In August last year, we told a sorry little tale about how small horticultural producers in Kenya were being drowned in EU red tape and were simply unable to cope.
Their problem was and is that, in order to continue exporting to EU member states – their main outlet - they had to conform with new rules on quality audits, which included the traceability amendment 178/2005. All exports into the EU had to be traceable to the grower.
This law and the numerous, mandatory codes of practice being imposed on the industry were pushing production costs higher and eroding investor profits and squeezing the small producers out of business. Only the larger growers had the resources (and skills) to deal with the paperwork and, out of the 200 or so registered growers supplying the export market, only about six big companies were expected to survive.
Now, at least, according to The Nation in Nairobi, earnings from flower exports have been growing by leaps and bounds and exporters are smiling all the way to the banks.
Kenya is the leading exporter of flowers to Europe, commanding 25 percent of total sales. It beats Israel and Colombia which are second and third respectively. Every year, at least extra 500 acres are put under flower farms - arguably the fastest expansion rate in the world. And, clearly, the surviving growers are coping with the paperwork.
So far so good, one might say, except that far from smiling, many of the workers are weeping all the way to the hospitals. Some have been forced into early retirement prompted by ill health resulting from handling unsafe chemicals. In one of the major flower-growing areas, more than 50,000 flower farm labourers live in the area with their families, a distressing number of them half-blind, permanently scarred or hairless as a result of their contact with toxic chemicals.
The Nation reports that animals have not been spared either. Early this year, fumigation chemicals at one of the farms were mixed with water but the lethal mixture found its way out of the farm, into the wild and, eventually into Lake Naivasha. Fishermen found dead fish floating on the water. Two hippos and about 12 cows belonging to Maasai herdsmen also died after drinking the water.
Not far from the labourers dwellings is a clinic set up for them. One of the doctors there says most the cases he encounters range from chronic bronchitis, breathing problems, severe headaches, loss of hair and acute chest pains - maladies he attributes to overexposure to dangerous substances.
Workers complain of inadequate or non-existent training, shortage or absence of protective equipment, lack of labelling and warnings, and the use of banned substances. They also talk of a hostile management culture where workers who make complaints are immediately fired. One worker says, "The best thing in the circumstances is to keep quiet and pray to God". The 50-plus owners of the farms have a mechanism where workers can easily be blacklisted in all the farms.
A storekeeper tells of his experience over four years when, he says, he has often handled unlabelled chemicals. When inspectors from the Pest Control Products Board come checking, he claims, workers are directed to hide the unlabelled bottles in a manager's house.
Official agencies like the Board, supposed to monitor the health of workers, are proving toothless so, asks The Nation, who will come to the assistance of the affected workers?
Well, clearly not EU inspectors. A manager at Homegrown Flowers, one of the largest flower farms in Kenya, which sits on more than 25,000 acres, says that vigorous audits and inspection exercises conducted by independent experts mainly from Europe have found out that the flower farms comply with the EU's hygiene rules and the European Good Agricultural Practices. Clearly, the right paperwork has been filled in, somewhat confirming our impression that the paper, not practice is the key, as far as the buyer is concerned.
However, the indifference to worker safety, and the tolerance of highly dangerous chemicals contrasts strongly with the EU’s paranoia over the relatively benign DDT, which the Ugandans want to reintroduce to control malaria.
How typical of the EU to over-react when there is no significant threat and to sit idly by when there is real harm to health – a classic example of the sledgehammer to miss the nut.
COMMENT THREAD
Thursday, August 25, 2005
Wednesday, August 24, 2005
Critical infrastructure
The EU, we are told by Euractiv has stepped up efforts to protect itself against terrorism. Attacks on infrastructure such as transport, energy and communication have the potential to be highly disruptive. Therefore, the EU wants to co-ordinate efforts in member states and reassure the public that efficient alert and information systems are in place to protect the main elements of critical infrastructure.
Critical infrastructures, says the EU commission, "consist of those physical and information technology facilities, networks, services and assets which, if disrupted or destroyed, would have a serious impact on the health, safety, security or economic well-being of citizens or the effective functioning of governments in the member states. Critical infrastructures extend across many sectors of the economy, including banking and finance, transport and distribution, energy, utilities, health, food supply and communications, as well as key government services."
"Because of the private ownership of major elements of critical infrastructure any security and control measures will (almost by definition) require the involvement of both private and public interests. National authorities will often have sole competence in the area. There is, however, often a level of transnational interdependence involved, which makes it clear that the EU should also play a certain co-ordinating role."
So there we are – this is none of the commission’s business but, since there is "often a level of transnational interdependence involved", the commission is going to get involved anyway.
This is the sort of thing – reproduced verbatim – is what is being churned out in our name. The presumption is colossal – implying that the EU has any capabilities in this field, when it is totally reliant on member states for any specific action.
Anyhow, the EU proudly informs us that the Critical Infrastructure Warning Information Network (CIWIN) and the European Network and Information Security Agency (ENISA) are in the process of being set up, the latter being one of the agencies agreed in Brussels in December 2001. This one will have its seat in Heraklion (Greece).
ENISA's mission is "to assist the Community in ensuring particularly high levels of network and information security". The Agency will therefore "contribute to the development of a culture of network and information security for the benefit of the citizens, consumers, enterprises and public sector organisations of the European Union, consequently contributing to the smooth functioning of the internal market."
The magic words are, of course, the "internal market" and it on that rests its somewhat spurious legal authority to act. And the main way the agency is going to work is by "the development of standards for products and services" on Network and Information Society – harmonisation by any other name.
Where sectorial standards do not exist "or international norms have not yet been established, the European Committee for Standardization (CEN) and other relevant standardisation organisations should propose uniform security sectorial and adapted standards for all the various branches and sectors interested." Such standards should be also proposed at an international level through ISO in order to establish a proper level playing field in this respect.
The sheer arrogance of this presumption is breath-taking. The European Programme for Critical Infrastructure Protection, says the Commission, is demanding that the Commission produce an annual communication to take stock of progress made and the challenges ahead. As if this thing was a human being?
The "programme" is says, will integrate the various analyses and measures across the different sectors of the economy. Member state governments will develop and maintain databases of significant critical infrastructure on a national basis and will be responsible for developing, validating and auditing relevant plans to ensure continuity of services in case of an attack under their jurisdictions.
And all because, we are told, "Europeans expect critical infrastructures to function, regardless of which organisations own or operate the component parts. They expect member states and the EU to play a leadership role in ensuring this happens."
Funny thing though, apart from the zombies in Brussels, I have never yet heard anyone suggest that the EU should play "a leadership role" in ensuring the functioning of our "critical infrastructures". I wonder where they got that from?
COMMENT THREAD
Critical infrastructures, says the EU commission, "consist of those physical and information technology facilities, networks, services and assets which, if disrupted or destroyed, would have a serious impact on the health, safety, security or economic well-being of citizens or the effective functioning of governments in the member states. Critical infrastructures extend across many sectors of the economy, including banking and finance, transport and distribution, energy, utilities, health, food supply and communications, as well as key government services."
"Because of the private ownership of major elements of critical infrastructure any security and control measures will (almost by definition) require the involvement of both private and public interests. National authorities will often have sole competence in the area. There is, however, often a level of transnational interdependence involved, which makes it clear that the EU should also play a certain co-ordinating role."
So there we are – this is none of the commission’s business but, since there is "often a level of transnational interdependence involved", the commission is going to get involved anyway.
This is the sort of thing – reproduced verbatim – is what is being churned out in our name. The presumption is colossal – implying that the EU has any capabilities in this field, when it is totally reliant on member states for any specific action.
Anyhow, the EU proudly informs us that the Critical Infrastructure Warning Information Network (CIWIN) and the European Network and Information Security Agency (ENISA) are in the process of being set up, the latter being one of the agencies agreed in Brussels in December 2001. This one will have its seat in Heraklion (Greece).
ENISA's mission is "to assist the Community in ensuring particularly high levels of network and information security". The Agency will therefore "contribute to the development of a culture of network and information security for the benefit of the citizens, consumers, enterprises and public sector organisations of the European Union, consequently contributing to the smooth functioning of the internal market."
The magic words are, of course, the "internal market" and it on that rests its somewhat spurious legal authority to act. And the main way the agency is going to work is by "the development of standards for products and services" on Network and Information Society – harmonisation by any other name.
Where sectorial standards do not exist "or international norms have not yet been established, the European Committee for Standardization (CEN) and other relevant standardisation organisations should propose uniform security sectorial and adapted standards for all the various branches and sectors interested." Such standards should be also proposed at an international level through ISO in order to establish a proper level playing field in this respect.
The sheer arrogance of this presumption is breath-taking. The European Programme for Critical Infrastructure Protection, says the Commission, is demanding that the Commission produce an annual communication to take stock of progress made and the challenges ahead. As if this thing was a human being?
The "programme" is says, will integrate the various analyses and measures across the different sectors of the economy. Member state governments will develop and maintain databases of significant critical infrastructure on a national basis and will be responsible for developing, validating and auditing relevant plans to ensure continuity of services in case of an attack under their jurisdictions.
And all because, we are told, "Europeans expect critical infrastructures to function, regardless of which organisations own or operate the component parts. They expect member states and the EU to play a leadership role in ensuring this happens."
Funny thing though, apart from the zombies in Brussels, I have never yet heard anyone suggest that the EU should play "a leadership role" in ensuring the functioning of our "critical infrastructures". I wonder where they got that from?
COMMENT THREAD
He isn't even a Conservative
Ferdinand Mount does a fairly comprehensive demolition job on Clarke in The Telegraph today, following Clarke's recantation on the euro and much more besides.
From this account, it is pretty well a "given" that Clarke's motivation is less than sincere, his recantation being seen simply as a rather transparent ploy to clear the way for his election bid as Tory leader. "I am afraid nobody is fooled," writes Mount. "One cannot help recalling the heckler who replied to Harold Wilson's rhetorical question 'Why am I standing up for the Royal Navy?' with the words 'Because you're in Chatham'." "Ken Clarke is a decent bloke… and he might make a splendid President of France. I just don't think he's one for us," Mount concludes.
I think the most damning comment I've heard about Clarke actually came from an MP of my acquaintance who, on hearing of his leadership ambitions, wailed, "but he isn't even a Conservative!"
COMMENT THREAD
From this account, it is pretty well a "given" that Clarke's motivation is less than sincere, his recantation being seen simply as a rather transparent ploy to clear the way for his election bid as Tory leader. "I am afraid nobody is fooled," writes Mount. "One cannot help recalling the heckler who replied to Harold Wilson's rhetorical question 'Why am I standing up for the Royal Navy?' with the words 'Because you're in Chatham'." "Ken Clarke is a decent bloke… and he might make a splendid President of France. I just don't think he's one for us," Mount concludes.
I think the most damning comment I've heard about Clarke actually came from an MP of my acquaintance who, on hearing of his leadership ambitions, wailed, "but he isn't even a Conservative!"
COMMENT THREAD
Out of control
The news today is that nearly a quarter of a million workers from the east and central European enlargement countries have arrived to work in Britain over the past year. (See Daily Telegraph report.)
Half the 232,000 applicants for work under the special registration scheme, in the period May 2004 and June 30 this year have been Polish, predominantly in their 20s, and by far the majority have taken jobs in the catering and hospitality sectors.
One holds no truck with those who hold up their hands in horror at the influx. Having worked in the hotel industry, I am all too familiar the problems of recruiting staff and, even during periods of recession, we often found that we could not get staff for certain jobs at any price. To have these cheerful, hard-working and often well-educated youngsters is a boon.
But what cannot pass without comment is the sheer incompetence of Home Office forecasting, which predicted an increase of up to 13,000 workers a year, when the actual number is 232,000 – 15 times more than the forecast. And that is the number the Home Office know about. Those who chose not to register can still apply legally for jobs, and there are no records kept of people who take this option.
However, many of these youngsters have no intention of staying in the country. They are often here temporarily and return to their own country, or move on to others, and therefore impose very little strain on the infrastructure of this country.
The point is, though, that the UK has absolutely no control over the situation. Having elected to grant eastern and central European citizens "freedom of establishment" and being required to grant them free access to the country under EU treaties, the fact that the flow is currently beneficial is not of the government's making.
According to the Telegraph, Sir Andrew Green, chairman of the Migrationwatch UK think-tank, says: "The Home Office must reduce the number of work permits granted to people from outside the EU to compensate for this very large inflow." That may or may not be necessary but, at the very least, we should be able to record – and have the option to control – the numbers entering this country for work.
As it stands, we have given up that control, and can only watch impotently as numbers vastly exceed our expectations. All other issues apart, that is not acceptable.
COMMENT THREAD
Half the 232,000 applicants for work under the special registration scheme, in the period May 2004 and June 30 this year have been Polish, predominantly in their 20s, and by far the majority have taken jobs in the catering and hospitality sectors.
One holds no truck with those who hold up their hands in horror at the influx. Having worked in the hotel industry, I am all too familiar the problems of recruiting staff and, even during periods of recession, we often found that we could not get staff for certain jobs at any price. To have these cheerful, hard-working and often well-educated youngsters is a boon.
But what cannot pass without comment is the sheer incompetence of Home Office forecasting, which predicted an increase of up to 13,000 workers a year, when the actual number is 232,000 – 15 times more than the forecast. And that is the number the Home Office know about. Those who chose not to register can still apply legally for jobs, and there are no records kept of people who take this option.
However, many of these youngsters have no intention of staying in the country. They are often here temporarily and return to their own country, or move on to others, and therefore impose very little strain on the infrastructure of this country.
The point is, though, that the UK has absolutely no control over the situation. Having elected to grant eastern and central European citizens "freedom of establishment" and being required to grant them free access to the country under EU treaties, the fact that the flow is currently beneficial is not of the government's making.
According to the Telegraph, Sir Andrew Green, chairman of the Migrationwatch UK think-tank, says: "The Home Office must reduce the number of work permits granted to people from outside the EU to compensate for this very large inflow." That may or may not be necessary but, at the very least, we should be able to record – and have the option to control – the numbers entering this country for work.
As it stands, we have given up that control, and can only watch impotently as numbers vastly exceed our expectations. All other issues apart, that is not acceptable.
COMMENT THREAD
EU to the rescue?
One has every sympathy with the Portuguese having to deal with the awful fires that are sweeping areas of their parched land, especially those in Coimbra where the fires had reached some parts of the city of more than 100,000 people.
And congratulations must go to the French government which has sent two Canadair firefighting aircraft to help, and Spain which has sent one. Germany has despatched three helicopters and Italy has pitched in with another Canadair. The Dutch air force has contributed two Cougar helicopters, each capable of carrying 500 gallons of water.
But there is something particularly distasteful about the former prime minister of that benighted land, one José Manuel Barroso, currently presidente of the EU commission, who is claiming credit for the EU in despatching the aid, attracting headlines from around the world to the effect that "EU helps Portugal fight fires".
"I welcome the speed with which the commission and member states have been able to respond to the urgent request for help," says Barroso, without a hint of embarrassment. Er… excuse me, just how many fire-fighting aircraft has the EU got?
This, of course, is not the first time Barroso has pulled this tawdry trick, being very much in evidence during the Tsunami crisis, claiming on behalf of the EU all the funds that had been pledged by individual member states,
Unable to do anything constructive, and uniquely incompetent at everything it tackles, the EU is the ultimate parasite, living off the reflected glory, missing no opportunity to claim for itself credit for the fruits of others' efforts.
Still, for an organisation that parades itself as the body which has "kept the peace in Europe", only grudgingly acknowledging the existence of Nato – and not at all the support of the US in that organisation – this is exactly what you would expect of such a low-grade bunch of shysters.
COMMENT THREAD
And congratulations must go to the French government which has sent two Canadair firefighting aircraft to help, and Spain which has sent one. Germany has despatched three helicopters and Italy has pitched in with another Canadair. The Dutch air force has contributed two Cougar helicopters, each capable of carrying 500 gallons of water.
But there is something particularly distasteful about the former prime minister of that benighted land, one José Manuel Barroso, currently presidente of the EU commission, who is claiming credit for the EU in despatching the aid, attracting headlines from around the world to the effect that "EU helps Portugal fight fires".
"I welcome the speed with which the commission and member states have been able to respond to the urgent request for help," says Barroso, without a hint of embarrassment. Er… excuse me, just how many fire-fighting aircraft has the EU got?
This, of course, is not the first time Barroso has pulled this tawdry trick, being very much in evidence during the Tsunami crisis, claiming on behalf of the EU all the funds that had been pledged by individual member states,
Unable to do anything constructive, and uniquely incompetent at everything it tackles, the EU is the ultimate parasite, living off the reflected glory, missing no opportunity to claim for itself credit for the fruits of others' efforts.
Still, for an organisation that parades itself as the body which has "kept the peace in Europe", only grudgingly acknowledging the existence of Nato – and not at all the support of the US in that organisation – this is exactly what you would expect of such a low-grade bunch of shysters.
COMMENT THREAD
Tuesday, August 23, 2005
Conflicting signals
Britain and the United States plan to deepen collaboration in defence research with the creation of a groundbreaking technology alliance to undertake work in network and information sciences.
So reports DefenseNews this week, retailing that industry and academia from both sides of the Atlantic have been invited to collaborate with the US Army Research Laboratory and the MoD in a single team known as the International Technology Alliance (ITA).
The team, we are told, is slated to investigate four areas of emerging technologies, including "network theory", and the first phase of the programme is expected to cost about $150 million. It could run for up to 10 years with funding split 50-50 between the two governments.
What is interesting is that this is old news, the details having been finalised in 29 July this year, yet only now do we see any publicity. One wonders if this is more government spin to counter charges that it has adopted a "Europe first" policy on defence procurement.
Certainly, none of the US big-hitters seem interested, with Northrop and Raytheon telling Defense News they would not be submitting proposals. And the money on offer – by defence standards – is not even small change, a fraction of the £5.8 billion so far wasted by the MoD on European projects.
While this might suit MoD propaganda purposes though, Janes Weekly reports that a delegation of UK MPs have recently returned from a little-publicised visit to Washington, DC, where they discussed the problems of military technology transfer.
They claim that US congressmen do not want to see the UK "frozen out" of the Joint Strike Fighter (JSF) programme and, speaking to their counterparts in the US, have highlighted MoD concerns that the UK will not have full access to JSF technology and thus be unable to maintain or modify its own aircraft.
The delegation included Peter Viggers (MP for Gosport), who said the technology transfer issue was "worrying for the defence industry and for the UK government", and accepted it was having a delaying effect on the future aircraft carrier programme.
So, on the one hand, we see a penny-ante little scheme between the US and UK, which probably does not even involve any restricted material while, on the other, we have US reluctance to share technology holding up a multi-billion flagship programme.
Conflicting signals there may be, but the message is pretty clear.
COMMENT THREAD
So reports DefenseNews this week, retailing that industry and academia from both sides of the Atlantic have been invited to collaborate with the US Army Research Laboratory and the MoD in a single team known as the International Technology Alliance (ITA).
The team, we are told, is slated to investigate four areas of emerging technologies, including "network theory", and the first phase of the programme is expected to cost about $150 million. It could run for up to 10 years with funding split 50-50 between the two governments.
What is interesting is that this is old news, the details having been finalised in 29 July this year, yet only now do we see any publicity. One wonders if this is more government spin to counter charges that it has adopted a "Europe first" policy on defence procurement.
Certainly, none of the US big-hitters seem interested, with Northrop and Raytheon telling Defense News they would not be submitting proposals. And the money on offer – by defence standards – is not even small change, a fraction of the £5.8 billion so far wasted by the MoD on European projects.
While this might suit MoD propaganda purposes though, Janes Weekly reports that a delegation of UK MPs have recently returned from a little-publicised visit to Washington, DC, where they discussed the problems of military technology transfer.
They claim that US congressmen do not want to see the UK "frozen out" of the Joint Strike Fighter (JSF) programme and, speaking to their counterparts in the US, have highlighted MoD concerns that the UK will not have full access to JSF technology and thus be unable to maintain or modify its own aircraft.
The delegation included Peter Viggers (MP for Gosport), who said the technology transfer issue was "worrying for the defence industry and for the UK government", and accepted it was having a delaying effect on the future aircraft carrier programme.
So, on the one hand, we see a penny-ante little scheme between the US and UK, which probably does not even involve any restricted material while, on the other, we have US reluctance to share technology holding up a multi-billion flagship programme.
Conflicting signals there may be, but the message is pretty clear.
COMMENT THREAD
The power of the net
According to a UPI report, published on the Science Daily site, the internet in France was a potent source of opposition to the EU constitution
This is based on a study by researchers at the University of Technology of Compiegne who found that 67 percent of French said they opposed the EU charter, when asked to expressed their opinions on some 295 Web sites dedicated to the question.
Some 79 percent of anti-constitution Web sites directed surfers to other anti-charter sites. Only 64 percent of sites supporting the constitution did the same.
"The Web served as a political tribunal for those who considered themselves distanced from television formats or big-time media, transforming the Web into a sort of negative medium," that apparently helped reinforce the negative vote, wrote Franck Ghitalla and Guilhem Fouetillou, two of the study's authors.
Small in numbers we may be, but ignore us at your peril.
COMMENT THREAD
This is based on a study by researchers at the University of Technology of Compiegne who found that 67 percent of French said they opposed the EU charter, when asked to expressed their opinions on some 295 Web sites dedicated to the question.
Some 79 percent of anti-constitution Web sites directed surfers to other anti-charter sites. Only 64 percent of sites supporting the constitution did the same.
"The Web served as a political tribunal for those who considered themselves distanced from television formats or big-time media, transforming the Web into a sort of negative medium," that apparently helped reinforce the negative vote, wrote Franck Ghitalla and Guilhem Fouetillou, two of the study's authors.
Small in numbers we may be, but ignore us at your peril.
COMMENT THREAD
The lawyers' delight
The Financial Times is running today with a story about the "denied boarding" regulations, headlining: "EU airlines count cost of compensation confusion".
When we first dealt with this issue in February last, we noted that the terms under which compensation would be payable specified "certain circumstances" which were by no means clearly stated.
Predictably, therefore, the airlines financed a reference to the ECJ, arguing that the regulation denies air carriers any defence against claims for delays caused by extraordinary circumstances such as bad weather, or acts of third parties such as an Air Traffic Control strike.
Now, featured in the FT, Simon Evans, chief executive of the Air Transport Users Council is noting that the number of complaints and queries received on passenger compensation has increased fourfold. "These rules have certainly raised expectations among passengers about what they can get if they have had a bad travel experience," he says.
But, he adds, the EU legislation has also created an unprecedented legal quagmire. Some airlines are saying the rules have left them with an unsustainable financial risk. Low-cost carriers in particular insist they could be forced to reimburse many times the actual price of a ticket.
Ryanair, Europe's largest low-cost airline, is among airlines that have so far resisted paying the new compensation claims. Jim Callaghan, its head of regulatory affairs, says the new rules are "a complete mess". He cites how a family of five that paid a total of €168 ($204) for their flight but were asking for compensation of €1,980 following a cancellation due to weather. In another case a woman who paid €46 for her flight was asking for €400. "This is how insane the situation is," he says.
Early next month, the advocate general of the European Court of Justice, the EU's highest court, is expected to give an opinion on the rules, following challenges by the International Air Transport Association and the European Low Fares Airlines Association.
Iata estimates applying the rules will cost EU airlines €560m a year, over and above existing compensation. For a medium-sized European carrier that amounts to about €40m a year - about a fifth of its operating profit - according to Iata's calculations.
Mark Franklin, head of the aviation group at DLA Piper Rudnick Gray Cary, an Anglo-American law firm, says: "Airline legislation is supposed to be part of a uniform worldwide system and the EU has certainly changed a major part of it."
Needless to say, "Brussels" is unrepentant, hopeful that the rules will provide an incentive for airlines to reduce delays and cancellations except where there are "extraordinary circumstances", such as the wildcat strike that left thousands of British Airways passengers stranded earlier this month.
Jacques "Wheel" Barrot, the EU's transport commissioner, has also argued that airlines should take advantage of the "better-quality image" provided by the legislation at a time when European passengers are becoming more litigious.
In the short term, however, says the FT, lawyers stand to benefit. In the UK, the first court hearings on passenger claims relying on the new rules are expected by the end of the year. Several law firms, meanwhile, have been busy advising airlines on how to fend off hefty claims and turn the "extraordinary circumstances" exemption clause in the new rules to their advantage.
"We have had a steady flow of questions from airlines," says Franklin. And there have been several small cases where people have sued airlines. He insists it is the "uncertainty and obscurity in the law that is the main source of why people come to us".
Don't you just love it. Even when making its own laws the EU is incompetent and, as always, the main beneficiaries are the lawyers.
COMMENT THREAD
When we first dealt with this issue in February last, we noted that the terms under which compensation would be payable specified "certain circumstances" which were by no means clearly stated.
Predictably, therefore, the airlines financed a reference to the ECJ, arguing that the regulation denies air carriers any defence against claims for delays caused by extraordinary circumstances such as bad weather, or acts of third parties such as an Air Traffic Control strike.
Now, featured in the FT, Simon Evans, chief executive of the Air Transport Users Council is noting that the number of complaints and queries received on passenger compensation has increased fourfold. "These rules have certainly raised expectations among passengers about what they can get if they have had a bad travel experience," he says.
But, he adds, the EU legislation has also created an unprecedented legal quagmire. Some airlines are saying the rules have left them with an unsustainable financial risk. Low-cost carriers in particular insist they could be forced to reimburse many times the actual price of a ticket.
Ryanair, Europe's largest low-cost airline, is among airlines that have so far resisted paying the new compensation claims. Jim Callaghan, its head of regulatory affairs, says the new rules are "a complete mess". He cites how a family of five that paid a total of €168 ($204) for their flight but were asking for compensation of €1,980 following a cancellation due to weather. In another case a woman who paid €46 for her flight was asking for €400. "This is how insane the situation is," he says.
Early next month, the advocate general of the European Court of Justice, the EU's highest court, is expected to give an opinion on the rules, following challenges by the International Air Transport Association and the European Low Fares Airlines Association.
Iata estimates applying the rules will cost EU airlines €560m a year, over and above existing compensation. For a medium-sized European carrier that amounts to about €40m a year - about a fifth of its operating profit - according to Iata's calculations.
Mark Franklin, head of the aviation group at DLA Piper Rudnick Gray Cary, an Anglo-American law firm, says: "Airline legislation is supposed to be part of a uniform worldwide system and the EU has certainly changed a major part of it."
Needless to say, "Brussels" is unrepentant, hopeful that the rules will provide an incentive for airlines to reduce delays and cancellations except where there are "extraordinary circumstances", such as the wildcat strike that left thousands of British Airways passengers stranded earlier this month.
Jacques "Wheel" Barrot, the EU's transport commissioner, has also argued that airlines should take advantage of the "better-quality image" provided by the legislation at a time when European passengers are becoming more litigious.
In the short term, however, says the FT, lawyers stand to benefit. In the UK, the first court hearings on passenger claims relying on the new rules are expected by the end of the year. Several law firms, meanwhile, have been busy advising airlines on how to fend off hefty claims and turn the "extraordinary circumstances" exemption clause in the new rules to their advantage.
"We have had a steady flow of questions from airlines," says Franklin. And there have been several small cases where people have sued airlines. He insists it is the "uncertainty and obscurity in the law that is the main source of why people come to us".
Don't you just love it. Even when making its own laws the EU is incompetent and, as always, the main beneficiaries are the lawyers.
COMMENT THREAD
"Secretive and sloppy"
This could apply to any and all of the EU institutions – and more besides – but in this case it describes the European Central Bank.
So says Prof Charles Goodhart, a former member of the Bank of England's monetary policy committee, as recorded by Ambrose Evans-Pritchard in today's Telegraph. To its sins, Goodhart adds "ineptitude", saying that the ECB's claim to manage inflation over the "medium term" was an empty mantra that let it dodge responsibility for failures.
This is in an open letter to ECB president Jean-Claude Trichet, published in the journal, Central Banking, where Goodhart slams the "conscious refusal" to be more precise. "Is the medium term two years, three years, five years, n years, or what? By refusing to define the term, you can never be accused of missing your target. [It] is just an exercise in obfuscation," he said.
He counselled Mr Trichet to have a good night's sleep before handling the press following key decisions - given past gaffes. "A meeting of the governing council is likely to be tense, often lengthy, and almost always extremely fatiguing. You will face the world's media at a time when you are worn out and stressed. I think it fair to claim that your predecessor suffered many of his most unhappy occasions at exactly such press conferences," he said.
Prof. Goodhart, emeritus professor at the London School of Economics, said the ECB should air its internal policy disputes by publishing the minutes rather than relying on secrecy to give a false sense of unity. "It is hardly desirable, nor does it lead ultimately to credibility, to suggest that consensus existed when, in practice, it did not," he said.
An ECB spokesman said secrecy was needed to shield the governors from national pressure. "Some could be in a hard position in their home countries if it was known how they argued at meetings," he said. Mr Trichet is expected to address the criticisms at a press conference on 1 September. One hopes he has had a good night's sleep.
COMMENT THREAD
So says Prof Charles Goodhart, a former member of the Bank of England's monetary policy committee, as recorded by Ambrose Evans-Pritchard in today's Telegraph. To its sins, Goodhart adds "ineptitude", saying that the ECB's claim to manage inflation over the "medium term" was an empty mantra that let it dodge responsibility for failures.
This is in an open letter to ECB president Jean-Claude Trichet, published in the journal, Central Banking, where Goodhart slams the "conscious refusal" to be more precise. "Is the medium term two years, three years, five years, n years, or what? By refusing to define the term, you can never be accused of missing your target. [It] is just an exercise in obfuscation," he said.
He counselled Mr Trichet to have a good night's sleep before handling the press following key decisions - given past gaffes. "A meeting of the governing council is likely to be tense, often lengthy, and almost always extremely fatiguing. You will face the world's media at a time when you are worn out and stressed. I think it fair to claim that your predecessor suffered many of his most unhappy occasions at exactly such press conferences," he said.
Prof. Goodhart, emeritus professor at the London School of Economics, said the ECB should air its internal policy disputes by publishing the minutes rather than relying on secrecy to give a false sense of unity. "It is hardly desirable, nor does it lead ultimately to credibility, to suggest that consensus existed when, in practice, it did not," he said.
An ECB spokesman said secrecy was needed to shield the governors from national pressure. "Some could be in a hard position in their home countries if it was known how they argued at meetings," he said. Mr Trichet is expected to address the criticisms at a press conference on 1 September. One hopes he has had a good night's sleep.
COMMENT THREAD
A leopard doesn't change its spots
So the odious Mr Clarke is trying to tell us that he got it all wrong and the euro wasn't such a good idea after all. Not a bad wheeze as it gets him on the front page of The Telegraph, which can't do his leadership bid any harm at all.
And, pushing at an open door, the self-same Mr Clarke – he who strongly opposed a referendum – is now exhorting Brussels to forget about the EU constitution, which has only been shelved after "no" votes in French and Dutch referendums.
But demonstrating his somewhat tenuous grasp of the issues, having described the constitution as "effectively dead", he is saying that it is pointless trying to push for closer integration unless public opinion across Europe demanded it. This assumes that the push for closer integration ever stopped and that public opinion ever demanded it in the first place.
That is the evil of Mr Clarke. Should he ever become the leader of the Conservative Party, he will continue down the path taken by leaders before him, of avoiding talking about European issues. He will present the comforting myth that, because the constitution has been halted, the process of integration is in abeyance. When pressed, he will chunter on about "reforms" in the full knowledge that nothing very much will happen and integration will go marching on.
The problem is, as the City Comment suggests, "We should rejoice at a sinner that repenteth…".
There are enough stupid people out there to be taken in by this nonetheless transparent attempt by an old warhorse to get the sniff of gunpowder in his nostrils. They should remember the old aphorism that leopards don't change their spots.
COMMENT THREAD
And, pushing at an open door, the self-same Mr Clarke – he who strongly opposed a referendum – is now exhorting Brussels to forget about the EU constitution, which has only been shelved after "no" votes in French and Dutch referendums.
But demonstrating his somewhat tenuous grasp of the issues, having described the constitution as "effectively dead", he is saying that it is pointless trying to push for closer integration unless public opinion across Europe demanded it. This assumes that the push for closer integration ever stopped and that public opinion ever demanded it in the first place.
That is the evil of Mr Clarke. Should he ever become the leader of the Conservative Party, he will continue down the path taken by leaders before him, of avoiding talking about European issues. He will present the comforting myth that, because the constitution has been halted, the process of integration is in abeyance. When pressed, he will chunter on about "reforms" in the full knowledge that nothing very much will happen and integration will go marching on.
The problem is, as the City Comment suggests, "We should rejoice at a sinner that repenteth…".
There are enough stupid people out there to be taken in by this nonetheless transparent attempt by an old warhorse to get the sniff of gunpowder in his nostrils. They should remember the old aphorism that leopards don't change their spots.
COMMENT THREAD
So, will they have an election?
While Chancellor Schr̦der hopes to be re-elected on a bogus anti-American platform and Angela Merkel defends her choice of a tax adviser Рa real reformer Рthe Federal Constitutional Court has still to decide whether there will be an early election or not.
On the whole it is expected that thought there are divisions among the judges, there will be a clear majority for the election. But you can never tell with the Federal Constitutional Court.
COMMENT THREAD
“The Federal Constitutional Court will rule on whether President Horst Köhler's decision to dissolve parliament after Chancellor Gerhard Schröder lost a vote of confidence is legally binding under constitutional law. The second senate of the Court has the responsibility to decide this and a decision is expected sometime in the week beginning Aug. 22.”The Court’s most recent appearance in the news was its refusal to extradite a suspected financier of Islamic terrorist groups to Spain, striking down the European Arrest Warrant as legislation that contradicts the German constitution.
On the whole it is expected that thought there are divisions among the judges, there will be a clear majority for the election. But you can never tell with the Federal Constitutional Court.
COMMENT THREAD
Monday, August 22, 2005
Another nail in the coffin
As you read, ten thousand Chinese and Russian troops are currently attacking the Shantung Peninsula in Northeast Asia by air and by sea. Fortunately, they are not at war but conducting joint military exercises.
Nevertheless, these exercises are of considerable concern, as they are according to the Korea Times and many other sources, a precursor to the parties gearing up for greater military co-operation. From this, Russia – already China’s biggest arms supplier – hopes to increase its sales of high-tech weaponry to the Chinese government.
In the high-tech weapons stakes, however, one of the hottest numbers is the unmanned combat aircraft, known as the UCAV or Unmanned Combat Air Vehicle. The next generation of these aircraft will probably replace the strike aircraft on most developed nations’ inventories and the RAF fully expects the Tornado GR4s to be thus replaced when the fleet in retired in 2018.
Until recently, the British government was working closely with the US on developing replacements, in £10bn project called the "Future Offensive Air System" (FOAS). But, last June, without warning, the British government pulled out of the project, even though the "definition phase" was not due for completion until 2008. Sources are suggesting that the reason was the increasing reluctance of its US partner to transfer military technology. The MoD was unlikely to "get what it wants".
Meanwhile, working up to making its European Rapid Reaction Force operational by 2010, the EU has designated France, under the European Capabilities Action Plan the lead nation for the development of a European UCAV. With the participation from Greece, Italy, Spain, Sweden and Switzerland, it also has commenced a programme called "Neuron", which has been allocated €300 million by the French government for the first phase.
The British are not, as yet, part of this programme, but with it pulling out of FOAS, there are strong rumours that it is considering joining.
That much illustrates yet again the increasing detachment of the UK from the US, and its realignment with Europe, a development which has been much chronicled on the Blog. And bad enough though this is, the situation has taken a sinister turn for the worse.
Tucked into a story on Russian aerospace in this week's edition of The Business is a short mention that Airbus Industries has signed a "secret agreement" with the Russian fighter builder MiG. Analysts, says the paper, "believe the companies will develop unmanned combat planes".
Now this is serious. Airbus, better known for its airliners, is 80 percent owned by the European aerospace company EADS, and 20 percent owned by BAE Systems – and heavily subsidised by British and other European governments. Effectively, Britain is engaged with a major European company, of which France is a major partner, in a collaborative project with the Russians, in developing high-tech UCAVs.
Now join all the dots. The EU countries have tried and failed to lift the arms sales embargo on China, but are still very anxious to sell arms to China. On the other hand, Russia is, as we have indicated, the major supplier of arms to China, unhampered by any embargo. What better way for the European to circumvent the embargo than to do deals with the Russians who in turn sell the arms on to China? Given that this deal has probably been in the offing for some time, no wonder the Americans would not give the MoD "what it wants".
Either way, for Britain to be so closely involved with the French as partners in selling technology to the Russians, on highly sensitive projects like UCAVs, is not exactly the best way to impress the United States with our credentials as allies. Yet again, we are seeing another nail in the coffin of the "special relationship".
COMMENT THREAD
Nevertheless, these exercises are of considerable concern, as they are according to the Korea Times and many other sources, a precursor to the parties gearing up for greater military co-operation. From this, Russia – already China’s biggest arms supplier – hopes to increase its sales of high-tech weaponry to the Chinese government.
In the high-tech weapons stakes, however, one of the hottest numbers is the unmanned combat aircraft, known as the UCAV or Unmanned Combat Air Vehicle. The next generation of these aircraft will probably replace the strike aircraft on most developed nations’ inventories and the RAF fully expects the Tornado GR4s to be thus replaced when the fleet in retired in 2018.
Until recently, the British government was working closely with the US on developing replacements, in £10bn project called the "Future Offensive Air System" (FOAS). But, last June, without warning, the British government pulled out of the project, even though the "definition phase" was not due for completion until 2008. Sources are suggesting that the reason was the increasing reluctance of its US partner to transfer military technology. The MoD was unlikely to "get what it wants".
Meanwhile, working up to making its European Rapid Reaction Force operational by 2010, the EU has designated France, under the European Capabilities Action Plan the lead nation for the development of a European UCAV. With the participation from Greece, Italy, Spain, Sweden and Switzerland, it also has commenced a programme called "Neuron", which has been allocated €300 million by the French government for the first phase.
The British are not, as yet, part of this programme, but with it pulling out of FOAS, there are strong rumours that it is considering joining.
That much illustrates yet again the increasing detachment of the UK from the US, and its realignment with Europe, a development which has been much chronicled on the Blog. And bad enough though this is, the situation has taken a sinister turn for the worse.
Tucked into a story on Russian aerospace in this week's edition of The Business is a short mention that Airbus Industries has signed a "secret agreement" with the Russian fighter builder MiG. Analysts, says the paper, "believe the companies will develop unmanned combat planes".
Now this is serious. Airbus, better known for its airliners, is 80 percent owned by the European aerospace company EADS, and 20 percent owned by BAE Systems – and heavily subsidised by British and other European governments. Effectively, Britain is engaged with a major European company, of which France is a major partner, in a collaborative project with the Russians, in developing high-tech UCAVs.
Now join all the dots. The EU countries have tried and failed to lift the arms sales embargo on China, but are still very anxious to sell arms to China. On the other hand, Russia is, as we have indicated, the major supplier of arms to China, unhampered by any embargo. What better way for the European to circumvent the embargo than to do deals with the Russians who in turn sell the arms on to China? Given that this deal has probably been in the offing for some time, no wonder the Americans would not give the MoD "what it wants".
Either way, for Britain to be so closely involved with the French as partners in selling technology to the Russians, on highly sensitive projects like UCAVs, is not exactly the best way to impress the United States with our credentials as allies. Yet again, we are seeing another nail in the coffin of the "special relationship".
COMMENT THREAD
How about the truck drivers?
Well, if the accountants won’t do it, and the farmers are too busy to get on their tractors (or their Corsair) and drive to Brussels, how about the truck (or lorry, as we used to say) drivers?
Having had to weather the increased fuel costs and the insanity of the working time directive, they are, according to the Transport News Network, now bitching about foreign truck drivers.
More specifically, they have noted that EU enlargement has created a "bonanza" for Eastern European lorries on UK Roads. Lorry operators from the ten accession states joining in May 2004 have doubled their traffic volumes in the UK, says the Department for Transport.
Of the new EU member states, 31 percent of the traffic from the new member states is from Poland - up 36 percent in the last year. Czechoslovakia and Hungary account for 25 percent each - up 23 percent and 87 percent respectively since Q2 2004. Overall traffic volume from accession states has increased 3.5 times since 2003.
The figures also confirm that the dwindling share of traffic undertaken by UK-based international hauliers has stabilised. In 1996, UK hauliers accounted for half of all international traffic. However, the combination of growing low cost foreign competition from Eastern Europe, and Sterling's appreciation in value against the Euro, meant that by 2004 the market share of UK-based hauliers had fallen to 25 per cent.
Foreign trucks now represent some ten per cent of the maximum weight vehicles operating on UK roads - there are around 10,000 foreign lorries on UK roads every day of the week.
The point, of course, is that while UK operators pay through the nose for road tax and bear some of the highest diesel costs in Europe, none of these vehicles – or the almost ten percent from outside of the EU - make any payment to operate on UK roads.
Simon Chapman, Chief Economist of the Freight Transport Association says "International road haulage is an extremely tough environment for UK hauliers. No sooner had the problems created by Sterling's exchange rates begun to abate then lower cost competition from Eastern Europe put further downward pressure on rates. UK operators cannot operate indefinitely on wafer thin margins just to keep the wheels of their truck fleets turning."
If we were an independent nation, we could perhaps levy a charge on every foreign vehicle entering the country – as do some other countries – but this is regarded as "discriminatory" by the EU and thus prohibited.
In an attempt to level the playing field, the government did attempt to bring in a lorry road user charging scheme, based on satellite monitoring, applicable to both domestic and foreign lorries, but this ran into technical problems and was abandoned, leaving no solution to an obviously unfair situation.
Perhaps, therefore, the lorry drivers can be prevailed to rise up. They could give lifts to the accountants, and bankers, and could be joined by the farmers in their tractors, to say nothing of the slaughterhouse owners, the fishermen, the airline pilots, the junior doctors (who cannot now get training places because of the working time directive), the electrical and electronic manufacturers, the garment retailers, chemical manufacturers, the military, taxpayers, consumers…
Come to think of it, it there anyone left? Why don’t we all rise up?
COMMENT THREAD
Having had to weather the increased fuel costs and the insanity of the working time directive, they are, according to the Transport News Network, now bitching about foreign truck drivers.
More specifically, they have noted that EU enlargement has created a "bonanza" for Eastern European lorries on UK Roads. Lorry operators from the ten accession states joining in May 2004 have doubled their traffic volumes in the UK, says the Department for Transport.
Of the new EU member states, 31 percent of the traffic from the new member states is from Poland - up 36 percent in the last year. Czechoslovakia and Hungary account for 25 percent each - up 23 percent and 87 percent respectively since Q2 2004. Overall traffic volume from accession states has increased 3.5 times since 2003.
The figures also confirm that the dwindling share of traffic undertaken by UK-based international hauliers has stabilised. In 1996, UK hauliers accounted for half of all international traffic. However, the combination of growing low cost foreign competition from Eastern Europe, and Sterling's appreciation in value against the Euro, meant that by 2004 the market share of UK-based hauliers had fallen to 25 per cent.
Foreign trucks now represent some ten per cent of the maximum weight vehicles operating on UK roads - there are around 10,000 foreign lorries on UK roads every day of the week.
The point, of course, is that while UK operators pay through the nose for road tax and bear some of the highest diesel costs in Europe, none of these vehicles – or the almost ten percent from outside of the EU - make any payment to operate on UK roads.
Simon Chapman, Chief Economist of the Freight Transport Association says "International road haulage is an extremely tough environment for UK hauliers. No sooner had the problems created by Sterling's exchange rates begun to abate then lower cost competition from Eastern Europe put further downward pressure on rates. UK operators cannot operate indefinitely on wafer thin margins just to keep the wheels of their truck fleets turning."
If we were an independent nation, we could perhaps levy a charge on every foreign vehicle entering the country – as do some other countries – but this is regarded as "discriminatory" by the EU and thus prohibited.
In an attempt to level the playing field, the government did attempt to bring in a lorry road user charging scheme, based on satellite monitoring, applicable to both domestic and foreign lorries, but this ran into technical problems and was abandoned, leaving no solution to an obviously unfair situation.
Perhaps, therefore, the lorry drivers can be prevailed to rise up. They could give lifts to the accountants, and bankers, and could be joined by the farmers in their tractors, to say nothing of the slaughterhouse owners, the fishermen, the airline pilots, the junior doctors (who cannot now get training places because of the working time directive), the electrical and electronic manufacturers, the garment retailers, chemical manufacturers, the military, taxpayers, consumers…
Come to think of it, it there anyone left? Why don’t we all rise up?
COMMENT THREAD
Spud bashing
I suppose if we cannot rely on the accountants to rise up and slaughter our oppressors, is there any hope that the farmers will do the deed for us?
Certainly, the EU seems to be doing everything it can to upset them, not least the potato farmers, who fear that their production costs may be pushed up by several hundred thousand pounds as a result of a new EU plant health directive currently under "consultation".
According to The Scotsman, industry leaders are to meet at the Oxford headquarters of the British Potato Council (BPC) this week and are expected to mount a hostile reception to the proposals designed to curb the potato cyst nematode (PCN).
In addition to added production costs, the proposed directive could also limit growers to certain varieties which may not be suitable to the market or to growing conditions. The directive could also have a significant knock-on effect on growers of bulbs, strawberries, brassicas, alliums and sugar beet where they are grown in rotation with potatoes.
If grown on PCN infested land, these crops would have to be proven to be free of infestation by washing or brushing practically free of soil after harvesting, adding significantly to costs.
Neither the BPC nor the farmers' unions believe the added controls, designed to update a 1969 directive, are justified. They maintain that current controls and attendant UK farming practices are sufficiently robust. "UK growers already exercise a strict regime of using resistant varieties and crop rotation to limit PCN spread," says Dr Mike Storey, BPC's head of research "We have to ask what is the point of these proposals."
The trouble is, I cannot see farmers - much less the general populus - rallying to the cry: "down with the plant health directive" and manning the barricades. However, there is a Cambridgeshire potato farmer who owns a pristine World War II FU4 Corsair ground attack aircraft, which is often displayed at Duxford.
A few modifications and a quick trip to Brussels, perhaps?
COMMENT THREAD
Certainly, the EU seems to be doing everything it can to upset them, not least the potato farmers, who fear that their production costs may be pushed up by several hundred thousand pounds as a result of a new EU plant health directive currently under "consultation".
According to The Scotsman, industry leaders are to meet at the Oxford headquarters of the British Potato Council (BPC) this week and are expected to mount a hostile reception to the proposals designed to curb the potato cyst nematode (PCN).
In addition to added production costs, the proposed directive could also limit growers to certain varieties which may not be suitable to the market or to growing conditions. The directive could also have a significant knock-on effect on growers of bulbs, strawberries, brassicas, alliums and sugar beet where they are grown in rotation with potatoes.
If grown on PCN infested land, these crops would have to be proven to be free of infestation by washing or brushing practically free of soil after harvesting, adding significantly to costs.
Neither the BPC nor the farmers' unions believe the added controls, designed to update a 1969 directive, are justified. They maintain that current controls and attendant UK farming practices are sufficiently robust. "UK growers already exercise a strict regime of using resistant varieties and crop rotation to limit PCN spread," says Dr Mike Storey, BPC's head of research "We have to ask what is the point of these proposals."
The trouble is, I cannot see farmers - much less the general populus - rallying to the cry: "down with the plant health directive" and manning the barricades. However, there is a Cambridgeshire potato farmer who owns a pristine World War II FU4 Corsair ground attack aircraft, which is often displayed at Duxford.
A few modifications and a quick trip to Brussels, perhaps?
COMMENT THREAD
What will it take...?
Wearily, one wonders what it will take for the "colleagues" to give up or, failing that, for us to rise up and slaughter them. Just how much more are we going to tolerate?
The latest in a long line of imposts is the "ambitious" new EU law known as the "markets in financial instruments directive" (Mifid). Like all the laws from this ghastly construct, is primary purpose is integration, this one though creating "a pan-European market for investment products".
The law supposedly allows investment companies to operate across the EU based on the authorisation of their home regulator and Brussels hopes the regime will stimulate cross-border competition in financial services.
However, says the Financial Times, banks are worried about it and have complained about the cost of implementing its complex provisions. And – love them or hate them, when the banks are worried, we should all worry.
Only a few days ago The Telegraph reported that the Square Mile was now the beating heart of the country and accounted for almost a third of the economy - twice the contribution from the manufacturing sector.
The Office for National Statistics said banks, insurers, management consultants and other financial services had contributed 30.2 percent of the nation's wealth in 2003, or £310.9billion. In 1995, the share was 24 percent.
Now Mifid, together with an ever-increasing number of directives affecting financial services, is creating considerable grief, and eroding the profitability of the City, which must compete in an international market.
What is particularly concerning the banks about the directive, though, is that when it was adopted last year, it left many crucial details to be settled later in a procedure involving the European Commission, national governments and regulators.
That process has now reached a decisive stage, and many companies say draft proposals contained in internal Commission working documents would be highly damaging to the sector if implemented unchanged.
The European Banking Federation (FBE) has hit out at a draft plan to force banks to reveal to the market details of large equity positions they have taken. In a paper submitted last week as part of the Commission's consultation on Mifid, the FBE describes the proposed rules as "too complex, cumbersome and restrictive".
It also warns that "investment firms which have entered into risk positions will be in danger of the market turning against them if they are unable to unwind their positions rapidly". The FBE has also criticised a Commission plan that would force banks to record and retain tapes of all client orders. "Our calculations clearly indicate that the costs of setting up the system would exceed the expected benefits for the clients," the federation says.
Wim Mijs, chairman of the FBE's financial markets committee and the head of government affairs at ABN Amro, has told the FT: "We are sailing into unknown territory. Industry and the EU institutions are trying to build a European capital market, but because some of the concepts used in Mifid are radically new there may be mistakes that would destroy value rather than help create a European capital market."
A large group of international and European associations, including the London Investment Banking Association, the International Capital Market Association and the Bond Market Association, have also raised concerns. They made clear in their public response to the Commission that they are concerned about a range of issues "which appear to have been introduced at a late stage without any formal assessment of their market impact".
Among the issues raised by the group are the Commission's proposal to require the reporting of share loans and Brussels' plans for resolving conflicts of interests. The group told the Commission last week that the proposal on stock lending "would lead to an intricate and costly infrastructure to generate information which will be meaningless and misleading".
The Commission stressed that none of the plans contained in the working documents were final, and that it would only table a formal proposal in October at the earliest. It insisted it would take account of industry complaints.
And indeed it will… and then ignore them. As I was saying, what will it take…?
COMMENT THREAD
The latest in a long line of imposts is the "ambitious" new EU law known as the "markets in financial instruments directive" (Mifid). Like all the laws from this ghastly construct, is primary purpose is integration, this one though creating "a pan-European market for investment products".
The law supposedly allows investment companies to operate across the EU based on the authorisation of their home regulator and Brussels hopes the regime will stimulate cross-border competition in financial services.
However, says the Financial Times, banks are worried about it and have complained about the cost of implementing its complex provisions. And – love them or hate them, when the banks are worried, we should all worry.
Only a few days ago The Telegraph reported that the Square Mile was now the beating heart of the country and accounted for almost a third of the economy - twice the contribution from the manufacturing sector.
The Office for National Statistics said banks, insurers, management consultants and other financial services had contributed 30.2 percent of the nation's wealth in 2003, or £310.9billion. In 1995, the share was 24 percent.
Now Mifid, together with an ever-increasing number of directives affecting financial services, is creating considerable grief, and eroding the profitability of the City, which must compete in an international market.
What is particularly concerning the banks about the directive, though, is that when it was adopted last year, it left many crucial details to be settled later in a procedure involving the European Commission, national governments and regulators.
That process has now reached a decisive stage, and many companies say draft proposals contained in internal Commission working documents would be highly damaging to the sector if implemented unchanged.
The European Banking Federation (FBE) has hit out at a draft plan to force banks to reveal to the market details of large equity positions they have taken. In a paper submitted last week as part of the Commission's consultation on Mifid, the FBE describes the proposed rules as "too complex, cumbersome and restrictive".
It also warns that "investment firms which have entered into risk positions will be in danger of the market turning against them if they are unable to unwind their positions rapidly". The FBE has also criticised a Commission plan that would force banks to record and retain tapes of all client orders. "Our calculations clearly indicate that the costs of setting up the system would exceed the expected benefits for the clients," the federation says.
Wim Mijs, chairman of the FBE's financial markets committee and the head of government affairs at ABN Amro, has told the FT: "We are sailing into unknown territory. Industry and the EU institutions are trying to build a European capital market, but because some of the concepts used in Mifid are radically new there may be mistakes that would destroy value rather than help create a European capital market."
A large group of international and European associations, including the London Investment Banking Association, the International Capital Market Association and the Bond Market Association, have also raised concerns. They made clear in their public response to the Commission that they are concerned about a range of issues "which appear to have been introduced at a late stage without any formal assessment of their market impact".
Among the issues raised by the group are the Commission's proposal to require the reporting of share loans and Brussels' plans for resolving conflicts of interests. The group told the Commission last week that the proposal on stock lending "would lead to an intricate and costly infrastructure to generate information which will be meaningless and misleading".
The Commission stressed that none of the plans contained in the working documents were final, and that it would only table a formal proposal in October at the earliest. It insisted it would take account of industry complaints.
And indeed it will… and then ignore them. As I was saying, what will it take…?
COMMENT THREAD
Sunday, August 21, 2005
Nobody benefits
Nobody benefits from the ridiculous quota on Chinese textiles. This blog has said it and now Alex Singleton, President of the Globalization Institute says it in the Business.
In his article entitled Mandelson and the EU taking the clothes off our backs Singleton goes into the history of the textile trade and the various attempts on the part of the developed countries to restrict the production in the developing ones. It seemed that the ending of the Multi-Fibre Agreement at the beginning of this year brought an end to that pernicious practice.
If anybody doubts that the practice is pernicious, let me remind them that Christian Aid favours the preservation of quotas, believing that politicians, civil servants and tranzis like themselves are the proper people to decide how trade and economic development should be arranged across the world.
Think of all those better off Chinese workers buying goods from Britain among other countries. Think of all those Chinese visitors. They are here already. We are getting Chinese students in some of the best universities (they routinely beat our own poorly educated youngsters but that is another and sadder tale); Chinese businessmen are still few and far between, what with the large numbers who find themselves on trial for massive embezzlement but Chinese tourists are becoming a sizeable force in London. They all leave money here one way or another.
If all goes well and China is too volatile for anyone to make safe predictions, there will not be all that many of them who will be prepared to work for that mythical one bowl of rice a day.
Other developing countries have benefited from free trade.
It is good to see someone else, apart from this blog, putting the boot into Mandelson’s undeserved reputation as a free-marketeer.
And let us not forget the people whom it hits hardest in the developed countries: those who cannot afford expensive clothes and for whom cheap imported textile meant being able to buy a variety of goods. Nor should we forget those who work in the retail industry. They, too, will be hard hit. So, does anyone benefit?
COMMENT THREAD
In his article entitled Mandelson and the EU taking the clothes off our backs Singleton goes into the history of the textile trade and the various attempts on the part of the developed countries to restrict the production in the developing ones. It seemed that the ending of the Multi-Fibre Agreement at the beginning of this year brought an end to that pernicious practice.
If anybody doubts that the practice is pernicious, let me remind them that Christian Aid favours the preservation of quotas, believing that politicians, civil servants and tranzis like themselves are the proper people to decide how trade and economic development should be arranged across the world.
“Christian Aid took out advertisements attacking the end of quotas: it preferred the Multi-Fibre Agreement's quota system, believing that so-called managed trade works better than free trade. They wrongly feared China would be a success but only as part of a race to the bottom, cutting the wages of workers as competition intensified.”In fact, the reverse is true. Those who work directly or indirectly for Western companies in the developing countries are paid considerably more than other people in those countries, though considerably less than workers in the West.
“But Chinese textile workers actually command relatively high wages of $120 or so a month. In the last two years, Chinese producers invested $25bn to retool and streamline their facilities. During the past 20 years, thanks to free-market reforms and free-trade, 200m Chinese have been lifted out of poverty, though there are still 160m Chinese living on less than $1 a day. Chinese imports should not just been seen as a way of getting cheap clothing for the West, but also as a way of helping lift people out of poverty.”A morally admirable aim, one would have thought, but also an economically sensible one. The more Chinese people have money, the more they spread it around within and outside their country.
Think of all those better off Chinese workers buying goods from Britain among other countries. Think of all those Chinese visitors. They are here already. We are getting Chinese students in some of the best universities (they routinely beat our own poorly educated youngsters but that is another and sadder tale); Chinese businessmen are still few and far between, what with the large numbers who find themselves on trial for massive embezzlement but Chinese tourists are becoming a sizeable force in London. They all leave money here one way or another.
If all goes well and China is too volatile for anyone to make safe predictions, there will not be all that many of them who will be prepared to work for that mythical one bowl of rice a day.
Other developing countries have benefited from free trade.
"While more than half of the population in the 10 countries Powell and Skarbek studied lived on less than $2 per day, in 90% of the countries, working a 10-hour day in the apparel industry is enough to lift a worker above - often far above - that standard, the authors found. In Honduras, a nation often criticised by protectionists, the average worker in the textiles industry makes $13.10 per day, even though 44% of the population has to make do with under $2 per day."Trade managed by officials of the kind favoured by Christian Aid and the European Union, always skews it in favour of some developed countries or, to be quite precise, the most vocal of the lobbies in those countries.
It is good to see someone else, apart from this blog, putting the boot into Mandelson’s undeserved reputation as a free-marketeer.
“Mandelson's behaviour has been disappointing to say the least. When he took office as EU trade commissioner, he was hailed as a great champion of free trade (though not by this newspaper). Harlem Desir, a French MEP, denounced his appointment saying that his free trade views were unacceptable. Desir need not have worried: despite Mandelson's rhetoric, he has allowed himself to cave in to special interests. Mandelson, who will always remain a spin-doctor at heart,initially tried to blame retailers for the stockpiles, but he has faced a growing backlash. Pressure from the governments of Germany, the Netherlands,Sweden and Denmark led him to organise crisis talks with the Chinese authorities, aiming to bring forward some of next year's quotas.”Unfortunately for Mandelson at such an early point of his career as Commissioner, this is one problem out of which he is not going to be able to spin his way. Bringing forward next year’s quotas is not going to solve the problem, merely postpone it. And he cannot simply get rid of them without agreement by the relevant Council of Ministers. We shall watch developments with interest.
And let us not forget the people whom it hits hardest in the developed countries: those who cannot afford expensive clothes and for whom cheap imported textile meant being able to buy a variety of goods. Nor should we forget those who work in the retail industry. They, too, will be hard hit. So, does anyone benefit?
COMMENT THREAD
Too many eyes in Gaza
As the Israeli withdrawal from Gaza nears its completion, one or two organizations find themselves in difficulty. Not, as it happens, the Israeli government, which can congratulate itself on the relative ease with which the project was accomplished (there had been fears of greater resistance and more violence of Israeli army against Jewish settlers).
Furthermore, as Allister Heath points out in the Business today, the Israeli economy is picking up, growth is accelerating and there are great hopes that the withdrawal will be the beginning of a probably long and painful move towards peace.
“The reforms of Benjamin Netanyahu, who resigned earlier this month as finance minister because of disagreements over Gaza, are paying off. The changes included a shake-up of the welfare state and tax cuts. The budget deficit fell from 5.5% of GDP in 2003 to 3.9% last year. Buoyant tax revenues caused by faster economic growth and limits on spending rises meant that the central government budget collapsed in the first seven months of this year.
Even with the cost of disengagement plan, Morgan Stanley expects the overall budget deficit not to exceed 3.4% of GDP in 2005 and then to decline towards 3% in 2006. The reduction in the budget deficit has allowed the central bank to keep rates on hold.”
Should they wish, they could start applying for membership of the European Union, but probably they have more sense than that.
Unfortunately, the picture is not so rosy on the other side and, given the EU’s consistent support for the PA, no matter what happened, it may well find itself torn between different organizations.
There is every evidence that hostilities between Fatah and Hamas will increase unless, by some miracle,Mahmoud Abbas manages to gain control over the latter. There are also signs of developing internal war between different groupings within Fatah.
As expected and feared, Hamas, whose aim is the complete destruction of Israel, has proclaimed that the withdrawal from Gaza is a military victory for them and a justification of the suicide/homicide attacks. Despite Javier Solana’s pompous pronouncements and congratulations of leaders, this does not bode well for the peace process or for the future of the Palestinians in Gaza.
MI6 appears to be in a spot of trouble. Mr Blair who believes, despite a good deal of evidence to the contrary, that a Palestinian state will eliminate the root causes of Islamic terrorism, has sent a supposedly secret MI6 mission of counter-terrorism experts to persuade Hamas to observe a ceasefire. Did they actually sign a ceasefire? Who knows?
The mission is led by “Alistair Crooke, a former MI6 officer who received an MBE for his work negotiating a Hamas ceasefire during the early stages of the intifada”. Another ceasefire that nobody noticed.
The Israeli government is unhappy because Mr Crooke has said that Hamas, which is vowing to carry on the fight until Israel ceases to exist, should be treated as a serious negotiating partner, not a popular view in Israel.
Meanwhile the security situation in Gaza has gone from bad to worse with kidnappings of UN staff (all of whom have now been withdrawn) and various western journalists. Presumably, at some point there will be demands for ransom. The French government will, no doubt, oblige though whom it will blame is hard to know.
MI6 to the rescue again:
“Such is the overall chaos within the Palestinian Authority that another team of MI6 officials is advising its security forces on setting up a command and control infrastructure to instil a measure of discipline. Unlike the Hamas operation, it has Israeli approval.”
All the EU has done so far is made measured noises of approval, without going into too many details as to what is expected in return from the Palestinian Authority.
Still, that is merely a sin of omission and can be explained by sheer inability to think straight. The UN, on the other hand, the ideological root of the whole tranzi movement, is once again in trouble.
Banners, mugs and T-shirts with the slogan: “Today Gaza, tomorrow the West Bank and Jerusalem” have appeared in the Palestine, with the UN Development Programme logo on them. Apart from the unfortunate but probably deliberate echo of the old “Today Germany, tomorrow the world” slogan, this is not precisely promoting the idea of the a “roadmap to peace”, unless it is the peace of the graveyard we are talking about.
UN officials cannot agree on the party line:
“Kemal Dervis, a UNDP official, responded to a complaint from the American Jewish Congress by saying that the UNDP "cannot be involved in political messaging" and it was "not at all acceptable" that its logo was used.
Yet Timothy Rothermel, head of the organisation's Palestinian programme, was quoted on Fox News, the American cable channel, as saying that the slogan was "consistent with the relevant UN resolutions and Security Council resolutions about the status of Palestine".
UNDP officials argue that the Palestinian Authority has the freedom to use the UN money without each element being reviewed by the world body.”
The US ambassador to the UN, John Bolton, has protested at the “inappropriate and unacceptable” use of the logo. Given the trouble the UN is in already, it seems foolhardy, to put it mildly, for its Development Programme officials to behave in this way. So far there have been no protests from any of the European ambassadors and no comment from the EU itself (surely the common foreign and security policy has something to say on the matter). Presumably, they are still on holiday.
COMMENT THREAD
Lying for Tony
Nothing is true in politics until it has been denied by a minister. And, in the wake of Booker's column last week, we have Minister of State for the Armed Forces, Adam Ingram, writing to The Sunday Telegraph to say that Christopher Booker is, yet again, wrong.
The MoD has not embarked on a secret programme to "Europeanise" our forces through the backdoor of equipment procurement, he claims. "The basis of our procurement process is clear: in an open competition, any company (UK, European, American or otherwise) can bid for a MoD contract. Ultimately, contractors are chosen on the basis of value for money for the UK taxpayer."
Interestingly, I am just reading Peter Oborne’s book, The Rise of Political Lying, in which he declares:
Take for instance, his phrasing: "The basis of our procurement process is clear: in an open competition, any company… can bid for a MoD contract." Read superficially, it would appear to suggest that all MoD competitions are "open", but if you read the words carefully, he does not actually say that. He simply makes an assertion to the effect that, if MoD competitions were open – which is not always the case – any company could bid.
Of course, not all competitions are "open" and, in any case, it depends what you mean by the word. The Type 45 Destroyer competition was open in the sense that bids were invited to build the ships. But, a complex system like an air-defence warship is basically a platform for the radar and missiles and the government had already decided on that equipment. Thus, any potential supplier who already had his own package would not be interested in just building the platform. The options were already closed down before the bids were invited. Was that an "open" competition?
Then there is the Panther contract. Bids were invited and three companies were short-listed, who submitted four vehicle types for assessment. Then, at the behest of the MoD – after the shortlist had closed – another vehicle was entered – the Italian-built Panther – which subsequently won the contract. Was that an "open" competition, where the MoD selects the very vehicle it enters for the competition?
As for the claim that contractors are chosen for "value for money for the UK taxpayer", the Panther is as good example as any of how that is not true. Purchased at £413,000 each for what amounts to an armoured SUV, the contract cost £166 million when the same number of up-armoured Humvees would have cost the taxpayer £40 million. How is that value for money?
In his column this week, Booker just happens to address this very subject of value for money, the cost of the government's "Europe first" policy. At the time of writing, we had worked out this had wasted just over £5 billion, which is serious money. To that must also be added the £830 million wasted on the Storm Shadow, which brings it up to over £5.8 billion.
But, writes Booker, all this pales beside the proposed £14 billion cost of the 3,500 Swedish-made vehicles equipped with French-made guns we are buying to equip three brigades of the British Army under the FRES (Future Rapid Effects System), at a cost of £4.6 billion per brigade. The US Army is to equip 36 brigades with its comparable but vastly superior FCS (Future Combat System) at a cost of only £1.8 billion each. Yet until 1999 we were equal partners with the US in developing this project. That is another £8 billion down the drain.
Returning to the egregious Ingram, his letter goes on to challenge Booker about the 2000 "Framework Agreement", with him claiming that the agreement "aims to remove barriers to industrial co-operation in the European defence market." He continues:
Ingram then goes on to say that the "Agreement" was not signed in secret. This is the "straw dog" ploy. Booker did not say it was signed in secret. What he did write was:
To conclude, Ingram argues that "we are not embarked on a programme of cutting our Defence ties with America in pursuit of a 'European Army'". In his original, unedited letter, he says this is "is plainly and ludicrously wrong," calling in aid, "last year's Defence White Paper" which, he says, was "quite clear":
Furthermore, it is not the "humanitarian or peace-keeping operations" which are affecting our relationship with the US. It is the process of re-equipping the armed forces to take part in the European Rapid Reaction Force, with the intention of carrying out "peace-making" operations, that is doing the damage.
But then, Ingram is a government minister in an administration that believes in "constructing the truth". A good and faithful servant, he is simply, as Oborne would put it, "lying for Tony".
COMMENT THREAD
The MoD has not embarked on a secret programme to "Europeanise" our forces through the backdoor of equipment procurement, he claims. "The basis of our procurement process is clear: in an open competition, any company (UK, European, American or otherwise) can bid for a MoD contract. Ultimately, contractors are chosen on the basis of value for money for the UK taxpayer."
Interestingly, I am just reading Peter Oborne’s book, The Rise of Political Lying, in which he declares:
Britain now lives in a post-truth political environment. Public statements are no longer fact based, but operational. Realities and political narratives are constructed to serve a purpose, dismantled, and the show moves on. This is new. All governments have contained liars and most politicians deceive each other and the public from time to time. But in recent years mendacity and deception have ceased to be abnormal and become an entrenched feature of the British system.It is in that context that Ingram's statement and the rest of his letter must be read. He is writing a "political narrative" constructed to serve a purpose. Its aim is to deceive.
Take for instance, his phrasing: "The basis of our procurement process is clear: in an open competition, any company… can bid for a MoD contract." Read superficially, it would appear to suggest that all MoD competitions are "open", but if you read the words carefully, he does not actually say that. He simply makes an assertion to the effect that, if MoD competitions were open – which is not always the case – any company could bid.
Of course, not all competitions are "open" and, in any case, it depends what you mean by the word. The Type 45 Destroyer competition was open in the sense that bids were invited to build the ships. But, a complex system like an air-defence warship is basically a platform for the radar and missiles and the government had already decided on that equipment. Thus, any potential supplier who already had his own package would not be interested in just building the platform. The options were already closed down before the bids were invited. Was that an "open" competition?
Then there is the Panther contract. Bids were invited and three companies were short-listed, who submitted four vehicle types for assessment. Then, at the behest of the MoD – after the shortlist had closed – another vehicle was entered – the Italian-built Panther – which subsequently won the contract. Was that an "open" competition, where the MoD selects the very vehicle it enters for the competition?
As for the claim that contractors are chosen for "value for money for the UK taxpayer", the Panther is as good example as any of how that is not true. Purchased at £413,000 each for what amounts to an armoured SUV, the contract cost £166 million when the same number of up-armoured Humvees would have cost the taxpayer £40 million. How is that value for money?
In his column this week, Booker just happens to address this very subject of value for money, the cost of the government's "Europe first" policy. At the time of writing, we had worked out this had wasted just over £5 billion, which is serious money. To that must also be added the £830 million wasted on the Storm Shadow, which brings it up to over £5.8 billion.
But, writes Booker, all this pales beside the proposed £14 billion cost of the 3,500 Swedish-made vehicles equipped with French-made guns we are buying to equip three brigades of the British Army under the FRES (Future Rapid Effects System), at a cost of £4.6 billion per brigade. The US Army is to equip 36 brigades with its comparable but vastly superior FCS (Future Combat System) at a cost of only £1.8 billion each. Yet until 1999 we were equal partners with the US in developing this project. That is another £8 billion down the drain.
Returning to the egregious Ingram, his letter goes on to challenge Booker about the 2000 "Framework Agreement", with him claiming that the agreement "aims to remove barriers to industrial co-operation in the European defence market." He continues:
This is a sensible agreement, which encourages nations to examine the possibility of co-operative procurement programmes in order to avoid wasteful duplication. Encouraging this is something we seek to do with many of our allies, not just these five European nations.This, in the style of mendacity employed by this government, is not altogether untrue, but the "agreement" is a lot more than that. For a start, it is a formal treaty and, as we pointed out, it commits the parties to:
…establishing a long term master-plan that would present a common view of their future operational needs. This would constitute a framework for harmonised equipment acquisition planning and would provide orientation for a harmonised defence related R&T policy.In this context, the use of the word "encourage" is far too bland, to the point of being positively misleading. The Treaty imposes – I stress imposes – specific obligations, to whit, "at each stage of the acquisition process, the Parties shall undertake regular and comprehensive exchanges of Documents and other relevant information and shall undertake co-operative work." Note, twice in one sentence, the word shall is used. The treaty provisions are not optional.
Ingram then goes on to say that the "Agreement" was not signed in secret. This is the "straw dog" ploy. Booker did not say it was signed in secret. What he did write was:
…everything about the way it was drawn up seemed calculated to hide its true significance. Signed by Geoff Hoon, as Defence Secretary, at the Farnborough Air Show on July 27, 2000, it was given the blandly misleading description of a "framework agreement" concerning "measures to facilitate the restructuring and operation of the European defence industry".In his letter, Ingram continues the process. Never once does he refer to the Agreement as a Treaty and he makes no reference to the fact that it imposes specific and detailed obligations on the signatories. All he can offer is that the House of Commons Defence Committee reviewed the Agreement and was content for ratification to proceed – as if the approval of a Labour-dominated committee made any difference
To conclude, Ingram argues that "we are not embarked on a programme of cutting our Defence ties with America in pursuit of a 'European Army'". In his original, unedited letter, he says this is "is plainly and ludicrously wrong," calling in aid, "last year's Defence White Paper" which, he says, was "quite clear":
The most demanding operations could only conceivably be undertaken alongside the US, either as a NATO operation or a US led coalition. Cooperation with our European allies on humanitarian or peace-keeping operations is not occurring at the expense of our close relationship with the USA.This passage is true, but it bears no relation to the denial preceding it, which makes it a particularly clever lie. What Ingram says applies only at the moment. It is undeniably the case that "the most demanding operations" could only be undertaken with the US, which is why the EU set out the European Capabilities Action Plan and the 2010 "Headline Goal" to redress that situation in order that the EU could mount autonomous military operations. What applies now will not apply in the future, if the "colleagues" can help it.
Furthermore, it is not the "humanitarian or peace-keeping operations" which are affecting our relationship with the US. It is the process of re-equipping the armed forces to take part in the European Rapid Reaction Force, with the intention of carrying out "peace-making" operations, that is doing the damage.
But then, Ingram is a government minister in an administration that believes in "constructing the truth". A good and faithful servant, he is simply, as Oborne would put it, "lying for Tony".
COMMENT THREAD
Saturday, August 20, 2005
The million pound bomb
Many people will remember the disastrous Tornado raid in the first Gulf War, which ended in the aircraft being shot down and Flt Lt John Nichol being humiliated on Iraqi television.
Amongst the lessons learnt from that episode was that it wasn’t an incredibly good idea to fly low-level into heavily defended airspace in order to lob a bomb at a target. A much better idea is to launch a guided stand-off bomb from a hundred miles or so away and let it find its own way to the target, allowing you to toodle back to the base and down a stiff gin or two.
Anyhow, by the time the next Gulf War came along, RAF Tornados were happily equipped with these bombs, better known as "Storm Shadow" cruise missiles. The RAF's 617 Squadron managed to fire off some 27 of them - compared with an estimated 400 or so "Tomahawks", mostly ship-launched, by the United States.
Back on the Home Front, however, ministers were being extraordinarily reticent about how much these new toys cost. Mike Hancock, Lib-Dem MP for Portsmouth South tried to find out in February 1998, when he was just told the current estimated cost of the programme, which then stood at £934 million.
By July 2002, when Hancock tried again, the cost of the project had increased to £981 million but the minister refused to give information on the cost of an individual missile, on "security grounds".
Undaunted, this fearless author consulted another source, Wikipedia which ventured where ministers feared to tread, informing us that the UK had ordered 900 Storm Shadows. That puts the price of the toys at over £1 million each – the million pound bomb.
Once again, though, the "curse of Europe" strikes. Storm Shadow is a French designed weapon, built by Matra Défense for the French Air Force under the name SCALP EG. It was built for the RAF by Matra BAe Dynamics, which was awarded the contract in February 1997 by the then Conservative government.
Had the government not been obsessed with buying European, it could have done a much better deal. Even at the time, it could have procured the well-tried US Tomahawk cruise missile, originally at $1.1 - 1.4 million but, as the "tactical Tomahawk", reduced to the bargain-basement price of $575,000. For sure, these were ship-launched, but for the 27 launched during the Gulf War, at a cost of £29.43 million, we could have saved over £20 million.
However, bearing in mind that Storm Shadow is primarily intended for the Eurofighter, which is just coming into service, an even better deal was waiting in the wings. Coming on-stream in greater numbers is the Lockheed Martin Joint Air-to-Surface Standoff Missile (JASSM), and you will just love the price - $300,000 (£167,000).
Needless to say, after buying US-designed air-defence destroyers at £600 million, as against our Type 45s at £1 billion each for less capable ships, the Australians are planning to buy JASSM for their Air Force.
The missile itself is slightly lighter than the Storm Shadow (2250 lbs as opposed to 2860) but carried the same weight of explosives and has a longer range of 200nm against 150nm for the Storm Shadow. Had we had the sense that the Australians clearly have, our inventory of 900 missiles that is costing us £981 million could have been purchased for £150 million, a saving of over £830 million.
But then, French is so chic, don't you think.
COMMENT THREAD
Amongst the lessons learnt from that episode was that it wasn’t an incredibly good idea to fly low-level into heavily defended airspace in order to lob a bomb at a target. A much better idea is to launch a guided stand-off bomb from a hundred miles or so away and let it find its own way to the target, allowing you to toodle back to the base and down a stiff gin or two.
Anyhow, by the time the next Gulf War came along, RAF Tornados were happily equipped with these bombs, better known as "Storm Shadow" cruise missiles. The RAF's 617 Squadron managed to fire off some 27 of them - compared with an estimated 400 or so "Tomahawks", mostly ship-launched, by the United States.
Back on the Home Front, however, ministers were being extraordinarily reticent about how much these new toys cost. Mike Hancock, Lib-Dem MP for Portsmouth South tried to find out in February 1998, when he was just told the current estimated cost of the programme, which then stood at £934 million.
By July 2002, when Hancock tried again, the cost of the project had increased to £981 million but the minister refused to give information on the cost of an individual missile, on "security grounds".
Undaunted, this fearless author consulted another source, Wikipedia which ventured where ministers feared to tread, informing us that the UK had ordered 900 Storm Shadows. That puts the price of the toys at over £1 million each – the million pound bomb.
Once again, though, the "curse of Europe" strikes. Storm Shadow is a French designed weapon, built by Matra Défense for the French Air Force under the name SCALP EG. It was built for the RAF by Matra BAe Dynamics, which was awarded the contract in February 1997 by the then Conservative government.
Had the government not been obsessed with buying European, it could have done a much better deal. Even at the time, it could have procured the well-tried US Tomahawk cruise missile, originally at $1.1 - 1.4 million but, as the "tactical Tomahawk", reduced to the bargain-basement price of $575,000. For sure, these were ship-launched, but for the 27 launched during the Gulf War, at a cost of £29.43 million, we could have saved over £20 million.
However, bearing in mind that Storm Shadow is primarily intended for the Eurofighter, which is just coming into service, an even better deal was waiting in the wings. Coming on-stream in greater numbers is the Lockheed Martin Joint Air-to-Surface Standoff Missile (JASSM), and you will just love the price - $300,000 (£167,000).
Needless to say, after buying US-designed air-defence destroyers at £600 million, as against our Type 45s at £1 billion each for less capable ships, the Australians are planning to buy JASSM for their Air Force.
The missile itself is slightly lighter than the Storm Shadow (2250 lbs as opposed to 2860) but carried the same weight of explosives and has a longer range of 200nm against 150nm for the Storm Shadow. Had we had the sense that the Australians clearly have, our inventory of 900 missiles that is costing us £981 million could have been purchased for £150 million, a saving of over £830 million.
But then, French is so chic, don't you think.
COMMENT THREAD
A disaster waiting to happen
There was always something particularly unwise in the EU's "denied boarding" regulations, which require airlines to pay compensation to passengers when their flights are delayed – almost irrespective of the reasons.
We brought this up in February last, after an incident when a British Airways 747 suffered an engine failure on take off from Los Angeles, en route to Heathrow, when the pilot elected to continue the journey, only to run out of fuel and have to make an emergency landing in Manchester.
At the time it was suggested that the decision to press on had been influenced by the "denied boarding" regulations, which had just come into force – only for this to be denied by the airline.
However, the safety issue has re-emerged this week, with The Telegraph reporting that pilots are speaking out about the commercial pressures they are under to fly even when their planes have technical faults.
It has not escaped notice either that there have been three major air crashes this month and while last year was declared the safest in history for air travel, when there were 428 fatalities; already this year more than 550 people have died in commercial flights. In the past month, three fatal crashes - in Venezuela, Greece and Italy - have resulted in 297 deaths.
Now, it seems, Belgian pilots are claiming that the financial pressures placed on pilots to take off, even in planes with minor technical malfunctions, have increased significantly as a result of the EU’s compensation requirements.
These claims are being made in the Belgian newspaper Het Nieuwsblad after 121 people died when their Helios Airways plane hit a hillside in Greece on Sunday, after losing cabin pressure, and after 160 people were killed when a West Caribbean Airways plane crashed in Venezuela on Tuesday when both engines failed.
Helios admitted there had previously been problems with the air pressure system on the plane. Interviews with one of the pilot's mothers indicated that her son may have been aware of such problems before taking off.
"The commercial pressure on the shoulders of pilots has increased enormously," says Filip van Rossum, a former Sabena pilot. "The profit margins in the aviation sector are paper-thin, the competition is fierce and the aviation industry is sensitive to rising oil prices. "Keeping a plane on the ground costs money, and aviation bosses want their pilots to keep their planes flying for as long as possible."
Van Rossum's views have been echoed by the Colombian Pilots' Association, which said its members had repeatedly warned the country's Civil Aeronautics Board about the inadequate safety procedures of West Caribbean Airways, before Tuesday's crash. As six of the airline's seven planes had been grounded for maintenance work, the aircraft that crashed in Venezuela had flown for nearly 20 hours continuously to cover the company's remaining routes.
The Colombian Civil Aviation Authority said it had fined the airline on several occasions for offences ranging from pilots not getting sufficient rest between flights to a lack of proper aircraft maintenance and pilot training. The airline has been put under "special watch" because of its financial difficulties.
However, there are also fears that the passenger compensation requirements could result in pilots with major scheduled airlines coming under pressure to take risks for commercial reasons. "One area that must not 'give' is flight safety," says Captain Mervyn Granshaw, chairman of the British Airline Pilots Association. "We need to ensure that any attempts to avoid compensation do not affect flight safety, and that there is no attempt to force planes to take off when it is inappropriate."
By way of balance, The Telegraph cites "a leading aviation expert", who has dismissed such fears, arguing that because of the huge choice of carriers available, airlines cannot afford to cut corners. "There is so much choice on nearly every route that airlines need to show that their safety records are unblemished, or travellers will opt to fly with another airline," said David Learmount, editor of Flight International. "According to the historical trend, what we have seen this year is just a blip. Safety levels have never been higher."
Despite this, the regulations cannot help but increase pressure to fly, whatever the expert might say. And, sooner or later, we could see a major air disaster in which this ill-considered EU law will be a contributory factor. Not for nothing did we, last February, dub this law the "denied safety" regulations. If the pilots are right, they are a disaster waiting to happen.
COMMENT THREAD
We brought this up in February last, after an incident when a British Airways 747 suffered an engine failure on take off from Los Angeles, en route to Heathrow, when the pilot elected to continue the journey, only to run out of fuel and have to make an emergency landing in Manchester.
At the time it was suggested that the decision to press on had been influenced by the "denied boarding" regulations, which had just come into force – only for this to be denied by the airline.
However, the safety issue has re-emerged this week, with The Telegraph reporting that pilots are speaking out about the commercial pressures they are under to fly even when their planes have technical faults.
It has not escaped notice either that there have been three major air crashes this month and while last year was declared the safest in history for air travel, when there were 428 fatalities; already this year more than 550 people have died in commercial flights. In the past month, three fatal crashes - in Venezuela, Greece and Italy - have resulted in 297 deaths.
Now, it seems, Belgian pilots are claiming that the financial pressures placed on pilots to take off, even in planes with minor technical malfunctions, have increased significantly as a result of the EU’s compensation requirements.
These claims are being made in the Belgian newspaper Het Nieuwsblad after 121 people died when their Helios Airways plane hit a hillside in Greece on Sunday, after losing cabin pressure, and after 160 people were killed when a West Caribbean Airways plane crashed in Venezuela on Tuesday when both engines failed.
Helios admitted there had previously been problems with the air pressure system on the plane. Interviews with one of the pilot's mothers indicated that her son may have been aware of such problems before taking off.
"The commercial pressure on the shoulders of pilots has increased enormously," says Filip van Rossum, a former Sabena pilot. "The profit margins in the aviation sector are paper-thin, the competition is fierce and the aviation industry is sensitive to rising oil prices. "Keeping a plane on the ground costs money, and aviation bosses want their pilots to keep their planes flying for as long as possible."
Van Rossum's views have been echoed by the Colombian Pilots' Association, which said its members had repeatedly warned the country's Civil Aeronautics Board about the inadequate safety procedures of West Caribbean Airways, before Tuesday's crash. As six of the airline's seven planes had been grounded for maintenance work, the aircraft that crashed in Venezuela had flown for nearly 20 hours continuously to cover the company's remaining routes.
The Colombian Civil Aviation Authority said it had fined the airline on several occasions for offences ranging from pilots not getting sufficient rest between flights to a lack of proper aircraft maintenance and pilot training. The airline has been put under "special watch" because of its financial difficulties.
However, there are also fears that the passenger compensation requirements could result in pilots with major scheduled airlines coming under pressure to take risks for commercial reasons. "One area that must not 'give' is flight safety," says Captain Mervyn Granshaw, chairman of the British Airline Pilots Association. "We need to ensure that any attempts to avoid compensation do not affect flight safety, and that there is no attempt to force planes to take off when it is inappropriate."
By way of balance, The Telegraph cites "a leading aviation expert", who has dismissed such fears, arguing that because of the huge choice of carriers available, airlines cannot afford to cut corners. "There is so much choice on nearly every route that airlines need to show that their safety records are unblemished, or travellers will opt to fly with another airline," said David Learmount, editor of Flight International. "According to the historical trend, what we have seen this year is just a blip. Safety levels have never been higher."
Despite this, the regulations cannot help but increase pressure to fly, whatever the expert might say. And, sooner or later, we could see a major air disaster in which this ill-considered EU law will be a contributory factor. Not for nothing did we, last February, dub this law the "denied safety" regulations. If the pilots are right, they are a disaster waiting to happen.
COMMENT THREAD
Friday, August 19, 2005
Dutch Agriculture Minister subsidized
It seems that Marianne Fischer-Boel, the Agriculture Commissioner from Denmark, is not the only politician to enjoy a substantial largesse from the pesky Common Agricultural Policy.
Netherlands has joined Britain and Denmark in disclosing where the various agricultural subsidies go. (Though the “astonishing” revelation that most of the money goes to very big landowners and, above all, various agribusinesses could have surprised only the journalists.)
The Dutch government is faced with a slightly more embarrassing situation. It seems that the Agriculture Minister Cees Veerman received about €190,000, (£129,000 or $233,000) last year for his farms in France and the Netherlands. Quite a nice little earner one would have thought.
Mr Veerman, needless to say, does not consider that there might be a clash of interest here. Instead, he has promised to reveal where all the other money goes in the Netherlands.
As the International Herald Tribune notes:
In fact, the Dutch are turning against the project and, in the wake of the Theo Van Gogh case, against many of the so-called European ideals, that are nothing of the kind but have been promulgated as such by the EU and its supporters.
Among those involved in the discussion about agricultural subsidies and the effect they have on the world in general is the Evert Vermeer Foundation, a research institute connected with the Dutch Labour Party, that concentrates on developing countries. It is they who requested the information under Freedom of Information legislation. Their spokesman, Yannick Du Pont, said quite reasonably:
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Netherlands has joined Britain and Denmark in disclosing where the various agricultural subsidies go. (Though the “astonishing” revelation that most of the money goes to very big landowners and, above all, various agribusinesses could have surprised only the journalists.)
The Dutch government is faced with a slightly more embarrassing situation. It seems that the Agriculture Minister Cees Veerman received about €190,000, (£129,000 or $233,000) last year for his farms in France and the Netherlands. Quite a nice little earner one would have thought.
Mr Veerman, needless to say, does not consider that there might be a clash of interest here. Instead, he has promised to reveal where all the other money goes in the Netherlands.
As the International Herald Tribune notes:
“In 2001, the Netherlands received about 236 million euros in direct farm payments, out of a total 25 billion euros of direct farm payments paid into the 15 countries that then comprised the EU. The total EU budget is about 40 billion euros, including other support and payments to encourage rural development.”This rather awkward revelation and the reluctance to give out other figures comes, as we know, at a difficult time for the Dutch euro-enthusiasts. The people rejected the Constitution in June and are showing no signs of contrition over it.
In fact, the Dutch are turning against the project and, in the wake of the Theo Van Gogh case, against many of the so-called European ideals, that are nothing of the kind but have been promulgated as such by the EU and its supporters.
Among those involved in the discussion about agricultural subsidies and the effect they have on the world in general is the Evert Vermeer Foundation, a research institute connected with the Dutch Labour Party, that concentrates on developing countries. It is they who requested the information under Freedom of Information legislation. Their spokesman, Yannick Du Pont, said quite reasonably:
“We want to reduce this absurd subsidy system. This is for the benefit of European taxpayers and to find a solution for developing countries. If they don't release the full figures, we will ask, '’What else are they hiding?’”Good question. One wonders what the answer will be.
COMMENT THREAD
Pants
The Daily Telegraph shows itself off in all its infantile glory today with a story that excels only in sheer banality and puerility.
Despite all the growing disasters in armed forces procurement, ignored by the paper, it is presented with MoD spin on its new range of desert uniforms and what does it focus on? The underpants.
Rather confirming Michael Buerk's dismal view of the fairer sex, the article is written by a woman, Catriona Davies, who starts off her piece with the stunningly stupid comment:
The missile was supposed to replace the Army's 20-year-old Milan, production of which ceased in 1989. We now learn that the missile stocks had a shelf-life of ten years. Since, only this month has the MoD brought into service the US Javelin missile (available since 1995), this means that for nearly six years the Army has been without a medium anti-tank missile – a tad more important than underpants. But have we seen anything of this in the Telegraph?
I gather a colloquial expression of disapproval currently in vogue is "pants!" A rather fitting description of both the paper and the dire Mz Davies.
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Despite all the growing disasters in armed forces procurement, ignored by the paper, it is presented with MoD spin on its new range of desert uniforms and what does it focus on? The underpants.
Rather confirming Michael Buerk's dismal view of the fairer sex, the article is written by a woman, Catriona Davies, who starts off her piece with the stunningly stupid comment:
The modern soldier has the best in high-tech weaponry, satellite navigation and lightweight combat clothing, but until now there has been one thing missing from the kit bag: sensible underpants for hot climates.Earlier this month, we reported on the procurement disaster over the Army’s medium-range anti-tank missile, arising when the MoD decided to go for a European project, only to have to cancel it when it failed to deliver, wasting £109 million.
The missile was supposed to replace the Army's 20-year-old Milan, production of which ceased in 1989. We now learn that the missile stocks had a shelf-life of ten years. Since, only this month has the MoD brought into service the US Javelin missile (available since 1995), this means that for nearly six years the Army has been without a medium anti-tank missile – a tad more important than underpants. But have we seen anything of this in the Telegraph?
I gather a colloquial expression of disapproval currently in vogue is "pants!" A rather fitting description of both the paper and the dire Mz Davies.
COMMENT THREAD
Big girls' blouses
Not content with causing total chaos over Chinese quotas for trousers and sweaters, the EU is now to add a further twist to the saga, taking it into really dangerous territory.
European clothing retailers are now reporting that their quota of Chinese-made women's blouses hit an EU import ceiling yesterday, with nearly 24.8 million of the garments having been cleared for entry into the EU as of last night.
Furthermore, data from an EU imports database show that two further categories — including T-shirts and brassieres — are also close to reaching 100 per cent of their 2005 quotas. Possibly, Trade Commissioner Peter Mandelson doesn't know what a bra is, but the lad is definitely on the rack on this one – which is more than you can say for the clothing – and he is struggling to find a way of bringing forward some of 2006 quotas for use this year.
One thing he seems unable to do, however, is relax the system all together, even though four government ministers, from the Netherlands, Denmark, Sweden and Finland, have written an article in the Financial Times saying there is a risk of job losses and bankruptcies unless the quota restrictions are eased.
Anyhow, unless he gets his skates on, he is going to become very familiar with the term "big girls' blouse" and, unfamiliar though he may be with the female form, even he must know it ain't a garment.
COMMENT THREAD
European clothing retailers are now reporting that their quota of Chinese-made women's blouses hit an EU import ceiling yesterday, with nearly 24.8 million of the garments having been cleared for entry into the EU as of last night.
Furthermore, data from an EU imports database show that two further categories — including T-shirts and brassieres — are also close to reaching 100 per cent of their 2005 quotas. Possibly, Trade Commissioner Peter Mandelson doesn't know what a bra is, but the lad is definitely on the rack on this one – which is more than you can say for the clothing – and he is struggling to find a way of bringing forward some of 2006 quotas for use this year.
One thing he seems unable to do, however, is relax the system all together, even though four government ministers, from the Netherlands, Denmark, Sweden and Finland, have written an article in the Financial Times saying there is a risk of job losses and bankruptcies unless the quota restrictions are eased.
Anyhow, unless he gets his skates on, he is going to become very familiar with the term "big girls' blouse" and, unfamiliar though he may be with the female form, even he must know it ain't a garment.
COMMENT THREAD
Thursday, August 18, 2005
As others die
No sooner had both Helen and I written pieces here and here on the baleful effect of pesticide restrictions imposed on the Third World by developing countries – and especially the EU – then up pops the Washington Times with an op-ed on the self-same subject.
In recent months it has become fashionable to say that future Western aid to Africa will be a hand up, not a handout, writes the WT. African governments, the aid lobby claims, will be encouraged to search for innovative solutions to their problems, free of Western interference.
Yet, we are told (and the case of Blog readers, reminded) when the Ugandan government decided to introduce DDT, an effective insecticide, to its malaria-control programme, the European Union threatened to embargo Ugandan agricultural exports to the EU. The EU threats are based on junk science. If carried out, they will cause a lot of harm.
The paper rehearses the case, noting that Uganda used DDT very successfully during the late 1950s and early 1960s. Some African countries - Eritrea, Madagascar, Mozambique, Namibia and Swaziland included - still successfully use it. It then continues:
Time will show how that money will be spent, says the WT. In the past, much of the money earmarked for fighting deadly diseases in Africa was embezzled by corrupt officials. In addition, US aid agencies, like the European aid agencies, actively opposed DDT use in Africa. Still, the fact that DDT is back on the agenda both in the United States and Uganda is good news for the Ugandan people.
The paper concludes with a sentiment that we would endorse: "It would be a shame if misguided environmentalists in Europe were to succeed in undermining the best hope the Africans have of defeating such a deadly menace."
Now it is the turn of our media. We live in hope, even as others die.
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In recent months it has become fashionable to say that future Western aid to Africa will be a hand up, not a handout, writes the WT. African governments, the aid lobby claims, will be encouraged to search for innovative solutions to their problems, free of Western interference.
Yet, we are told (and the case of Blog readers, reminded) when the Ugandan government decided to introduce DDT, an effective insecticide, to its malaria-control programme, the European Union threatened to embargo Ugandan agricultural exports to the EU. The EU threats are based on junk science. If carried out, they will cause a lot of harm.
The paper rehearses the case, noting that Uganda used DDT very successfully during the late 1950s and early 1960s. Some African countries - Eritrea, Madagascar, Mozambique, Namibia and Swaziland included - still successfully use it. It then continues:
In part as a result of the pressure from the environmentalist lobby, the South African government briefly discontinued the use of DDT in the late 1990s. Between 1998 and 2000, KwaZulu Natal, South Africa's most malarial province, experienced a 400 percent increase in malaria cases and the government was forced to reintroduce DDT. By 2001, malaria cases fell to their pre-1998 levels.The WT then adds a fascinating insight, telling us that the EU threats are part of a broader European agenda to force African countries to comply with rules and regulations that are totally unsuitable for Africa's level of economic development:
Encouraged by those results, the Ugandan Minister of Health, Jim Muhwezi, floated the idea of approving the use of DDT as one way of combating malaria in Uganda. He wants DDT to be used in addition to bednets and new drug treatments. If realised, Mr. Muhwezi's wish would come not a moment too soon. Despite the fact that malaria is both preventable and curable, the disease kills up to 110,000 Ugandan children every year. Based on its past performance, it is reasonable to expect that the introduction of DDT could dramatically reduce that death rate.
Unfortunately, DDT also happens to be an insecticide that most environmentalists love to hate - and nowhere more so than in the capitals of Western Europe. DDT has been used for more than 60 years and in all that time no scientifically replicated study has been able to link the chemical to cancer in humans.
Despite the bad press from environmentalists, the insecticide has an incredibly safe record of use. In any event, when used in malaria control, DDT is sprayed on the inside walls of houses in minute quantities. The chances of any trace amounts of DDT ending up on agricultural produce are tiny, and even if they did, the effects on human health would be negligible.
Take Pascal Lamy, who used to be the EU's chief trade negotiator and now heads the World Trade Organization. Before leaving the EU Commission, Mr. Lamy proposed to open European markets to imports from the poor countries. In exchange, those countries would have to sign on to the Kyoto Protocol on global warming, the Cartagena Protocol on genetically modified organisms, and a plethora of international labour agreements.It is encouraging, adds the WT, that the United States does not share the EU's approach to combating poverty and disease in Africa. The Bush administration has not tried to force African countries to subscribe to growth-killing environmental and labour regulations. Moreover, the administration takes a different view on how malaria should be fought. President Bush's commitment of $1.2 billion to combat malaria on the African continent explicitly allows for "indoor residual spraying with approved insecticides," including DDT.
But European countries did not have to comply with environmental and labour regulations when they were at Africa's stage of economic development. After Europe developed and its standard of living increased, many people were able to pay a premium for commercial goods that were produced in an environmentally friendly way.
Increased efficiency of production and the concomitant reduction of waste also contributed to better environmental quality. Forcing poor countries to accede to unsuitable treaties will only slow down their economic development.
Time will show how that money will be spent, says the WT. In the past, much of the money earmarked for fighting deadly diseases in Africa was embezzled by corrupt officials. In addition, US aid agencies, like the European aid agencies, actively opposed DDT use in Africa. Still, the fact that DDT is back on the agenda both in the United States and Uganda is good news for the Ugandan people.
The paper concludes with a sentiment that we would endorse: "It would be a shame if misguided environmentalists in Europe were to succeed in undermining the best hope the Africans have of defeating such a deadly menace."
Now it is the turn of our media. We live in hope, even as others die.
COMMENT THREAD
Merkel's team
Angela Merkel, Chancellor Schröder's challenger is leading in the polls by 14 points despite a rather lacklustre set of policies, all of which can be characterized by the words "yes, but …."
However, that might change. Ms Merkel has announced her team and at least one appointment is threatening to be quite successful. She has appointed Dr Paul Kirchhof to take charge of the financial policy.
The fact that it might be quite a good idea is proved by the fact that it was immediately criticized by Peter Lösche, a political scientist at Göttingen University.
Ambrose Evans-Pritchard describes him:
Dr Kirchhof’s biggest claim to fame is his radical 2001 plan to simplify the German tax system, something that is badly needed.
There is an interesting omission: Bavarian Premier Edmund Stoiber has no position. Partly, this is because he has not agreed to move to Berlin, should the party find itself forming the new government after the election.
Furthermore, Stoiber is not precisely popular as a politician. His recent critical remarks about the ossies, eastern Germans was another faux pas. The CDU appears to be struggling in that part of the country, despite Merkel's own origins and many of the votes might go to "Red" Oskar Lafontaine. Whatever one may think about the ossies and the effect they had on German politics, four and a half weeks before a crucial election is not the time to voice those reservations.
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However, that might change. Ms Merkel has announced her team and at least one appointment is threatening to be quite successful. She has appointed Dr Paul Kirchhof to take charge of the financial policy.
The fact that it might be quite a good idea is proved by the fact that it was immediately criticized by Peter Lösche, a political scientist at Göttingen University.
“Politics should not be about appointing friends but about competence and political experience and (Friedrich) Merz is clearly the one with those attributes,” – he said rather crossly, ignoring the fact that Merz’s financial ideas were largely Kirchhof’s in the first place.At the same time the appointment was welcomed by the German industry federation (BDI) and Lombard Street Research, whose chief international economist, Gabriel Stein, breathed a sigh of relief:
“I was worried that the Christian Democrats still lacked a sense of crisis,thinking they could save the German model by tinkering with it. But this shows a much deeper readiness to get to grips with the issues.”Dr Kirchhof’s main “sins” as far as the German media and academe are concerned, are his political independence and distinct coolness towards the European project.
Ambrose Evans-Pritchard describes him:
“A Heidelberg law professor and former judge on the constitutional court, Dr Kirchhof wrote the landmark 1993 ruling on the Maastricht Treaty stating that Germany reserved the right to strike down any European Union directive that breached its own constitutional law.”Not that the Karlsruhe court has ever bothered to use that ruling except to release a badly wanted alleged money launderer for various Islamic terrorist groups, not, presumably what Dr Kirchhof had envisaged, but you cannot have everything. Also, it is the thought that counts.
Dr Kirchhof’s biggest claim to fame is his radical 2001 plan to simplify the German tax system, something that is badly needed.
“In 2001 he drew up proposals to slash the top rate of income tax from 39pc to 25pc, while abolishing a dizzying range of 163 tax exemptions to offset the loss in revenue. Under the scheme, there would be three tax levels - 15pc, 20pc, and 25pc - with the top rate kicking in at just €20,000 a year (£13,600).”Other appointments include Wolfgang Schäuble, Helmut Kohl’s foreign policy expert, as the spokesman on foreign and European affairs.
There is an interesting omission: Bavarian Premier Edmund Stoiber has no position. Partly, this is because he has not agreed to move to Berlin, should the party find itself forming the new government after the election.
Furthermore, Stoiber is not precisely popular as a politician. His recent critical remarks about the ossies, eastern Germans was another faux pas. The CDU appears to be struggling in that part of the country, despite Merkel's own origins and many of the votes might go to "Red" Oskar Lafontaine. Whatever one may think about the ossies and the effect they had on German politics, four and a half weeks before a crucial election is not the time to voice those reservations.
COMMENT THREAD
Defence policy: what a difference the years make
If you wanted to know what this government's Defence policy was, where would you look? As a task, it is not as easy as it sounds. Cutting to the chase, the actual place to look is in the archives for HM Treasury – and you thought the place to look was the MoD… silly you!
Under this current system of governance, each spending department lodges with the Treasury a "Public Service Agreement" (PSA) in the annual spending review, which is published each year. There, department by department, are set out the detailed objectives or "targets", which collectively are the effective statement of government policy.
Now, just as a matter of idle curiosity, have a look at the Ministry of Defence's PSAs for the year 2000, and in particular, targets 4 & 5:
The summit itself was on 23-24 April 1999 – the 50th anniversary - at which the Nato member heads reaffirmed their commitment to Nato as "an alliance for the 21st Century", and agreed an "updated" Strategic Concept. Thus, we seen in government policy, a firm commitment to Nato at the heart of defence policy.
Interestingly, though, in the 2002 Spending Review PSA, "target 4" and the reference to the Washington Summit seems to disappear. We have in its place the following:
There, we see a reaffirmation of the 2002 "target 5", but with the addition of an interesting little note, that this is a "Joint target with Foreign and Commonwealth Office". But, we are also given these "killer" lines:
Currently, therefore, there are three objectives, on a par, only one of which is to do with Nato. The other two involve working within the EU, enhancing its "defence capabilities". The role of Nato has been substantially downgraded and the government has moved closer to a "European defence identity".
It is so nice to know what government policy now is – but what a difference the years make.
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Under this current system of governance, each spending department lodges with the Treasury a "Public Service Agreement" (PSA) in the annual spending review, which is published each year. There, department by department, are set out the detailed objectives or "targets", which collectively are the effective statement of government policy.
Now, just as a matter of idle curiosity, have a look at the Ministry of Defence's PSAs for the year 2000, and in particular, targets 4 & 5:
4. Working with NATO Allies, implement the decisions of the NATO Washington Summit, including the new Strategic Concept and the Defence Capabilities Initiative, and help to adapt NATO to the new strategic environment.Target five we know about, which came from the 1999 Helsinki European Council, but the reference to the Nato Washington Summit in objective four needs a little explaining.
5. Work with partners so that the European Union (EU) can, by 2003, deploy forces of up to Corps level (50–60,000 personnel) within 60 days, capable of undertaking the full range of Petersberg tasks (from disaster relief to large scale peace-support operations) in and around Europe.
The summit itself was on 23-24 April 1999 – the 50th anniversary - at which the Nato member heads reaffirmed their commitment to Nato as "an alliance for the 21st Century", and agreed an "updated" Strategic Concept. Thus, we seen in government policy, a firm commitment to Nato at the heart of defence policy.
Interestingly, though, in the 2002 Spending Review PSA, "target 4" and the reference to the Washington Summit seems to disappear. We have in its place the following:
5. Strengthen European security through an enlarged and modernised NATO, an effective EU military crisis management capacity and enhanced European defence capabilities.We now come to an even more obscure document – unread by millions – none other than the "Quarter 4 Report to HM Treasury, Progress Against Spending Review 2002, Public Service Agreement Targets (April 03-March 06) as at 31 March 04", which will, I guess, never reach best-seller status.
There, we see a reaffirmation of the 2002 "target 5", but with the addition of an interesting little note, that this is a "Joint target with Foreign and Commonwealth Office". But, we are also given these "killer" lines:
From 1 April 2003, this subsumes SR2000 Target 4, "Working with NATO Allies, implement the decision of the NATO Washington Summit, including the new Strategic Concept and the Defence Capabilities Initiative, and help adapt NATO to the new strategic environment."In other words, official government policy has changed. The commitment to Nato and its updated "Strategic Concept" given at the Washington Summit is now ditched and the key target is to "Strengthen European security through an enlarged and modernised NATO, an effective EU military crisis management capacity and enhanced European defence capabilities."
Currently, therefore, there are three objectives, on a par, only one of which is to do with Nato. The other two involve working within the EU, enhancing its "defence capabilities". The role of Nato has been substantially downgraded and the government has moved closer to a "European defence identity".
It is so nice to know what government policy now is – but what a difference the years make.
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I know it's serious...
...and totally OT, but I could not resist drawing attention to the unfortunate juxtaposition of phrasing in today's Telegraph report on the scandalous shooting of Charles Menezes. Says the Telegraph...
On the more serious issue Helen's posting at the time of the Stockwell shooting raised some important questions.
Given the appalling details which are now emerging, Clarke's little sojourn to see his EU chums in the wake of the first bombing seems even more inappropriate. Our Home Secretary has a stinking mess on his own doorstep and he would be better advised putting his energies to cleaning it up rather than wasting his time in Brussels. Government, like charity, begins at home.
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No positive identification was made because an officer was "relieving himself" at the time. According to the leaked documents...Do we now know the source of the leak?
On the more serious issue Helen's posting at the time of the Stockwell shooting raised some important questions.
Given the appalling details which are now emerging, Clarke's little sojourn to see his EU chums in the wake of the first bombing seems even more inappropriate. Our Home Secretary has a stinking mess on his own doorstep and he would be better advised putting his energies to cleaning it up rather than wasting his time in Brussels. Government, like charity, begins at home.
COMMENT THREAD
A minimum of formalities?
Twenty days after he was arrested in Rome, an Italian court has agreed to extradite to Britain Hussain Osman, the man accused of trying to bomb a Tube train at Shepherd's Bush.
But the police have been given a further 35 days to pursue inquiries into Osman's activities in Italy, where he lived for several years before moving to Britain and claiming refugee status under a false name and nationality.
It also allows time for Italy's highest court of appeal, the Court of Cassation, to rule on the validity of the court's decision. Osman's lawyer, Antonietta Sonnessa, said she would appeal against the decision within the 10 days allowed. The judges must make up their minds within a further 20 days.
At best, therefore, the British police get their hands on Osman some fifty-five days after his arrest, five days short of the deadline set under the procedure for the European Arrest Warrant
This is the warrant that "simplifies and speeds up the procedure, given that the whole political and administrative phase is replaced by a judicial mechanism."
It replaces the current extradition system, requiring each national judicial authority (the executing judicial authority) "to recognise, ipso facto, and with a minimum of formalities, requests for the surrender of a person made by the judicial authority of another Member State."
And this is the EU's idea of "minimum of formalities"?
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But the police have been given a further 35 days to pursue inquiries into Osman's activities in Italy, where he lived for several years before moving to Britain and claiming refugee status under a false name and nationality.
It also allows time for Italy's highest court of appeal, the Court of Cassation, to rule on the validity of the court's decision. Osman's lawyer, Antonietta Sonnessa, said she would appeal against the decision within the 10 days allowed. The judges must make up their minds within a further 20 days.
At best, therefore, the British police get their hands on Osman some fifty-five days after his arrest, five days short of the deadline set under the procedure for the European Arrest Warrant
This is the warrant that "simplifies and speeds up the procedure, given that the whole political and administrative phase is replaced by a judicial mechanism."
It replaces the current extradition system, requiring each national judicial authority (the executing judicial authority) "to recognise, ipso facto, and with a minimum of formalities, requests for the surrender of a person made by the judicial authority of another Member State."
And this is the EU's idea of "minimum of formalities"?
COMMENT THREAD
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