Europe

Ireland’s crisis is the fault of Fianna Fáil, not just the euro

In all likelihood, George Osborne will rise this afternoon to groans if not jeers. Britain looks set to lend Ireland £7bn as part of multilateral and bilateral bailouts. Many, particularly the Eurosceptic right, question our involvement, given our straitened financial circumstances and the apparent fact that Britain is sustaining the eurozone’s monetary and debt union, and will have to borrow to do so.     George Osborne has been adamant throughout: Ireland is too important to Britain’s recovery to risk collapse – British and Irish banks are closely linked, debts and borrowing are often co-dependent, trade is very profitable. That the bailout should strengthen the euro is a natural consequence of Ireland

The death knell for the Euro?

Are we witnessing the start of a very long death scene for the Euro? Asked if the Euro will survive, William Hague replied simply: “who knows?”. The new president, Herman Von Rompuy, has said that the Euro faces an “existential test”. We are looking at the very real prospect of the Euro’s collapse. And that “if we don’t survive with the eurozone, we will not survive with the European Union”. This would, by necessity, require a new treaty – and give Britain an unprecedented opportunity to renegotiate its membership on terms the public regard as acceptable. In my News of the World column today, I say (£) that this presents Cameron

Progress towards an Afghan solution?

Nato has agreed to the Afghan plan, or so they say. As Lieutenant-Colonel David Eastman says, Afghan security forces are deemed to be sufficiently capable for the handover to begin next year, as Obama and Petraeus hope. There are those who disagree – some doubt the Afghans, some doubt success itself. Nato secretary general, Anders Fogh Rasmussen may have to be added to that former group of dissenters. He said earlier today: ‘If the Taliban or anyone else thinks they can wait us out, they can forget it.’ The problem for those of Rasmussen’s thinking is that the Taliban can wait; Nato can’t. William Hague has reiterated the government’s promise

Nato – from the glass half empty point of view

Nato leaders are in Lisbon and Daniel Korski has argued that the most successful military alliance in history isn’t done yet. Writing in the Independent, Patrick Cockburn gives an alternative. He contends that Nato will never recover from the Afghan mission, and he has three substantive points: 1). Nato’s solutions are the problem. ‘It is not just that the war is going badly, but that Nato’s need to show progress has produced a number of counter-productive quick fixes likely to deepen the violence. These dangerous initiatives include setting up local militias to fight the Taliban where government forces are weak. These are often guns-for-hire provided by local warlords who prey on ordinary

Britain may not be able to avoid bailing out the Irish

This morning, it sounds as though Ireland has finally buckled to demands that they accept a bailout from the EU. Their central bank governor, Patrick Honohan, has said that he expects a “very substantal loan” from Europe – although the details, and debtees, are yet to be clarified. In the UK, of course, backbench MPs and others have been quick to condemn any move which would force British taxpayers to cough up cash under the EU’s various bail-out arrangements. Only problem is: the UK may not have a choice. The part of the eurozone bail-out package which Britain could be underwriting to the tune of £6-7 billion – the so-called

Blaiming the Euro for Irish Woes

On the other hand, Philippe Legrain makes the case that too much blame is being apportioned (perhaps opportunistically) to the euro and not enough is being fixed to the Irish government: The problem is not that savings flowed from Germany to Europe’s periphery. It is that they funded property bubbles rather than productive investment. But the blame for that lies with herd-like investors, flawed banks and foolish governments, not the euro. After all, America, Britain, Iceland and other non-euro countries all had huge property bubbles too. Granted, joining the euro did slash Irish interest rates, creating cheap borrowing that fuelled the boom. But at a macro level the Irish government

The British taxpayer should not be bailing out Ireland

Everyone is talking about the royal wedding today.  It will be a great occasion but the public finances are tight and people are already asking about the cost.  There is a bigger issue for British taxpayers, though.  Our politicians have arranged for them to get hitched to the bride from hell: the ongoing fiscal disaster in the eurozone.   Under current plans it is reported that we could be liable for up to £7 billion in any Irish bailout.  At the TaxPayers’ Alliance, we have just this morning started a petition against British taxpayers’ money being put at risk for a euro-bailout of Ireland; you can sign it here.  

Alex Massie

To Solve The Irish Question, Ireland Must First Admit there Is a Question

Alas, poor Hibernia. According to RTE, Brian Cowen Denies Any Bailout Talks. The rest of the world is not so easily fooled, however. These may be “technical” discussions but they’re not discussing the finer points of hurling, are they? Among the more creative solutions to Ireland’s predicament: rejoin sterling. According to Mark Reckless, Tory MP for Rochester: Every MP I have spoken to says they would be happy for Ireland to have a guaranteed seat on the Bank of England’s monetary policy committee. This would mean that, unlike before 1979, Ireland as a sovereign country would have a proper say in setting sterling interest rates. When we raised the idea

Sovereignty, and the loss of it

The superb Slugger O’Toole blog highlights what is certainly the most resonant quote if the day: “When you borrow, you lose a little bit of your sovereignty, no matter who you borrow from.” Those words were uttered by the Irish finance minister Brian Lenihan this morning, and they capture his country’s grisly predicament perfectly. The Irish government has been fighting the European attempt to bail them out because they believe, quite understandably, that it would mean a final handover of control to Brussels and Berlin. But their loose economic policy – built on debt, and structured around a stubborn currency – has already seen them lose control to the point

Another Irish Loser: Alex Salmond

There are precious few heroes in Ireland today and no gods either. But not all the losers are Irish either. Some are Scottish. Chief among them, Alex Salmond and the Scottish National Party. Not because an independent Scotland would necessarily have been destroyed by the financial tsunami that swept the globe (though, to put it mildly, it would have been “difficult” to cope and might well have required a humiliating begging-trip to London) but because an independent Scotland would have made some of the same mistakes and unfortunate assumptions that have helped cripple poor Hibernia. Europe, you see, was an important part of the SNP’s slow rise to power. At

How different will Sarkozy 2.0 be?

After months of rumours, plummeting approval ratings, and battles with anti-reform protesters, French President Nicolas Sarkozy reshuffled his Cabinet yesterday. With a new government in place, the worst of the reforms behind him and the G-20 chairmanship in the offing, President Sarkozy is hoping to rebuild his profile before the next presidential election. But will it work? The popular François Fillon continues as Prime Minister despite a strained relationship with the Élysée. But Defense Minister Hervé Morin and Foreign Minister Bernard Kouchner have been replaced by Alain Juppé, a former prime minister and protege of former President Jacques Chirac, and Michèle Alliot-Marie, a former justice minister in the last cabinet.

Ireland’s nightmare becomes Europe’s problem

“We certainly haven’t looked to Europe.” That was the message spilling from the mouths of Irish Cabinet ministers last night – but, as Alex suggested in a superb post on the matter this morning, their utterances may come to naught. After all, Europe has certainly looked to Ireland – and it doesn’t like what it sees. Already, Brussels’ moneymen are urging a bailout on the country, and Ireland’s moneymen are thought to be in “technical discussions” about how that might work. The upshot is that a financial intervention from Europe is now considerably more likely than not. And with that come European demands over how Ireland should manage its public

Alex Massie

“It’s a Very Bad Thing When Economists Start to be Interesting”

Yes it is. Despite what the Irish government says, it’s now surely a matter of when Ireland has a bailout forced upon it. We left “if” behind some time ago. Even the non-denial denials are specific enough to be revealing. As Shane Ross put it on Sunday, “The game is up.”  Perhaps it won’t happen today and pehaps it won’t be tomorrow but it will happen soon. And the worst of it is that it’s not really about Ireland at all. The history of the Greek and Irish experiences (for all their differences) suggests that saving one patient merely endangers the next sickly country in the waiting room. None of

The world is now in China’s hand

The world is undergoing a permanent shift of power from West to East, with China being the biggest beneficiary and middling states (like Britain) likely to be the biggest losers. The government may, in the words of William Hague, reject any kind of strategic shrinkage. But if China’s economy continues to grow at even half the rate it has developed until now, Britain will end up looking small no matter what policy it pursues. What is the best way to deal with a country like China, which on current projections, will have a larger economy than the United States by 2050? How best to position Britain if the US and

What happened to Germany’s European identity?

What has happened to Germany? Policy-makers and analysts have been pondering the question for the last few years. No longer happy to be the pro-European par excellence, Germany has become more assertive, more self-centred – in others words more normal. German scholar Ulrike Guerot has called the new Germany “post-Romantic”, ie more interest-based and less willing to let its history determine its future. Dominic Moisi says Germany has become “a second France.” Part of the reason is the change among the country’s political elite. The post-war generation has left the scene and the new leaders – on the Left and Right – have little time for Helmut Kohl’s cheque-book diplomacy.

Is Euro-pragmatism here to stay?

I’m off to Brussels, capital of the superstate, home of the EUSSR, or whatever you might want to call it. It has made me re-engage with European issues for the first time in six months. If Europe is not dead as a political issue in Britain then it is at least firmly stored in a coalition freezer, which can only be unlocked in the case of a thumping electoral for the Conservatives. But if the Tories scrape in at the next election or come up short of an outright majority,  David Cameron is likely to want the Coalition to continue. That would mean another decade of euro-pragmatism. A decade is

In defence of UK-French defence cooperation

The Entente Cordial Redux has generated a lot of commentary, most of it ill-informed, some of it ridiculous. Tory MP Bernard Jenkin, in particular, has singled himself out to be a perpetuator of stereotypes with his reference to the duplicitous nature of the French. But many historians, like the otherwise brilliant Orlando Figes, have not fared much better, talking about the Crimea War as if it had any relevance at all for modern warfare. It’s good fun to tease the French. That is what boozy lunches ought to be about. But it should not pass for serious commentary by MPs. Since the 1990s the French have worked very closely with

James Forsyth

Europe hasn’t gone away

The Tory party’s acceptance of a 2.9 percent increase in the EU budget has persuaded Steve Richards that ‘Europe has ceased to be a toxic issue in British politics.’ As Steve acknowledges, this is in part because the Euro-sceptics have won the argument over the single currency. But it is also because the Tory parliamentary party has accepted that the coalition means nothing positive is happening on the Europe front for the next few years. One thing, though, needs to be borne in mind: the Tory party is more Euro-sceptic than it has been in living memory. Talk to new Tory MPs, who are mostly hardcore sceptics, about Europe and

Prisoner voting rights are undemocratic

It was unlikely that the Coalition could have played for any more time before lifting the ban on prisoner voting.  That was the tactic played by the previous Government, but now it seems the will of Strasbourg will prevail.  But the policy is wildly out of step with public opinion, hard to justify and difficult to administer – it is also another example of how our own Parliament and domestic courts have been undermined.     The public are opposed – usually on principle – to granting additional privileges to serving prisoners, especially when they have done little or nothing to earn it.  They are against voting rights in particular

James Forsyth

A day of Tory grumbles

Today is one of those days when you can’t walk around the Palace of Westminster without bumping into a Tory with a grumble about the coalition’s polices. First of all, there’s massive irritation that the government has been forced into agreeing that prisoners should have the right to vote. It has revived Tory concerns about the ECHR and annoyance that the presence of the Lib Dems in the government means that nothing will be done about it. Then, there’s this Anglo-French defence agreement. Tories are, understandably, deeply suspicious of anything that smacks of giving the French a veto over the deployment of British forces. For many Tory MPs, the answer