Archive for the 'EU matters' Category


David Herdson says the Migrant crisis has laid bare the EU’s big delusion

Saturday, September 26th, 2015

Ultimately, the Union must unite or perish

Ever closer union: three words that have caused interminable difficulty for those who wanted – those who want – a European Common Market. Three words that are now superfluous, though not for the reasons that the Marketeers would like.

The reason they’re superfluous is that the other initiatives the EU has undertaken contain an internal dynamic that supersedes any treaty rhetoric. Nowhere has that been more clearly demonstrated that with the migrant crisis afflicting southern and central Europe. A Common Market needs free movement of people, goods, services and money, and it has them. It does not need to do without internal borders altogether yet 22 of the 28 member states have done just that. All others but Ireland and the UK are obliged to do likewise.

This is gesture politics of a delusory nature; all very well in normal times but utterly inadequate in times of real need, and dangerous for that very fact. What it means in reality is that Germany’s borders are patrolled by Greece, France’s by Hungary, or Austria’s by Estonia. And under the current scale of illegal immigration, Greece is incapable of securing its borders – which is why other countries down the line have scrambled to control theirs (to be fair to Hungary, none of Serbia, Croatia or Romania are yet in Schengen – Serbia isn’t even in the EU).

Europe has wanted it both ways: to play at Union by giving up what are essential national powers without handing that power up to anyone. It has simply been lost. If a single country had a particular crisis at one border post or port or coastline, the government would deploy additional resource there in an attempt to sort it out. The EU, by contrast, cannot: there is no Union border force, no government to direct it and no money set aside to fund it. Nor, at present, is there the will to create them.

And Schengen is a microcosm of the EU’s topsy-turvy nature. Many of the powers it does hold are trivial and could easily be retained by the members; they have been handed over precisely because they are trivial. By contrast, many of the powers it needs to be able to fulfil and manage grand projects like Schengen and the Euro have been retained because to do otherwise would be to create in the EU the functions of a state despite the fact that a single currency and a borderless region are themselves features of a state.

How has it managed even so far? In the absence of a meaningful central executive, it’s the European Council – the heads of government and state – who have assumed the role. But 28 people acting collectively cannot provide leadership. In reality, it is, as it has to be, to the heads of the biggest that the rest look. Whether or not Germany and France wanted that leadership (and they do), it would be thrust on them all the same.

Which is why Merkel has come in for so much criticism over the migrant crisis and why the delusion at the heart of the EU has been exposed: her impulsive action acted not only against her own country’s interest but committed so many other member states to act against theirs too, without the opportunity to prevent it. In essence, she committed the cardinal European sin of exposing a breach of consensus; a consensus without which the EU doesn’t work.

Is there an alternative? Only if those powers-by-default are centralised at a European level. But to do so means recognising a further transfer of power to the EU. Further, a meaningful power to determine and enforce policy cannot come without the power to direct manpower and hence without a border force constituted at a European level – and that would increase the demand for the political accountability of whoever is leading that role.

To Americans, all of this might sound familiar, if ancient history. And so it is. Europe has created its own version of the Continental Convention, a body whose divisions and lack of direct powers led it to failure within a few short years of practical independence. The EU has built a more complex structure but that same power-hole lies at the centre: a lack of means to carry out the ends it is expected to achieve.

Yet if twenty-first century Europe has the advantage over eighteenth century America in institutions, in lags far behind in another way. Federalists have been on the back foot for a decade, since the rejection of the European Constitution. Some advances might be made by stealth or necessity but the fire has gone out of the belief: the public have been left behind. Not only is there no-one of the brilliance of Alexander Hamilton or James Madison to make the case, there is no-one at all to make the case.

To some extent that is entirely understandable. As well as being emotionally wedded to nation states old, new or yet to be (re-)born, citizens are cynical that the answer to every problem seems to be more power to a centre when that centre’s past demands for more have been met with today’s failures. That cynicism is to an extent misguided: the failures stem from taking on unnecessary projects without the tools for the jobs, though the stealth in the design of such projects can’t be ignored. Even so, the failure must be dealt with all the same. Some 8000 migrants are still arriving in Europe per day from Africa or Turkey: a quarter of a million per month.

But what is to be done? No doubt the leaders hope that they can muddle on through as before and perhaps for now they’re right. But the spanner that David Cameron has thrown in the EU works in the form of his hoped-for renegotiation has the potential to give the lie to ever closer union not only in theory but in brutal fact should Britain choose to leave, as is entirely possible both if the EU cannot get its act together and if it can only do so through still further unification. In fact, that treaty change he seeks ought to be an opportunity for all sides to push for necessary changes, not only for countries sceptical about union but also those needing to fill the power vacuum that the migrant crisis is exposing. On whether someone – Cameron, Merkel, Tusk, Juncker or whoever – is ready to come forward with a comprehensive and workable arrangement may well hang the future of Britain’s membership. Indeed, on that may well hang the future of the whole project.

David Herdson


The final Greek vote: YES 38.7%: NO 61.3%

Monday, July 6th, 2015


So what’s the next move? We really are moving into the unknown


Tsipras’ own goal is Cameron’s gain

Friday, July 3rd, 2015


David Herdson on a crucial weekend

If there were any doubt that David Cameron is a lucky politician, events in Europe this last week have again made the point. No sooner had he suffered a setback at the European Council, failing to win a chance of treaty reform, than the Greek government gives him (inadvertently, no doubt), a huge helping hand.

The decision of Alexis Tsipras to commit his government to destruction by a method to be determined by the Greek voters tomorrow might be somewhat unorthodox by normal standards but then this is no orthodox government. The act of a snap referendum was, however, perhaps predictable as the equivalent of a student sit-in or protest march, which is the kind of politics Syriza is familiar with: the belief that a demonstration of solidarity and causing enough of a fuss will force opponents to grant concessions.

Those tactics work rarely enough in the workplace or the university, never mind the conference chambers of government, which is why Syriza has signed its own government’s death warrant. If the vote’s a Yes then its resignation follows, leading inevitably to new elections which one presumes the centre-right New Democracy would win. Alternatively, if it’s a No then it’s a more drawn out and bloody affair with an inevitable stand-off effectively between Yanis Varoufakis on the one hand, Wolfgang Schäuble on the other and the Greek banks and population in between.

By that point, irrespective of the economics, political factors would be paramount and the overriding consideration of the creditors would be to avoid setting an easy precedent – and the creditors, who in the context of an uncontrolled bank run have the trump card of effectively controlling Greece’s money supply and hence its ability to import food, petrol and other essentials – will therefore win providing they keep their nerve. Quite how the government would fall remains an open question but that it would fall is not.

Which way the vote will go is hard to call. The betting markets have Yes at a consistent 4/9 with SkyBet offering No at 7/4 (all other bookies quoting 13/8). That seems to me to considerably overestimate Yes’s chances; sufficiently so to recommend No at those odds.

No is clearly the loud campaign – who rallies for austerity? – and the government clearly believes its own delusions as to what the outcome will mean. And voters believe in the truth of that which is plainly strongly believed. Furthermore, at the last election, the main parties actively, if independently, advocating No polled 52.8% between them (you can’t call as disparate a group as the communist KKE, the radical leftist Syriza, the populist-nationalist ANEL and the neo-Nazi Golden Dawn a ‘coalition’ or ‘alliance’). By contrast, those advocating Yes, the conservative New Democracy, centrist Potami and social democrats Pasok only polled 38.5%. (The rest of the 2015 vote went to parties who failed to make it to parliament). The polls, with one exception have all shown the two sides within 4% of each other but with upwards of 15% undecided. That doesn’t feel to me like a solid Yes.

Of course, a loud campaign isn’t necessarily a winning campaign and Yes voters have plenty of reasons to be shy about their intentions. The likelihood is that No will struggle to reach most of the undecided: if they were inclined to vote that way they’d already be there. The question is whether Yes can motivate them instead.

What does all this have to do with David Cameron? Domestically, it again reinforces the message of responsible spending, of fixing the roof while the sun shines or at least making a start once the storm’s passed. Within the EU, it means the UK is no longer the most awkward member. True, the notion of opting out of ever closer union might be heretical to some but at least Britain wants to do it by changing the rules and staying within the rules. Greece’s game-playing, by contrast, is disruption of a different order. There’s an incentive for the Euro-elite to differentiate between the two approaches. Furthermore, there’s a real risk of Greece not only leaving the Eurozone but the EU itself. To lose one member may be unfortunate but to lose two would risk starting a fashion. There is therefore a strong incentive to cut a deal.

But it’s not just about appeasing the Brits. The Eurocrisis has been the beginning of the end of the Delors-era EU: the Europe of the Social Chapter and the federalising-through-regulation. The austerity programme, forced on many members in part via the Euro, has meant a rolling back of the social agenda. Put simply, it’s shifting the EU to the right. And that’s the positive case for Cameron to put to the sceptics in his own party.

David Herdson


The Greek finance minister says he’d rather ‘cut his arm off’ than sign a deal that doesn’t include debt relief

Thursday, July 2nd, 2015

The betting markets seem to believe that Yes will win, but I suspect whatever the outcome either the Greek government or the Euro in Greece will be gone shortly after the referendum result is announced. This might lead to the government, money, people and businesses wanting to get out of Greece like a bat out of Hellas, it won’t be just a flesh wound for Greece.

All of this is just a few days before George Osborne presents his summer budget



The Ipsos Mori issues index for June

Wednesday, July 1st, 2015



The big risers are Immigration/Immigrants and EU/Europe, which seems understandable given the focus on the EU referendum since the election. The big faller is the economy, which maybe confirmation of the fifteen year high in consumer confidence that the pollster GfK found yesterday.

For me the most interesting aspect of this polling is the below chart.

Issues EU

There’s a real difference between the ages, so the older groups are more concerned by the EU than younger ones, this as has been noted before, could help OUT win the referendum with older voters the most likely to vote.

The fieldwork for this polling ended on the 15th of June, so before the recent events in Greece and Tunisia.

The data tables are available here.



Betting on when the Greek banks reopen

Tuesday, June 30th, 2015

Banking 2

For the Greek people, it appears this tragedy has been going on longer than it took Odysseus reach home after the fall of Troy, but looking at the above tweets, it is looking like that we are approaching the end phase of Grexit. Last night, the Greek Prime Minister indicated he would resign if the Greek’s voted yes in Sunday’s referendum.

So on that basis the 1/2 on the banks opening on July 8th or later might be the way to go, right now, we don’t know what the Greek currency or government will be in a week’s time, until we do, the banks will remain closed is my thinking.

The link to the Paddy Power market is here.


Note – This thread was written around 12.15pm BST, so the situation might have changed since then please check the news before you place any bets, the Greek government’s approach indicates they have lost their marbles, or will the EU delay Acropolis Now, either way, the Greek banks are going  to be the centaur of attention for the next few days.


In Greece the crisis over the Euro is set to become a Drachma

Saturday, June 27th, 2015

It appears, unsurprisingly, that all the bookies have suspended their markets on the outcome of the referendum and Greek exiting the Euro after this announcement

This is all happening eleven days before George Osborne’s presents his emergency budget, it might strengthen his case for austerity, it may also end the clamour for tax cuts, particularly the top rate of tax is unlikely to be cut from 45% given the wider economic mood.



Greece is the word for the next few days

Friday, June 26th, 2015

It will be a case of this referendum dominating events for the eight days at least, and undoubtedly longer, it appears that Alexis Tsipras is trying to give their creditors a Grecian Burn, how will they respond?

The Guardian reported last week that

A recent opinion poll for the news website Newsit showed as many as 74% of Greeks back the euro – with fully 50% saying they would be prepared to accept “major concessions” by the country’s Syriza-led government if it would help break the deadlock with bailout lenders. “We have to stay in,” said Votskaris. “If we leave, things will only get far, far worse.”

I genuinely don’t know how this referendum, regardless of the result, will impact on the economy, or the politics in this country or our own EU referendum, it will all depend on the outcome of this Greek referendum, which is held just three days before George Osborne’s budget.