Europe

Europe is being strangled by the Franco-German alliance

David Cameron’s complaints at last night’s EU meeting about the lack of a growth agenda have, in part, been addressed by the new draft conclusions. Cameron — who was supported by the Dutch, Italians and Spanish — seems to have secured promises on the completion of the single market, deregulation and the services directive in the summit’s draft conclusions. This isn’t going to turn around the European economy. But it is a step in the right direction and a small, but possibly significant, victory for the PM.   I understand from sources in Brussels that there has been frustration with the extent to which the conclusions presented last night simply

Imagine if Cameron hadn’t vetoed…

When David Cameron headed to Brussels last December, it was far from certain that he would veto the proposed treaty. It was only when Nicolas Sarkozy proved totally uninterested in accommodating Britain’s demands that the Prime Minister decided that he could not sign up to it. In a way, Sarkozy did Cameron a favour. Imagine if Britain had got the safeguards the Prime Minister wanted and had signed up to the treaty. How would he then have reacted this week, when the Irish announced that they were going to hold a referendum on it? The pressure from the Tory benches to let the British people vote on it would have

What will the UK’s proposed ECHR reforms actually come to?

Two items of news that may unsettle stomachs in Euroland today: i) that Ireland is planning to hold a referendum on the new European fiscal treaty, and ii) that the UK is pushing — as April’s European summit in Brighton approaches — for the European Convention on Human Rights to be rewritten so that national courts have greater discretion and power. The BBC’s James Landale has more details on the latter here, but the basic point is that the government has circulated a ‘position paper’ that proposes injecting a few principles and particulars into the ECHR. One of these is ‘subsidiarity’, the idea that decisions should be made at the

The Irish Ask Another Brussels Question

And, as we know, Brussels has a habit of changing the answer any time anyone offers the wrong inconvenient answer. Nevertheless, the Irish government’s decision – made on the advice of the Attorney General – to hold a referendum on the latest EU “Stability Pact” is not, I hazard, likely to please everyone: “I am very confident that when the importance and merit are communicated to the Irish people that they will endorse it emphatically by voting yes to continuing economic stability and recovery,” the Taoiseach [Enda Kenny] said. The compact, agreed at special EU summit earlier this month, proposes tough new budgetary discipline on each euro zone state, including

Europe’s latest tonic could worsen Osborne’s political problems

Seems that the latest plan to fix the eurozone involves cooking up a pot of alphabet soup. Over in Mexico, G20 finance ministers are currently discussing whether to blend two existing eurozone bailout funds, the EFSF and the ESM, with some extra money from the IMF. They hope that this EFSF-ESM-IMF mix will add up to about £1.25 trillion of ready cash for failing eurozone economies. ‘Look at the size of our fund,’ they will then say, as they try to settle nerves across Europe and beyond. Details are lacking, but some things are already worth noting about this potential mega fund. First is that it seems to be coming

Prisoner: Cell Block Athens

The Financial Times has a swell story today, demonstrating how Greece, already a ward of Brussels, is not likely to be trusted with even its own pocket-money, far less be allowed out without a chaperone. She is imprisoned: European creditor countries are demanding 38 specific changes in Greek tax, spending and wage policies by the end of this month and have laid out extra reforms that amount to micromanaging the country’s government for two years, according to documents obtained by the Financial Times. The reforms, spelt out in three separate memoranda of a combined 90 pages, are the price that Greece has agreed to pay to obtain a €130bn second

How to remain a nation state

Britain out of Brussels’ clutches by 2020? It can happen, says David Owen, in a piece for the magazine this week. It’s based on a speech to Peterhouse College, Cambridge. Here’s the full version: In all the controversy about the eurozone and Greece it is easy to ignore one simple fact: maintaining a core eurozone is creating an unstoppable momentum towards a United States of Europe. On 7 February 2012 the German Chancellor Angela Merkel indicated very clearly her direction of travel. The eurozone crisis for her is to be the springboard to another Treaty to replace the Lisbon Treaty. She said ‘Step-by-step, European politics is merging with domestic politics.’

The hurdles facing Greece

Greece’s problems are far from over. As Pete said this morning, the €130 billion bailout hardly means the country is out of the woods, or that it won’t still be ejected from the eurozone. Standard Chartered have released a handy guide to the many obstacles Greece faces. Here are some highlights: 1. The first hurdle is the private-sector debt swap due to take place March 8-11. This is when private creditors are supposed to swoop in and save the day. But, to be enticed to do so, Greek bonds will likely have to come with collective action clauses (CACs). Here’s where it gets technical — if these CACs are invoked,

Alex Massie

Darling: This is a Greek Versailles Treaty

Alistair Darling’s suggestion that income tax might be devolved (entirely!) to Scotland as part of a new post-referendum “settlement” was, understandably, the headline part of his Scotland on Sunday interview at the weekend. But his views on the Greek crisis were even more candid: His assessment of the Greek crisis is astonishingly frank. “The policy they [European leaders] are pursuing towards Greece is sheer lunacy. Nobody actually believes it will work privately, if you speak to people.” Even if everything worked, he notes that Greece would still have debts worth 120 per cent of its national income. “It will still leave the country so indebted and so crippled that it

Greece saved at last? Nope…

Greece sorta defaulted last night. That’s what you need to remember when reading of Greek Prime Minister Lucas Papademos’s ‘happiness’ at the €130 billion deal reached by eurozone finance ministers in the early hours. Sure, the country will now be able to pay off its creditors when various loans mature on 20 March. But the concurrent ‘voluntary’ haircut of 53.5 per cent for private bondholders will still be seen as a ‘restricted default’ by credit rating agencies. And it could feasibly get worse if those private bondholders decide not to play along and instead trigger a credit event, either manageable or messy. The question hovering over Greece is now, really,

Cameron’s ECHR problems won’t end with a Qatada deal

The news that Theresa May will fly to Jordan to continue talks about Abu Qatada shows how close the government thinks it is to a deal with the Jordanians that might satisfy the European Court of Human Rights and allow his deportation. One government source explained to me earlier that the problem is the Jordanians are offended by being asked to provide these guarantees about a fair trial and no evidence being obtained by torture. For this reason, there needs to be a fair amount of diplomatic stroking. A deal with Jordan on Abu Qatada is becoming increasingly necessary if Cameron is get out of this bind on the ECHR,

Bailout country | 16 February 2012

With the political wrangling over another Greek bailout continuing today, we thought CoffeeHousers might care to read (or re-read) Faisal Islam’s cover piece for The Spectator from four months ago: In a theatre in central Athens, over a thousand tax inspectors have gathered to shout crossly about the latest cuts to their pay and pensions. Eventually the argument, between the government-affiliated union leader and his members, spills out on to the street. The rank-and-file feel betrayed: they were persuaded to accept the first wave of pay cuts earlier this year, and now they are being asked to take even more. This does not feel to them as if they’re being

The steady erosion of Greek democracy

The longer this Greek crisis goes on, the clearer the various agendas at play are becoming. As the Greek finance minister said earlier, the actions of the Eurozone’s northern faction — led by Germany — do suggest that it wants Greece out of the euro. As I’ve blogged previously, the Germans believe that with Monti in charge of Italy and a new centre-right government in Spain, the effects of Greece leaving the euro could be contained. But this is a big risk. After all, Lehman Brothers was allowed to go bust because it was believed that it was safe to do so. Certainly, the other eurozone countries are no longer

Will Germany let Greece stay in the euro?

The German government is split on the biggest policy question of the day, according to the FT’s German edition. As Open Europe points out, the paper has a senior member of the CDU/CSU group in the Bundestag saying that finance minister Wolfgang Schäuble ‘supports the bankruptcy of Greece, Merkel wants to strictly avoid it… It goes back and forth, which is not very helpful.’ If true, this is a remarkable story. The British Foreign Office has been convinced since the beginning of the year that the Germans are keen to kick the Greeks out of the euro. Their conversations with the Germans have convinced them that Berlin believes that the

Greece needs to quit the eurozone

The Greek people are being crucified on a cross of euros. Unemployment there is 21 per cent and rising fast and the austerity pact that its politicians have cobbled together to try and receive the next tranche of bailout cash will make things far worse. It is in the interests of the Greek people for the country to default and devalue but this, obviously, isn’t possible with Greece inside the eurozone. There are elections in Greece in April and it is to be hoped that one of the main parties there has the courage to break from the view that Greece must stay in the eurozone regardless of the cost.

Size Matters: Dysfunctional Government Edition

Via Andrew, Francis Fukuyama has a new gig at Stanford University running a Governance Project. Introducing it, he lobs a hand grenade at one aspect of American Exceptionalism:   I would argue that the quality of governance in the US tends to be low precisely because of a continuing tradition of Jacksonian populism. Americans with their democratic roots generally do not trust elite bureaucrats to the extent that the French, Germans, British, or Japanese have in years past. This distrust leads to micromanagement by Congress through proliferating rules and complex, self-contradictory legislative mandates which make poor quality governance a self-fulfilling prophecy. The US is thus caught in a low-level equilibrium

Ignore the European Court and deport Abu Qatada tonight

The Al-Qaeda preacher Abu Qatada is a Jordanian national who is in the UK illegally (having come here in 1993 on a forged United Arab Emirates passport). The headache he has caused successive UK governments looks like finally reaching a peak. But there is a simple solution to the problem he poses. Last month, not only for the first time in the decade-long Qatada process, but for the first time ever in an extradition case, the European Court of Human Rights cited Article 6 ‘rights to fair trial’ to ensure that Abu Qatada could not be returned to Jordan. The Court had previously played around in the Qatada case only

Where has the pro-EU camp gone?

Did you see that amazing article by a group of pro-EU businesspeople? What about that clever ad paid for by ‘Better To Be In’, the new pro-EU lobby group? Nope, me neither. The reason we haven’t seen anything like that is because the pro-European camp in Britain is in total disarray. Like a beaten army, it is withdrawing in a state of confusion, while some diehards stage energetic but un-strategic counterattacks against the advancing Eurosceptic forces. A letter from pro-EU businessmen was, frankly, unimpressive: the signatories were hardly a who’s who of Britain’s business community, and even included some former officials. Hardly a show of strength. But yesterday’s letter from

Cameron’s coming battle over the ECHR

The coming release of Abu Qatada on bail is going to put bellows under the whole debate about the European Court of Human Rights. In his recent speech to the Council of Europe, David Cameron rightly protested about a situation with terror suspects in which ‘you cannot try them, you cannot detain them and you cannot deport them.’ We will now find out how quickly Cameron is prepared to act on this issue. If Cameron wants to makes changes to the Courts and the Convention, then he is going to have to get agreement from every member of the Council of Europe. There’s no guarantee that he’ll be able to

Don’t expect repatriation in this Parliament

When David Cameron wielded his veto at the European Council in December many Tories thought this was the beginning of a process of repatriation of powers from the EU. Myself, I thought it would be the high water mark of the government’s Euro-scepticism — and so it has proven. But things are about to get even worse for the Bill Cashes of this Parliament. In the short-term, at least.   Why so? Well, the government appears to be concluding that it will not get a receptive ear from its European partners on any repatriation bid. The other European leaders are simply too busy fixing the euro to even read any