong was redressed. The Parliament and the Press re-echoed the sentiments of the classes, and the Crown assented to the wishes of the subject.
Where did we go wrong?

Mugs, yet again

It is a measure of how little Blair understands of the dynamics of the EU that he wants much of the expenditure devoted to the CAP to be redirected to EU research and development projects, arguing that too much of the CAP funding goes to benefiting French farmers.

What he clearly does not realise is that a disproportionate amount of the research budget also goes to France, not least via the space programme where 40-45 percent of the €10 billion annual budget – abstracted from the framework research programme – ends up in the hands of French aerospace manufacturers.

And now we get yet another example of the pork barrel being rolled out in France's favour, with the award of the largest ever international research programme, the International Thermonuclear Experimental Reactor (ITER) research programme being awarded to… you guessed it, France.

Initially expected to go to Rokkasho-Mura, in north eastern Japan, the EU has fought a long and dirty campaign (some details of which we recorded in an earlier posting) to get the project relocated to Cadarache in southern France. Not least, the EU used some of the tactics of unilateralism it often criticises in the United States, having threatened to pull out of the project all together and go it alone, if the Japanese did not yield.

These bully-boy tactics have now succeeded but, according to a report by Reuters, success had come at a very high price – one which the rest of us are going to have to pay.

The EU had had to make huge financial and industrial concessions to the Japanese to clinch the €10 billion project, the deal for which was signed in Moscow yesterday. It will get contracts for up to 10 percent of the procurement, EU participation in science projects in Japan, and up to 8 percent of the cost of ITER construction, plus a disproportionate share of Japanese staff on the ITER organisation, including the post of director-general.

Furthermore, the EU will have to fund 40 percent of the €4.6 billion construction cost. Needless to say, though, France only has to pay 10 percent – down from the original 20 percent - the same as the other five members of the international consortium. For that, it will have a facility that employs 3,500 scientific workers and first use of the technology, if it proves successful.

The role of Britian, of course, is to pay our share to keep French research and industry going, on top of which we are expected to relinquish our rebate, and let France keep its CAP funding. Do we really have "mug" stamped on our foreheads?

They are not joking

It is not only the European Union that is in bad odour with the United States because of selling arms and trying to sell more arms to the Chinese. Israel is, too.

According to ISN Security Watch, Israeli officials have announced that a major arms deal with China had been frozen.

Israel has come under pressure from the US in recent months over the planned sale to China of upgrades for unmanned aerial surveillance vehicles, or drones, that would have included US technology. Washington feared the drones could be used by China against Taiwan.
Six months ago trade sanctions were imposed on Israel because of the deal and Israeli officials have now flown to Washington to discuss matters and allow American defence officials to examine the details of the deal.

The discussions and their consequences are likely to be quite strongly worded.

Tuesday, June 28, 2005

Heritage conference

A major conference convened in Washington today, to discuss whether the EU is in the best interests of the United States. It was organised by the Heritage Foundation in association with the Discovery Institute, Global Britain and the Hudson Institute.

Taking part from Britain was Lord Pearson of Rannoch (Campaign for an Independent Britain), the Rt Hon. David Heathcote-Amory MP, Sunday Telegraph columnist Christopher Booker, Daniel Hannan MEP, Ruth Lea (Centre for Policy Studies) and Ian Milne (Global Britain).

Speakers from the US included Yossef Bodansky (Former Director, Congressional Task Force Against Terrorism and Unconventional Warfare), Judge Robert H. Bork (Hudson Institute), Edwin Meese III (Chairman, Center for Legal and Judicial Studies, The Heritage Foundation), The Hon. Gordon Smith (R-OR – Member, United States Senate), Mark Ryland (Vice President, Discovery Institute) and Kenneth R. Weinstein, (PhD., Chief Executive Officer, Hudson Institute).

The one-day event was the brainchild of Lord Pearson of Rannoch who wants the US to understand the "real nature of the beast". His aim is to discourage Americans from promoting an integrated union and to raise questions about its beneficiaries. "The whole project has gone badly off the rails and this moment of confusion is a great moment for the US to grit their teeth and realise that it's very much against their best interests," he says.

The Conference can be viewed via the Heritage Foundation website, via the link above. The morning session is particularly worth watching, and especially the parts towards the end of the morning on defence issues.

You win some and you lose some

SecGen Kofi Annan, father of Kojo of food-for-oil fame used the anniversary celebrations of the UN to call on world leaders to support his supposedly far-reaching reforms of that organization.

The UN, he explained, had many successes, such as the near total eradication of polio and smallpox. Well, I don’t know about that. WHO did play an important part in the vaccination programme but those vaccines had to be produced first. And, in any case, did the programme need that enormous political superstructure we call the United Nations?

It’s just as well that there are these successes, because the SecGen can point to precious few in the political field. He did admit that there were also failures, such as the 800,000 (at a conservative estimate) massacred in Rwanda.

I suppose it would have been the height of bad taste to mention DR Congo, Sudan, the Balkans and the food-for-oil scam.

The world, however, according to the SecGen, needs a new, dynamic, reformed UN more than ever. (Or was that the EU according to Tony Blair? One gets so confused with all these dynamic reforms.)

At least, unlike Blair, Annan seems to have come up with some ideas, though it is not clear how they would achieve anything. But then, it is not precisely clear what he wants to achieve beyond hanging on to his job.

Among other proposals for reform there is changing the make-up of the Security Council, doing something about the Human Rights Commission and increasing money for development.

All of them are controversial, to say the least, and some will give the UN, an unaccountable organization, full of members whose own countries are a bit of a mess, too much power.

How, for instance, can one justify making the Human Rights Commission more powerful if half its members ignore human rights in their own land? After all, Sudan, barely a state at all, with several unpleasant civil wars and continuing massacres supported by what passes for a government, is a member. Libya used to chair it. Cuba is a member. And so on, and so on.

Suppose, more powers are given to it. How will they be administered? And who will be condemned and made to submit? Any African countries? Not, one would have thought, after they all announced that Mugabe’s policies were entirely his business and bulldozing shanty towns was quite a good idea as they had been somewhat unhygienic.

Increased development funds? Will their distribution be overseen by Cotecna?

Well, never mind. At least the SecGen can claim credit for all that vaccination.

He still doesn't get it

Holding forth in The Daily Telegraph is that sterling example of Tory success, none other than John Major.

A prime minister that was effectively destroyed by the European Union, with the party split by the bitter wrangles over Maastricht, and totally discredited by the ERM debaçle, up he pops in the op-ed column where, without a trace of embarrassment, he is telling the Tories how to get re-elected.

"We have to win hearts and minds and recapture the centre", says this great sage, also observing that, "for too many years, politics has been held in low esteem."

What he doesn't seem to realise is that there is a good argument for suggesting that the pursuit of one is related to the other. As my colleague has pointed out, go down the centre and you get hit by traffic from both direction. It is the "no-man's land" of politics where shells from both sides land.

More to the point, the shadow of Maastricht, and the bitter divisions that it set in train, still haunt the Conservative Party. It is Maastricht, above all, that neuters the Party on the EU issue, and gives the Labour Party endless scope for mischief whenever the EU hits the agenda. Until Conservatives come to terms with that, they are going nowhere.

Yet the man who inflicted the double disaster of Maastricht and the ERM on the Conservative Party - and the nation – mentions neither in his little homily.

Instead, he asserts that the key question remains: what is the thrust - the underpinning philosophy - of 21st-century Conservatism to be? In the early 1990s – just as the Party was tearing itself apart over Maastricht - he advocated a "nation at ease with itself", to the derision of most political commentators at the time.

Yet that remains his recipe. Never mind that membership of the European Union – which now makes the majority of our laws – is actually incompatible with being a Conservative. Never mind that, unless the central issue – of who governs this country – is resolved, the nation cannot ever be at ease with itself.

Yet, all little Major can manage is to whine that it was "a black day" when labels such "Euro-sceptics" or "Euro-enthusiasts" first came into use, clearly not understanding that they represented real, fundamental divisions within the Party. "They did nothing but divide the Conservative Party," says Major. But they still divide the Party. The current terms, "modernisers" and the "traditionalists" of today's debate, are but a re-working of the same divide.

In an attempt at modesty, Major concludes that "experience is the name people give to their mistakes." He admits to experience. What he doesn't admit to is total. abject failure, the man who wrecked the Conservative Party. But, as a born-again sage, he is now certain that the Conservatives can win – "but only if we embrace the changing nature of the world as it is today, and capture the non-ideological heart of the British voter." Yeah, right.

Readers may be interested to learn that a very generous and thoughtful benefactor has acquired on our behalf the domain This is currently diverted to this Blog so that it can be accessed without the "blogspot" moniker.

As soon as time permits - and with the offer of assistance from other readers - we hope soon to turn the Blog into a fully-fledged website, not least with a properly fuctioning forum and better facilities for readers' posts (which sometimes are better than the material we produce - don't get excited. I did say sometimes).

Anyhow, we will keep you posted on developments.

Piggy in the middle

Flagged up by The Daily Telegraph yesterday was a report that Britain and France are in a race to woo the Poles, both seeking to enlist the support of the largest of the recent accession countries in the coming negotiations on the budget.

British and French ministers, the DT said, "will arrive in Poland today for the start of a week-long race between London and Paris to sign up eastern and central European nations as allies in the battle over European Union reform." By the end of the week John Prescott (are they mad?) and Douglas Alexander, the Europe minister, will both have visited Poland, and between them added the Czech Republic, Slovakia, Hungary, and as many Baltic states as Mr Alexander can cram in.

But it was yesterday where the real action was. Douglas Alexander, less than impressive as a Europe minister, was in Warsaw, gatecrashing on a meeting of the so-called "Weimar Triangle", the informal grouping of Poland, France and Germany.

It is a sign of the times that Alexander was kept well away from the new French foreign minister, Philippe Douste-Blazy, the latter refusing to speak unless the British Europe minister was out of the room. So much for entente cordiale.

But, with Poland uneasily entertaining the various suitors, it was perhaps easy to overlook the contribution of German Foreign Minister Joschka Fischer, recorded by Deutsche Welle, with a little help from Reuters.

As one of the "Weimar three" told his audience of Polish diplomats that the EU must continue with further expansion of the bloc even in the face of growing popular opposition to enlargement. "In my view, we must carry out commitments, even if they are unpopular," Fischer said. "The EU must do what it promised to do. However, if we think we can enlarge without deepening integration and closing ranks, then from this crisis we can tumble into a bigger one." "If we were to heed the populists, then we would be guilty, we would be amiss, we would make a great mistake," he added.

Albeit from a politician who is on his way out, this underlines the essential divide between the people and the European élites. Firstly, it does not matter what the people want – "the EU must do what it promised to do" – even if it had no mandate to make promises. Secondly, the integrationalist egenda is still there, unchanged: "deepening integration and closing ranks…". But, if Fischer thinks that will avoid a crisis, he is sadly mistaken.

However, there was no meeting of minds between Fischer and the French Interior Minister, temporarily Nicolas Sarkozy, until Chirac can find an excuse to get rid of him. Said Sarkozy, the EU should suspend enlargement after letting in Bulgaria and Romania. That, of course, means a big "no" to Turkey, a move that would be highly popular in France. But hey! We mustn't do what's popular, must we?

Anyhow, that aside, Poland is now keen to play the role of a mediator in the conflict concerning the budget, and the generally vague plans for reform. But France has the edge here, as Both France and Poland have a keen interest in maintaining the CAP. Already the poison is being injected, with an unnamed French diplomat stating: "These countries are used to language from Britain that is very pro-enlargement, but when it came to putting hands in wallets they weren't there." He added, archly, "The new members won't forget that."

According to the International Herald Tribune, Adam Rotfeld, Poland's foreign minister agreed that enlargement must not stop. He then lambasted western EU nations for a return to "national interests and egoism" and "a fear of foreigners and aliens." Charging that there had been "a revival of stereotypes of people living beyond the former Iron Curtain," he said Poland had a right to play a central role in the EU.

While this is clearly a dig at France, the IHT says it remains unclear whether Blair may have alienated Poland and the other accession states by blocking the budget deal. In a sign that Poland's patience for a budget deal may be thin, it says, Rotfeld called for solidarity among EU nations and said the point of the EU was not to help rich nations become ever richer but to help poorer regions catch up.

The Financial Times puts this in perspective. "Poland's main interest is to steer a course between Britain and the continental powers to ensure that its own goal is met as much EU money as soon as possible to try to make up for decades of communism," it says - something rather affirmed by my co-editor's post.

Illustrating how sensitive the issue is, the FT cites Jaroslaw Pietras, Poland's European affairs minister, saying: "If Britain does not want the odium of slowing preparations for the payment of cohesion funds to the new member states they have to do something."

However, while Poland's main interest is clear, Rotfeld says Warsaw is trying to wield influence without being forced to join any of the EU blocs. "I cannot imagine building a European Union which would ignore or marginalise Great Britain," he said at a news conference after his Weimar meeting.

Like it not, though, Poland is in the unfortunate position of being "piggy in the middle" between powerful rival factions. That in itself gives Poland some power, but also makes her vulnerable. If it plays its hand badly it could be in trouble, and Poles need no reminders of what happens to piggies when the big bad wolves come out to play.

A sorrowful shake of the head

Yesterday’s editorial in the Wall Street Journal Europe [subscription only] shook its collective head sorrowfully over the falling of the free-marketeer Commission President Barroso. It is amazing that anyone should still believe that particular canard.

On this blog we pointed out from the very beginning that Barroso was not giving unequivocal answers to the European Parliament when questioned; that he did not really know how free market work, preferring to see growth and development as a process that could be directed by the Commission; that he was not entirely open about the Services Directive; and that he told different things according to whether he spoke to employers or union leaders – a free-marketeer to the first and protector of social Europe to the second.

Above all, from his appearance on the EU political scene Barroso has maintained that he wanted to see a greatly increased EU budget, in order to put into place more grandiose projects – not precisely the views of a free-marketeer.

The WSJE still hoped for better things. The article enumerates his various failures all to do with his reluctance to stand up to the centre-left minority in the European Parliament, after their dissing of Rocco Buttiglione.

Actually, they attribute too much to the European Parliament. Barroso did not want to stand up to powerful robber barons like Chirac.

They are right to point to the obsession of getting the constitution ratified and the various surrenders to achieve that, most notably, on the Services Directive, though, actually, Barroso had never spoken up clearly in its favour.
“If the Barroso commission thought that seeing the constitution through was of paramount importance, fine; we happen to disagree. It is the duty of politicians to do what they think is right, but that’s why it was so disappointing to see the commissioners sell out free-market principles. If they really believe that reforms are necessary to cure Europe’s sclerotic economies, then they should have weighed whether the constitution was really worth such a high price.”
The mind does boggle. Where on earth do these journalists get the idea that the Commissioners, second-rate politicians to a man and woman, had any free-market principles?

Furthermore, once the IGC put together that constitutional treaty, it had to be implemented and the further integration of the EU, a cause nearer to the average Commissioner’s heart than free markets or economic development, depended on the process continuing unchecked. It was, of course, checked but by the people of France and the Netherlands.

Well, never mind, says the editorial briskly. President Barroso has time to prove his mettle.
“For starters, Mr Barroso should reverse course and begin championing Mr Blair’s economic reforms. These measures have a far better chance of gaining acceptance from the French and the Germans if they aren’t draped in the Union Jack, so the commission could play a key role in presenting reform as coming from a broader coalition that includes Scandinavian and Eastern European nations (which, by the way, it does).”
Which reforms are those? Mr Blair, the Prime Minister who, with his Chancellor of the Exchequer, has brought the British economy closer to the sclerotic European ones than it had ever been before, has not actually produced any reforms. He has just talked in a grandiose fashion of those “new” ideas.

Experience tells one that the French and Germans will reject anything they want to reject, regardless of who is presenting them.

And as for the East Europeans and their desire for reforms: it is there in some measure but what they really desire and keep saying they desire is for the West Europeans to increase the budget and give them more dosh.

I fear, I do so fear that the Wall Street Journal Europe is in for a few more disappointments.

Monday, June 27, 2005

Prizes for everyone

In May of this year, we picked up on a Financial Times story about how the competition to build the Galileo satellite navigation system had ended in a classic political fudge.

We had visited the story in January when permission had been given to build the Galileo system and two rival consortia were vying for a contract to deploy and operate the equipment. Bids had been submitted in February but then, when the result had been expected in March, the competition was deferred.

According to the FT, it was a phoney battle anyway. The competitors for the €7 billion contract were iNavSat, made up from France's Thales and the Franco-German EADS plus the British based satellite communications group Inmarsat, against Eurely, composed of Italy's Finmeccanica, France's Alcatel and Spain's AENA and Hispasat.

But when the competition had been postponed in March, the EU had commission claimed that the contest was so close it could not make up its mind. It argued that a further extension would allow the rivals to improve their offers.

But the real reason was to persuade the two rivals to join forces and put forward a single offer, thus avoiding the risk of political conflict - the last thing the EU and leading member states wanted as they struggled to win popular approval for the new European constitution.

Now the latest act in this particular pantomime is being played out, with Reuters reporting that the long (pseudo) battle to win the rights to build and operate Galileo ended on Monday with approval for the two former rival consortiums to make a joint bid.

The Galileo Joint Undertaking (GJU) is now claiming that the combined bid was of better value to the public and aims to have completed talks on the concession contract before the end of 2005.

"The evaluation of this joint proposal, compared to both individual offers, showed a significant reduction in the financial contribution from the public sector and an increase in the foreseen commercial revenue," the GJU said in a statement. Documents provided by the commission showed the joint bid would lead to a 20 percent increase in expected commercial revenues, thanks to combining know-how in areas like telecommunications, transport, and receivers.

More likely, the non-competing contractors have found a way of milking more money from the system's eventual customers and, therefore, will not need to bill the EU for quite as much as they originally thought, especially as – courtesy of Mr Darling – they are likely to get a sizeable chunk of revenue out of the proposed road charging scheme in the UK.

The lucky non-competitors are to be awarded a 20 year concession, from 2006 to 2026, which will give them plenty of time to recover their original investment – a modern version of "prizes for everyone", except the taxpayer of course.

An interesting theory

The EU’s squidgy soft foreign policy has done a great deal of harm in the Middle East. It has been consistently anti-Israeli, a pro-western democratic state, for all its faults, to the point when accusations of anti-semitism have been thrown around.

It has turned a blind eye to the fact that EU money was going to the Palestinian Authority that was openly subsidizing terrorist groups such as Fatah and the Al-Aqsa Martyrs’ Brigade. It has insisted on keeping the late unlamented Chairman Yasser Arafat in the centre of the picture, even though it was clear that his malign influence was preventing any hope of a peaceful settlement or the creation of a democratic Palestinian state (as opposed to any old Palestinian state run as a private fiefdom by Arafat and his friends and relations).

A recent article on the TechCentral website by Rory Miller, Senior Lecturer in Mediterranean Studies at King’s College, London, enumerates many such examples.

The PLO and its successor the PA never quite renounced terrorism either against Israel or, for that matter, their own people but that did not prevent the EU from lending its support.

Indeed, the PLO and the PA and Arafat himself have always assumed that they do not need to try all that hard to negotiate or rein in the terrorist groups, because they will always have Western Europe’s support.

Progress became possible only after Arafat’s death and the uncertain first steps made by Mahmoud Abbas (Abu Mazren), under American pressure, to deal with the various heavily armed groups milling around in the area.

Mr Miller speculates at the reason for this behaviour on the part of the Europeans that has not only not helped the Palestinians but has, actually, set back the possibility of a Palestinian state and some kind of a decent life for its people.
“Some point to Europe's long-time indifference to the suffering of Israelis, which in turn has been attributed to a visceral anti-Israeli feeling within Europe due to guilt over the Holocaust and a belief that Israel is the last bastion of colonialism in the Middle East. Some go even further and blame anti-Semitism.

Others explain the European stance as an inevitable function of Europe's post-1945 world-view, which places a premium on negotiation and non-confrontation as well as a commitment to finding economic solutions to political problems. Still others attribute the European position to the fact that the EU, the largest financial donor to the Palestinian Authority since its creation, simply cannot bring itself to acknowledge the PA's failings.”
Some of us have preferred to view this as an inevitable outcome of the EU’s problem: the desire to create a common foreign policy without any common interests. The policy's central plank is, therefore, an opposition to whatever the United States might do.

Mr Miller comes up with an even more intriguing explanation:
“But there is another possible explanation, which goes something like this:Despite its long-time public support for Palestinian statehood the EU is secretly committed to preventing the establishment of a viable and sovereign Palestinian state. As part of this policy, it has turned a blind eye, and even excused, the worst excesses of the Palestinian leadership, knowing full well that in doing so it has not only diluted US efforts to stem Palestinian rejectionism, but has actually prolonged the conflict. It gives the Palestinian leadership little incentive to moderate its positions or meet its formal commitments.”
Not impossible, I suppose, but it is taking deviousness to extraordinarily self-defeating lengths.

A new project

The sun is shining and it is time to start a new project, methinks. Well, there are only six or seven on the go at the moment.

A recent article in the Daily Telegraph by Lady Antonia Fraser reminded me of that old and valued friend, Our Island Story by H. E. Marshall, and the excitement of learning history as a story. Of course, as Lady Antonia, points out, many of our attitudes to what is important have changed or, actually, expanded. (Her own book on women in the seventeenth century is absolutely excellent and would not have been written at the time Henrietta Marshall’s volumes were produced.)

At the same time we have all been hearing of the hoo-hah about the Trafalgar re-enactment that eschews the words French, British and Spanish, and, for all one knows, the name Nelson as well, in favour of Red team and Blue team.

In no other country would this happen. Pace the egregious Adam Nicolson, talking of Trafalgar, its importance and the simple fact of who won it, is not “triumphalism”. It is simple knowledge of history, without which no civilized human being can truly exist.

The idea that somehow Europe can be united is usually advanced by people who really do not know very much about the Continent and, above all, its history. The idea that its countries can live in peace with each other is, as it happens, compatible with a knowledge of history, which is a tale of agreements and treaties as well as of battles and, even more interestingly, of economic and social developments that spread across borders.

No other country, I maintain, knows so little of her own history. This is not a particularly new development. I shall depart from my usual habit and write a little more personally.

I was fourteen when we arrived in this country and I went to school here. I had studied history in other countries and was stunned by the inadequacy of what passed for history in an extremely good grammar school that I went to. It was not the teacher’s fault, who was knowledgeable and enthusiastic. The syllabus was bizarre. We went up to the end of the eighteenth century in one year and started in 1815 the following. The French Revolution and its aftermath were simply not studied and the development of the modern world, whose story just sort of petered out, remained incomprehensible.

But, at least, we learned dates and events. We could piece the story together. This no longer happens. A young colleague in my other life (a.k.a day job) said to me recently that she had found history boring because it had made no sense.

She had been taught a course in the Industrial Revolution, another one in social welfare and something else that she had forgotten. None of it had made any sense, none of it could be put together into a coherent picture.

So, I come to my new project, still in its infancy. I am thinking of opening a private educational establishment, dedicated entirely to the teaching of British history, with additional courses on European, American and World history as and when these impinge. I think I could make a great deal of money even if I charge the absolute minimum amount, so that anyone could afford it. Any takers?

Yippee, another anti-dumping duty

The Commission is proposing a new Council Regulation, suggesting that it should be adopted by July 12 at the latest. The likelihood is it will be.

Its purpose is to extend the anti-dumping regulations that are imposed on bicycles imported from China to those imported from Vietnam. What a good idea. Just what the world needs as we are trying to help countries that are poor (and Vietnam is certainly poor). Let us not buy things that they manufacture.

But, of course, there is another part to this story. The UK has, until now, been the largest importer of bikes from Vietnam. Raleigh and others have relied heavily on them but are now looking round for other suppliers.

The extension of anti-dumping duties was discussed in response to complaints. Can anyone guess where those complaints came from? The European Bicycle Manufacturers’ Association, which just happens to be based in Paris. A coincidence, surely.

Of the Commission’s anti-dumping committee, 19 members voted for the extension of anti-dumping duties, four voted against and two abstained. Maybe the British member did vote against but what use is that to anybody?

The chances of the Regulation not being adopted by the Council of Ministers is slim to the point of invisibility.

Still waters run deep

It was entirely predictable – and predicted – that after the high drama of the European Council, the media would lose interest in the EU for a while, and move on to pastures new.

In that, it is fairly accurately reflecting the sentiment of the general public, the vast majority of whom, I suspect, regard the EU as a "done deal" with the collapse of the constitution. To my horror, more than a few people have said to me, "good thing we're not going into that Europe, now", or words to that effect. The whole EU issue – for the time being at least – is running out of steam.

Understandably, the loss of interest has also reflected in the readership of this Blog, the average hit-rate having halved over the past week, although the sunshine might have had something to do with that as well. Surprisingly – to us at any rate, the greater downturn has affected our domestic audience most, with international readership holding up to the extent that it makes up better than two-thirds of our "hits".

The expected calm is by no means unwelcome, as it gives me an opportunity to catch up on recent events, as Booker and I are still completing the second edition of The Great Deception. Making sense of June, with the aftermath of the referendums and the European Council, is by no means an easy task.

One thing that as emerged in the aftermath, however, is a scatter of stories on the CAP, two yesterday in The Observer, and one in The Sunday Telegraph, plus another "debate" piece in The Guardian today. I thought initially, I would tag an analysis of these pieces to this post, but it has run to such a length that I will make the subject of a separate post for later today.

Another issue that has not yet emerged into either public or media consciousness is the effect of Blair's recent theatricals on the Conservative Party. Although Blog readers will be aware that his speeches were remarkable devoid of content, the impression the prime minister has conveyed is one of new-found Euroscepticism, which presents a singular threat ot the tepid Euroscepticism of the Tories, to the extent that they now feel threatened by it.

Thinking Tories – if there is such a breed – are acutely aware that, in the the recent South Staffordshire by-election, while Sir Patrick Cormack retained his seat on a swing of 1.56 percent, polling 13,343 votes, UKIP increased its share of the vote to 10.43 percent, up 6.69 percent, polling 2,675 votes and chasing the Lib-Dims for third place.

Given that the next general election may well coincide with the Euro-elections, whence the EU issue cannot be so easily marginalised, UKIP therefore continues to present a serious threat to the chances of the Conservatives getting re-elected and, if Blair, or his successor, has stolen their "Eurosceptic" clothes, the task may be even more difficult.

Under the surface, therefore, things are beginning to stir. Blair cannot be allowed to keep the intiative on an issue which the Tories regard as one of their stronger points and we may well, as a result, see a realignment and strengthening of Tory policy on the EU over the coming months.

It is too early yet to say what precisely might emerge, but it is always as well to remember that still waters run deep. Just because it is calm on the surface, don't mean that nuttin's happening. As always, we will try to keep you informed.

Maybe when they have set up their systems they will teach us

Here is some news to gladden one’s heart and tickle the funny bone. An agreement has been signed between Ghana and the European Union, whereby the EU will hand over €4.6 million (c 50.4 million cedis or just over £3 million) to support the Ghana Audit Service from 2005 to 2009.

The rationale, as expressed by Mr Kwadwo Baah-Wiredu, Ghanaian Minister of Finance and Mr Stefan Frowein, EU Ambassador (who says the EU has no diplomatic service?) is that as the EU handed over €27.8 million in budgetary support (a.k.a. aid) last year and will give another €24 million this year, the money ought to be properly audited.

In fact, the Ghana Audit Service has already had money from the European Union for the first phase of reform and strengthening and this had run successfully from 2000 to 2004.

One might wonder how is it that the recipient countries are left to audit funds handed over to them by donors, clearly in conditions that leave much to be desired. Would it not be better for the donors to do the auditing to find out where the money has gone to?

Well, maybe not. After all, the EDF (European Development Fund) and ECHO (European Commission Humanitarian Aid Office) are among the most problematic parts of the whole EU structure.

The Court of Auditors has produced report after report, lambasting every single project and it was a report by a special commission on certain activities within ECHO that brought down the Santer Commission.

And talking of the Court of Auditors, have we not had a bit of trouble there with the EU’s own budget? For instance, I cannot recall a single occasion on which the budget was signed off by the Court. Each time a devastating report appears, the Commission blusters and promises to mend its ways, gets the budget passed in the European Parliament (ex post facto) and the whole charade begins again.

This is what Ambassador Frowein said about the Ghana Audit Service:
“A supreme audit institution, like the Ghana Audit Service, needs to be a major watchdog to make sure public funds are used correctly, efficiently and effectively. This is obviously important as public funds are ultimately tax-payers' money and we all want to see our tax money spent correctly.”
Quite so. And maybe when the GAS has proved its worth it could send its representatives to Brussels to teach them about accounting for taxpayers’ money.

Sunday, June 26, 2005

I just love it

Confirming its growing reputation as an incisive commentator on EU affairs, The Business today offers a trenchant editorial on the Blair "smoke 'n' mirror show" under the heading: "Yet more Eurobabble from Tony Blair". The first two paragraphs are absolutely vintage:

If the congenitally gullible British media is to be believed, Europe has a new liberator: he goes by the name of Tony Blair and Britain's newspapers and broadcasters think he will triumphantly ride into Brussels on Friday (1 July) to inaugurate Britain's presidency of the European Union (EU) by unleashing a radical programme of market-based reforms and a bonfire of red tape that will make Europe great once more. Needless to say, this is pure nationalist fantasy, the latest manifestation of the conceit long embedded in the British political elite that if only its politicians were more committed to the EU then they could lead it. As an aspiration it is even more ludicrous than usual because this time it is to be achieved largely by the British Prime Minister's supposed force of conviction, charisma and skills as a salesman, allowing him to bypass Europe's discredited leaders and convince the people of the need for a dramatic break with the past in a mere six months. Forget New Labour, New Britain; now it is New Labour, New Europe.

The ludicrously-high expectations of what Mr Blair can achieve were exemplified by an embarrassingly naive double-page spread in the Blairite London Times on Saturday with a headline that would have made the old Pravda proud: "Britain is blowing a wind of change across Europe". We hate to rain on anybody's parade but this sort of journalism needs to take a cold shower because, to be blunt - it ain't gonna happen. Mark our words: it will all end in failure and embarrassment, for the Prime Minister and his desperate cheerleaders in Britain's Euro-sceptic press and the Tory Party, whose intellectual collapse accelerates by the week.
Cutting to the chase, the paper confirms this Blog’s own view that, at best, Blair may achieve one or two marginal reforms which, in best Blairite fashion, will be trumpeted as epoch-making (whereas, in fact, they will make no difference to the EU's decline). At worst, it says, and more likely), he will have no impact whatsoever on the course of European events, in line with most of the other recent presidencies, including the Dutch who were supposedly going to launch a deregulation drive.

The paper points out another issue familiar to our readers that, under the Treaties which shape how the EU operates, all proposed legislation or reform must originate from the Brussels Commission (the permanent bureaucracy), not the European Parliament, not ministers and therefore not Britain. In something of an understatement, it says:

That makes change even more difficult. For example, the British government has said that it will use its Presidency to slash red tape and save "hundreds of billions of euros". Aside from the fact that this is an aspiration it has yet to achieved in Britain, which must raise some doubts that it can do it on a European scale, it is simply unachievable given the current way the EU operates, regardless of the "significant political support" London claims from other members to pursue such an agenda.
The rest of the editorial is equally trenchant and well worth a read, not least the reminder that the dysfunctional Blair-Brown duumvirate is steadily re-shaping Britain in Europe's image. Thus do Blair-Brown mimic what they affect to despise. By adopting the social chapter, signing up to two integrationist European treaties and pushing through a huge number of large regulatory initiatives, Britain's supposedly fabled labour market flexibility has been drastically eroded. The British model is dying the death of a thousand Brown-Blair cuts and looking more like the sclerotic economies of continental Europe every year.

The paper concludes by saying that Europe's political establishment should relax. For Mr Blair to go to Europe and call for modernisation cannot possibly be construed as endorsing real free-market reform when the Blair-Brown government has spent its time doing the opposite at home. It is, therefore, it says, high time the British media regained its faculties and ceased treating Blair as a vanquishing hero. Nobody is happy with the status quo in Europe; but the European Establishment is not turning Euro-sceptic; neither is Blair.


With a new editor in charge of The Sunday Telegraph, last week’s Booker column was something of a dog's dinner in presentational terms as the new broom was still in the process of sweeping. However, a "new format" column has now emerged. Booker has been given an extra 200 words and a higher profile – and I get to keep my job.

Anyhow, to celebrate the expanded column, this week Booker has run no less than five stories, but the lead is a theme familiar to our readers, the Blair speeches and the EU constitution. Tony Blair, he writes, made just enough of the right noises to convince the more gullible sections of the media that he might be about to mastermind some miraculous transformation of the EU. Booker continues:

He talked about the need to hear the people of Europe blowing their trumpets outside the city walls. He talked of the need for "leadership", and how the EU needed to be "modernised", its economies deregulated, the Common Agricultural Policy reformed. If all this happened, he might even be prepared to renegotiate the British rebate.

But examine his speeches in Westminster and Brussels closely and they include not a single proposal as to how any of these wonders might be achieved. The financial arrangements for the CAP, as President Chirac reminds him, are set in stone for another eight years (and, as a Brussels official was last week quoted as saying, the agriculture which the CAP sustains is viewed as "the very fabric of European civilisation, a rampart against decline, the rural exodus, mushrooming urban sprawl, shanty towns, crime, violence, drugs").

Mr Blair was not so foolish as to suggest that a single power already handed over to Brussels should be returned. The Constitution may be in the deep-freeze, but the "European project" rolls on regardless, including policies which could only legally be implemented if the Constitution was ratified.

The only chance the peoples of Europe had to give a verdict on all this was through those referendums which, since the French and the Dutch said no, have been suspended indefinitely. Not least in the UK, people have therefore lost their last chance to express their concerns in a peaceful, democratic fashion.

There is not the slightest indication from Mr Blair or anyone else of how the EU could be reformed so as to turn it into anything other than what it is. The system of government which already produces half our laws is now more unaccountable than ever. We are subjected to a government which we cannot dismiss or replace, so that to a great degree we now in effect live in a one-party state.

All that has happened, as a result of the turbulence of the past month, is that we face on a "European" level the equivalent of that one-kilometre zone which Mr Blair has decreed should be set up round the Palace of Westminster, in which no demonstrations are to be allowed ever again. If the people wish to blow their trumpets, they can do so, But only so far from Jericho that they are out of earshot, so that our rulers within the city walls can continue ruling undisturbed.
A very familiar theme, our readers might think, but it bears repetition. And, in the same areas, for his second story, Booker retails the account of how, last Monday in the House of Lords, Lord Pearson of Rannoch asked about the various ways in which the EU is already implementing the "Constitution for Europe" without waiting for it to be ratified.

He asked the relevant minister, Baroness Amos, about the setting up of a "European space programme", the European Defence Agency, the European Fundamental Rights Agency and an EU diplomatic service, all of which are marching ahead without any proper legal authorisation.

The response from the minister, writes Booker, was astonishing. She made not the slightest attempt to answer his question, but merely lectured him on how he clearly did not understand the ratification process. Next day Lord Pearson, joined by Lord Waddington, a former Home Secretary, tried again. This time Lady Amos replied, "I am not aware of any formal or informal legislative proposals that rely on the treaty as their base". Despite having been caught out the day before, she had made not the slightest effort to do her homework.

Yet, as a Cabinet minister, Lady Amos receives £98,999 a year from the taxpayers. Why, if she is not prepared to produce slightly more serious answers to serious questions, do we have to shell out such a sum? Written questions have now been tabled in an effort to get the Baroness to do the job she is paid for.

Story three, which can be read online, is an update on the Lindstrand story, which goes on and on, without resolution, demonstrating just how corrupt (in the computer sense of being degraded) our government has become. Story four rehearses the theme we raised in this Blog, about the new EU proposals for the sugar regime, with Booker making the point that the inherent bias towards France is one of the reasons why the CAP is so loved by President Chirac.

Booker concludes with a salutory admonition: It is all very well for Mr Blair to talk airily about reforming the CAP, he writes. What he must remember is that it was devised in the 1960s by France, with the specific purpose of protecting French agriculture, so that the rest of Europe could pay for French surpluses twice over: first by subsidy, then by importing the produce. Despite at least three "reforms" of the CAP since, that principle remains sacrosanct. Mr Blair will be long gone before it is abandoned.

For the final story, Booker has a side-swipe at The Daily Mail – always good fun, especially when the Mail is in a sanctimonious mood. Again, it can be read online.

Saturday, June 25, 2005

The shame of the "super-soft" squidgy power

There is something particuarly shameful about the craven attitude of Britain towards its former colony Zimbabwe, and its homicidal dictator Mugabe. Not least is that our policy has been subsumed under the EU's common foreign policy and we are no longer free agents in this matter.

Instead of outright condemnation – and more – therefore, we have to sit and listen to El Presidente José Manuel Barroso express his "disappointment" with the African Union's silence on the clearance programme being undertaken by Mugabe, which may have made as many as 300,000 people homeless.

Thus, it is not Jack Straw – or Tony "Care" Blair – making the running, but Barroso. It is he who has been discussing Zimbabwe with South African President Thabo Mbeki. And all Barroso can come up with is the statement: "I was disappointed with the statement made by the African Union… Questions of human rights should be the concern of all people... these are universal values and everybody should respect those values."

If this is the EU's "soft" power, you can keep it. It is not so much "soft" as "super-soft" to the point of being squidgy – like an over-ripe Camembert, and just about as much use.

If ever there was an argument for "hard" power, on the US model, this is it. Mugabe's regime is so corrupt, all it would take would be the appearance of the 2nd Battalion, The Parachute Regiment, and it would fold. And if we need the money to finance an expedition – well, our MEPs are currently costing us in the order of £80 million a year. Get rid of them and we'd have change left over.

A wind of change?

An illustration of how difficult it is to assess the current situation is amply given by two newspapers this morning, the Financial Times and The Times. Reporting on exactly the same issue, the one offers the headline: "Blair's call for overhaul of EU falls on deaf ears", while the latter gives us: "A wind of change starts to blow across Europe."

The FT is unremittingly negative, citing Le Figaro, which notes that economic reforms can only be implemented by national governments rather than by the EU. And, it says, Blair's Third Way is not a model that could be exported to France and Germany because these countries have never experienced the necessary Thatcher revolution first.

France's politicians, the FT also tells us, are still fuming about the way Blair blocked the deal on the budget, stating that, from the French perspective, an achievable deal was wrecked by British intransigence. It then calls in aid Chirac’s Europe minister, Catherine Colonna, who is dismissive of Blair’s rhetoric, saying that his fine words would now be judged by what he could achieve during the UK's EU presidency.

"We will measure the concrete actions of the British presidency and its capacity to deliver common solutions to all of the most pressing questions, such as the EU budget, the social dimension for Europe, and the question of security," she says.

And, although Blair has signalled his willingness to compromise on the rebate the UK, we are told that French analysts suggest it would be near-impossible for Mr Chirac to reciprocate. Weakened by the "no" vote in the referendum, Chirac's position is being further eroded by the polarisation of the political debate ahead of the presidential elections in 2007.

Then, his rival for the presidency, Nicolas Sarkozy, is veering towards a nationalist stance that puts more pressure on Chirac not to compromise. On the left, as well, there is pressure. Laurent Fabius, described as the "intellectual champion of the 'no' vote," is performing a symmetrical trick in trying to mop up votes on the anti-European left.

The FT then quotes François Heisbourg, a political analyst, who says that although Mr Blair's rhetoric was impressive, it was unlikely to win over many minds in Paris. "The basic elements of the Blair agenda are extremely appealing," he says. But there are caveats. "First, does he believe what he is saying? Second, Blair's political credit has been eroded by the Iraq war. Do we now believe what this guy is saying?"

In a much longer piece, The Times retails how "jeers turned to cheers" during his speech to the EU parliament, with one Spanish journalist running out declaring: "I am convinced! He is absolutely right!"

By yesterday morning, says The Times, Blair had become the toast of Europe. Across the EU he is being hailed as the natural leader of the continent: the only man who can save Europe from itself. Italian politicians hailed Blair’s vision of Europe, declaring that a new "Rome-London axis" would provide the driving force of the new EU. Berlusconi is in "total accord" with him and Piero Fassino, leader of the Democrats of the Left, the main opposition party, said that Blair was charting the way for Europe.

The Times choses the left-wing French newspaper Libération for its quote on French sentiment, which declares in its headline: "Blair's new deal for Europe." It also picks up "the country’s most influential newspaper", Le Monde, which has backed Blair's demand for a reform of the CAP, calling for the partial renationalisation of farm aid.

Even Germany's "professionally Europhile journalists", according to The Times, are gushing with praise, with the Berliner Zeitung proclaiming Blair the new strongman of Europe. Die Welt has declared: "The British sense of freedom strengthens Europe."

And so on it goes, presenting a wholly different picture to that offered by the FT. But there is a note of reality creeping into The Times's picture, from the unlikely figure of Giscard d'Estaing. He believes that Britain was right to question EU spending, but adds: "there is a difference between winning a battle of ideas and influence, and actually getting reforms."

Furthermore, the paper notes that France, like every other country, retains the veto on any change in farm subsidies. Even if Chirac is no longer president after the 2007 elections, his successor will face the same pressure from French farmers not to cave in. If Frau Merkel wins the German election, she is also likely to be hostage to the Bavarian farming lobby.

The piece concludes with an observation from a British diplomat, who admits: "Things move slowly in Europe. But we can perhaps start the process of reform."

When it comes down to it, therefore, The Times, despite its optimistic headline, ends up close to the FT’s position. Effectively, its "wind of change" is a light summer breeze, not enough to lift a windsock or move a sailboat more than a snail's pace. And soon, if the FT is any guide, that will dissipate and we will end up becalmed. And after the calm, as we all know, comes the storm.

Friday, June 24, 2005

The march of integration (2)

Just to show that, despite the collapse of the constitution, nothing really has changed, yesterday policy experts, industry representatives and MEPs were meeting in Brussels to discuss what is currently one of the commission’s most treasured initiatives, its "Defence Equipment Policy".

And just to show how irrelevant member state governments really are, all these worthies agreed amongst themselves that national defence markets in Europe should be thrown open to cross-border competition.

First flagged up on this Blog in September 2004, the issue under discussion was the commission's Green Paper on defence procurement, and its intention to circumvent the "national interest" clause in the treaties which exempts defence equipment purchasing from the EU's procurement directives.

This "opt out", currently Article 296 of the EU constitution, is under attack from all quarters, not least German MEP Joachim Wuermeling, who is drafting a report on the issue for parliament's Internal Market Committee. "We have a big black hole [in defence procurement policy] at the moment," he says.

Alongside him is German Green MEP Angelika Beer, arguing that the European Union (i.e., member states) "cannot continue to have 25 watertight markets for defense equipment." Her party considers the commission's green paper proposals, which aim to remove the national opt-outs, as "very welcome".

At the moment, the commission is considering three possible approaches to breaking up national defence markets: a communication to clarify the limits of Article 296; a binding directive to apply EU procurement rules to the defence sector; and a voluntary code of conduct regarding the use of the article.

The EU's European Defence Agency (EDA) is drafting the code, ostensibly on behalf of national governments, but in fact, on the initiative of the commission. Basically, the commission has given member states an ultimatum that, unless it can come up with a workable voluntary code, which makes provision for sharing out defence work across all member states, or it will issue a draft directive with binding procurement rules.

And so, softly, softly, unannounced and unrecognised, doth the march of integration continue.

And the walls came tumbling down… (not)

There can have be few more assiduous euro-watchers than Ambrose Evans-Pritchard, of The Daily Telegraph, and still fewer who have been more meticulous in charting the fall and fall of the great single currency project.

His latest offering, in the business section of the Telegraph details how the "Eurozone's growth 'is grinding to a halt'", retailing a report by HSBC that claims the eurozone is sliding towards a Japanese-style "liquidity trap" and may have trouble holding monetary union together unless the EU authorities take prompt action.

The bank says that Germany is perilously close to deflation and it believes it is only a question of time before there are generalised price falls in the country. This will in turn raise more questions about the rules governing EMU and the sustainability of the single currency itself. Netherlands and Italy were also in danger.

Italy, currently competing for the "number one basket case" slot of the eurozone, is in "dire straits" after a "collapse" in productivity and negative growth for five out of the past nine quarters. "Italy has completely failed to adapt to the rigours of the fixed exchange rate," the bank says.

Its forecast is for 1.1 percent eurozone growth in 2005, but it warns that the zone may tip into recession as the global trade cycle turns down. Germany's exports to China are already falling. Furthermore, its warning comes as fresh data show a 3.9 percent fall in Italian retail sales in April, the worst monthly drop since records began.

According to Ambrose, the dreaded term "liquidity trap" was used by economist John Maynard Keynes in the 1930s when traumatised consumers and investors refused to spend, pushing prices ever lower. Deflation renders conventional monetary policy impotent as it is impossible to cut interest rates below zero (though there are other methods). Inflation-adjusted rates rise as the crisis deepens, causing mass bankruptcy.

Germany and Holland may now be slipping into this trap. Their core inflation is around 0.7pc, but on a downward glide path. The ECB's one-size-fits-all interest rate, stuck at 2pc as the bank still struggles to cool property booms in Spain, Greece, Ireland, and parts of France, is effectively driving Germany - and Holland - deeper into slump. Deflation is hard to stop once it becomes lodged in the system. Japan is now in its eight year of falling prices despite zero interest rates for much of the period.

Peter Wandesforde, HSBC's chief European economist, said the weaker euro has helped put off the day of reckoning. "We're not looking at the doomsday scenario quite yet: but it is a question of when, not if," he says.

Gazing at the crystal ball, however – even though it still has not had its 5,000 mile service – one cannot help but wonder whether this is not the opportunity that the "colleagues" have been waiting for. So far, the euro has led a charmed life, with the eurozone avoiding any major economic crisis. One is surely overdue.

But, as we have all observed, rather than being knocked back by crises, the EU seems to thrive on them. In fact, it was in 1975 that a Study Group on "Economic and Monetary Union 1980" observed that crises could be "the occasion of progress, by provoking a crystallisation of latent wills." "Great things are almost always done in crises," it observed, an early exposition of the doctrine we have come to know as the "beneficial crisis".

Famously, Prodi once exclaimed that the growth and stability pact was "stupid" but the context of his remark has been much misinterpreted. He was railing not so much against the pact itself, as at the inability of the commission to enforce it – the lack of a so-called economic government. Even as he left office as EU commission president, he bemoaned the its lack.

Thus, if in the near further, the eurozone does suffer a massive economic crisis, there may be many of the colleagues who welcome it as an opportunity to "crystallise latent wills" in order to launch the next major wave of integration.

After all, it was Monnet who so wanted a "Finance Common Market" leading to European economic unity. "Only then," he argued, "would… the mutual commitments make it fairly easy to produce the political union which is the goal." The lack of a European economic government remains a major stumbling block in the achievement of that goal and, as Blair said only recently, "In every crisis there is an opportunity." That might have been Monnet speaking.

Ban the trumpets

My wail of frustration in my overnight posting, occasioned by the dire commentary on Blair's speech in The Times, is in part assuaged by the leader in The Telegraph today.

Unlike the Thunderer – more like the Whimperer – the Telegraph takes on Blair's vacuous speech with the heading: "Europe needs hard decisions, not hot air." In so doing, it picks up his one of his more egregious clichés, "In every crisis there is an opportunity," suggesting that he might have added: "for flights of rhetoric".

It also picks up another "striking line from the speech": "The people are blowing the trumpets around the city walls." Blair's advice was that the politicians should leave the fortress and offer the people the "leadership" which, apparently, they demand. But this, says the Telegraph, is a curious reworking of the story. According to the Bible, it was not Jericho's leadership which Israel demanded, but its submission. The trumpets are indeed blowing, and the EU does not have long to comply.

Interestingly, Andrew Gimson, in the Telegraph's parliamentary sketch picks up this "arresting phrase", noting that "some of us started to feel a bit nervous". We looked around at the walls of the vast, circular parliament chamber, he writes, and wondered whether they were about to collapse. But try as we might, we could not hear the people blowing their trumpets above the sound of Mr Blair blowing his own trumpet.

As to the response of the MEPs, one can imagine that, unlike the denizens of Jericho who succumbed to the sound of trumpets, even now they will be crafting an amendment to the physical agents directive, banning the use of trumpets within 1km of their walls. As for anything more substantive, the EU is a machine without a stop button. It is going to take more than trumpets, whether from Blair or the rest of us, to bring it down.

Looking to the future?

There is a certain amount of discussion in the media both here and in the United States, where there is a temporary spate of interest in European affairs, of where Mr Blair can find his allies in the fight for the reform of the EU.

There are, to begin with, two objections to the whole scenario. One is that a slightly reformed and more efficient EU is not a desideratum, any more than Gorbachev’s putative more efficient Communism was. In fact, both are complete impossibilities.

The other problem is that Mr Blair, as we have discussed several times on this blog, has no clear idea of what it is he wants the EU to become and how to go about achieving it. His “opponents”, mostly the fearsome threesome of Juncker, Chirac and Schröder, on the other hand, know the answers to both those questions extremely well.

But a few tinkering agreements may be possible. Where are those allies going to come from?

The obvious answer is the new member states, who would certainly support Britain, should this country lead a break-up of the foreign and security policy. Without being Atlanticist or Anglophone, those countries perceive Russia as the enemy and are considerably less anti-American than the west Europeans. The reasons for that are obvious and lie in very recent history.

Alas, in this as in various other matters, Britain is letting them down. There is no movement to break up the CFSP and to refashion the strategic architecture in a more sensible fashion.

When it comes to the budget, the situation is a little more murky. The East Europeans are hoping for greater hand-outs, though they do not seem to be able to deal with the money they already have.

Whether the hand-outs come from the rebate or from a bigger input into the budget from the West Europeans matters less to them than the final outcome. They are, therefore, more likely to heed the siren call of the French, probably realizing that reform of CAP is an unlikely scenario. Noticeably, that is rarely mentioned by East Europeans.

There are the Scandinavians and the Dutch, who are unhappy with the way the EU is going and may well be instrumental in some very serious changes. Possibly, they, rather than the British, will be the ones to bring about the project’s demise.

France and Germany remain the biggies and Blair is clearly beginning to address his vaporous comments to the successors of the present lame-duck leaders.

Chirac may or may not stand in 2007. If he does not, he will move heaven and earth to ensure that his successor will be Dominique de Villepin but he may not manage it. In which case, it will probably be Nicola Sarkozy.

Where do these two gentlemen stand on the EU? We know about Villepin. He is a ferocious anti-American and sees the EU and all its dealings in terms of what is best for France. He does not even disguise his opinion that the universally recognized anomaly of the CAP is nothing of the kind, since it benefits France and what benefits France, according to the self-published poet, benefits Europe. Toujours l’audace.

Sarkozy has been a little more circumspect. He has made no statements about the CAP, preferring to focus on the need for more money to be invested in research and development and omitting to mention how much of that would come to France.

It is clear from comments made by his staff and supporters that he will never depart from the French presidential line about CAP. He wants to win, doesn’t he?

Ths former Socialist Laurent Fabius, whose involvement in a sordid scandal to do with transfusion of infected blood and people dying of AIDS has done him no harm at all, led the no campaign. His line is that Chirac is not doing his best for France because he is not ensuring that the EU budget becomes bigger as France needs both the CAP and more funds for research.

That leaves Germany, where the likelihood is that Schröder and the SDP will lose the September elections to Angela Merkel and the CDU. (Nobody is making any bets on Italian politics. How wise.)

Germany may well become interesting. Unlike France, the country is beginning a slow and painful internal reform process, though it often reminds one of Lenin’s title “One step forward, two steps back”. (That was about the German Social-Democrats as well, oddly enough.)

The CDU with its probable coalition partner, the Free Democrats, is committed to some idea of a reform, as it is clear to the meanest intellect that the German economy cannot keep on spluttering the way it does without there being really serious problems and upheavals.

She and the CDU foreign policy spokesman, Friedbert Pflüger, have already made noises to the effect that the foreign policy is likely to change under their rule. Becoming slightly more pro-American and less pro-French is not very expensive and not likely to be too unpopular. Schröder’s policy of slavishly following Chirac and boxing Germany into a corner was not altogether popular, particularly if that meant no American support for the cherished German plan of a permanent seat on the UN Security Council.

What of the CAP and the budget? There are cautious comments coming out of the CDU that they would be interested in a wholesale reform of the latter and some changes in the former. Clearly, they cannot be too outspoken as their sister party, the Bavarian CSU will fight any reform of the CAP tooth and nail.

Here, however, we must take note of an important aspect of the discussion and that is the background and personality of the new leader. Angela Merkel is not just going to be the first woman Chancellor (and the first woman leader of something called Germany since the early Middle Ages) but she is an Ossie.

She grew up in East Germany. Her father was a Lutheran pastor, which means there must have been various problems for the family and, also, that she learnt early not to express too many opinions.

She is a physicist by training, which also puts her out of step with much of the German political establishment, and her first political experiences were in the dissident and opposition movement in the DDR.

Her talents were recognized by Lothar de Maizière, the first elected leader of East Germany and by Helmut Kohl. But she realized very quickly when the financial scandals broke around the latter that she had to distance herself from him.

Her rise in the CDU has not been easy, it being a somewhat crusty, male-dominated organization. But there she is, at the top, with an outlook on the world that is likely to be very different from all her predecessors.

Whether she will be Blair’s ally remains to be seen. The likelihood is that Blair will have forgotten his fight to “modernize” the EU by the time Merkel’s probable election takes place. But that she will be an unpredictable force for change cannot be denied.