Posts Tagged ‘european union’


July 4, 2016

The Leave camp are going to have a serious problem. Or maybe they’ve always had one.

One thing that seems to be coming increasingly clear – at least, observing events from afar – is that not only have a lot of Remainers failed to understand the reasons behind the Leave vote, but many of those that voted Leave don’t seem to have fully understood what they were voting for either.

This could be a huge problem for the Leave camp.

You are never going to convince those die-hard Eurosceptics, who have spent all their life campaigning against the EU, that actually being part of this European project might not be that bad of an idea.

But you might just convince those that thought the world would be different when they ticked that Leave box that they made the wrong decision.

I have seen a number of people wavering on this and this is a reflection of the poor work that the Leave campaign did in preparing an exit strategy.

They probably didn’t think they had to.

As Sarah Vine has been repeatedly quoted as saying over the past few days – no doubt because it is such an awesome quote – “you were only supposed to blow the bloody doors off”.

No one expected the Leave campaign to actually work, let alone those that were behind the campaign. Every eurosceptic that I spoke to before the referendum were focusing on getting as close to the Remain vote as possible. Certainly they never thought they’d beat them.

But they should have thought harder.

Because it now appears that we are a country without a plan. And since we do actually live in a parliamentary democracy, folk, in case anyone has forgotten, leaving the EU isn’t simply a question of laying a hand on the Magna Cart and saying, “I solemnly swear to invoke Article 50”. As some that voted Leave thought it would be.

And now Nigel Farrage is gone, having tendered his resignation as UKIP leader today. One might have hoped that he’d stick around to try to… you know… formulate a plan. Or perhaps dust off the one that he’d had all along at the bottom of his sock drawer, but with all the excitement of everything had clean forgotten about.

All of this means that many people are feeling duped.

You might be able to win a battle with false rhetoric, grandiose promises and over-simplification.

But you can’t seal that victory.


Wrong reasons

July 3, 2016

17.4 million people – a little more than a third of the voting-age population – are not bigoted racists who think Nigel Farage and Boris Johnson are gods. This is perhaps the single most important thing to understand about the referendum, because if we fail to understand this salient fact then this country will remain hopelessly divided.

I in no way tried to campaign for one result or the other because for me it was just too difficult to call. There were too many complexities to the debate that I simply could not decide which side to come down on.

What frustrated me about the whole affair, and continues to frustrate me, is this constant barrage of misinformation and a lack of any real debate about the issues that matter. Some people have said that, with such an important issue as EU membership, perhaps it should not have been left up to the people to decide. If I’d have known that the whole campaign was going to be boiled down into such simplistic arguments that started to become meaningless, I would probably have agreed.

There is a very good argument to be made that the whole referendum should be run again, or declared null and void and let our politicians make this decision. After all, we do pay them to take decision on complex matters that we, the humble public, don’t really understand.


But I don’t want to dwell here on democracy or whether the referendum was democratic or not. Countless others are already making that point.

I want to emphasise something much more fundamental. That, whatever happens to our standing with the EU, the result of this referendum must not be ignored.

Okay, two thirds of the voting-age population did not vote to leave the EU. But one third did. And they are important.

I understand that passions are running high, but it is perilous to ignore those in the Leave camp or to simply dismiss them as bigoted racists. This is what the EU’s political establishment has always sought to do and look where it has got them. The EU is lurching – or, rather, hobbling – from crisis to crisis.

That is not an EU I think we should be part of.

Now it is perfectly valid to think that we should remain a member of the EU. There are exceedingly good reasons to remain, and many people can see them much more clearly than the reasons to leave.

But there are also good reasons to leave. And failing to recognise and understand them, and to engage in a sober debate that doesn’t deride either side, is imperative.

But in amongst all the frustration and hot tempers, I am seeing precious little of this. And this is not a good path to go down. Hostility towards the EU will not go away if the referendum is voided. It must be understood for it to be corrected.

And above all, those that voted to leave the EU must have their voice heard – and not simply dismissed as stupid or daft or insane every time they tentatively suggested that leaving the EU might not be a bad idea. Otherwise all anyone will here are the Nigel Farrages and Boris Johnsons of this world, or those that have made anti-European rhetoric their career path.

(As an addendum to this entry, I am in the process of compiling a list of reasons why people might have voted to withdraw from the EU – besides the anti-immigration argument. But this is a hard list to compile, and needs careful thought, so it is not done yet. I am trying very hard not to demonise either side and to move things forward in a spirit of constructive debate. And incidentally, whilst the next couple of years of withdrawal from the EU might be painful, in the long-run things could turn out for the better; but that slightly contentious point doesn’t seem to ever be properly debated.)

Oh hear us

June 23, 2016

There is something rotten in Europe. As Brits go to the polls today, it is worth bearing that in mind.

With Remain having taken the lead (by between 2 and 8 percentage points, depending on which poll you look at), and an estimated 10% still in the undecided camp, it looks exceeding unlikely that Brits are now going to vote to leave the EU. Most of those who have not yet made up their mind will probably be swayed by the status-quo.

It is perhaps not surprising that there is such a vociferously strong anti-EU voice in Europe. We’ve always had this, ever since we signed up to the single market. It’s in our ethnic make-up. Like Belgians have their strikes. Or Germans have their sauerkraut.

But it is so surprising that Leave came so close to pulling us out of the EU with such a lousy campaign. This isn’t a crazy lunatic movement that doesn’t like the black fella, as some in the Remain camp constantly insinuate. This is a disparate movement of people that have some very real grievances with how the EU is run.

I think that few who have written about the EU would think that everything is hunkydory in the glitzy corridors of Brussels bureaucracy. Over the past months, I have spoken to many people with first-hand experience of the Brussels apparatus who think it is an utter shambles.

So which way are they voting?

In, of course – because they just can’t think of a good enough reason for voting the other way. Because one hasn’t been presented to them.

But, faced with such moderate thinking and a rather shambolic campaign, it says a lot that Leave seem to have come so close.

So if, as I strongly suspect, we vote to remain within the EU, some really tough action is required in Brussels to convince the British that what they voted for was the right thing. And we are not talking about another hastily put-together David Cameron whistle-stop tour of the European capitals. We need real change.

And that real change needs to start with a scaling back of Brussels intervention, a better reliance on the free market economy and an acknowledgement that there are certain powers Brussels does not have to sink its claws in for the single market to work.

And perhaps above all the EU needs to start engaging better with its citizens. Not this half-hearted campaign of misinformation and propaganda, but a real engagement to explain exactly what the EU is. Because what has emerged during this campaign – talking to people about it, reading comments on my Facebook feed and Twitter, tuning into the occasional debates – is that people still don’t seem to get the EU.

And for this to take hold, the EU needs to drop its veil of arrogance and deceit. The EU did not end wars in Europe. The EU is not irreplaceable. And the EU is most certainly not infallible.

Of course, I don’t think any of these changes are actually going to take hold – and indeed we may find ourselves in a situation where the political elite want to bind European nations into an even more tightly-knit bloc, so those pesky Brits can’t hold an entire continent to ransom again.

But if the EU don’t listen to what the British are trying to say – and I mean really listen – then this problem is never going to go away.

Why the Leave camp will fail

June 20, 2016

The other week, during my time in London, I had the privilege to listen to MP and shadow foreign secretary Hilary Benn make the case for staying in the EU. Rarely have I heard such a masterful orator and, whilst I might not have agreed with everything he said, it was actually quite thrilling to listen to him make his case. Like hearing a well-read bit of poetry.

By comparison, the Eurosceptics on the panel often sounded shrill and desperate and occasionally a little bit crazy. At one point, one of the panellists – Gerald McGregor, a Chiswick town councillor – brandished a piece of paper in his hand, and suggested that David Cameron’s return from Europe before the referendum was a little like Neville Chamberlain returning from Nazi Germany before World War II broke out. Comparing the European project to Nazism isn’t really what folk want to hear.

And that is why the Leave camp will fail.

Not just because their standard-bearers seem to constantly be making obscure references to fascism or tyranny or to a world that now no longer exists (although that probably doesn’t help). But because arguing about leaving the European Union is a lot harder than arguing about remaining. And the Leave camp just don’t seem to have put in the effort to make this case clearly, passionately and rationally enough.

Of course, this isn’t all their fault. Rational Eurosceptics do have the very real problem of having to make their voices heard above those of charismatic and politically-ambitious spokespeople of the Eurosceptic cause, such as Boris Johnson and Nigel Farage. Both likeable enough fellows, but they have managed to boil the arguments of why we might want to leave the EU into such crass shades of grey that they are easily put down by any Remainer with half a brain.

Maybe that is what people want to hear – the simplistic – because it is just too difficult to understand all the nuances behind what it would mean to leave a community that we have been wedded to for longer than I have been alive.

It is extremely difficult to make a rational argument for why we might want to leave the EU without sounding a little crazy, which is why I never try to enter this mine field. But I have some very good Eurosceptic friends who do make such a case very convincingly. The problem is that such convincing arguments never seem to enter the mainstream.

It is precisely because the Eurosceptic case is so much harder to put than the pro-European one that those in the Leave camp should have worked harder at making it. They should have made an effort to understand and explain the more complex areas of the debate, not simply glassed over this and repeated ad-nauseam the rather right-wing snub to immigrants or the subdued left-wing doff to the NHS.

Like what benefit does leaving the EU actually bring to people living in the UK? As with the Scottish referendum, people will be voting with their wallet in mind.

Like exactly why there is such a democratic deficit in the EU, and whether that really matters? Because many people don’t seem to quite get this.

Like exactly what comes afterwards? Okay, perhaps this is a difficult one to answer, since this is a great unknown, but at least they could have tried. At least they could have given us some plan as to what comes once we have taken this leap in the dark.

None of this to say that we shouldn’t leave the EU; I am still split 50-50 on this. Rather, the point of this blog entry is to reassure those committed Remainers out there that they don’t have anything to fear. The Brexiters had a far harder task of persuading people why they should hand back their membership card. And because their job was so much more daunting they should have tried twice as hard to do so.

At least.

And then, even without Hilary Benn in their arsenal, they might just have succeeded in winning enough of the electorate round to make a difference.

In or out?

May 24, 2016

With less than a month to go, I still haven’t made up my mind. One would think it should be simple. I spent five years working in Brussels, after all, and understand something of how the EU works. But the more I think about it the more I just don’t know. Maybe I should tick both boxes.

I think the problem is that we – the British people – are being denied a proper debate about the issues that matter. Which makes me a little mad.

We hear from the Nigel Farage camp that these foreign workers are coming and stealing our jobs. Probably want our women, too.

We hear from the Treasury that we’re going to be £4300 worse off – per year – if we were to leave the EU, with apparently not serious rationale for that number. I can invent numbers, too. Squiggledom. It’s twice a googleplex, so it’s pretty darn big.

So: in or out?

Immediately after my five-year stint in Brussels, I had decidedly made up my mind that we ought to leave this ill-fitting marriage. I firmly believed that the EU needed to be dismantled and rebuilt – and the only way to do that was for us to be out. But now I’m seeing so many more nuances.

Frustratingly, this trip to the UK has so far yielded no useful insights. I’m working in our London office at the moment, and one of my colleagues was handing out “Remain” bumper stickers today. When another colleague told him that he would probably vote to leave, the Remain colleague expressed surprised and said that he thought all financial correspondents would want to stay in Europe the EU.

If only it were that easy.

Here, then, are my meandering thoughts – from someone that really has not yet made up his mind.


– We would be able to adopt our own policy towards immigrants, because to be quite frank the EU’s has so far been an utter disaster. This is not to argue for less immigration – as the dreadful right wing press often do – but just the fact that we would be able to control who comes to our countries, and therefore could make sure this is the right kind of migrant. Jobs are not finite – socialist France flirted with that idea, and to an extent still does, and it’s just blatantly wrong. Just ask Adam Smith. Except he’s dead. But those that come to this country should contribute to its well-being. This also goes for the refugees that we take. I firmly believe that we have a moral obligation to accept a certain amount of refugees fleeing from human rights abuses, but that should be on our terms and we should give them jobs as soon as we can.

– Our government should no longer be able to hide behind the ineptitude of the EU. There are actually things that the British government cannot do because the EU doesn’t allow it. This makes it much harder to hold them to account when they step out of line.

– The masterminds behind the EU project are a dishonest bunch. They were given very good advice that launching the euro currency when it was half-baked would result in a “Greece”. It could have been any one of the peripheral countries – that wasn’t known at the time – but they chose to ignore such advice because it fitted their own narrative. If “Greece” happened then that would be a very good reason to move towards more centralised fiscal control. Which may be a noble end in itself, but I’m not sure I want to place my faith in people that have to lie to get where they are going.

– When I was in Brussels, I lost track of the times I heard the European Commission express in all of sincerity that the EU was the reason that European nations weren’t still at war with one another. No! No! And no! The reason for the longest period of piece that we have had for millennia is globalisation, and the EU is a by-product of that globalisation. Not the other way round.


– Strength in numbers. It’s true that we are a small nation – the sun does now set on our noble Empire. So it’s nice to buddy-up to our European partners from time to time.

– We have more representation in Europe than people often realise. Although there is this huge gulf of democratic unaccountability – in the sense that we haven’t actually voted in most of the people that are making decisions for us – we do have a permanent representation to the EU and they are a pretty active bunch.

– Free movement of labour and free movement of trade – these are concepts I hold dear. I am, after all, a migrant worker. I wouldn’t particularly like it if Hong Kong suddenly chose to shut its door on my kind. And I like to think that I am contributing to their society – through tax and being a damn fine pillar of.

– We’ve pissed our European neighbours off a fair bit recently, by being so obstreperous. How about we now start to make amends?

– However you look at things it’s going to be expensive. Contracts will need to be renegotiated or updated, business deals will need to be done on a different footing, some firms may even decide to relocate. If you’re a lawyer, now is probably the time to cash in.

– What is going to happen if we leave? No one really knows. If we stay, there’s almost certainly going to be a relentless march towards greater federalism. And so perhaps that is what everyone needs. Better the devil you know, eh?

But, whatever the outcome of the referendum of June 23, it probably doesn’t matter as much as people think it does. If we stay, we carry on pretty much as before, with maybe a tiny bit more acceleration towards federalism. If we leave, well, it honestly isn’t going to be the end 0f the world that everyone is predicting. Do people honestly think that, after her initial hissy fit, Europe won’t want to engage with us?

Maybe I’ll just tick both boxes and let fate decide.

The dangerous game of regime change

June 29, 2015

There can be little rationale behind the decision not to throw Greece a lifeline other than a clumsy bid for change of government. Tsipras is a difficult man to deal with: let’s try and get someone new. We have been here before.

Remember that irascible Italian clown Silvio Berlusoni, who “acquiesced” to step aside in favour of the dour though competent Mario Monti? He had little choice when borrowing costs shot up to dizzying levels, on the back of ebbing enthusiasm for government bonds. Even the great cavallo couldn’t survive this.

A decision by the Frankfurt-based European Central Bank (ECB) not to continue purchasing Italian government debt directly contributed to this sudden hike – and spelled the end of Berlusconi. Which may not, of course, have been a bad thing – depending on your political inclination. Some Italians I know think he did a lousy job for the country.

But allowing a supposedly independent European body to overthrow a leader of a sovereign nation simply because they might not like his economic policy – or for that matter his sexist jokes – is quite clearly undemocratic.

And now we have Greece.

With fairy shoddy conditions attached to the latest bail out aid from the EU – “blackmail”, I think was how Tsipras described it – the Greek leader chose, quite rightly, to take the latest demands from creditors to the people that he serves. After all, it was the Greeks that invented democracy.

But in response did the ECB throw the Greek banks a badly-needed lifeline. Hell no. Instead, the ECB imposed a cap on the amount of money that banks can borrow from the country’s central bank, forcing Tsipras to announce capital controls on the banks from today.

It was a poor decision from Greece’s creditors, and could well push Greece towards – and out of – the exit door.

But to my mind this move is reminiscent of the cat-and-mouse game that the EU has been playing all along. Having to impose capital controls is frustrating and worrying for the Greeks, ominous for the eurozone – and a clear affront to Tsipras’ capability of charting a passage for Greece through this crisis.

Ah! – and therein lies the rub.

Should the majority of Greeks deem Tsipras to be responsible for this mess, they may very well seize the opportunity that he has provided them with and take control for negotiations. They may side with the creditors and agree (albeit reluctantly) to the terms of the bail-out – and then boot Tsipras from office.

That may very well be the thinking behind refusing to extend credit to the banks, at least until the referendum is done away with it.

But it is a dangerous game to be playing.

True, Tsipras has certainly made some mistakes since taking office earlier this year. He was perhaps a little clumsy with his negotiations at the start, and has earned something of a reputation as a double-dealer by telling the EU one thing and then the national parliament another.

But these mistakes pale into insignificance when it comes to the litany of cock-ups that the EU / ECB mafia have made. Things needn’t have got this bad, but they have – and things are pushing perilously close to a Grexit.

Which would be a good thing for Greece. Perhaps less so for the rest of Europe. But we’ll survive.

If I was Greek, I know where I’d put that ‘X’. It might be followed by a ‘V’ sign, too.

Greece Part II

June 25, 2015

Ok, so Greece should leave the euro. My position on that has not changed in the five years. My love of German sausages and my dislike of Angela Merkel also remains the same.

What has changed is that Europe’s leaders now don’t have any time to sort out this impending crisis. Five years ago they did, and could have rationally – as I argued then – allowed Greece to leave the euro-block in an orderly fashion, with the view to bringing it back in at some later date. Like when Greek politicians were mature and honest enough to play the euro game (let us not forget, in case anyone has, that Greece should not have been allowed in in the first place because they deliberately and not very elegantly massaged their figures to comply with the Maastricht criteria – both Athens and Brussels should be slapped on the wrist for that).

The panic-stricken cry to counter this argument has always been one of: “contagion!” If Greece is allowed to leave, then Spain and Portugal would shortly follow, possibly even Italy.

That’s quite possibly the case now. It wasn’t five years ago. Five years ago, European leaders could have chosen to draw up a firm plan that would allow Greece to structure an exit from the euro, get its house in order and – should conditions so permit – return. The banking union that European leaders were so hell-bent on creating could then have been applied to the remaining members of the Eurozone, including Spain and Portugal, and thus prevented contagion spreading. Greece was too far gone.

The case for leaving the euro is clear in its simplisticity: the Greek currency – which will become the drachma – will devalue and competitiveness will return to the country. Because the euro-tragedy isn’t simply one of dodgy Greeks and tax-dodging. That’s only half the story. It is one of a country robbed off its competiveness by being tied to a ludicrous half-baked financial experiment.

People may argue that, should it leave the euro-zone, Greece would become a pariah state, shunned by investors and shut out of the world’s financial markets. But investors have short-term memories and, once Greece’s house was in order, they would return. Probably in droves. The pain would be short-lived.

There is of course a precedent for this. Argentina defaulted on its debt in 2001 and was forced to abandon its peg with the dollar (the separate 2014 default of Argentinian debt is quite different and doesn’t have a place in this blog entry). True, the short-term pain was acute: businesses went bankrupt and there was widespread capital flight. But quite soon competitiveness returned and the country actually started to do rather well, growing at enviable levels (an average of 9% a year between 2003 and 2008).

Of course, I don’t think Greece will leave the Eurozone. It’s going to be touch and go, but eventually Angela Merkel and her counterpart Alexis Tsipras will trump their respective finance ministers, who have been spitting venom at one another. What did IMF boss Christine Lagarde say a few days ago – the talks needed “the adults in the room”?

From a very early age, one starts to understand that the adults don’t always know best.

Let them come

November 29, 2013

David Cameron seems to be veering towards dangerous populism that kills any possibility of having a rational debate about the European Union. Suggesting that we are becoming the “nasty country” of Europe, as EU employment commissioner Laszlo Andor did, might be a little harsh; but perhaps the “intellectually disingenuous” country might be closer to the mark.

From the beginning of next year, a wave of Bulgarians and Romanians are certain to wash up on British shores. Someone should probably tell them about the weather in Britain in January. But, that aside, there’s not a whole lot we can do to stop them arriving. And nor should we.

Cameron’s jibe at Tony Blair that he should never have let East Europeans into the country so soon after enlargement – EU countries could have imposed a seven-year transition period for such nationals; only Sweden, Ireland and Britain waived this right – is a cheap populist argument that follows a discredited school of economics. It presupposes that jobs are finite, which they are not.

Take a look at the following graph. Here you can clearly see the British economy outperforming the French one right up until 2008, when of course we paid the price for our deregulated financial market.


Now I wouldn’t be so presumptious as to claim this was entirely due to wondering Poles, but they certainly helped.

Now, Cameron isn’t, as noted, suggesting that Bulgarians and Romanians can’t come. What he is doing is imposing measures to make sure they don’t rip off the British taxpayer.

Fair enough.

But there is also an inherent danger in what he is doing. By appealing to a slightly disagreeable anti-immigrant sentiment that currently courses through the echelons of British society, Cameron, who was schooled at Eton and studied economics at Oxford, risks an over-simplification of the discussion.

Immigration is not bad. It is what has kept our economy afloat for the past decade. It is what made America.

What is bad – and here I will agree with our PM – is those East Europeans that come to the UK simply to get free housing.

But I for one would like to know how many of these Romanians and Bulgarians are planning on coming to the UK simply so they can be out of work in greater comfort than back home. Surely they must know it is cold there.

Cameron needs to move away from straight-forward populism, and be a little more thorough in his treatment of the argument.

A carefully thought-out, mature and sensible immigration policy is what we need.

Some statistics wouldn’t go amiss, either.

How to reinvent a party

May 4, 2013

When I embarked upon my journalism career, a good 12 or 13 years ago, I shared an office with Nigel Farage, who is now head of the UK Independence Party (UKIP).

Well, ‘shared’ is perhaps a rather big word. Since he belongs to a party that chose not to recognise the legitimacy of Brussels, he rarely turned up at the European Parliament. When he did, we’d share a jovial bit of morning banter, eyes watering from the tobacco smoke that suddenly engulfed the room (this being before the European Union banned smoking in its buildings and then in much of Europe).

The one piece of advice that everyone seemed to be giving me at the time – even the eurosceptics – was: “If you’re serious about a career in the British media, be careful not to get too close to UKIP.”

This was at a time when UKIP only had three MEPs [Members of the European Parliament], and a definite reputation for being part of the loony fringe. The following European election – in 2004, I think – the number of UKIP MEPs jumped up to 11. They didn’t become any more normal, and they didn’t show any greater willingness to turn up for the turgid parliamentary plenaries.

This was at a time when people like Robert Kilroy-Silk, the rather pompous and blatantly xenophobic former BBC chat show host, were being drawn to the party. His invective against the Arabic world – “We owe Arabs nothing”, he spluttered, and then proceeded to explain why they should show some gratitude towards our puny island – grated with what might be considered mainstream voters. His obvious vanity – “I cannot hide my tan, or my looks and I don’t intend to, and I am not ashamed of either” – also didn’t sit well with the regular Joe Bloggs.

He was only the highest-profile member of what was, on the whole, turning out to be a rather nutty lot.

The problem with a party like UKIP, which was founded around the single premise that the UK should withdraw from the EU, has always been that it attracts nutters. Like the British National Party (BNP), UKIP was a perfect platform for xenophobic bigots to air their populist and hate-inspired views.

This was one of the main reasons why the more rational wing of the UK’s eurosceptic movement disliked UKIP so much. All one ever heard of the eurosceptism in the UK seemed to be: “those nutty UKIP folk are at it again”. It prevented a proper debate taking place about why leaving the EU might actually make sense for the UK. It didn’t go down too well with our European partners, and was probably one of the reasons why the then-British ambassador didn’t get invited to more sauerkraut or bouillabaisse soirées.

On Thursday, UKIP won an astonishing 147 local council seats in the England, 23% of the total seats available. Before the election, they just had 7. This surprised even Farage, who optimistically predicted they would get 100.

David Cameron, our PM, has been forced to eat his words, having previously dismissed the party as a bunch of fruitcakes and loonies. Gaining so many seats across the country, and in many areas that have not been traditionally UKIP territory, makes them seem anything but insane.

The march towards Thursday’s result started some time before the election, though. The past couple of years has seen the party’s leader, Farage, appearing everywhere. I’ve been absolutely astonished by the extent to which the BBC seems to have been embracing UKIP, portraying the party not as a fringe entity but as a serious force to be reckoned with. But then Farage always knew how to use the media.

Farage is a terrific orator and, whatever your views about Europe, when you listen to him he really seems to make sense. When he talks about the UK’s immigration policy, he really touches a chord with ordinary people. Of course something needs to be done about the UK – and the EU’s – daft and schizophrenic immigration policy; but few people tackle this issue. And few could tackle it with the aplomb that Farage has mastered. In silver tones, he repeats and repeats again that we’re not against foreigners, just those foreigners that are not going to contribute to society.

And who can argue against that? It’s positively seductive.

I’m not a huge fan of Farage. I knew him briefly – and always enjoyed our smoke-asphyxiating morning conversations, filled with humour and joviality – but I think he deserves tremendous credit for turning the party around, and positioning it squarely alongside the other three main parties.

This is even more astonishing given that UKIP, as noted above, was initially formed as a single-issue party. And I’m still not entirely sure what else it stands for. Nor, I imagine, are most of the electorate. Getting across this message will be the challenge for Farage over the next couple of years. And I’m certain he is up to it.

I’d just like to leave you with one further thing that the footage from the BBC news reports yesterday reminded me of. By Jove, the head of UKIP can really down a pint. Maybe that’s why the great British public voted for his party.


July 16, 2011

There is probably a reason that William Shakespeare set many of his best-loved plays in Greece and Italy. Troilus and Cressida. Anthony and Cleopatra. Romeo and Juliet. The Two Gentlemen of Verona. The setting of these Mediterranean cities and towns just ooze drama and suspense. They also exhibit a sense of foreboding and tragedy.

Over the past year, we have seen what might very well be a nail-biting Shakespearian play enacted for real. It certainly has all the hallmarks of one – drama, suspense, betrayal and of course tragedy.

At the apex of this play is Greece, a heavily-indebted country on the fringes of Europe that is quite clearly unable to pay back the money that it has borrowed. The European powers, most obviously Germany, have done its best to portray the embattled country as the villain of the play. The country’s thieving politicians looted from state coffers and then massaged the figures showing the health of the economy so that they could get into the EU.

This is probably a just criticism of the country. But there is another villain in the play, too – the European Union.

Almost ten years ago, when I started writing about the introduction of the euro, it was quite obvious that the project was half-baked and crazy. It was difficult to find a rational economist that wouldn’t question the sense of launching a single currency without proper fiscal union. Only economic advisors working for the EU seemed to gloss over this very salient point. Those who dissented were quickly pushed aside – look at the case of sacked economist Bernard Connolly. There were others.

This was the first time I had begun to understand how the EU apparatus really worked. With hindsight, I find it is possible to conclude only one of two things. Either the technocrats and politicians running Europe are stupid. Which is worrying. Or they are dishonest. Which is worrying.

I am disinclined to believe that those people who oversaw the relatively smooth introduction of the euro are stupid, which unfortunately points to my only other conclusion.

It was quite clear they knew that a single currency without fiscal centralisation would never work. I recall that, at the time, many people were talking about the Greek eventuality. Of course, it wasn’t certain that it would be Greece that would run out of money. But certainly one country or other would need to be bailed out, and it would probably be one of the Mediterranean lot. This was not an unforeseen problem. It was known that at some point, since the EU had robbed these countries of their power to devalue, there would have to be some sort of mechanism for transferring money around. In the United States, this is called the Federal Reserve. In the European Union, it is starting to take shape as a Permanent Bailout Fund.

The main problem is that a number of members in the EU – with the good old Brits up at the top – do not want greater fiscal control by Europe. They want to control their own monetary affairs, which they are, in all of honesty, doing quite a good job of at the moment.

But this crisis seems to have precipitated a call for greater fiscal control, so there is a proper mechanism for transferring money to countries that need it.

A very good argument can be made for a more centralised monetary policy, but the absolutely maddening thing is that European politicians and bureaucrats have never made it. And they have never made it because they know that it doesn’t have popular support among the countries of Europe. This isn’t democracy. It is autocracy.

For those europhiles in Brussels, the hope is that fiscal unity will follow this crisis. The alternative, it seems, would be a collapse of the euro.

This choice seems to becoming starker all the time. Last week, Italy displayed worrying signs of defaulting on its debt. Giuliano Tremonti, the finance minister, whom I have a certain grudging appreciation of, put forwards a package of austerity measures. He was immediately ridiculed in La Republica by Silvio Berlusconi, the prime minister. Italian bonds predictably slumped, but thankfully Tremonti’s package of austerity measures was passed by parliament.

If Italy falls, then there is just not enough money to bail the country out.

The problem is that European politicians are still not being honest. It took ages for them to admit that Greece was bankrupt, even when it had become clear that default was inevitable. Their great hope is that a default can be put off to 2013, when a centralised bail-out fund has been set up to address the problems that Europe is now riddled with.

The chance of the problems being postponed until then is looking increasingly unlikely. This is largely the fault of European politicians. If a year ago they had admitted that Greece was bankrupt and demanded a restructuring of their debt, instead of simply plugging the holes with German taxpayer’s money, things might look a little rosier. Not much, but a little.

But instead they told the voters that this money was all that was needed to make the problem go away. Unfortunately for the likes of Angela Merkel, the German Chancellor, voters have a way of remembering these things.

The alternative, it seems, would be a forced withdrawal of Greece from the euro (which it should never have joined in the first place) and inevitable talk of a possible break-up of the single currency.

Many commentators have said this would be a terrible thing for the economy of the world as a whole, but I’m not convinced. The terrible thing for the world as a whole would be years of stagnation and unrest in places like Greece and Italy, with governments brought to their knees by the violence of angry voters, and thuggish populist politicians slipping into their place. And all because Europe’s politicians lied to its people.

There is a highly memorable scene in the play of Anthony and Cleopatra. Anthony has suffered defeat at the hands of the Egyptian navy and believes that the Egyptian Queen Cleopatra, his lover, has betrayed him. He vows to have her killed in revenge. She hears of this plot and spreads the word that she has committed suicide. In remorse, Anthony falls on his sword. But he doesn’t die completely. He is brought to Cleopatra and whispers, with his last breath, “I am dying, Egypt, dying.” And, so saying, he joins the after-life. In response, Cleopatra kills herself by placing a poisonous asp on her breast.

And all because the two lovers couldn’t be honest with one another.