The European Union, Economic and Monetary Union, Choice and Necessity
and about referenda
and the EU Constitution
and how the EU can tackle Climate Change
and the troubles with the Euro due to Greece etc


April 18th 2003
The European Union was formed out of necessity. After a recent series of attempts by European powers to create a European Empire (notably France led by Napoleon, later Germany, twice, led on the second occasion by Hitler), it became apparent that this was not the way to go about ensuring peace on the continent. Another European war, let alone World War, would finish us.  Britain had long espoused a foreign policy of maintaining what we called the balance of power, intervening to support European nations that risked being overcome and swallowed up by others, as any European superpower was seen as a threat to our national security. As a maritime nation we had long been dependent on maritime security to protect our trade routes and access to the empire and later the commonwealth. But the balance of power theory was becoming outdated too.

After the second catastrophic world war, a new approach was initiated. This entailed keeping the concept of separate nation states but setting up institutions to work out common policies to deal with matters of trade, security and in some cases the production of major commodities in those areas where competition without rules would inevitably lead to commercial conflict leading to political conflict. Agreements on iron, steel and coal production and then The 'Common Market' was the opening phase. This brought about the progressive elimination of tariff barriers (customs duty) between member states. It thereby got rid of the offence of routine smuggling, it increased trade and brought a rising standard of living. As the means of communication and transport  for goods, services and individuals became more sophisticated and prosperity shared between much larger proportions of the population, new problems arose when there were different standards applied to the same activities.

To prevent the advantages of freedom of travel and residence within Europe from being abused by the individuals of one nation learning how to operate to advantage in one country while enjoying the laws of another with regard to e.g. taxation, health and safety, professional qualifications, and to prevent unfair international competition, a degree of convergence had to be applied in the domestic policies of member nations. However, the fact that each nation was responsible for its own currency and interest rates meant that as increasing stability was sought and sometimes reached in pursuing the detail and minutiae, instability appeared at the macro level of national exchange rates as these became vulnerable to speculation by the new breed of international financiers and money traders who were able to track and forecast the fluctuations within the market.

This had been foreseen, and the project of establishing a common currency had been studied for many years. However at this point we must recall that Britain had not been amongst the original founder nations of the Common Market or the European Union which it became. We were always running a few years behind, sometimes through our own reluctance, sometimes through a bit of obstruction by the French. It was not until the 1970s that we became full EU members.

The Bank of England and the City of London were institutions which considered themselves 'sui generis', pre-eminent, pioneering yet robust and able to exist and resist any experiment that included currencies which we had seen devalued to almost nothing in this century such as the Lira, the Franc and the Deutschemark. Many people in the UK doubted that the single European currency would ever come about. It did, though, for two reasons: first because it was possible, and second because it was a necessity if the EU was to continue.

For the same reason the United Kingdom will have to join the Economic and Monetary Union or leave the EU, or the EU will have to become a two-level institution with very different privileges for those within the EMU central core. While being outside this central core might not cause problems for newly joining states, it would cause the UK immense difficulties. It would also cause our major partners in the EU some problems. For this reason it is in our interest to join the EMU core as soon as possible. We have satisfied all the criteria for acceptance by the other members, but there remain some structural economic anomalies which could bring us some difficulties. These are what have to be addressed before the government can recommend adopting the Euro and putting it to the public in a referendum.

A further discussion on this will be added here in due course. At this stage I will just add that joining EMU will not affect our sovereignty or control of our currency more than not joining it. We lose a certain amount of freedom, but we actually gain more control. In the world that we are moving into, the control is what we need.  It will also be very beneficial for Europe, and that will be very good news for Britain. It would also help if we could learn the proper meaning of the words Federal and Federation.  For example, the FAI (Federation Aeronautique International) is the body which the Sporting Aviation Organisations of the world's countries are members of, which enables them to compete internationally in competitions in gliding, ballooning, aerobatics and endurance and speed records. A federation is made up of independent bodies, who create and subscribe to a federation. To have a 'federal' solution to the problem of relations between states, they have to remain independent states, responsible for running their own affairs. Is that clear? Or are the British, alone, incapable of understanding that?
JB April 18th 2003

UPDATE April 28th 2003 is a report from the Treasury Select Committee published today. In essence this report explains that to delay joining the Euro is not in the UK's interests, that the best window of opportunity is about to open, and that it is an opportunity that should not be missed.

If we are to take this opportunity, plans to bring about the structural adjustments with minimum pain will need to be fleshed out, and a forthright campaign to explain the facts of life to the public will have to be prepared. We know now that logic can not be relied upon, as was proved by the failure to convince the UN Security Council and the British public of the need for the UN to enforce resolution 1441.  Distasteful and appalling as it is, emotional means must be added to the brew. How grateful those of us who are not in politics can be that we can leave this awful job to others.

Professor Tim Congdon continues to seek economic rationale to back his obvious emotional choice to fight for monetary independence regardless of the facts. The debate could go on forever, as there is absolutely no way anyone can choose a course of action that will 'win' for any given country. We could win inside EMU or outside, just as we could lose. The question is what game to play, and the answer is inside for all those who believe that Britain is good for Europe,  Europe good for Britain, and that using the national currency as a private perk for the British financial empire and those who run it and benefit, rather than the country as a whole, is not the sustainable future.

This in no way prejudices our penchant for doing business and running our bureaucracy rather more in the American way. It does mean that we will have a better chance of  encouraging a rather more anglo-saxon approach within Europe as a whole, but we need to make the case within rather than sitting on the edge and complaining. The Tories who are anti-emu now want to see a referendum called as soon as possible so that it can fail. The danger is that it will be put off again by the government for fear of failing. The coming serious slump, which will affect manufacturing and employment in general may clarify people's thinking. Meanwhile the relative rise in the value of the EURO is not to the advantage of the EMU countries which depend on exports. The Dutch governor of the European Central Bank is always being criticised, but so far he hasn't put a foot wrong (apart from letting slip an unguarded comment on one occasion to the pack of idiot journalists). It's a pity he has to retire at all, he is so obviously qualified to do the job. The German public will blame their current difficulties on joining the Euro but they will be quite wrong.
We are told today that Gordon Brown is of the opinion the 5 tests have not been passed. We are not yet ready to join EMU. In fact we have passed the 5 tests, but we are not ready. This incredibly boring truth of course gives great pleasure to those who are against the project and have no understanding of why it is necessary.

The fact is that the economic case has been established, the political case is pressing, but because as a nation we are this bunch of insular misfits with our own eccentric way of doing everything we are, as usual, not ready. We have never been ready for anything. I think perhaps we had better leave it at that. It will be disastrous for our industries, but so what? Our railways are a disaster, our roads too, our farms, many of our schools, our eating habits, our unmarried mothers, our drug culture, our immigration control. A hundred good ideas are ignored every year by government and business alike, though a few get through . I think we should just laugh.

UPDATE MAY 23rd 2003
It is now time to explain the purpose of REFERENDA,
why they exist in our political system, what they are and what they are not.

Referenda are not the way policy is developed in a parliamentary system. They are not even the way policy choices are decided. That is the job of the politicians who take on the responsibility of studying politics, philosophy and economics and the law sufficiently to be able, using the institutions and organisations set up to develop and present the options, to make these choices on behalf of the electorate.

However, when a government takes a political decision on behalf of its citizens that it believes in their best interest or even vital for the economic and social well being of the nation, but which commits them, in peacetime, to an important change which has profound implications and involves commitments to allies and neighboring countries, and/or will need a significant effort and will to see it through to success, then it is important that the public is informed of the steps about to be taken.and 'signs up' for them.

There are instances when as an individual, we acquire a new piece of software and after reading the terms and conditions (or skipping them!) we are faced with two buttons to click: ACCEPT or DECLINE. A referendum is the equivalent, on a national scale, when a government puts a programme in front to of the nation and tells them: "we need you to sign at this point, to confirm that we have sought your approval to commit the nation, and accept the privileges and the obligations that go with them."

If the nation declines, the government cannot go ahead. If this creates a serious problem, presumably further public debate will ensue and unless an alternative policy is devised to enable the country to survive politically without that policy, the referendum will be held again. But let us be clear, in a parliamentary democracy, policy is not decided by the public in referenda. Policy is proposed and voted on by politicians. Politicians decide if there is to be a referendum to involve the public and make them aware of the importance and of the commitment. The public may of course decline to take the responsibility, and in that case the governments hands are tied in that issue and the privileges of the new policy are denied them, and the nation.

Gordon Brown, because he is informed and intelligent, must be aware that it is
politically and economically vital for us to join the Euro Zone. He also knows that it will not be easy, and that during the transition we will need to exhibit solidarity as a nation. The nation has to be won over, and the referendum has to be won because if it is lost it will be some time before it can be held again. If he is to seriously and credibly recommend to the nation that now is the time to commit, he must be sure that it is and have the means to persuade them. If he thinks the time is not yet right, then we have to accept that, since he is the man who will be leading the economic case for taking the plunge, but it means it is ever more urgent to find the means to prepare for the adjustments that will have to be made.

MAY 22
As we approach the crucial French Referendum on the EU Constitution, there is still much confusion amongst the electorate and the media commentators on the existence or otherwise of a PLAN B in th case of a NO vote. Perhaps I can make the situation clear. Plan B can only be to implement the constitution on an ad hoc basis when there is no acceptable alternative. Alternatives are either to forbid travel, trade, employment, financial transactions, or to let them proceed unregulated in any way, leaving individuals at the mercy of the personal decisions of functionaries in banks, at borders, in police services, in hospitals and indeed in any public or private organisation with which they have to deal. The most basic Plan B is to carry on with the current procedures. However we know these are not satisfactory and that as one reason for the changes agreed in the new constitution.

The constitution has been agreed after an immense amount of work and international consultation. It is the best that could be agreed so far. If it is to be rejected, the points objected to must be marked and the alternatives that must follow (be they anarchic or regressive), must be accepted by all those who vote no. For instance, if we had a referendum in the UK "Do you wish to abolish income tax and VAT - YES/NO", it would have to include: "I understand that in voting NO, I give up all rights to services provided by the state or by private organisations who provide services on behalf of the state".

The EU can only exist because it has operating procedures and rules backed by the force of laws agreed by all parties. Because of these laws we have the ability to trade and travel and take up employment within the countries of the EU, with all the permissions and exceptions that are incorporated therein. There are also rules that affect the relationship between the EU and the rest of the world with regard to the above. The world's commerce and prosperity depend on the freedoms permitted by these structures and they way in which they allow the movement of goods and people and services and intellectual property and money across international boundaries.

Now that the EU has been recently enlarged, the laws already agreed and those added to deal with the enlargement have been consolidated in was has been called the EU Constitution. This has to exist for the EU to function. For reasons which have little to do with reality and much to do with emotion amongst those who have no idea of the foundations on which peace and prosperity (two attributes which can easily become antagonistic if politics is not expertly handled) depend, this highly sophisticated process has been made the subject of a YES/NO vote by anybody over the age of 18. Should they vote NO, it might be a vote against the UK Government; or it might be because of xenophobia; or any one of a number of reasons that have nothing to do with the consequences of voting YES or NO. So I look forward to what will happen, as it may enlighten those people who think we should ask children, brought up in many cases by families that have little knowledge of these things, taught by teachers often have poor qualifications, affected above all by media controlled by those obsessed with their own image (a default nature for media people), how to devise the laws on which peace and acceptable behaviour in both a domestic and international context, depend. The one way to risk the future of democracy is to abuse it. That has always been the reason for its failure in the past.

UPDATE June 08 2004
We await the official position this coming week. In the meantime Gordon Brown has confirmed his thinking as being in line with the above - good news for all those who value sanity and logic. But now we have some German economists advising us to stay out of the Euro! "Look at the trouble the single interest rate is causing us. Look how well you are doing in comparison!"  Cobblers.  It is true that Germany can no longer pretend to solve its problems by fiddling the interest rate - a good thing too. Its problems have been caused by using economic policies that are slightly out of date on a population that has changed, aggravated by  some special factors. But it is also true that the single currency cannot be managed to its best advantage for all while the UK has one foot in the boat and one on the shore. We are part of the problem. As usual.

The media have made much of the failure to reach agreement on a drafting of a written constitution for the EU. The reason for the constitution to be formally established now is two-fold: to consolidate in a single document the essence of the various treaties that make up the EU as it now stands and the latest agreed positions on defence etc;and to settle details that define the voting arrangements, rights and values that will apply when the new members from Eastern Europe are added. There are no significant problems other than with the last of these, caused by the expectations of voting power allocated to Poland at the time of its application. The Poles are now resisting any modification to this, whereas the French and Germans are insisting that their has to be a reasonable relationship between the voting power of nations and the size of their population. The outcome is of some significance because it would mean that a Franco-German alliance on a specific policy would only have to attract support from one other 'big player' to gain an overall majority. However, given the amount and transparency of debate in the EU structure it is unlikely that this would ever give rise to an abuse of power that would cause unnecessary hardship to any member. There is as usual a lot of fuss about nothing, but all those responsible for representing their country are at the mercy at home of opposition parties who will stop at nothing to make their electorates believe that 'they are being sold down the river'. It is a pity politicians cannot talk frankly to the electorate, but history has proved that this is only possible when we are at levels of deep crisis. Agreement will eventually come, because it has to. Until it does, the U will carry on in the best ad-hoc traditions and deal with its expanded membership as best it can. Calling for a referendum on this in the UK is of course ridiculous, so not worth further comment here.

Some people may be wondering why the Pound is so strong, wrecking the balance of payments, but holding up with the Euro. This is because the British Empire is now a financial one, and the pound is its currency. British Banks and foreign investments are doing well all over the world, and British property prices have been rising at home. The pound, by being the currency of an EU member but remaining under the control of the Bank of England, has benefited in some special ways. The city of London remains a serious business centre. Major British companies have been run a great deal more carefully than some in the United States and elsewhere. The Dollar has been lost favour compared to both the Euro and the Pound for many reasons that are clear to all, and so many US citizens have been interested in hedging their bets as the Dollar has been allowed to decline, and sterling has benefited. But this is not sustainable in the long run. The strong pound keeps imported raw materials prices down, but it is the value added in manufacturing that determines the price of our exports. Manufacturers costs include climbing out of pensions holes and stock market crashes, and competing with dollar prices and US companies still benefiting from offshore tax avoidance becomes harder. Something has got to give. The day will have to come when we join to the dollar, or join EMU, or forget about running the UK as a balanced economy and decide to become an international business empire only, with a service economy and offshore manufacturing industry. I doubt we can sustain an island society like that. At the right time we should join EMU, and the right time is as soon as possible at the right exchange rate. Unfortunately as things stand, the wellbeing of the UK economy is now dependent on staying outside EMU. Blair's former economic adviser. Derek Scott, rules it out for a very long time. The reasoning behind this remark is understandable. But it is a mistake to think that joining EMU was a mistake for the other core EU countries. It is said their economy is sluggish relative to ours. That is true. But without EMU Europe's currencies and economies would now be in chaos. There is a price to pay for Euro stability. And it would be a great mistake to think that they relative dynamism of the UK economy is not paying a high price of a different sort. Under the apparent stability, appalling pressures are building. Social pressures, debt pressures, and some very old fashioned political pressures. You aint seen nothin' yet. We have chosen to stand alone.  It was a mistake. But globally speaking there are no mistakes. The British public made it impossible to join EMU, they will play the game they have chosen by majority, led by the ideas and voices they have chosen to follow, and that is how it should be. There always has to be 'one'. Evolution depends on it.

The PM has now said that.he does not rule out a referendum on the EU Constitution. In other words he is unwilling to take on the media, who have already convinced a proportion of the electorate that they are entitled to one. That proportion also includes many who are required to vote Labour in the next election. Awful though the idea of a referendum being forced wrongly on the nation may be, it is true that taking on another battle when he has so many on his hands is the last thing he needs. Most educated people believe that the issue is a classic case where parliament should decide, as the referendum cannot be framed in any way that would make it comprehensible and at the same time make the consequences clear to a population which is now 30 percent broadly illiterate and probably 50 percent misinformed. However, we shall see. It may be that good will come out of discussing the issue and it may be that the referendum is winnable in spite of these problems. However, it will set a terrible precedent. Referenda should be confined to General elections unless something groundbreaking occurs but a General election is inappropriate. The public demand for a referendum on this issue is just a contrivance.

UPDATE APRIL 20th 2004
Regardless of what anyone thinks, the logic is as follows:

Question: Does the (now enlarged) EU need an agreed constitution?
Answer: All those involved with running the political and economic business of the EU say this is now essential, as there is already a constitution but it is spread about in all the various treaties and subsidiary agreements that have been signed over the past decades. It is not possible for subsequent generations of the enlarged community to conduct the affairs of the EU without a central constitutional reference in language that has been agreed internationally, centralised in a document with the force of law.

That is the only question that has to be addressed. If the answer is, for some extraordinary reason, that the EU can muddle through without a constitution, there will have to be some new facts that defy all knowledge and experience to justify this. I cannot take the suggestion seriously. There is already considerable confusion due to the lack of such a document, and both the union and the individual nation states that constitute it are the losers. The winners are those who use and sometimes abuse the bureaucracy for their own ends.

Clearly the nation states must negotiate the language of the constitution so that it is acceptable to national governments, as all will have to sign up to the final document. If they are unable to do this, then the EU cannot continue, as it would be putting the citizens of each country in the hands of those who were running the institutions, who could interpret the rules differently, as suited them.

The idea that all the EU members except one or two could sign it is, of course, absurd. The constitution must be drafted so that it interprets the treaties already signed clearly, and further clarifies any resultant outcomes that have been identified since.

The views of those who do not understand the above can be listened to if that is their wish, but that will change nothing. If the UK refuses to sign up to the constitution (assuming the other countries agree to one) and refuses to join the Euro, then it will obviously have to leave the Union. The logic of this is elementary.

Never has so much utter tripe been talked by so many. Mature reflection reveals the decision to switch tactics and have a referendum on the EU constitution to be eminently sensible. The only posture the Europhobes can adopt is to pretend not to understand! There is no U-turn in ends, only in means. Our rather modest and polite Prime Minister is beginning to look like a giant, so minuscule is the intellect and character of his opponents. Listening to Andrew Niel's programme on BBC1 this evening, even Michael Portillo, who has been known to make sense since he was taught a proper lesson, comes over as an idiot (he makes more sense on Iraq). As for Howard, his performance in the commons was juvenile. Yet many people loved it. How depressing is that.

Over the past few days the position as set out above has been publicly acknowledged. In spite of Michael Howard attempting to convince the uneducated that "only countries have constitutions", a majority of the adult population knows full well that any formal organisation with members has to have a constitution and that in this case it is absolutely vital. The celebrations by all the countries of Eastern Europe have been sincere but muted, because of the very nasty taste that has been cast over the whole proceedings by the arguments that persist in Britain - the European nation to which, above all, these countries previously thanked for helping them achieve their freedom from both Communism and Fascism. What rankles most is the sheer dishonesty of those who claim a constitution means a move to a single state. Blair is right to lance this boil.

UPDATE JUNE 6th 2004
I am sure the International Herald Tribune will not mind my posting here, unedited, Graham Bowley's excellent article of Wednesday June 2. It is sad that we have to buy a foreign newspaper to get a clear view of what is going on in our own country.

Grand European vision? The British can't see it

EU remains a bogeyman and fault line
By Graham Bowley/IHT
Wednesday, June 2, 2004

LONDON: When Nick Clegg, viewed by many observers as one of Britain's brightest young politicians, became a member of the European Parliament in 1999, he wanted to help build the grand European project and secure Britain's place in it.

Five years later, Clegg, a 37-year-old Liberal Democrat, has grown disillusioned with the British electorate, and its indifference or even burgeoning hostility toward the European vision. After the European elections on June 10, he is leaving Brussels and returning home to forge a career in local British politics instead.

"The vexed debate about Britain's role in Europe is worse than it was under Margaret Thatcher," Clegg said recently by phone from Brussels.

"It is ironic that we have a pro-European prime minister but he has presided over a degeneration of the debate in the U.K. You realize your work does not make any difference. I may be winning my battles in the committee rooms of Strasbourg and Brussels. But meanwhile the war for hearts and minds is being lost back home."

For the nations of continental Europe, the EU may be a thrilling and glorious undertaking, a way to heal the wounds of World War II and overcome Europe's political obscurity by creating a geopolitical equal to the United States. But across the English Channel, Europe remains a bogeyman and fault line of British politics.

French, Germans, Italians have embraced the euro enthusiastically, and in many countries, despite skepticism and weariness with European bureaucracies, talk of an eventual federal Europe is a source of political excitement.

Yet, Britain continues to stand aloof from its continental neighbors, wary of European intrigues and incursions, rejecting the euro and proud of its older, sovereign democratic traditions. Many Britons see a robust trans-Atlantic alliance with the United States as preferable to submersion in a European federation.

After the EU political fault lines helped topple the Thatcher government, Tony Blair, in the first blush of his premiership, wanted to do things differently by finally leading Britain more fully into the continent's embrace. Yet in April, hardening public opinion, stirred by a Europhobic tabloid press, helped force him to pledge a referendum on the EU's proposed constitutional treaty, possibly after the next general election, which could turn into a vote on Britain's place in the EU itself. As even pro-European Blair has grown shy of campaigning vigorously for the European cause, the voices most often heard now in Britain are those of either strident anti-Europeanism, or indifference. The ambivalence is likely to mark Britain's elections to the European Parliament, its part in one of the biggest exercises of democracy on the globe. Although the Parliament is increasingly influential, and is the only internationally elected assembly anywhere, the election of the 78 British seats in the 732-member body has been greeted with a shrug of indifference from voters more concerned about Blair's pressing difficulties in Iraq or summer train strikes than anything to do with the technicalities of Brussels' legislation.

In the last election, five years ago, British voter turnout was barely one in four, the lowest in the EU. According to opinion polls, this time around it is likely to be slightly higher, at about one in three. But this is still low compared with the approximately 45 percent expected for the whole Union, illustrating once again what Clegg calls Britain's dangerous "democratic deficit."

The British government has tried to close that gap. In this election, mail-in ballots are allowed in 4 of the 12 voting regions (though there have been delays in getting forms to voters), and the European vote has been scheduled to coincide with local elections for about 5,000 council seats in England and Wales, and elections for mayor and an assembly in London.

"Super Thursday," as election day has become known, will be the first chance voters have had to register their displeasure over the war in Iraq, whose unpopularity has only increased with evidence of abuse of Iraqi prisoners and the failure to find weapons of mass destruction. This may precipitate a swing away from Labour to Liberal Democrats, the only main party that campaigned openly against Britain's involvement in the war. But Iraq is not the only source of voter discontent. While the economy is strong, Labour is perceived to have done poorly on public services like transportation and education, despite pouring billions into the public sector. Any weakness in the polls will almost certainly trigger fresh speculation about challenges to Blair's leadership of the Labour Party.

"Blair has lost a lot of credibility as a trust figure," said Colin Hay, professor of political analysis at Birmingham University. "This will be a test."

In addition, if scheduling other elections together with the European vote caused any upsurge in voter interest, this is marked mainly by a swing toward nationalistic, anti-European and anti-immigration sentiment rather than any increasing affection for Brussels.

This may benefit the Conservative Party, which opposes the proposed EU constitution and switch to the euro even while insisting that Britain play a constructive role in the EU ("In Europe, not run by Europe" is one of the Tories' election slogans.) Certainly, the path to a bright political future in Britain does not seem to lie through Europe.

"I have done my stint," Clegg said last week in Brussels, after a debate in a hotel meeting room with Dominique Strauss-Kahn, the former French finance minister. During the debate, which centered on the future of the European project, Clegg thundered about a "crisis of legitimacy," the "gap between the aspirations of the EU and the disaffection of the electorate," and warned of a possible "political conflagration" - all to the slightly brow-furrowed disapproval of Strauss-Kahn.

Afterward, sipping coffee in the hotel bar, Clegg expanded on his remarks. "The gap is most acute in the UK," he said. "If you are Italian or Belgian, you don't suffer that weird sense of a parallel universe" that British members of the European Parliament do.

Now he intends to run for a safe seat in Sheffield in northern England for the Liberal Democrats. If elected, he says only half sadly, he "probably won't come back at all" to Brussels.

According to polls, small parties could attract attention by grabbing disproportionate shares of the small number of votes cast next week. The far-right British National Party may thrive in northern areas like Yorkshire, where it is fielding about 100 candidates for council elections. Another beneficiary of the anti-European sentiment could be the U.K. Independence Party, which is campaigning for Britain's immediate withdrawal from the EU. Buoyed by recent large business donations, it has had high-profile endorsements from the actress Joan Collins and Robert Kilroy-Silk, a broadcaster and former Labour member of Parliament who has described Arabs generally as "limb amputators" and "suicide bombers" and is running for the European Parliament as a member of the U.K. Independence Party.

Nigel Farage, one of the U.K. Independence Party's three members of European Parliament, is a commodities broker who wears a pin-striped suit and has a silver pound sign lapel pin. His heroes, he says, are Ronald Reagan, Margaret Thatcher and Winston Churchill. "Better to be dead than subjugated," he said last week, drawing on a cigarette in a Westminster café.

Another U.K. Independence Party candidate, Stephen Harris, an American and British citizen who served in the U.S. Navy in Vietnam, draws parallels between the EU and Soviet Communism and the American North's defeat of the South in the civil war. "Now they are trying to take 25 countries and 21 languages and put us into one homogenized, pasteurized goo," he said from his office in southeast England. "They are crazy. What are they smoking?"

Anthony King, professor of government at Essex University, said the U.K. Independence Party "is proving able to tap into a very widespread feeling in the U.K. that the EU interferes too much in Britain's internal affairs."

"It will probably get 15, 20 percent of the vote," he added, "and that will be the sensation." According to a poll last week by YouGov for The Daily Telegraph, Labour and the Conservatives could each garner about a quarter of the European vote, and the Liberal Democrats about 18 percent. The U.K. Independence Party could triple its three seats to nine, though Robert Worcester, of the polling group MORI, doubts that it will do as well as that. The results will be known on the night of June 13, after polling places have closed in all member states. While Clegg has conceded defeat over the European Parliament, Mary Honeyball, a Labour member of the European Parliament from London who is running for another parliamentary term, still considers the struggle worthwhile. "I try to emphasize the small positive things we have done that make a difference to people's lives," she said last week.

Honeyball ran for Parliament in Britain but failed twice. During the last five years as a member of the European Parliament, she has campaigned for women's rights and sat on the EU economic and monetary affairs committee, which scrutinizes the European central bank and financial services industry.

Last week, the station was almost empty except for high-speed trains roaring past toward central London. One potential voter approached, only to complain about excessive pay and expenses for members of the European Parliament. Another, the station manager, Terry Killeen, said he was a Tory but probably would not vote next week.

Honeyball looked resigned. "If you have got a couple of minutes on the doorstep with somebody," she said later, on the train back toward central London, "you don't go on about the grand European vision. They would think you were slightly mad."

International Herald Tribune

UPDATE JUNE 18th 2004
We now have, as of this evening, a constitution for the enlarged EU. It will have to go the rounds of all the governments for them to study and be sure in their own languages what it means. Then in due course it will be debated in the UK Parliament and voted on. Then it will be the subject of a UK referendum. The reason for things being done in this order is very simple. Despite the juvenile posturings of Michael Howard, the enlarged EU has to have a constitution to which all members subscribe. Those countries which are prepared to subscribe to it can be EU members. Those which are not will have to leave. In the case of the UK, because of the confusion in the minds of the population caused by those seeking personal advantage, as well as many who are just ignorant or deluded, the situation has to be explained and the public has to sign on the dotted line that it has been explained to them. "Terms and conditions apply" is the appropriate phrase, and a majority has to tick the box to commit us. If we vote no, and most of Europe votes yes, we shall have to leave until we change our mind and vote again. We could of course end up encouraging all those who wish to destroy the EU to do so, and we could succeed in this. If that happens it will be a disaster for us and for Europe, but not for life in general. The vital principle is that intelligence and wisdom flourish and go forward, and that ignorance and idiocy leads to self destruction. The Universe is perfectly self designing.

OCTOBER 21 2004
How delightfully ironic to hear the leader of UKIP (United Kingdom Independence Party) telling Kilroy Silk he should be a team player and abide by the UKIP Party Constitution. This from the leader of a party that refuses Britain's role as a team player in the EU, or the need for it to have a constitution.
The Buttiglione case is interesting. I shall now explain it to you, since nobody else seems to be both capable and willing of so doing. First, here are the facts and the positions taken by protagonists.

During a confirmation hearing  two weeks ago for his position as incoming EU Justice Commissioer, the unfortunate Mr Buttiglione answered all his questions honestly. He said he regarded homosexuality as a "sin", and that marriage existed to allow women to have children and the protection of a male. He was also reported as having said single mothers were not very good people. This has caused a lot of confusion! According to one school of thought this rules him out as EU Justice Commissioner as he would be administering a justice system which not only does not recognise this position but opposes it as part of its fundamental tenets. This would appear to be entirely logical.

On the other hand, it could be argued that it is equally wrong to discriminate against Mr Buttiglione because of his religious beliefs, beliefs which have been held by political and judicial authorities for thusands of years but which he is prepared to relegate to his private opinion in order to join the ranks of those of different persuasion in a political system that claims to tolerate different beliefs.

Jose Manuel Barroso, the EU Commission President says:
"The new commission will be absolutely opposed to any kind of discrimination based on sexual orientation, gender, religious beliefs." This would seem to apply both ways, against and also in favour of Mr Buttiglione.

The Commission President devised a way round the problem by creating a special committee to rule on all questions where matters that might conflict with Mr Buttoglione's beliefs, and Mr Buttoglione has apologised for giving offence, pointing out that these days the law is not synonymous with religious dogma or doctrine.

But few are satisfied.

Rome's right-wing Il Messaggero is critical:
"It is a mistake to mix religion and politics," the paper says. "Europe does not want to hear about this mixture of State and Church, which is part of our history."

But the right-wing Milan paper, Il Foglio, blames Mr Buttiglione's critics instead:"The tragicomedy of the Buttiglione affair shows that socialists, liberals, Greens and communists have no scruples," it says.
"This is why Barroso risks not getting enough votes next Wednesday in Strasbourg," it adds. "And even if he does eventually get them, a very slim majority will mean being subject to constant blackmail throughout the five years of this parliament."

Then everyone wades in on one side or the other, so what is the 'truth' here?

The truth is that as usual most of those involved are usuing the situation to pedal their own agenda. There is no right or wrong to the story as a whole. There are those who wish to discredit the EU and its institutions, who will try to make it into a crisis regardless. There are those who are against the Roman Catholic Church who will use the situation to that end. There are those who claim the Commission is 'undemocratic' in spite of the fact that commissioners are sent there by their respective elected governments to act on behalf of both Europe and their nation. These people will claim that the case proves that the Parliament should have more power. The truth here is that the Commision is both democratic and accountable, but it is quite right for the EU Parliament to debate this issue and make its opinion known and felt.

It is not a crisis at all. The outcome is not a foregone conclusion. Everyone will play their part. The important thing is that hopefully they will all discover that they do not have a monoply of the truth, of rectitude, of reasonableness or of logic. At the end they will have to find a way to agree on a modus vivendi which prevents abuse and allows for good government. It may be that this is reached by rejecting the entire commission and starting again, or it may be that paranoia will subside. It is, after all, inconceivable that Mr Buttoglione or his office would end up persecuting gays, single mothers or people of other than Roman Catholic persuasion.

OCTOBER 30th 2004
M Buttoglione has stood down. Quite right too - the EU has to get on with its business. He caused the trouble himself by making unnecessary public pronouncements about his personal religious beliefs. That does not mean that those calling for his replacement were right - they are the ones who are intolerant, paranoid (and this despite it is they who are overturning  two thousand years of moral consensus amongst Christians, Muslims, Bhuddists, Hindus, Confucianists etc.etc. which has been the basis of law througout Europe, America and most of Asia, and produced terrestrial civilisation as we know it..

Mr Buttoglione himself is of the opinion that his position and opinions have been completely misunderstood because of misleading rerporting by the media. This is true of course. Mr Buttoglione is an educated and erudite man, and most of the world newspapers and broadcasting networks are infested by people of limited intelligence and even more limited education. Even if they understood what he was saying (in any of the languages he speaks fluently, which they probably do not) they would twist it to fit their own tiny minds or those of the readers they hope to pander to . But he should know that by now.

Personally I am all for encouraging women to go to work and stay out of the home and get a life other than having more and more children. That was the best role for many in the past but it is not the best role now or in the foreseeable future. Nevertheless, being a full time mother at the right time is a very important job, and some women will be housewives as a profession and excel at it. As for homosexuals, they obviously represent a flowering on the tree of life that does not have, as its role, the extension of that branch. Their contribution is to use their talents to produce much of value, but not the next generation.  I doubt that homosexual relations between consenting homosexual adults is a serious sin, or a sin at all. So why is the business of Europe and its constitution bogged down in all this boring rubbish? Well, curiously, it now turns out it is very important. Are we really going to be dictated to by intolerant, politically correct obsessives with chips on their shoulders about everything? I am all for Mr Buttoglione standing down so we can get on with life, but we have been warned - politics stands the risk of being taken over by people who are driven by their own psychological problems.

MAY 11 2005
I have desisted from writing anyting since October last year, as there has been nothing notable. The fuss over little or nothing above has died down. But now the French are facing a schizophrenic condition over the constitution which they find too free and anglo-saxon but are faced with the fact that re-negotiation to end up with one they like more is next to impossible. Their referendum approaches. And there is something else new and significant. The Working Time Directive is a part of the existing treaties to which we have an opt out; yet the point of it is to allow completely free trade without a free-for-all on working hours. With our combined opt-out from the currency and the Working Time Directive, the UK can really be said to be taking the piss. Alternatively we could claim special disadvantage due to geographical isolation and anyway the others all cheat, but that does not seem to be a good position unless we intnd to allow the whole EU to descend into corruption and eventual failure.

The Working Time Directive is very flexible. The 48 hour limit is not applicable to any one day but to an average over the year. It is not of itself a  Health and Safety measure, but is designed to enable reasonable health-and-safety restrictions on hours to be applied without those who apply them incurring penalties within the EU due to others taking no such action. The argument should be over the limits set, not over the principle. Yet as usual we are arguing over the principle. That is because we have to listen to all those who do  not accept the EU as necessary. They have little idea of how bad things could get without it. Here is the position today, from the Reuters report

Wednesday May 11, 02:12 PM 2005

STRASBOURG, France (Reuters) - The European Parliament voted on Wednesday to scrap Britain's fiercely guarded opt-out from the EU's 48-hour maximum work week, reopening a long-running ideological battle with London.

The European Union legislature voted by 378 to 262 with 15 abstentions to abolish after three years a provision under which governments can allow firms to ignore the limit.

Britain, which regards flexible labour laws as vital for economic efficiency, voiced dismay but said the vote was only a stage in a complex legislative process and the proposals would now go back to the executive European Commission for revision.

"We are very disappointed that they have taken this decision," Employment Minister Gerry Sutcliffe told BBC radio. "I think that the European employment ministers ... will accept our position."

A coalition of Socialist, Greens and Christian Democratic lawmakers voted to tighten the rules on working time in the name of health and safety, endorsing a report by Spanish Socialist Alejandro Cercas that said the opt-out had led to major abuses.

Members of the Labour party in the EU assembly defied Tony Blair to vote with the abolitionists despite intensive phone lobbying by cabinet ministers.

"The force of the argument was such that every one of the Labour MEPs ... pledged to vote with the Socialist group on this," Labour MEP Stephen Hughes told Reuters.

The Conservatives and Liberal Democrats said the revolt in Strasbourg showed Blair was losing his grip on his own party, which was re-elected last week with a slashed majority.

The Trades Union Congress says around 3.75 million people in Britain work more than 48 hours a week, among them junior hospital doctors in the National Health Service, truck drivers, workers on North Sea oil rigs, and many managers.


Member governments must approve a final version of the legislation by qualified majority in the EU Council, and Britain will need to put together a blocking minority of several countries if it is to preserve its opt-out.

"It will only be agreed if parliament, the member states and the Commission can agree on the same version," a British spokeswoman in Brussels said.

Commission spokeswoman Katharina von Schnurbein said the EU executive did not agree with parliament's bid to scrap the opt-out 36 months after a new law comes into force, and would maintain its proposal to allow individuals to opt voluntarily to work longer where there was no collective agreement.

London hopes for support from new ex-communist east European member states who oppose stricter labour laws.

Right-wing Polish MEP Konrad Szymanski said in a statement: "Today's vote is a black day for the European enterpreneurship. In its shape approved today, the directive would become one of the most economically harmful elements of the European law.

"They have decided to impose the worst legacy of the French and German economies on those countries which do not want that, such as Poland, Britain and Ireland."

The Confederation of British Industry, an employers' group, said abolition could cost millions of jobs and urged the government to stand firm.

"There is no place for handcuffs in a competitive economy -- as long as employees work in safe conditions and have freedom of choice they should also have the freedom to work, " CBI director-general Digby Jones said in a statement.

"Reports of widescale UK employer abuse of the opt-out are grossly exaggerated ... How can Europe possibly hope to compete with the likes of China and India in the 21st century global economy?" he said.

In another headache for governments, parliament voted that all on-call time should be counted as working time, endorsing a 2003 EU court judgement which said that even if doctors were asleep when on-call, it still counted.

The European Commission had proposed that doctors could no longer count time spent on call in hospital as working time if they were not actually deployed, an effort to ease the burden on governments and the health sector.

The assembly did give some leeway, suggesting that inactive parts of on-call time could be calculated differently to comply with the 48 hours maximum working week.


Hmm..... there is logic on both sides here, so there cannot be a solution based on assuming that in principle, only one side is right. That is why we have the EU and its institutions, to deal with such problems. Let us never forget that in the modern world, all wars have started for economic reasons. The point of the EU is to avoid that as, with today's technology, all victories are pyrrhic.

MAY 29 2005 - a Date for History
The EU has been the most important political development in the history of the world, but so well has it worked that the inhabitants of some of its member countries have absolutely no idea to what extent they are dependent on it. Some think that democracy and elections in individual states is enough to ensure an absence of tyranny or anarchy or control of the economy by corrupt or violent forces, and that this is sufficient to avoid war between such states. They are wrong. Tyrants take control with the will of the people when economic policies cannot satisfy the popular appetite. Difficult times are coming for the developed nations, and corruption and anarchy followed by tyranny can follow the collapse of strong and stable government. It is not for no reason that all the decent political parties in France and all the press urged their countrymen to support the continuation of the EU. The failure to agree a constitution at this time undermines the rule of law throughout Europe. We are at a moment of great danger. Unfortunately in the UK we have some senior politicians, particularly in the Tory party, of such staggering ignorance that they have no idea of what is at risk here. For that reason it is quite a good thing that the French referendum has taken place and we have had this negative result. It will serve as a very necessary lesson. It is too late for a warning.

JUNE 2nd 2005

Now that we have the Dutch result, the position is clear. In the last few years the previous prosperity brought by the freedom of trade and movement has given way to the pressures of the globalization that inevitably followed. The EU imposed costs on its members in return for its immense benefits. Now, because the costs are still there but the benefits are not seen to be delivering, the new constitution is seen as a 'more of the same' package, and the public has rebelled. What they do not realise is that without the EU things would be very much worse and without the new constitution things would rapidly get worse still. There is of course another way forward. A Fortress Europe which does not expand its membership. It would then deal and trade on one level internally and on another with other blocs or unions. This would however lead to a greater loss of sovereignty and national control, which most people are against. They are right to be against it, as the EU can only exist as a Union of Nation States who take responsibility for their own affairs within a framework of agreed rules and harmonization to allow free trade and movement along with collective security. Each state must use its own language, traditions and culture thrive and develop. The thought that there was ever the slightest chance or risk of Europe becoming a single state can only exist in the heads of the politically paranoid whose fear is based on extreme ignorance.

It is good that the level of debate has now been raised. Perhaps there is a chance now of getting a majority to understand the issues. It seems that our Prime Minister and his cabinet actually do, so that is a very good start. We should now proceed with finding out what the rest of the EU countries think about the proposed constitution, and what the majority position is on enlargement in each country and as a whole. We are told that the opinion of the public in each case must be respected. This depends, actually, on what the opinion is based. If it is experience, then respected it should be. But treaties cannot be abandoned or changed by referendum unless the public that votes also ticks the box that says they have signed up to the possible consequences, as these could be painful. We are in an era where the closing and patrolling of borders has become near impossible - that was why we were able to make the Berlin Wall impossible to maintain. The heads of state thought and negotiated long and hard before they came up with the draft EU constitution.  Those who wish for an alternative may be able to do better, but they will have to put their alternative to the test . Anarchy, or the alternative of international obstruction or effective rule by millions of bribable and corruptible controlling bureaucrats, is not a pleasant one.

To get some idea of the ignorance of the subject in the UK Conservative party, one bright spark today put forward Asylum as one of the areas where each EU country must now obviously have their own rules regardless of others. Should one laugh or cry? Asylum and certain security issues are in the list of subjects which cannot be dealt with without cooperation on a level that can only exist if the rules of each state, even if they are different to suit individual circumstances, have to be mutually agreed and acknowledge by the other states whose support is required for them to function. It might be a good idea if all MPs were sent on a brief course called "Systems", starting by learning what the word System means, and ending up with the knowledge of a few basic rules that apply to all systems.

JUNE 6th 2005
Jack Straw's statement of the UK position is now, as expected, sensible. All one can say to the Conservative spokesthings is 'grow up'. The level of debate at most schools is better.

JUNE 19th 2005
It is now time to try to clarify the confusion in the heads of practically all those who have felt impelled to criticise the French on the one hand and the UK and allies on the other for their stance on agriculture. To listen to Blair on the one hand and Chirac on the other, one could be led to believe that it is not just a question of means but of ends that is in dispute. 

We must stop subsidising EU agriculture, goes the UK argument, so we can use the EU budget to help move Europe forward to meet the challenges of the new millennium in a competitive global economy. And we tie this in with the need to cease subsidising  food production which floods world markets and cripples farming development in those countries where must get established and be sustained. Fine. But the impression is given that agriculture in the UK is economically and socially unnecessary - we should be earning our living as a nation in the commerce and industries of the new millennium and buy our food from wherever it can be best produce, often in climates more suitable than ours.

But this is not the case. UK agriculture is vital, and management and maintenance of the countryside is vital. Nor must we not turn our land into massively efficient plains of mono culture as a way of gaining what looks like efficiency but which carries immense costs to our society as a whole. The deep irony is this:- while we complain about the French benefiting from the CAP to support its farmers, we need our rebate to do exactly the same, though we do not say so. We will need it to support the new system under which guaranteed prices to support overproduction are replaced by funds paid to farmers to manage the countryside regardless of production. And nothing could be more important. The countryside is the lungs of of our nation, essential for our health, neglected at our peril. It is far from certain the the Blair government understands this.

It is only because we do not use the mechanisms of the EU in the same way as the French that we have reached this extraordinary impasse. Both countries have used and abused the CAP in their own way, and now both are arguing about how to face the truth. They are arguing about the means, and Blair and Straw (a great Foreign Secretary in may ways) seem sometimes to be arguing about the ends. Let us hope, as Blair takes the chair in the coming months, that he comes to understand the ends as well as the French do, and the French understand as well as the UK and others that we have to find clear, honest and recognised means to achieve these ends.  These include making the EU globally competitive but can also include defending our rural culture. Indeed if we do not do this we will be in deep trouble, and the French are absolutely right to make this an issue. 

There appears to be a penchant in the Blair philosophy that the future of the British economy will be ensured by excellence in certain cutting edge service and manufacturing industries, protected by patents, experience and leadership which will permit us to employ nearly all our population and maintain a good standard of living. I am sorry to disillusion him. We will be outperformed from time to time in any area you care to mention when it comes to the global commercialisation of goods and services, even if we invent them. We will have difficulty in employing and housing a large part of our population  Times are coming when although we can avoid a 'fortress Europe', we can do so only by having a common survival system with a lot of mutual arrangements. I believe one of these will be a common currency. Another will be taking care of our countryside and making sure it is more fully inhabited and maintained and used by more urban-dwellers for the good of their souls. Our French neighbours understand this. We must learn from them, and they from us.

As for the enlargement of the EU, I have always said this must proceed with caution. It has proceeded very slowly, but that is not quite the same.

JUNE 22 2005
The Chancellor's annual speech to the city this evening was, I hope, an acknowledgment that the CAP reform which is necessary should result in the removal of both the UK rebate on one hand and abuse of EU mechanisms to achieve covert support for agriculture in other countries on the other, as well as the end of guaranteed prices on commodities such as sugar anywhere in the EU. Some rational and overt EU support for the management of the land, however, must be assured on a proper basis where market forces do not supply short term replacement funding.

Today was the PM's turn, addressing the European Parliament. It looks to me as if the straightforward approach can prove to be the best and and indeed the only way forward. There will be opponents on all sides who will be dismissive. Some will claim he is abandoning Europe, others that he is selling out to it. But these will be the views of, on the one hand, those whose fear of the future leads them towards a unification syndrome and search for the superstate, and on the other
those who have suspicious or prejudiced views of people who are not of their ilk. The budget can be sorted. The Constitution and enlargement plans are now more difficult to get agreement on, however. A lot of good will and patience will be required.

JUNE 26th
Unbelievably it seems that most people, including many heads of states and foreign ministers and UK MPs across the political spectrum agree with the views expressed in the previous  2 paragraphs. It is not going to be easy, but can it be true that a wind of change and a dose of reality is on the way? All sides have lessons to learn. If they open their minds, they can.  But.....

JULY 4th 2005
The following Reuters report is correct, and the opinion's expressed are realistic. If Blair gets this wrong, it will be quite a mess.

Monday July 4, 03:06 PM
EU commissioner doubts Blair's plan for EU

BRUSSELS (Reuters) - The European Union budget chief expressed doubts on Monday about Prime Minister Tony Blair's plan to launch fundamental economic reform of the bloc, saying it lacked substance so far and created divisions in the EU.

EU Budget Commissioner Dalia Grybauskaite, who met Blair last week, said she was pessimistic about Britain's ability to steer the EU towards a deal on its 2007-2013 budget during its six-month presidency which started on Friday.

She said Blair's liberal reform agenda, unveiled at the European Parliament last month, had so far produced only a theoretical debate, which could distract the EU's 25 members from reaching the budget deal this year.

"Today, I can see only the willingness to engage in a battle, to engage in the discussion about reforms, without really identifying the substance of reforms," Grybauskaite, a former finance minister of Lithuania, told reporters.

"Any European discussion on reforms is a long process ... If the goal is to restore the damaged image at home by fashionable discussion on reform, if we will see that by December, I can evaluate it as an example of irresponsible ... populism," she said, but declined to blame Blair directly.

Agreement on the budget is important to help lift the EU out of the political doldrums caused by the double rejection of its constitution in French and Dutch referendums and aggravated by the failure of last month's summit on the long-term budget, political analysts said.

"It's mainly a war of words, maybe more political rhetoric which we hear at the media level. All sides do not yet engage in real discussions about reforms," said Grybauskaite.


Grybauskaite said the EU crisis would deepen if the bloc failed to agree on the budget by December, the end of Blair's presidency, and if Britain's reform drive did not bring results.

Blair has vowed to try to overhaul the EU's economic and social model to allow the bloc to cope with globalisation and has called a special summit for later this year to discuss the sustainability of the European social model.

He has also pledged efforts to secure a budget deal, which is crucial for the EU's new member states from eastern Europe to receive billions of euros in the bloc's aid to modernise their economies damaged by decades of communist rule.

Blair's drive to cut the EU's expensive farm aid and liberalise economic legislation will be opposed by France and Germany, with the former eager to protect generous farm funds it receives from the EU and the latter keen not to jeopardises its social welfare model.

Blair helped to block a budget deal at the summit on June 17, resisting demands for a scale-down in Britain's contested rebate from EU coffers while pushing for an overhaul of the Common Agricultural Policy (CAP).

She warned that new member states such as Poland and the Baltic republics would lose billions of euros in EU aid unless the budget agreement is reached by December.

If it is not, Austria would seek to clinch a deal at the end of its presidency in June.

AUGUST 23 2005
I have refrained from comment for 3 months as the passage of time, alone, is the only way that enlightenment on these issues can be achieved. I break my silence now because the Daily Telegraph has seen fit in a headline to announce that Kenneth Clarke has changed his mind on the Euro and pronounced it a failure. Naturally, when you read the text, he has not changed his mind but in the course of a lengthy discussion remarked that the Euro had failed to bring prosperity and high employment to the countries in the monetary union. That it has avoided a much worse scenario is not the headline, yet those of us who have contemplated how the past few years would have been managed by Europe without the move to EMU have little doubt that this is the case. The strains of globalisation and a number of other factors would have caused a series of local financial earthquakes and possibly extreme social disruption. The unified currency of the United States has not brought, of itself, in the same period, high employment and prosperity either. The world has gone into a very sticky patch (thank goodness - though I will not explain why just yet) and the establishment of EMU has prevented some of the usual escape routes which different EU members would have taken. The UK has taken its own escape route of course, managing to have its cake and eat it, but will also have a price to pay now.  Things look bad for the EU just now, but that's not because either the EU or EMU are a bad idea. They are and will be a great help in a time of trouble, and the troubles themselves will put great strains on the EU, which is good for it providing transparency is advanced and undetected corruption is not adopted as a solution to anything.

Special Entry Monday 3rd October 2005
 HOW EURO ARE YOU? - a fairly well devised and presented programme on BBC TV

The opinions expressed by the studio audience showed, above al,l the very partial knowledge of some, the prejudice of some, the confusion of many and the good sense of others. The most extraordinary remark came from a lady posing as an economist -
BRIDGET ROSEWELL, Chief Economist for Greater London Authority. She saw the point of using a common currency, she said, but it could just as easily be the dollar or the Chinese currency. There ought to be some sort of exam before someone can call themself an economist, in whch they are examined on the systems, protocols and morality involved in ensuring the integrity of a currency, particularly one used internationally, and the consequences of using a currency not subject to disciplined control and transparency, at the level where supervision is exercised, amongst the controlling authorities. In addition the aforementioned consideration, sharing a currency with nations where the size of the population or the economy is completely disproportionate to other is not sensible either.

Two French contributors including Elizabeth Gigou on film made positive points on the future of the EU, completely rubbished by Anthony Worral Thompson on the grounds that France has not ratified the constitution and never applies the EU rules and we do, so we should ignore their opinions. WT is a typically clueless Brit. It is the EU law that enables us to overrule the French and get our beef back on sale in France after BSE. Bridget Rosewell (see above para) comes in again with childish economics: "I thought the EU was about free trade - but its about restrictions!" This is the equivalent of a football team complaining when they unilaterally change the size of their ball and their goal: "I thought the FA was about allowing international football - but it is just about the rules!" It is the rules and restrictions that make free trade, and international footbalI, possible. That is the whole point of the EU. I suppose it helps to allow people like this on TV so we can find out about them and be warned how morons are taking power. This woman is actually Chief Economist for Greater London. You couldn't make it up! Children are in charge, and children with no education either.

Will Hutton tried to take some other speakers to task for lying (he was more diplomatic of course but that's what they were doing).

The level of confusion in people's minds was exemplified by the closing remarks of an otherwise intelligent pro-EU speaker. When Peter Hitchens spoke of patriotism, this man opined that patriotism was nationalism was a recipe for disaster. How wrong that is. Patriotism is vital. For our country to be a contributing member of the the EU we must take responsibility and pride in Britain and its history and run it properly.

TURKEY HAS STARTED THE EU ENTRY PROCESS. The confusion is considerable. It all depends on whether you take the long view or not. Those in favour put aside the problems of Turkey's size, birth-rate, Islamic heritage and history as being either manageable or inherently positive attributes. Those against see them as unmanageable and negative. The truth? Either can prove to be the case. Turkey and the EU can be what we can make of it. If we bring out the best in both, it is the way to go. Muslims, Christians, Bhuddists and Jews can work well together providing they really understand their own religions, their history and meaning. Scholars in Spain achieved this in what the rest of Europe knows as the Dark Ages and well after. What we have to fear is ignorance and superstition and sex-starved martyrs in search of a heaven full of virgins.

Dec 2nd 2005
Today, the PM has been setting out his proposals for the EU budget, with a package that leaves the choice to 'Old Europe' and 'New Europe' as to which of them can compromise on some major funding considerations, the Common Agricultural Policy, the UK 'rebate' and the assistance to the newly joined eastern nations. The UK position has been very fairly set out and it is now up to the rest to come to decisions that allow a package deal on these three.

If they do not, then the UK rebate remains and, since it is a proportionate calculation, it will rise in real terms. The UK could then contribute according to a later budgetary agreement towards the funding of the assistance to the new members or, failing that,
make a unilateral gesture.

If, on the other hand, there is some coordinated agreement with the new members, a portion of the rebate (15% has been suggested) could be hypothcated in advance for supporting the enlargement.

A third possibility is that there could be further reform of the CAP, allowing the UK to forego much more of the rebate - a rebate that otherwise would have to be contributed to by the new members.

What commentators seem to be ignoring is that now that the agricutural subsidy is no longer going so much towards subsidised overproduction but to management of the countryside, it is not such an economic or political mistake. Even the perception by the English that the French use it to featherbed small farmers is being blown out of the water - they can be seen as preservers of the environment and the community. In the Commons, Howard persists in talking utter bollocks on matters of which he is extremely ignorant. The UK position is very sound. We can spend our rebate on the countryside as we wish, on the environmental duties of farmers if we wish - or not. We can return some of it to help enlargment obligations, and we can go for more if the other members are agreeable. In short, we don't have a problem. Our position offers the other members a variety of options to deal with their problems.

DEC 05 update
The UK proposals have been deemed 'unacceptable' by the EU bigwigs and the Eastern Europeans. OK, in that case they will have to come up with a better idea that makes some sort of sense. It is not an ideal solution, but this problem (for a change, and contrary to the opinion pedalled by the opposition), is not one of the UK's making. It is one caused by the wonky foundations on which the CAP has been built and the wonky compromises forced on the EU in the past to compensate for this. I recommend caution for the critics and for over-simple-minded reformers

DECEMBER 16th 2005
Unless the Poles get over-excited and complain about the deal proposed today, what has been agreed is about as good as could be achieved now and will make future progress possible. Its what I would describe as digging us all carefully out of a hole we had been stuck in and sinking for rather too long. No doubt Tories and Libs will complain, but then the dogs always bark as the caravan passes.

DEC 17th 02:00 am
It seems the efforts have succeeded on an agreement on the long term EU budget. In my view it is the result of some extremely intelligent work and very good diplomacy. The newly entered states can now plan ahead. Growth in the EU economy can increase. What we now have to ensure is that growth is environmentally acceptable. All aspects of the EU budget will be reviewed on a reasonable time scale. The main part of what we call the British Rebate is maintained until the CAP can be reformed further.

MARCH 24 2006
ECONOMIC AND CULTURAL NATIONALISM rears its head and threatens to stall the EU at the very moment of history it should be ready to manage the stresses and strains of globalisation.

At the EU Spring Summit, President Chirac and his entourage stormed out of the room when Ernest-Antoine Sellière, President of the EU Employers Federation, after an introduction in French said he would speak in English - a reasonable choice considering  he represents 20 million businesses in 33 countries and English is the language of business. The next speaker was M. Trichet, the President of the European Bank, who spoke in French, which was equally acceptable I would have thought. The French president strikes an inceasingly pathetic pose as he ages. It really is time France got rid of this man who represents the very worst pomposity and hypocrisy of his nation - a nation which has contributed hugely to European civilisation.and the quality of life in every sphere and deserves better. Compared to him, Mitterrand was positively Churchillian.

The economic nationalism is more understandable but misguided. French government owned and run monopolies have been hugely successful, largely because the French civil service is business-trained and there has never been any attempt to keep big business and government at arms length. What would be classed in the UK as corruption and cronyism is seen in France as in the national interest - and so it has been. The nation has prospered because of it because it has been patriotically applied. But now it is time to look after Europe if patriotism is to lead to success and this needs a big change for the French. In the UK, we have cheated on the EU by keeping our own currency. The French and some others cheat by refusing to open their markets to key business ownership. This is distinct from government keeping a 'golden shareholding' in certain critical areas. Many EU member countries cheat in their own special way. It is time for frankness and a proper agreement on how to proceed in our collective interest or we will be in deep doo-doo. We certainly can do without Chirac and his ridiculous posturing, and if David Cameron wants to get anywhere he will have to understand what the EU is about as well. We can't join EMU right now, but we need to keep the EU strong and on course, not to political union but to collective survival by making the best use of our assets, human, geographical, historical and innovational.

SEPTEMBER 26th 2006
The EU entry of Romania and Bulgaria on Jan 1st 2007 is now approved.
However terms and conditions apply and in this case they are dependent on some improvement in internal political and social management in these two countries to bring them nearer average EU standards. see
The entry of Turkey looks much further further enlargement is now on hold until an EU Constitution is agreed. That makes sense to me.

OCTOBER 5th 2006

PM praises Finland's EU leadership

5 October 2006

Tony Blair and Finnish PM Matty Vanhanen meet for talks in Downing Street 5 October 2006 Tony Blair met his Finnish counterpart in Number 10 for talks ahead of an informal summit of European leaders later this month.

Finland currently have Presidency of the EU and Matti Vanhanen and Mr Blair covered a wide range of issues during their Downing Street discussions.

Speaking to journalists afterwards, the PM praised Mr Vanhanen for his handling of the Presidency so far, adding:

"There are really difficult issues, but I think as ever Finland has shown itself extremely capable of dealing with them."

Mr Vanhanen's stated priorities for his six-month Presidency include the future of the EU, competitiveness, external relations, and justice and home affairs.

The two leaders will meet again at an informal summit of the 25 member nations in Finland later this month.

Looking ahead to the summit in Lahti on October 20, the PM said migration, energy policy and the importance of innovation in Europe's economy would be on the agenda.

Mr Blair went on to answer questions about the NATO forces operating in Afghanistan, of which Finland are a part.

While in London, Prime Minister Vanhanen will deliver a lecture on the challenges of globalisation at the London School of Economics.

OCTOBER 16th 2006

In view of the fact that in order to deal with climate change more, new legislation will be required, it is vital we get the decks cleared of unncessary legislation first and concentrate on the real needs and the way the EU can help to move the world towards both new technology and new restraints where these cannot be avoided by new technology.

'Most bosses' want new deal on EU
Most UK business bosses want the government to renegotiate membership of the European Union, a survey suggests.

A study of 1,000 chief executives for Open Europe, a think-tank which wants an overhaul of the 25-nation bloc, found 60% favoured a new settlement.

Meanwhile, 54% suggested that EU over-regulation "outweighs" the benefit of a single market.

German Chancellor Angela Merkel says she will try to cut red tape when Germany becomes EU president next year.

'Too much legislation'

The poll, by ICM, suggests businesses - by a margin of 60% to 30% - would support moves to renegotiate existing treaties to reduce the powers of the EU back to a basic free trade area.

Some 52% suggested the organisation was "failing", compared with 36% who said it was "a success".

Open Europe's director, Neil O'Brien, told BBC Radio 4's Today programme: "There's a feeling that there's too much legislation...

"There's a perception that the costs are outweighing the benefits of the single market."

ICM polled a range of businesses, including a quarter with more than 250 employees and a quarter with four or fewer.

Its findings contrast with a recent survey of 50 chief executives of FTSE 100 and FTSE 250 companies by YouGov.

It found 34 thought the single market had been positive for business and that 39 would prefer Britain to stay in the EU.

European Commission President Jose Manuel Barroso is expected to call for critics not to "sulk from the periphery" in a speech in London on Monday.

Landmark EU chemical law passed
The European Parliament has backed a deal, reached with EU governments, on wide-ranging legislation to control the use of toxic chemicals in industry.

The law is designed to make firms prove the thousands of chemicals they use in products from cars to clothes are safe.

It comes after years of wrangling between firms keen to avoid more red tape and environmentalists seeking to cut the use of hazardous pollutants.

EU nations will have until 2018 to implement the new rules.

Safety standards

Reach has been described as the most important piece of EU legislation for 20 years.

1,000 pages of text
30,000 chemicals to be registered over 11 years
At least one million more animal tests
Billions of euros saved in healthcare costs

It puts the onus on business rather than public authorities to test chemicals for safety - including the thousands of chemicals that have been used for years without proper understanding of their effect on health or the environment.

It is also meant to encourage the replacement of hazardous chemicals with safer ones, and to spur innovation.

However, environmentalists had always hoped the law would go further than it did in its final version - and industry groups still say it went too far.

"This deal is an early Christmas present for the chemicals industry, rewarding it for its intense and underhand lobbying campaign," said Green MEP Caroline Lucas.

Alain Perroy, director general of the European Chemical Industry Council (Cefic) said his members regretted the "unnecessary requirements" introduced for authorisation of chemicals.

New agency

Environment Commissioner Stavros Dimas said it would "increase our knowledge about chemicals, enhance safety, and spur innovation, while encouraging substitution of highly dangerous chemicals by safer ones".

What has been agreed must now be implemented properly and we will actively monitor the situation
BEUC director Jim Murray
Europe's main consumer group BEUC said the adoption of the law was not the end of the story.

"What has been agreed must now be implemented properly and we will actively monitor the situation," warned BEUC director Jim Murray.

He pointed out that the deal still allows some cancer-causing substances and other poisonous chemicals to be used in consumer products, even when safer substances exist, as long as they have been subject to "adequate" control.

"The only adequate form of control for such substances is substitution when possible," he said.

The system for registration, evaluation and authorisation of chemicals (Reach) demands that firms provide lists of the chemicals they use and specify any possible risks.

A newly-established agency in Finland will oversee the way the firms assess chemicals for safety.

The register will initially focus on the most toxic chemicals and those produced in the largest quantity.

Issues unresolved

Manufacturers will have to come up with plans to replace the most hazardous chemicals, but they will not be banned outright as environmentalists had hoped.

While the EU said the deal improved the safety standard of chemicals, green lobbyists were angered by what they saw as the EU bowing to industry pressure.

Conservation body the WWF said the final text of Reach "was not the complete disaster that it would have been if the chemical industry lobby had succeeded in all their wrecking tactics" but said it left a number of substantial problems unsolved.

It also warned that the deal would continue to allow potentially harmful chemicals into the environment.

'Right advice'

After the legislation was passed the UK's Federation of Small Businesses (FSB) called on its government to help small firms.

"This regulation will affect small businesses that manufacture or import chemicals in the EU as well as those using chemical preparations in their industrial or commercial activities," it said.

It said that the cost of complying with the new rules would hit small firms "especially hard" because they were "least able to absorb costs or pass them on to their customers, unlike larger businesses".

John Holbrow of the FSB added: "Civil servants must bear in mind the thousands of jobs across the business spectrum that depend on Reach being implemented well.

"With the right advice small firms can do their bit without being left exposed to prosecution due to their understandable lack of resources and specialised knowledge."

And the CBI warned: "An overly bureaucratic implementation of the regulations could yet undo the benefits of today's sensible compromise and make REACH unworkable."

DECEMBER 30th 2006      I tend to agree with the following view from Denis MacShane. Apart from anything else we have to have a new EU constitution by 2009.

(extract from
Cameron's policy is 'disaster' for UK

A former Europe minister has said the Conservatives' foreign policy is a "disastrous blow" to Britain's national interest.


In an interview with Denis MacShane, who still advises the government on European affairs, also said that if Gordon Brown became prime minister he could help transform the EU economy.


In relation to the Tories' ambition to split from the European People's Party grouping of centre right parties, MacShane said: "David Cameron once said to me: 'Denis, I am much more Eurosceptic than you realise.'


"So you have a situation where the Tories under Cameron are now further to the right than they were under Michael Howard or Iain Duncan Smith. The Tories' rupture with political parties in Europe is a disastrous blow to Britain's national interest," he added.


And referring to the UK's need for allies post-Iraq, MacShane went on: "Britain needs all the friends it can find at the moment and for the main opposition party to say to all of its sister parties in Europe 'drop dead we don't want to touch you with a barge pole' is incredibly negative and very bad for the interests of the UK."


On how a Brown-led government would approach Europe as compared to Blair MacShane said: "I don't see any substantial difference. I think Gordon Brown has been right to insist that Europe has got to wake up economically and the number one problem in Europe in the last 15 years has been lack of growth.


"I don't think Europe will regain political confidence until it recovers economic dynamism.


"Otherwise Ed Balls has been making some very pro-European speeches, heaping praise on European commissioners, which is a rare thing to hear.


"He has also been pointing out that the EU is an important challenge to a Brown administration and that if we want to solve many of our problems from crime and terrorism to immigration and the environment then we have to do it with Europe," he said.

Published: Fri, 29 Dec 2006 00:01:00 GMT+00
Author: Edward Davie

JANUARY 1st 2007

Romanians and Bulgarians wake up as EU citizens

Reuters Monday January 1, 07:56 AM
BUCHAREST/SOFIA (Reuters) - Millions of Bulgarians and Romanians awoke on Monday as citizens of the European Union after a night of fireworks and street parties celebrating their countries' entry into the bloc at midnight.

Deemed too politically and economically backward for membership during the EU's first eastward expansion in 2004, the Black Sea neighbours squeezed through the door in what political analysts say was the last chance to join this decade.

The accession of the poor, ex-communist duo raises the EU's membership to 27 states, almost half of them former eastern bloc countries cut off from the West by the Iron Curtain until 1989.

"Today a dream came true, a dream of generations of Bulgarians who have always wanted to live together with the free European peoples in peace and prosperity," Bulgarian Prime Minister Sergei Stanishev said at an outdoor concert in Sofia.

The EU's new borders will stretch from the Atlantic and Baltic in the west and north to the Black Sea in the southeast.

Romania -- the larger of the two -- and Bulgaria will together boost the EU's population by 30 million, to 490 million, but will add just 1 percent to its economic output.

Their membership has sparked debate over the EU's eventual borders, with some member states fearing further expansion could bring waves of immigration and crime that could drive their citizens out of jobs and lead to instability.

Other EU hopefuls such as Turkey and countries in the western Balkans now face the prospect of a long wait.

In France, where "enlargement fatigue" is particularly strong, President Jacques Chirac hailed the new wave of accession as a step in the reconciliation of Europe.

"Sofia and Bucharest are once again European capitals," he said, according to the text of a speech released by his office.


"We are Home!" said a headline in the Bulgarian newspaper Trud in a special New Year's day edition.

"You travelled a long and difficult road to get here. Welcome to the European Union family," German Foreign Minister Frank-Walter Steinmeier said after meeting Romanian officials.

Germany takes over the EU presidency on January 1 and will face the monumental task of spearheading the bloc's institutional reform which is crucial to further enlargement.

Eager to tap 40 billion euros (27 billion pounds) in EU development funds to overhaul dilapidated infrastructure and boost industry, Bulgaria and Romania hope membership will help them close a huge wealth gap with the West.

However, problems remain. Brussels has already criticised the new members for doing too little to combat corruption and -- particularly in Bulgaria -- organised crime gangs born from the ex-communist secret services that control large parts of the economy.

Although their economies are growing fast, income per capita is just a third of the EU average.

Diplomats fear that, having achieved EU admission, politicians may relax on reforms and Brussels has vowed to monitor the new members, threatening to penalise them if they fall behind.

As loud music from Sunday's celebration concerts echoed through the streets, Bulgarians and Romanians hoped their new status would mean an end to prejudice and isolation they felt as non-EU members.

"Until today when I have gone to other countries, every waitress, every salesman turned up his nose when hearing I come from Romania," said salesman Sergiu Radu, 27.

"I hope this means an end to that shame and frustration."

MARCH 05 2007     
The Environment Secretary has a lot to do if he is going to get Europe's car manufacturers to meet any sensible target. He is lecturing on it but unless these lectures are a warning of coming legislation we are not going to get far

EU 'should focus on environment'

The EU must become the "environmental union" and make tackling climate change its primary purpose, David Miliband has said.

The environment secretary, delivering a lecture at the University of Cambridge, said strong political leadership would prove vital in moving into a "post-oil", low-carbon economy.

EU agrees renewable energy target
European Union leaders have agreed to adopt a binding target on the use of renewable energy, such as wind and solar power, officials say.

European Commission President Jose Manuel Barroso said Europe was now able to lead the way on climate change.

The 27 EU states will each decide how they contribute to meeting a 20% boost overall in renewable fuel use by 2020.

The measures could include a ban on filament light bulbs by 2010, forcing people to switch to fluorescent bulbs.

The bulbs last longer but more are more expensive to buy.

In another key measure, agreed on Thursday, EU leaders said they would cut carbon dioxide emissions by 20% from 1990 levels by 2020.

BBC world affairs correspondent Nick Childs says there is an air of real achievement in Brussels.

But, he says, the compromises over each nation's share of the burden in reaching the targets have yet to be negotiated, meaning the hard decisions may still lie ahead.

'Crucial issue'

Mr Barroso described the agreement as historic, saying it was the most significant in which he had played a part.

"We can say to the rest of the world, Europe is taking the lead, you should join us in fighting climate change," he said.

We can avoid what could well be a human calamity
Angela Merkel
German Chancellor
UK Prime Minister Tony Blair said: "These are a set of groundbreaking, bold, ambitious targets for the European Union.

"It gives Europe a clear leadership position on this crucial issue facing the world."

Looking ahead to the G8 summit of industrialised nations in June, Mr Blair said the European deal would give "a good chance" of getting the US, China and India on board too.

German Chancellor Angela Merkel, who chaired the two-day summit, also welcomed the package of binding measures.

The EU deal on climate change is totally unnecessary, given that Man is not causing global warming
Andrew Howlett, Manchester
"I personally am very satisfied and happy that it has been possible to open the door into a whole new dimension of European co-operation in the years to come in the area of energy and combating climate change," she said.

"We can avoid what could well be a human calamity."

The EU plan involves:

EU officials are working on a directive that would compel the use of modern low-energy fluorescent light bulbs. It could come into force as early as next year.

The Australian government announced similar plans to phase out old-style filament bulbs last month.

Nuclear concession

The statement on renewable energy sources allows flexibility in how each country contributes to the overall target for the EU.

Poorer Eastern European countries, which are more dependent on heavy industry and carbon-heavy coal, had argued they would struggle to make the investment in wind farms and solar power necessary to meet binding targets.

The final text allayed their fears by stating that "differentiated national overall targets" for renewables would be set, "with due regard to a fair and adequate allocation taking account of different national starting points".

In what is viewed as a concession to France, the text recognises the contribution of nuclear energy in "meeting the growing concerns about safety of energy supply and carbon dioxide emissions reductions".

However, it also highlights safety concerns, stating that "nuclear safety and security" should be "paramount in the decision-making process".

It is thought the EU could offer to extend its 20% target for emissions cuts to 30% if other heavy polluters like the US, China and India come on board.

MARCH 23rd 2007

EU in 'new basis' birthday pledge
A "Berlin Declaration" marking the EU's 50th birthday will set the goal of putting the 27-nation bloc on a new foundation by 2009.

However, the declaration will not specifically mention the controversial EU draft constitution.

It will speak of "renewing in time for the 2009 European Parliamentary elections the basis on which the European Union is built".

EU leaders are to endorse the text at a special summit in Berlin on Sunday.

Italian Prime Minister Romano Prodi has told the BBC that without a constitution Europe will die - a view that Britain and some other member states firmly reject.

The draft constitution - so far ratified by 16 of the 27 member states - was rejected by French and Dutch voters in referendums in 2005.

Constitution battle

The German Chancellor, Angela Merkel, has told Germany's Bild Zeitung newspaper that the enlarged 27-member EU needs a new constitution to streamline decision-making.

It would be unthinkable to vote in the next European elections without having first built a clear and functioning institutional framework
Romano Prodi
Italian Prime Minister

Meanwhile in Rome, where the treaty that led to the EU was signed, European Commission president Jose Manuel Barroso said European politicians had to convince citizens that the EU was the best answer to 21st-Century challenges such as globalisation and sustainable growth.

But Czech President Vaclav Klaus told BBC News the failure to agree on a constitution had not caused a crisis in the EU.

"The people who want to accelerate the unification process are in a hurry and normal people in Europe are not in a hurry," he said.

He said the secrecy surrounding the text of the Berlin Declaration was "ridiculous" and an example of an EU tendency to push decisions through without proper debate.

However, he said he was not going to undermine the summit.

Britain, the Czech Republic and Poland are particularly wary of efforts to revive the constitution.

Berlin's big bash

Berliners are being invited to a party thrown by the EU to celebrate the 50th anniversary of the Treaty of Rome.

A highlight will be an all-night clubbing extravaganza, in which ravers can hop between 35 Berlin nightclubs for an EU-subsidised 12 euros (£8).

There will also be free bratwurst and beer, and museums will open all night.

The two-day party, on 24-25 March, is being held in Germany because the country currently holds the rotating presidency of the EU.

Berlin - a formerly war-torn and divided city - is also seen as a symbolic venue in which to celebrate the modern unity of Europe.

Chancellor Merkel, French President Jacques Chirac and British Prime Minister Tony Blair will attend a performance of Beethoven's 5th Symphony by the Berlin Philharmonic, followed by a banquet and a firework display.

The general public, meanwhile, will be treated to a free open-air concert near the Brandenburg Gate by bands from all over Europe.

They include veteran English rocker Joe Cocker, Scottish folk band The Unusual Suspects, and Outlandish, a Danish-Moroccan trio.

MARCH 26th 2007         The last paragraph is particularly interesting

The Independent        
Published: 26 March 2007 

Merkel seeks treaty giving EU more powers by 2009

By Stephen Castle in Berlin

Germany's Chancellor, Angela Merkel, has seized the initiative over the European constitution by outlining ambitious plans to clinch an end-of-year deal on a fresh treaty that would include new powers for the EU.

Ms Merkel used celebrations for the 50th birthday of the EU yesterday to speed up the timetable for salvaging parts of a constitution that has been in limbo since French and Dutch voters rejected it in a referendum in 2005.

A summit in Berlin paved the way for an inter-governmental conference - the only body that can re-write the EU's rule book - that could be wound up by the end of the year. That would enable each of the 27 nations to ratify the new agreement next year, allowing it to come into force before the next European elections in 2009.

Ms Merkel, who holds the EU's rotating presidency, made it clear that she foresees a treaty giving the EU new powers over energy policy and one in which fewer decisions on justice and interior matters are subject to national vetoes.

EU leaders broadly backed the fast-track approach but remain divided on the content of the treaty which will take the place of the constitution. Britain has made it clear that it agrees with the timetable only so long as it involves a slimmed down text that does not trigger a referendum in the UK - though it has yet to lay down what this means.

The constitution would have reformed decision-making for an enlarged EU, creating a slimmer European Commission, a full time president of the European Council, where governments meet, an EU foreign minister and creating a voting system based on population size.

Tony Blair said that the reforms "need to be resolved", adding: "I think the sooner it is resolved the better, actually". But he also reminded supporters of the constitution that there were "two 'no' votes in France and Holland and we have to be realistic about that".

The Dutch government this week insisted a new treaty "must, in content, scope and name, convincingly differ" from the constitution. The Poles and Czechs are also sceptical and Ireland's premier, Bertie Ahern, called for a "dose of reality" around the table.

Ms Merkel's plan envisages a decision in June to open an inter-governmental conference in the second half of the year, when the Portuguese hold the rotating presidency of the EU.

"People feel we have to take a decision in June about a road map with a certain content - without prejudging anything in the IGC," she said. "We have often said that the IGC should ... be short and concentrated." As part of the celebrations, European leaders endorsed a three-page "Berlin Declaration" setting a mid-2009 deadline for establishing a "renewed common basis" for the EU, while leaving out the word "constitution".

Even though Ms Merkel is ready to drop the use of the "c" word when discussing the new treaty, the Chancellor faces acute difficulties in getting the agreement of all 27 member states on the contents of a new text.

The Polish President, Lech Kaczynski, said that ratifying a new treaty to reform European Union institutions in place of the stalled EU constitution in 2009 was "unachievable".

Berlin is hamstrung until France has elected a new president in May and faces the added difficulty of a change of premiership in Britain. The likely new prime minister, Gordon Brown, is generally more Eurosceptical than Mr Blair. Both the Belgian Prime Minister, Guy Verhofstadt, and his Danish counterpart, Anders Fogh Rasmussen, said that a deal by the end of the year was essential if the EU was to hit its 2009 deadline.

The Italian premier, Romano Prodi, said that Germany would press for a "very tight" calendar for negotiating a new treaty when the leaders next meet in June. Yesterday's meeting was held against the background of two days of celebrations to mark the 50th anniversary of the signing of the Treaty of Rome, which gave birth to what became the EU. In her ceremonial speech, Ms Merkel recalled Britain's scepticism about the prospects of European integration in the run-up to the signing of the treaty.

She quoted a British official, Russell Bretherton, who is reported to have told a key meeting in Messina: "The future treaty you are discussing has no chance of being agreed: if it was agreed, it would have no chance of being ratified; and if it was ratified, it would have no chance of being applied."

Leading article: Britain still prefers to sit on the fence

Published: 26 March 2007

Chancellor Merkel had the first laugh. Presenting the formal declaration to mark the 50th anniversary of the Treaty of Rome, she quoted the confidently pessimistic forecast of the British observer at Messina where the treaty was prepared. If the treaty was agreed, he prophesied, it would not be ratified; if ratified, it would have no chance of coming into force. Thus did the hapless Russell Bretherton encapsulate Britain's hopeful lack of faith in the European idea - a thread of wishful thinking that has persisted, one way or another, to this day.

The newly opened question is whether Ms Merkel will have the last laugh, too. Discreetly, she has used Germany's presidency of the EU to inch the idea of a constitutional treaty back on to the agenda. Her efforts have not been met with the scorn that might have been expected, given that the last attempt at a treaty was rejected by France and the Netherlands and abandoned by a crocodile-tear-shedding Tony Blair.

Yesterday's Berlin declaration closed with the following oblique reference to a new treaty. "We must always renew the political shape of Europe in keeping with the times," it said. "This is why today... we are united in our aim of placing the European Union on a renewed common basis before the European Parliament elections in 2009." Boldly, the declaration set not only an objective, but a timetable.

Much - but not as much as the British might hope - waits on the results of the French election. A diversion could be created by Poland, arguing about the mention God. But yet again it is timorous Britain that will be on the spot.

APRIL 21st 2007

Leading article: Double talk, cynicism and a terrible failure to make the case for Europe

Tony Blair should not be trying to conceal what he is doing on Britain's behalf in Europe. He should be upfront about it

Published: 21 April 2007

The Prime Minister has finally set out his stall on the vexed subject of the European constitution. Mr Blair has said he hopes he and his fellow European leaders will be able to agree on the framework for a new constitutional treaty when they meet in June. He claims that Britain will not hold a referendum on the resulting document after all.

This is the right approach. Mr Blair was wrong to promise a British referendum on the constitution three years ago. Such a poll would have been an historical anomaly. There was, for instance, no referendum in Britain on the Maastricht Treaty, which imposed a more far-reaching and significant settlement.

The "pause for reflection" on the constitution called after French and Dutch voters rejected the document in twin referenda in 2005 has now gone on long enough. While two key members of the union rejected the document, we must not forget that 18 member states did ratify the original text.

The time has come to focus on practicalities. Europe needs the institutional reorganisation outlined in the constitution. Thanks to two waves of enlargement in three years, the EU has gone from a union of 15 states to 27. The European Council's voting system needs to reflect this changed reality. And the German Chancellor Angela Merkel is right to make progress on this front a central objective of her country's EU presidency.

But while Mr Blair's fresh focus on resurrecting the treaty is welcome, it is a shame that it has been accompanied by the usual cynical spin. Only last week we were told that Mr Blair was planning to reject a revival of the treaty. In fact, he is planning to accept it in a marginally altered form.

We heard similar double talk over Britain's EU budget rebate in 2005. There was much posturing from Mr Blair at home and assertions that Britain would never give up the rebate. But, in the end, the Prime Minister sensibly did a deal to bring this anomaly to an end. And let us remember the context in which Mr Blair announced in 2004 that there was to be a British referendum on the constitution. After months of denying the need for such a public vote, the Prime Minister suddenly and unexpectedly relented. This was a transparent device to silence the virulently anti-European right wing press and the Conservatives, which were both working up a head of steam in opposition to the constitution.

Sadly, this sort of short-termist manoeuvring has characterised Mr Blair's entire approach to Europe. Mr Blair should not be trying to conceal what he is doing on Britain's behalf in Europe. He should be up-front about it. If this institutional reorganisation is good for Britain, he should come out and say so unambiguously. His persistent failure to make the case for Europe has allowed popular prejudice and ignorance surrounding the EU to go unchallenged.

The damage this does should not be underestimated. When it comes to the major challenges of our times such as climate change, peacekeeping and trade reform, Europe is indispensable. The unchecked growth of an anti-European mindset in Britain is diminishing our power to help to shape the world for the better.

This June's summit will be Mr Blair's final act on the European stage. He no doubt wants to be able to cite breaking the impasse over the treaty as one of his lasting achievements. One successful summit will not gloss over Mr Blair's distinctly patchy record with respect to Europe. But if Mr Blair is serious about boosting his European credentials, he should spend his time between now and the summit explaining loudly and clearly to the British public the merits of the European Union.


Alternative treaty gives hope to a European constitution

By Stephen Castle in Brussels

Published: 21 April 2007

Prospects of resuscitating key parts of Europe's constitution increased sharply yesterday as Tony Blair led a new bandwagon to avoid holding referendums across Europe on a new, alternative, treaty.

Britain's manoeuvre removes one of the main obstacles to efforts to salvage key elements of the constitution which was voted down by the French and the Dutch in plebiscites in 2005 after the threat of rejection by the voters.

The change of heart improves the prospects of getting agreement on a new text by the end of this year but provoked opposition claims that the constitution would be sneaked in "by the back door". It also marks a retreat by the UK's pro-Europeans who once argued that only a referendum victory would remove the poison from the EU issue in Britain and silence the Eurosceptics.

In fact, across the EU, policy-makers now accept that it is virtually impossible to win plebiscites in all the key countries in the 27-nation bloc. In addition to the UK the Netherlands now hopes to avoid a referendum and Nicholas Sarkozy, the front-runner in the French presidential elections, has said he would not put a new treaty to the people.

Another country with Eurosceptic public opinion, Denmark, is considering its position and its Prime Minister, Anders Fogh Rasmussen, said that an agreement might not require a popular vote. Mr Blair's announcement was seen as helpful to Mr Rasmussen.

That could mean Ireland, which voted against the Nice Treaty in the first of two referendums, being the only country to host a plebiscite this time. It is likely to do so because its constitution requires a referendum if national sovereignty is transferred. That means leaders risk the humiliation of being forced to hold a vote by the Supreme Court if they fail to put a treaty to the people.

In an interview with the Financial Times and other European newspapers, Mr Blair made it clear that the UK will only sign up to a scaled down version of the constitution, one which extracts only the changes needed to streamline decision-making.

Mr Blair added: "If it's not a constitutional treaty, so that it alters the basic relationship between Europe and the member states then there isn't the same case for a referendum."

His comments are in line with those made after a meeting with the Dutch premier, Jan Peter Balkenende, who also backed the idea of a "mini-treaty" which simply amends existing EU agreements rather than replacing them.

Nevertheless a series of obstacles remain. The first is the prospect that the French presidential elections are won by Ségolène Royal, the socialist candidate, who has promised a referendum.

Moreover the British and Dutch positions raise the question of whether EU nations will be able to agree on a text. Eighteen nations have already ratified the constitution and most of them want to keep a text as close as possible to the current one.

Meanwhile the decision to axe a referendum has already provoked a domestic reaction in the UK where Mr Blair is due to stand down within weeks.

The Shadow Foreign Secretary William Hague said; "What he [Mr Blair] is saying now sounds suspiciously like an attempt to introduce elements of it by the back door, despite its decisive rejection by the voters of France and Holland.

"This would go against the government's previous assurances and be totally unacceptable to the people of Britain."

MAY 30th 2007

We are coming up to another moment when the matter of the constitution has to be deal with. Here is a reminder of the position:

EU constitution: Where member states stand

The European constitution was knocked off course when France and the Netherlands rejected it in referendums in May and June 2005, but European leaders are now discussing ways of reviving it in full or in part.

This could mean resurrecting the original text, with minor changes, or drafting a new one.

On the other hand, some countries argue there is no urgent need for institutional reform and that the EU should concentrate instead on policies that deliver immediate practical benefits for citizens.

So far, 16 countries have completed ratification, two of them by referendum; two have very nearly finished ratifying it; and two have rejected it.

That leaves seven countries where the constitution is on ice.

Use this map to find out the state of play in each country.


France : A legally binding referendum on 29 May 2005 resulted in a "No" vote of almost 55%. Both the main parties - the governing, conservative UMP and the Socialist Party - were in favour of the constitution, but both parties also had dissidents campaigning for a "No". The far left and the far right were opposed, as were as were trade unions, some farmers' groups and the anti-globalisation movement.

The two leading candidates running for the French presidency have outlined strategies that could result in French approval for a new treaty. Nicolas Sarkozy favours a slimmed-down treaty that could be adopted by parliamentary vote. Segolene Royal favours sticking to the original constitution, but adding a protocol emphasising the EU's ambitions in social policy. She would then put this to a second referendum.

The Netherlands: Some 61.6% of Dutch voters said "No" to the constitution on 1 June 2005, even though the main political parties, trade unions and most newspapers were backing a "Yes". In January 2006, the then Dutch Foreign Minister Bernard Bot went further than any other European government minister, saying that for the Netherlands, the constitution was "dead". In May 2006 he said he thought the constitution would "stay dead".

However, a new Dutch government formed at the beginning of 2007 has signalled it will co-operate with efforts to tackle institutional reforms in the EU. The government has asked a body known as the State Council to rule on whether a referendum would be necessary on any future treaty based on the constitution.

"The European Constitution will not be offered for ratification again," a Dutch Cabinet document said in March 2007. "The new treaty must, in content, scope and name, convincingly differ from the European Constitution."

It added: "More co-operation is needed in energy, environment ... asylum, immigration, anti-terrorism and crime, and foreign policy."


Austria: The upper house of the Austrian parliament completed ratification on 25 May 2005. Three members of the far right voted against the constitution, while 59 other representatives approved it. The lower house voted nearly unanimously in favour of ratification on 11 May. Some Austrians have voiced fears that the constitution's mutual defence pact would undermine the country's neutrality.

During Austria's EU presidency in 2006, Chancellor Wolfgang Schuessel said that the constitution was not dead, and that Europe was "in the middle of a ratification process".

Belgium: A vote in the Flemish parliament on 8 February finished the ratification votes by the federal and regional parliaments. The King and the government completed the formalities on 13 June. Foreign Minister Karel de Gucht said on 23 May that an intergovernmental conference should be called in 2008 to revise the EU's fundamental treaties, and that the result should be put to a referendum in 2009.

Bulgaria: The Bulgarian parliament ratified the constitution on 11 May 2005, as part of its preparations for joining the EU on 1 January 2007.

Cyprus: Cyprus' parliament ratified the constitution on 30 June 2005.

Estonia: The Estonian parliament ratified the constitution on 9 May 2006, in a decision backed by all the country's major political parties.

Finland: The Finnish parliament voted to ratify the constitution on 5 December 2006 and this vote has been accepted by President Tarja Halonen.

Greece: The Greek parliament ratified the constitution on 19 April 2005, by 268 votes to 17. It had the support of the government and the main opposition party, Pasok.

Hungary: Hungary's parliament ratified the constitution on 20 December 2004, by a margin of 304 votes to nine.

Italy: Italy ratified the constitution on 6 April 2005 with an overwhelming majority in the upper house of parliament - 217 votes to 16. The text, which was signed by EU leaders in Rome in 2004, was approved by the Italian lower house (the Chamber of Deputies) in January 2005. Centrist parties backed the constitution, however, the Northern League and the Communist Party, argued that it eroded regional and national sovereignty.

Prime Minister Romano Prodi told the BBC in March 2007: "Step by step we shall go back in order to have a common basic paper: probably it will be less complete, and maybe in some people's opinion less cumbersome, but it will include all the basic principles, not the specific rules of behaviour."

In February 2007, he and Spanish counterpart Jose Rodriguez Zapatero said they were committed to the "greatest level of integration" provided for in the treaty.

Latvia: Latvia ratified the EU constitution in parliament on 2 June 2005, by 71 votes to five, just hours after the Dutch had rejected it.

Lithuania: Lithuania became the first country in the EU to ratify the new EU constitution on 11 November 2004, passing it by 84 votes to four, with three abstentions.

Luxembourg: Voters in Luxembourg approved the constitution by 56% in a referendum on 10 July 2005 - held despite agreement on a "pause for reflection" at the EU summit a month earlier, and the postponement of votes in other countries.

The "Yes" campaign had the support of all parliamentary parties. The "No" campaign attracted a varied group of supporters, from left-wing anti-globalisationists to far-right sympathisers. The far-left "di Lenk" party (the Lefties), said the text was too market-orientated and did not do enough for workers. The Luxembourg parliament formally ratified the constitution on 25 October 2005.

Prime Minister Jean-Claude Juncker has expressed the hope that the German EU presidency in the first half of 2007 will make progress with the constitution. But he has also been quoted as predicting that the period of reflection will last until 2009 or 2010.

Malta: The Maltese parliament ratified the constitution in a unanimous vote on 6 July 2005. All three political parties in the country were in favour of ratification. Debate on the constitution focused on the question of whether there is a clash with traditional Maltese Christian values, and possible threats to Maltese sovereignty.

Romania: The Romanian parliament ratified the constitution on 17 May 2005, as part of its preparations for joining the EU on 1 January 2007.

Slovenia: Slovenia's parliament voted overwhelmingly to ratify the European Union constitution on 1 February 2005. MPs supported the move by 79 votes to four.

Spain: Spaniards voted for the constitution in a consultative referendum on 20 February 2005 by 77% to 17%. However, turnout was only 42%. Ratification was completed by votes in the lower house of parliament in April, and in the upper house in May. All of Spain's main political parties were in favour of the treaty, though there was opposition from regional parties in Catalonia.

Spain hosted a meeting in January 2007 of the 18 Friends of the Constitution - those that have already ratified, or nearly ratified it. Foreign Minister Miguel Angel Moratinos told the meeting the constitution was "a magnificent document" that should be expanded rather than "carved up". On the eve of the meeting, Europe Minister Alberto Navarro said Spain could not accept a "mini-treaty" that dealt with institutional reforms, but scrapped the other parts of the constitution.

Prime Minister Jose Luis Rodriguez Zapatero said in February that the EU needed to find a way to "maintain the essence" of the project, while making it possible for countries that have had problems with ratification to sign up to it.


Germany: The German parliament voted to ratify the constitution in May 2005, but the bill has yet to be signed by President Horst Koehler, pending the outcome of a case being heard in the constitutional court. The main political parties are officially in favour of the constitution - which increases Germany's voting power in the Council of Ministers - but the successor of the former East German communist party, the Party of Democratic Socialism, is against it. The constitution also has some opponents on the right.

German Chancellor Angela Merkel has said that cherry-picking bits of the constitution "does not work". She has proposed keeping the text intact, but attaching a declaration on the "social dimension of Europe" to address some of the concerns that led to the rejection of the constitution in France.

"I still support the text we approved in the Bundestag," she told the Suddeutsche Zeitung in May 2006. "All the actions we will undertake in the German EU presidency in 2007 should serve to bring Europe closer to agreeing on the European constitution again."

Slovakia: The Slovak parliament ratified the constitution on 11 May 2005, by 116 votes to 27, with four abstentions. However, a complaint has been made to the constitutional court that the Slovak people should have been given the right to vote on the constitution in a referendum. The Slovak president is unable to complete the ratification process until the court has issued its ruling.


Czech Republic: The Czech government says Europe is functioning quite well without a constitution. They say a "bad treaty" would be worse than none at all, though they are not against negotiating a new "basic treaty" from scratch.

Czech President Vaclav Klaus told the BBC in March 2007: "I am absolutely sure that there is no crisis because of the non-existence of the European constitution, but the people who want to accelerate unification process are in a hurry and normal people in Europe are not in a hurry. They can live with the existing structures and rules.

"To pretend the debate is over and it's just a question of bringing in clever speech writers to summarise the completed debate and write a nicer text than the former constitution would be a tragedy, but I am afraid something like that could happen."

Denmark: Officials said Denmark was "quite pleased" with the original text of the constitution, but the country postponed its planned referendum on the treaty after the French and Dutch "No" votes. Prime Minister Anders Fogh Rasmussen said: "We would like to continue our process, we have prepared everything for the referendum, but of course we cannot put the treaty to a vote in Denmark if there's not a treaty to vote on."

In February 2007, Foreign Minister Per Stig Moeller said Denmark would back German efforts to solve the impasse over the constitution. "If all 27 members vote for it, we will be on board," he said.

Denmark rejected the Maastricht Treaty in 1992 but adopted it in a second vote, after winning opt-outs, in 1993. Danes also voted "No" in a 2000 referendum on acceptance of the euro. It is unclear whether Danish law obliges it to hold a referendum on any new treaty.

Ireland: The Irish government stopped preparations for a referendum on the constitution after the French and Dutch "No" votes but Irish diplomatic sources say the constitution is a good document, which Ireland would like to see ratified and implemented.

In May 2006, Prime Minister Bertie Ahern confirmed his support for the constitution, describing it as "the right choice for Ireland". He said it would "enable the EU to function more efficiently, more democratically, in a way that is easier to understand".

Irish voters rejected the Nice Treaty in 2001, then approved it in 2002. Ireland is the one country in the EU where the only way of ratifying the constitution, or a successor treaty, is by referendum.

Poland: President Lech Kaczynski has called for a brand new constitution, saying that the original text pushes for more integration than European citizens are willing to accept. He is also quoted as saying it "has practically no chance of being ratified in Poland, neither by referendum nor by parliamentary vote". The country's plans for a referendum are on hold.

Prime Minister Jaroslaw Kaczynski has said the EU should abandon the original constitution, and start work on an entirely new Basic Treaty. He and Czech prime minister Mirek Topolanek wrote in a joint letter in February 2007 that it would make more sense for the EU to "create a new basis for co-operation, one that is clearer and involves less red tape".

Portugal: Portugal will hold a referendum only after a final text has been agreed by all 25 member states. "I don't' believe that the constitutional is dead. Europe needs a constitutional treaty in order to go further. If it's not this exact text, we will have to find something," Prime Minister Jose Socrates said on 9 March 2006.

Sweden: Sweden put ratification on hold after France and the Netherlands rejected the constitution.

The main political parties - conscious that Swedes rejected the euro in 2003 - say a referendum is unnecessary because the constitution does not make fundamental changes to the existing treaties.

United Kingdom: The UK government was preparing to hold a referendum in spring 2006, but shelved these plans after French and Dutch voters rejected the constitution. Prime Minister Tony Blair told parliament: "Realistically, given the 'No' votes in France and the Netherlands, ratification cannot succeed unless and until those votes change."

Former Foreign Secretary Jack Straw said on 10 January 2006 that the best that could be said about the constitution was that it was "in limbo". He added: "It is difficult to argue that it is not dead." However, Mr Blair said on 2 February 2006: "I accept that we will need to return to the issues around the European constitution. A European Union of 25 cannot function properly with today's rules of governance."

In October 2006, Mr Straw's successor as foreign secretary, Margaret Beckett, commented: "It's a common failing, isn't it? People started to get enthusiastic about a grandiose project but it didn't come off."

The UK last held a referendum on 6 June 1975, two-and-a-half years after joining the European Community, on whether to remain a member. Two-thirds of those who voted said "Yes".

So, that's the position. Of course the EU needs a constitution even if it only to formalise in a single document the position as it is now. But frankly we need to stop fudging things as a considerable international commitment is now inevitable if we are to manage the climate change problems. The anti-europeans will want a referendum in the hope that the UK public will blame the EU for our problems and say no. They should not count on this. As I have said previously a referendum in inappropriate in this instance and it is unfortunate that it was ever promised. However the British people should be allowed to stand or fall, profit or suffer by making their own decisions and living with the consequences.

JUNE 21st 2007
Because the UK government promised a referendum on the new constitution, the anti-EU brigade and the political opportunists with no agenda other than their own interests are making it very difficult to get a successful outcome to the coming meeting in Brussels. The ever amusing William Haig says the government will do whatever it takes now to avoid a referendum. The question Mr Haig cannot answer is exactly what he would want to hold a referendum on. He knows as well as anyone that whatever question was put to the public a large proportion of them would answer another. Those who want to say NO will say no whatever the question if it causes the process to fail. Those who want to say YES rather than cause a EU crisis will say yes even if they are not fully in favour of the implications. Only a minority will vote for the right reason on the question asked (unless the question itself is not about the matters that really need to be decided, which then renders the process pointless).

So the problem for our team in Brussels is to decide whether or not to agree to only to reforms which they can obviously claim do not require the previously promised referendum (which may prevent a successful outcome to the conference and trigger a crisis) or to go for a compromise that may e difficult to sell without offering a referendum at home. My own view is that a referendum is absurd. There is no question that could sensibly be asked other than  "DO YOU WANT TO HAVE AN EU CONSTITUTION" Since that has been already decided in the negative, even though it was a very sensible idea, the matter is closed. The new treaty is simply what is required to accommodate new members and the voting arrangements and powers and derogations and exceptions that have to be agreed whether we like it or not if the EU is not to be disbanded. Anyone who does not understand that this would be suicidal should be better informed.

EU leaders to discuss new treaty
EU leaders are preparing to meet in Brussels to discuss a treaty to help the union work more effectively.

A draft tabled by Germany recommends deep reforms, but not a constitution - an idea spurned by French and Dutch voters two years ago.

The paper makes several concessions to EU member states opposed to key parts of the failed constitution.

But Poland and the UK are still warning they could use their vetoes if they do not get their way on a new treaty.

'No super federal state'

European Commission President Jose Manuel Barroso told the BBC on Thursday that the revised treaty "is good for Britain".

"Britain - with this agreement that is on the table - will have more votes, will have much more votes," he told Radio 4's Today programme.

Failure would almost amount to humiliation for Germany's chancellor, Angela Merkel

"It is good for all those who want to push forward an agenda of an open Europe, a modern Europe, a Europe that is efficient. It is not at all about creating a kind of super federal state. No one is proposing this. Why are we creating imaginary threats?"

The UK Foreign Secretary, Margaret Beckett, said Britain wanted a Europe "of sovereign nations, not a superstate".

The summit is intended to issue a mandate for an intergovernmental conference to agree the precise wording of a treaty to replace the failed constitution.

We realise we cannot stop the process [of reform] - that would be too risky for the future
Jaroslaw Kaczynski
Polish Prime Minister

If it fails, it will plunge the EU into a political crisis as deep as the one that followed the rejection of the constitution by French and Dutch voters two years ago.

The German paper proposes that the new treaty is called "The Reform Treaty", accepts that the EU will not have a "foreign minister", and provides countries with a chance to opt out of EU policies in the area of policing and criminal law.

'Olive branch'

Correspondents say the biggest remaining problem for the UK could be Germany's continued support for the idea of making the EU's Charter of Fundamental Rights legally binding.

The UK fears this could allow the European Court to make decisions that would change British labour law.

The part of the constitution that Poland most disliked - the introduction of a new voting system for decisions taken by member states - is preserved in the latest German proposals, seen by the BBC.

However, the BBC's Oana Lungescu in Brussels says the German paper offers Poland a "discreet olive branch".

For the first time it mentions, in a footnote, that the Poles, backed by the Czechs, want to raise the idea of changing the voting system at the summit.

The new system would benefit larger member states to the detriment of smaller and medium-sized ones, and have the effect of reducing Poland's clout.

'50-50 chance of deal'

Despite his warnings of a possible veto, Polish Prime Minister Jaroslaw Kaczynski hinted that Warsaw could drop its opposition if it guaranteed a strong voice in EU decision-making.

"We realise we cannot stop the process [of reform] - that would be too risky for the future," he told Reuters news agency.

He said there was a 50-50 chance of the summit ending in agreement.

Under the latest German proposals, Britain gets reassurances that the European Courts will have no power to examine foreign affairs policies.

And at the request of the Dutch, the draft gives more power to national parliaments to block EU laws.

But a Dutch proposal to enshrine criteria for further enlargement in the treaty, is not fully satisfied.

That would send a very negative signal to Balkan countries, an EU diplomat said.

JUNE 23rd

Although the debate ran on to 5am of the following day, the solution to the governments problems was in the ed very simple. We allowed all the other EU member states to agree the mandate for a new treaty as they wished, but got opt-outs for the UK on every point we wished to decline. As for the French and their insistance that 'free and unfettered competition' should not be defined as an aim, but as a means to the desirable end of economic health, that was easly satisfied and not even Gordon Brown was against getting the presentation right. As for the Polish problem, there will be no change to the voting system till 2012

As David Owen points out,
"These issues that the prime minister's been discussing over the midnight hours in Brussels are deep constitutional questions," and he managed to get them all sorted to complete satisfaction of the UK, so  there is no possible reason for a referendum. However, the UK Independence Party and who knows how many strange members of the House of Lords and the pleasant but insular William Haig will bore us to death in the coming weeks with claims that this is not so and maybe even hold up the passage through the Lords of ratification.

EU treaty good for UK, says Blair

Tony Blair said Europe could now "move on"
Blair on agreement
An agreement reached in Brussels on a new European Union treaty protects Britain's interests, Tony Blair says.

It gives the UK an opt-out on a charter of human and social rights and keeps Britain's independent foreign policy and tax and benefit arrangements.

Gordon Brown also intervened to persuade Mr Blair to demand a protocol to protect the EU's internal market.

The Tories say Britain has agreed to "major shifts of power to the EU" and are demanding a referendum.

Concerns 'sorted'

Mr Blair had gone to Brussels with four "red lines" on human and social rights, foreign policy and tax and benefits which he did not want crossed before a deal could be made.

He said the two days of tough talks had secured all of Britain's four key demands.

He said the agreement would allow the UK to take on those parts of EU judicial and crime policy it chose to, and that the treaty would not require a referendum.

This deal gives us a chance to move on
Tony Blair

Mr Brown and Mr Blair had several last-minute telephone conversations after the chancellor expressed his unhappiness at a concession to France which had removed a treaty objective of "free and undistorted competition".

Foreign Secretary Margaret Beckett told Radio 4's Today programme the prime minister-in-waiting's objections had now been "sorted" and were "not a problem".

She said Britain was not a country which "governs by referendum".

"People buy into the notion that somehow some massive change has taken place. This is not a massive change," she said.

'Major shifts of power'

The new treaty is planned to replace the failed EU constitution, which was rejected by voters in France and the Netherlands in 2005.

Mr Blair said the most important thing about the deal was that it allowed the 27 European nations to move forward.

"The truth is we've been arguing now for many years about the constitutional question," he said.

These issues that the prime minister's been discussing over the midnight hours in Brussels are deep constitutional questions, and to pretend otherwise is absurd
Lord Owen

"This deal gives us a chance to move on. It gives us a chance to concentrate on the issues to do with the economy, organised crime, terrorism, immigration, defence, climate change, the environment, energy - the problems that really concern citizens in Europe."

But shadow foreign secretary William Hague said the government had "absolutely no democratic mandate" to push through the changes that had been made.

"Blair and Brown have signed up to major shifts of power from Britain to the EU and major changes in the way the EU works," Mr Hague said.

"The EU would now be able to sign treaties in its own right and, despite any 'opt-ins', the European Commission and Court of Justice would now have new powers over criminal law."

'Stealth and deceit'

Liberal Democrat leader Sir Menzies Campbell said the treaty had not come "cost-free" for Britain.

"By opting out of the Charter of Fundamental Rights, there is now the danger of a two-tier citizenship in the EU," Mr Campbell said.

"Tony Blair has not covered himself in glory with his swansong negotiations in Brussels."

The leader of the UK Independence Party, Nigel Farage, accused Mr Blair of "stealth and deceit".

"The real achievement of this summit - and Tony Blair's helped in this - is that the European Union itself has taken a significant step forward to becoming the global superpower that it always sought to be," he said.

The treaty will need to be ratified by each of the EU's member states at the end of the year, before entering into force in mid-2009.

Mr Blair told reporters he was "absolutely confident" of Mr Brown's support for the agreement, and he did not think there would be any obstacles in finalising the treaty in December.

But some observers in Brussels say the House of Lords may not be very willing to play ball when it comes to ratification.

JUNE 25th 2007

On today's BBC 2pm News Headlines we are told Gordon Brown says there is no need for a refrendum on the terms of the latest EU treaty even though the other EU members say it contains all the ingredients of the previously proposed constitution. Indeed it does, but the UK has obtained complete and clear opt-outs on all the clauses we do not support. A Constitution cannot have such opt-outs. That is why it is not a constitution and why it does not require a referendum. The BBC headline is misleading spin by omission, and should not have been approved.

JULY 30th 2007
What great idea, hold a privately funded referendum on the EU treaty. I suggest the following questions.

1. Have you studied the history of the European Union?
    (the list of required documents is attached)
2. Have you studied the full EU Treaty which is the subject of this referendum ?
3. Are you aware of which other countries are in favour of this treaty ?
4. Are you in favour of the ratification of this treaty by the UK ?

From the above we might get some idea of who thinks what and why.

'Private' EU referendum proposed
A privately funded referendum on the EU treaty should be held if Gordon Brown refuses to call one, says a Tory peer.

Ex-employment secretary Lord Young told the BBC it could be a last resort and would not be short of sponsors.

It follows calls from Labour MP Gisela Stuart, who helped draw up the original constitution, for a referendum.

The government says a referendum is unnecessary as the EU treaty is not the same as the constitution - and the UK has secured a series of opt-outs.

When Tony Blair was prime minister he had promised a referendum on the constitution - which was abandoned after it was rejected by French and Dutch voters in 2005.

Referendum pressure

The new treaty, expected to be finalised later this year, preserves much of the original constitution - but the government says it does not transfer "in any significant way" any UK sovereignty to the EU.

However Lord Young told BBC Radio 4's Today programme he believed it was the "biggest constitutional change this country's ever gone through" and pressure had to be kept on the government to hold a referendum.

"It's not a Conservative matter, there's a large number of Labour MPs who are now pushing towards having a referendum," he said.

There are a large number of people who feel extremely strongly about the government breaking its word
Lord Young

Lord Young said a privately funded referendum was rare but not unprecedented - pointing to Stagecoach tycoon Brian Souter's poll on the repeal of Clause 28 - which prevented local authorities from promoting homosexuality - in 2000. It was said to have cost him £1m.

Lord Young said there were "a whole lot of things" that could be done before getting to that stage, to put pressure on the government to hold a referendum.

"This is the end of the road, I hope long before that Gordon will have changed his mind," said Lord Young.

'Old agenda'

But he said: "I have no doubt at all it will be possible, at that time, to raise the amount of money that is concerned.

"There are a large number of people who feel extremely strongly about the government breaking its word."

last week Ms Stuart said "all the big items" from the abandoned constitution had been retained and the British people should be asked to endorse the treaty.

Mr Brown has accused the Conservatives of "retreating to the old agenda" on Europe. Foreign Secretary David Miliband has said the treaty "takes forward institutional reform in a sensible way".

AUGUST 23rd 2007

Gordon Brown is quite right, it is for Parliament to debate and ratify the new EU Treaty, just as it does with any treaty and has done with all previous EU treaties. Although many clauses in the Treaty are the same as in the proposed Constitution, it is a completely different animal. The Constitution was a complete, take-it-or-leave it set of conditions for membership, even if there were classes of membership, which would remain in place unless the Constitution was brought up for revision at some future date. The new Treaty is a set of clauses to be accepted or negotiated by each state. Some states have negotiated opt-outs or adjustments to the clauses. That has to be done in each case, and it has been done. It could be done again. The members have to negotiate and come to agreement on special cases. There is absolutely no possibility of having a referendum, therefore, as there is no Constitution to be approved. The clauses of the Treaty, as adjusted for the UK's particular 'menu', will be debated by Parliament in due course in the proper way and I certainly hope, ratified.

Brown rejects union EU vote call
Gordon Brown has rejected calls from two trade unions for the government to hold a referendum on the new EU treaty.

The GMB and RMT had joined the Tories and UKIP in demanding a vote by tabling motions for the TUC annual conference.

They say the treaty is almost the same as the discarded EU constitution, on which a referendum was promised.

But the prime minister said: "The proper way to discuss this is through detailed discussion in the House of Commons and the House of Lords."

He added that he was confident Parliament would pass the treaty.

He told a press conference: "Let's see what the TUC do. My own view is that the TUC, when it meets, will support the government."


The RMT's motion asks the TUC to campaign for a "no" vote, if a referendum is held on whether to adopt the treaty.

Its general secretary, Bob Crow, told the BBC: "They [the government] went to the British people on the promise there would be a referendum."

He also said: "What we want him [Gordon Brown] to do is implement what his manifesto was."

The GMB union said it was concerned the UK's opt-out from the EU Charter of Fundamental Rights was being retained in the transition from the constitution to the treaty.

European officer Kathleen Walker-Shaw said the British government should opt back in to the charter before EU heads of state meet in October.

She added that the GMB had not yet decided how it would campaign in the event of the government calling a referendum.

But she went on to say it was unlikely the union would campaign for a treaty where workers would become second class citizens in Europe.

Ms Walker-Shaw said: "The government's position is not acceptable. We are giving them the chance to change it."


She added: "We want a social Europe. What sort of message is this preaching to developing countries that we are telling to raise working standards, when a government in Europe won't even accept them for its own people?"

Earlier this month, the Conservatives accused Mr Brown of trying to push the "unreadable" revised EU treaty through "on the quiet".

Shadow foreign secretary William Hague said: "By all the standards of the past, the commitment to a referendum should be upheld."

But the government says a referendum is not needed as the treaty is different to the constitution rejected by French and Dutch voters in 2005.

Gary Titley, Labour's leader in the European Parliament, said: "It's a world of difference between what was proposed in the constitutional treaty and the amending treaty."

He added that the EU was an ongoing "political process" which was designed to allow member states to "meet the challenges of globalisation".

UKIP, which campaigns for Britain to leave the EU, is also demanding a referendum on the treaty, calling on the government to "let the people decide".

Its leader, Nigel Farage, said it was "seriously good news" that unions were demanding a vote, adding: "Gordon Brown must be the only man in the country who doesn't realise that we have to have a referendum on this treaty.

"Every other political leader in the EU has said that this is the constitution in all but name, and the Labour Party was elected with a manifesto to hold a referendum on that document.

"He is doing a rather splendid impression of an ostrich, surrounding himself with yes men who are trying to drown out the overwhelming calls for the British people to have their say."

OCTOBER 18th 2007
Agreement has been reached between all members of the EU on the new revising Treaty. Each country has the exceptions it requires. The voting system has been modified to make it possible to deal with future decisions in a manner that makes sense - it is clear that nothing necessary will be obstructed and nothing that could damage our interests more than we benefit by membership could be voted through though, if it ever were, we could always leave. The so called 'red lines' are established 'for the time being', and that means until we in the UK wish to move or remove them, nothing else. The Treaty will be debated thoroughly in parliament and unles we wish at that stage to remove any opt-outs it is likely to be approved. The usual lot are talking the usual rubbish, Cameron worse than usual, the rest just the usual mix of ignorance, prejudice and naked self interest. If only the naked self interest were enlightened, most would see the value of the EU and this Treaty immediately, but they don't want to be enlightened. Eventually it is an issue like this which will reform the political structure of the UK. We will forget about left, right, class etc. and have a party that has a modicum of honesty in its thinking and debating, another for those who don't value that sort of thing and a third for those who are just confused.

NOVEMBER 17th 2007
Here is David Miliband's Bruges speech. It was brilliantly, clearly and calmly delivered. I approve and agree with every word of it. I look forward to this young man being, one day, Prime Minister of the United Kingdom.

Miliband EU speech in full
Here is the full text of British Foreign Secretary David Miliband's first major speech on the UK's relationship with Europe, made at the College of Europe in Bruges, Belgium.

I feel a strong sense of personal history in delivering this lecture today. My father was born in Brussels, my mother in Poland.

My family history reflects the strife which divided the Continent and the values which later united it.

This college reflects that history too. You have a sister college in Poland.

The vision of your founder, Henri Brugmans, a hero of the Dutch resistance, was fired by memories of dark days listening to BBC reports of resistance struggle against fascism.

And the people we honour this year, Anna Politkovskaya and Hrant Dink, were exemplars of our basic commitment to freedom of expression, a founding value of the EU.

But my speech tonight is not about history. It is about the Europe that you, the students gathered here, will inherit in the future.

President Sarkozy has suggested we need a Groupe des Sages to focus on the Europe of 2030. Today I want to enter that debate, not to engage in a piece of futurology, but to suggest how the EU can help to shape the world of 2030.

My argument is this: The prospects and potential for human progress have never been greater. But our prosperity and security are under threat. Protectionism seeks to stave off globalisation rather than manage it. Religious extremists peddle hatred and division. Energy insecurity and climate change threaten to create a scramble for resources. And rogue states and failing states risk sparking conflicts, the damage of which will spill over into Europe.'

These threats provide a new raison d'etre for the European Union. New because the unfinished business of internal reform to update our economic and social model is on its own not enough to engage with the big issues, nor the hopes and fears, of European citizens.

For the EU because nation-states, for all their continuing strengths, are too small to deal on their own with these big problems, but global governance is too weak.

So the EU can be a pioneer and a leader. Our single market and the standards we set for it, the attractions of membership, and the legitimacy, diversity and political clout of 27 member states are big advantages. The EU will never be a superpower, but could be a model power of regional cooperation.

For success, the EU must be open to ideas, trade and people. It must build shared institutions and shared activities with its neighbours. It must be an Environmental Union as well as a European Union. And it must be able to deploy soft and hard power to promote democracy and tackle conflict beyond its borders.

As Gordon Brown said on Monday there is no longer a distinction between 'over there' and 'over here'.

Let me begin with some reflections on Britain's relationship with Europe.

"We British are as much heirs to the legacy of European culture as any other nation."

The churches, literature and language of the UK "all bear witness to the cultural riches we have drawn from Europe."

"Without the European legacy of political ideas we could not have achieved as much as we did."

"Our destiny is in Europe."

Those are not my words. They were delivered by Margaret Thatcher to this College in 1988 in her famous Bruges lecture.

But despite these words, Mrs Thatcher's speech was haunted by demons.

A European superstate bringing in socialism by the back door. A country called Europe that stripped individual nations of their national identity. Utopian ideals and language that obstructed practical progress.

These were the demons that led her some years later to conclude that far from being vital to Britain's progress: "In my lifetime Europe has been the source of our problems, not the source of our solutions".

These demons still haunt some people. Thanks to Mrs Thatcher, "Bruges", has become a rallying cry of Euro-scepticism.

But I agree with my predecessor as Foreign Secretary Douglas Hurd who said in 2005: "The myth that we are threatened with a European superstate is still nourished in the Conservative cul-de-sac.

"Certainly there are Continental idealists who bitterly regret that it has faded away, but faded it has, as has been clear since Maastricht."

Open markets, subsidiarity, better regulation and enlargement are now far more part of the conventional vocabulary of European debate than a United States of Europe, centralised taxation or a common industrial policy.

The truth is that the EU has enlarged, remodelled and opened up. It is not and is not going to become a superstate.

But neither is it destined to become a superpower.

An American academic has defined a superpower as "a country that has the capacity to project dominating power and influence anywhere in the world...and so may plausibly attain the status of global hegemon."

There is only one superpower in the world today - the United States. There may be others on the horizon, such as China and India, but the US has enormous economic, social, cultural and military strength. In terms of per capita income alone it will remain by far the dominant power for my lifetime.

For Europeans, that should not be a source of dread: there is a great shared project for Europe and America, to embed our values and commitments in international rules and institutions.

The EU is not and never will be a superpower. An EU of 27 nation states or more is never going to have the fleetness of foot or the fiscal base to dominate. In fact economically and demographically Europe will be less important in the world of 2050 that it was in the world of 1950.

Our opportunity is different. The EU has the opportunity to be a model power.

It can chart a course for regional cooperation between medium-sized and small countries.

Through its common action, it can add value to national effort, and develop shared values amidst differences of nationality and religion.

As a club that countries want to join, it can persuade countries to play by the rules, and set global standards. In the way it dispenses its responsibilities around the world, it can be a role model that others follow.

This speech is intended to set out the basis of such progress.

The EU has been defined for the past 50 years by a focus on internal change: by a Franco-German bargain over industry and agriculture, by the creation of a single market and the drive for basic shared social standards; by EMU. And the need to attend to internal policy problems remains.

We should be immensely proud that in the post second world war period Europeans drove down levels of economic inequality and social injustice. That is the cause that brought me into politics.

And the modernisation of our social and economic systems is essential to preserve those gains. That is why the UK is fully engaged in the current debates about policy reform in Europe.

But that will no longer be enough. The defining challenges of the 21st century are global in scope, not national. We have spent a decade or more debating institutional reform; everyone who has participated is exhausted; and the rest of the European population are either bored or angry.

The EU must now apply itself to managing the risks and maximising the benefits of the next wave of globalisation, both for its own citizens and around the world. This is where we need new thinking.

The insecurities and threats of 2030 are clear. A Europe at war not within its borders, but struggling to cope with forces beyond its borders. Global capital, people and goods with whom it has not made peace.

Religious extremism and division on its doorstep. Energy insecurity and climate change which threatens our security as well as our prosperity. Conflict and instability in regions where we have economic as well as moral interests.

To avoid that future, we need to base our next generation Europe on four principles.

My starting point is that a model power in the 21st century must be one that looks outwards. As Jose Manuel Barroso said, " Europe must be an open Europe".

So my first guiding principle is that we must keep ourselves open - open to trade, open to ideas and open to investment.

This is not a foregone conclusion. Across Europe, it is tempting for producers to seek the shelter of tariffs, for environmentalists to yearn for a return to a (it has to be said) mythical world of self-sufficiency, for communities to fear unplanned migration.

I understand the concerns. Openness creates risks and insecurities as well as opportunities. Our national welfare states must help people adjust to rapid economic and social change.

This is tough. Migration is a big issue. And while Europe can be a magnet for the world's best talent, it cannot be a tent for the world's poorest people.

Without some migration, an ageing and declining population will leave Europe facing economic stagnation and unsustainable social security bills.

But integration of new communities is vital. We shall only tackle the root cause of migration - the poor economic prospects in neighbouring countries - if we continue to open up our markets.

That is why, on economic and social grounds, the case against economic protectionism is overwhelming.

Openness - to new investment, new products and new services - provides the competitive spur needed to raise our game. An open regulatory environment provides the basis for the highest value.

If we hold back on open trade, we will only hold back the process of modernising our economies and raising productivity.

We will force European consumers to pay higher prices. We will strengthen the hand of protectionist lobbies beyond our borders. We will deny millions of African farmers a lifeline out of poverty.

If we have the courage to press for more free trade and investment, and act as a model power in going further and faster than other countries, we will enrich ourselves and the rest of the world.

That is why we need to put European agriculture on a sustainable and modern footing: reduce tariffs, open up energy markets and complete the creation of a single market in services.

This is not a race to the bottom. Europe is a model for reconciling economic dynamism with social justice. We must use the power of the single market to export these values.

We have already seen how the single-market can pull up standards in the rest of the world. Thanks to the Reach Directive the chemicals in Chinese-made products have to comply with European standards.

The size of our market means that European low carbon standards can become the global standard-setter.

My second guiding principle is that we should use the power of shared institutions and shared activities to help overcome religious, regional, and cultural divides, especially with the Islamic world.

There is, after all, a bleak scenario for 2030: a world more divided by religion, both between and within countries. Greater threats - both at home and abroad - from terrorists and rogue states. Growing hostility towards the West.

Rejection of the global economic changes that many people believe has made us rich at their expense.

The EU can help lead the search for an alternative. The EU itself represents a triumph of shared values.

Now we need to find and express shared values across religious and not just national lines, so that Europe and its Muslim neighbours enjoy strong, unbreakable ties, and peace allows us to talk, debate, trade, build businesses, build communities and build friendships.

We can do this only by creating shared institutions and engaging in shared activities that provide a living alternative to the narrative which says the West and the Islamic world are destined to clash.

There are obvious immediate needs:

But our top priority must be to keep our promises on enlargement. As Vaclav Havel said in December 2002, "the vision of becoming part of the EU was...the engine that drove the democratisation and transformation of" of Central and Eastern Europe.

Enlargement is by far our most powerful tool for extending stability and prosperity.

Countries that are already on the accession path - Turkey and the Western Balkans - must be given full membership as soon as they fully meet the criteria.

And Turkey and all Cypriots need to play a constructive role in UN efforts to solve the Cyprus problem and unify the island on a bi-zonal and bi-communal basis.

If we fail to keep our promises to Turkey, it will signal a deep and dangerous divide between East and West.

Beyond that, we must keep the door open, retaining the incentive for change that the prospect of membership provides.

Being part of Europe should be about abiding by the shared rules - the acquis - that embody our shared values by respecting our separate identities and traditions.

Not all countries will be eligible for full membership, or show the will to join. So we should take the European Neighbourhood Policy a step further. We must state clearly that participation is not an alternative to membership, or a waiting room. And we must offer access to the full benefits of the single market.

The first step would be the accession of neighbouring countries - especially Russia and the Ukraine - to the WTO. Then we must build on this with comprehensive free-trade agreements.

The goal must be a multilateral free-trade zone around our periphery - a version of the European Free Trade Association that could gradually bring the countries of the Mahgreb, the Middle-East and Eastern-Europe in line with the single-market, not as an alternative to membership, but potentially as a step towards it.

Finally, we need to create more shared activities to build shared values and bring us closer to our neighbours.

ERASMUS student exchanges have been hugely successfully over the last twenty years in fostering a common understanding and common identity between European students.

Some 150,000 students participate every year, taking the opportunity to absorb another culture and learn another language.

Let us set the goal that by 2030 a third of our ERASMUS exchanges will be to countries beyond our borders, including those of the Middle-East and North Africa.

My third guiding principle is that a model power should champion international law and human rights not just internally, but externally too. We need to live by our values and principles beyond our borders, not just within them.

Peace and democracy has settled across our continent. To that extent, the EU has been an extraordinary success.

But, as the wars in the Balkans showed, our record is not perfect. And our task will not be complete until the final piece in the Balkans jigsaw - Kosovo - is resolved.

But in the future the main threats to our security will come from farther afield. From failed or fragile states, where law and order dissolve, where the economy stops, where arbitrary violence rules, and terrorists can operate at will. We can see the terrible effects in Darfur and Chad today.

From rogue states, that defy and endanger the international community by breaking the common rules we have all agreed to abide by. And from non-state actors - like Al Qaeda - hell bent on destroying our way of life.

Europe is well equipped to contribute a positive response to these threats. Like NATO, its members have shared values which can generate the political and military commitment for decisive action.

But like the UN, its member states have the full spectrum of economic, development, legislative, political and military tools.

We must begin by establishing a wider consensus on the rules governing the international system.

We must use the legitimacy and political clout of 27 members to enshrine the principle of Responsibility to Protect at the heart of the international system.

We must be prepared to uphold commitments made under the Nuclear Non-Proliferation Treaty. We must mobilize member states behind the establishment of an Arms Trade Treaty.

We must also overcome the blockages to collaboration with NATO. We welcome the signs of increased willingness on the part of key partners to do so.

First, European member states must improve their capabilities. It's embarrassing that when European nations - with almost two million men and women under arms - are only able, at a stretch, to deploy around 100 thousand at any one time.

EU countries have around 1,200 transport helicopters, yet only about 35 are deployed in Afghanistan. And EU member states haven't provided any helicopters in Darfur despite the desperate need there.

European nations need to identify the challenges we face; the capabilities we consequently need; then identify targets for national investment in equipment, research, development, and training necessary to make more of our armed forces; work together for efficiency; and back it up with political drive.

A second thing we must do is to strengthen our ability to respond to crises in a more comprehensive way. Increasing our capacity to put peacekeepers into the field - whether on UN, EU or NATO missions - is a crucial part of cooperation.

As the prime minister set out earlier this week, military forces should be deployed on peacekeeping duties with civilian crisis management experts as an integral part of the operation.

There is limited value in securing a town if law and order breaks down as soon as the troops move on. There is limited gain in detaining terrorists and criminals if there is no courthouse to try them in or jailhouse to hold them in.

Security without development will soon alienate local populations. Development without security is impossible. They are two sides of the same coin.

Third, we must use our power and influence, not just to resolve conflict, but prevent it. We must show we are prepared to take a lead and fulfil our responsibilities.

Javier Solana and George Robertson, working together for the EU and NATO, brought Macedonia back from the brink of civil war in 2001.

Our military deployment to north-eastern Congo in helped plug a critical gap in the UN's presence there in 2003. We have built on UN sanctions to increase pressure on countries like Iran and Sudan.

And where the UN has been reluctant to act - as on Zimbabwe and Burma, where the regimes continue to oppress their people - we have introduced our own measures.

My fourth guiding principle is that any model power in the 21st century must be a low carbon power, so the European Union must become an Environmental Union.

More than any other area, the decisions we take on energy now will affect the world we inhabit in 2030.

In the decisions made at the Spring Council last year, the EU showed its ambitions to be model power on climate change. By setting unilateral targets, with the offer to go further if others do, we are using our political clout to increase the pressure on others to act.

By backing those targets with regulations and a carbon price, we are beginning to use our economic clout to transform product markets too. But to become an Environmental Union but we must go further.

We must set ambitious, long term regulations to phase out carbon emissions in key areas, transform product markets through the standards we set, and gain economic advantage in environmental innovation.

The priorities are clear. We must agree a timetable for reducing average vehicle emissions to 100g/km by 2020-2025 (compared with average EU emissions of 160 g/km), on the road towards a zero-emission vehicle standard across Europe.

We must ensure that by 2015, we have 12 demonstration projects in Carbon Capture and Storage, and that by 2020, all new coal-fired power stations must be fitted with Carbon Capture and Storage.

We should ensure the long term future of the EU ETS, to include more sectors of our economy, and to become the hub of a global carbon market which generates the incentives and the funding for the shift to low carbon power and transport not just in Europe but around the world.

The third phase of the EU ETS provides an opportunity to scale up and reform the CDM - to move it from a focus on individual projects, to groups of projects or whole sectors. We have already agreed to extend the EU ETS to include aviation, but we must also consider the case for surface transport.

And we should consider moving from individual countries setting their own allocation to harmonised allocations on the road to cap-setting done centrally. As the European Central Bank regulates money supply for the Eurozone, it is worth thinking whether the idea of a European Carbon Bank could in future set limits on the production of carbon across Europe.

Discussions on the future of the EU budget must take account of this context.

The current budget will be worth 860bn Euros over 7 years.

The three tests for the future of the EU budget are clear: is it advancing national and European public interest? Is grant spending the right tool to achieve our objectives, or could regulation, or loan-finance, provide a better alternative? And is it demonstrating sound financial management?

Over time, I believe that points to aligning the budget more closely with the external global challenges we face, in particular, a focus on climate change.

Environmental security not food security is the challenge of the future.

It is telling that those who are near us, want to join us. And that those who are far away, want to imitate us. The EU can claim major successes.

The single market has created peace and prosperity out of a continent ravaged by war. Enlargement has transformed Central and Eastern Europe. European forces across the world are active in preventing and resolving conflict.

These are real achievements. The common view is that they represent a triumph over institutional arrangements.

But the constitutional debate shows that people don't want major institutional upheaval. Unanimity is slow but it respects national identities.

The commission is not directly elected but that is exactly why it avoids the temptation of national and political affiliation and offers a wider European perspective.

The lesson, I think, is that in politics we tend to overestimate our ability to influence events in the short term, but we hugely underestimate our ability to shape our long term future.

That is particularly true for the European Union.

Across Europe, people are feeling a divergence between the freedom and control they have in their personal lives, and the sense of powerlessness they face against the great global challenges we face: from preventing conflict and terrorism to addressing climate change, energy insecurity, and religious extremism.

They are confident about personal progress, but pessimistic about societal progress.

Europe has the chance to help fill this void. There is a clear choice.

Focus on internal not external challenges, institutions rather than ideals. Fail to combine hard and soft power, the disciplines and benefits of membership with the ability to make a difference beyond our borders. The result - the return of protectionism, energy insecurity, division with the Islamic world, and unmanaged migration from conflict.

Or Europe can look global and become a model regional power.

We can use the power of the EU - the size of our single market, our ability to set global standards, the negotiating clout of 27 members, the attractions of membership, the hard power of sanctions and troops, the power of Europe as an idea and a model - not to substitute for nation states but to do those things to provide security and prosperity for the next generation.

We are pragmatic. We have missed some opportunities. But pragmatism and idealism should be partners. And the UK is determined to make them so.

DECEMBER 13th 2007
Normally I agree with Kenneth Clarke and not with Piers Morgan, on most matters. But today the reverse is the case. Gordon Brown has had a really good week and done everything he had to do, in the right order. The photograph was not important. He did well in Iraq, in Afghanistan, in the House of Commons and in Portugal. Miliband was there to sign at the ceremony and Brown got there a little later to add his signature as PM. Many jobs well done.

Brown belatedly signs EU treaty
UK Prime Minister Gordon Brown has belatedly signed the EU reform treaty, having missed a ceremony attended by leaders of the 26 other member states.

Mr Brown delayed his trip to Lisbon so he could appear before a Commons select committee scrutinising his government.

He promised the committee there would be a full debate in Parliament on the 250-page text but no referendum.

The Conservatives said Mr Brown's "diary clash" did not reflect well on him, making him appear "gutless".

"If he believes this treaty is the right thing for the country then he ought to have the guts to go to the actual signing ceremony," Shadow Foreign Secretary William Hague told BBC News 24.

He's behaving rather childishly
Kenneth Clarke
Former Conservative chancellor

"We had this chronic indecision in Downing Street about what the prime minister would do. I don't think that's a very good advertisement for prime ministerial decision-making."

Kenneth Clarke, the pro-European former Conservative chancellor, said Mr Brown's "stunt" proved he was "not very good at international diplomacy" and was more concerned with newspaper headlines.

It was "a foolish way of going about defending a treaty which he's taken part in the negotiations of", Mr Clarke told BBC News 24. "He's behaving rather childishly."

The Liberal Democrats said Mr Brown's absence raised "serious questions".

Lib Dem leadership contender and ex-MEP Chris Huhne criticised "inept and peevish behaviour that leaves Gordon Brown's reputation for honest dealing with our EU partners hanging by a thread".

To pretend that this is any different to the failed constitution and deny the British people a referendum is monstrous
Nigel Farage
Leader, UK Independence Party

UK Independence Party leader Nigel Farage said he spoke to Foreign Secretary David Miliband in Lisbon just moments before he signed the treaty and repeated his demand for a referendum, receiving only "a hollow laugh" in reply.

Mr Farage said: "This is just about the most thoroughly dishonest political process I have ever been witness to.

"This is a constitutional treaty with profound, far-reaching implications and for the British Government to pretend it is something it isn't and deny us a referendum is monstrous."

Referendum rejected

Mr Miliband stood in for Mr Brown for the signing in the Portuguese capital.

Mr Brown has said there was no need for a referendum as the treaty was different from the constitution rejected by voters in France and the Netherlands in 2005.

But he told the Commons liaison committee there would be "more scope for Parliament to debate some of these issues than there has been in the past".

The UK will give up its veto in many policy areas as the EU introduces more qualified majority voting, but Mr Brown said the changes were in the country's interests.

"Some of them are minor and procedural and the other ones are in Britain's interest and if they are not we have usually got an opt-in or an opt-out to decide whether we wish to be part of it," Mr Brown told the committee.

'Ingeneous MPs'

He said MPs would have the final say over whether Britain opts out of justice and home affairs legislation, when it is taken over by the EU.

But MPs would not be able to vote on which parts of the treaty Britain wanted to opt in to as decisions on that had to be made within a "three-month window", he added.

"It will have to be a matter for the government to make that decision on the basis of what we know to be the best interest of the country but the general debate we will have in the House of Commons," Mr Brown said.

He said he was sure some "ingenuous" MPs would find ways to introduce amendments to the bill ratifying it, but he declined to go into detail about the wording of the bill, saying it would be published "very soon".

The treaty will greatly alter the way members govern themselves. It creates an EU president and a vastly more powerful foreign policy chief for the union's 27 nations.

JANUARY 22nd 2008
JANUARY 22 2008
This is what I expect from the EU. Leadership. It is not a 'threat' as suggested by the BBC headline. It is a simple statement that if we are to tackle global warming (and the US has now agreed that we must tackle it) then we have to reach intenational agreement on the costs to industry. There is no way to break that logic. So the US must come to an agreement with the EU, and that is that. Meanwhile the usual UK political dipshits are calling for a referendum on the latest Treaty on the grounds that it contains stuff that was in the abandon Constitution on which the little dears were 'promised' a referendum. I think we should all get back to the Churchill formula when it comes to promises.

Barroso trade threat on climate
By Roger Harrabin
Environment analyst, BBC News

The president of the European Commmission has threatened to impose carbon tariffs on imports unless the US agrees to a global climate change deal.

Jose Manuel Barroso wants to protect energy-intensive sectors such as aluminium, steel and cement.

He says there is no point these industries cutting emissions in Europe if they lose business to countries with more lax rules on carbon emissions.

Mr Barroso made the comments in a speech to business leaders in London.

Level playing field

He said foreign firms should be forced to purchase the same EU carbon allowances European firms would have to buy, thereby levelling the industrial playing field.

I think we should be ready to continue to give the energy-intensive industries their (carbon) allowances free of charge - or to require importers to obtain allowances alongside European competitors
Jose Manuel Barroso
European Commission President
The threat of trade measures is the nuclear bomb of climate negotiations - and the commission president said he very much hoped it would not be used.

He said his preferred option was for a comprehensive global treaty on emissions.

His fall-back was a global sectoral agreement imposing uniform standards on energy-intensive export industries.

If these failed, he would either protect Europe's industries by giving them all their carbon allowances in the European Trading System (ETS) free of charge, or charge importers at the same rate for the allowances.

"I think we should be ready to continue to give the energy-intensive industries their ETS allowances free of charge - or to require importers to obtain allowances alongside European competitors, as long as this system is compatible with WTO (World Trade Organization) requirements."

French idea

The idea of climate trade sanctions against nations such as the United States has long been promoted by the French.

They say it is unfair for Europe's firms to bear a financial risk because of the EU's leadership on a global issue.

They believe the right measures would be acceptable to the WTO, which in some cases allows countries to impose charges on environmental grounds.

But US trade representative Susan Schwab said on Monday that climate change should not be used as an excuse for protectionism. And EU Trade Commissioner Peter Mandelson agreed that restrictions were not "the way forward".

He has been overruled by Mr Barroso, who will be aware of the effects of his words not just in Washington but also in Beijing and Delhi.

Last night's speech at Lehman Brothers Bank in Canary Wharf was quite warmly received by an audience mainly of investors.

John Llewellyn of Lehman Brothers said Mr Barroso was right to make the threat of trade sanctions, and right to insist that they would be very much the last resort.

He said: "I have heard quite prominent Americans say they would recommend to the Europeans that they did it (impose trade measures). But it's not the way to go if you can possibly avoid it."

Tom Burke of environment consultancy E3G said the soft threat would focus minds among other major polluters in future climate negotiations.

"What was really important in the way Barroso raised the issue of compensatory adjustments is that it sends a very strong signal about how serious Europe is about this," he said.

"People need to understand that Europe sees climate change as in its national interest. And Europe's going to fight pretty aggressively to protect the interest of 450 million Europeans."

JANUARY 30th 2008
I am spending hours listening to the EU (Amendment) Bill in the House of Commons. The discussion has been on Energy Policy and shared competencies. I realise we do need an opposition party, and they even have a duty to pick holes and suggest amendments, but all we have from the Conservative back and front benches is a mixture of deliberate obfuscation, distortion of the truth and a display of profound ignorance. Fortunately it sounds as if the other parties and some intelligent Conservatives not present at this stage have sufficient competence to get through this rubbish and eventually get this bill passed.

FEBRUARY 13th 2008
It is indeed a question of trust.

Would you rather trust the vote of the entire adult population of the UK, many of whom do not read or write or understand English or have any knowledge of the Lisbon Treaty in any other language, others who are hopelessly misinformed by the UK press, others whose financial interests are served by keeping the UK out of the EU and who put these interests above that of the nation?
Or would you trust the votes of the members of our two houses of Parliament who have spent much of their lives considering the issues, observing the evolution of the EU and debating the treaty in great detail?

It is indeed a no brainer. We should accept the verdict of parliament. The Constitution was abandoned by France and others because of the impossibility of presenting the issues in a manner that a referendum could handle. To have a referendum on the Lisbon Treaty, devised for the very purpose of avoiding a referendum that could have an outcome both meaningless and tragic, would be half-witted. Every EU country agrees.

I am in favour of a referendum to stay in or pull out of the EU. It would be irresponsible to the level of madness to pull out, but I think the UK does need a medical opinion on its state of mental, as well as physical heath, and the sooner the better.

Meanwhile we still have to put up with this arsehole Wheeler. Well, I suppose it's good for us to have to deal with him.

Legal bid to force EU referendum
A legal bid to force the UK to hold a referendum on the EU reform treaty has been launched by spread-betting millionaire Stuart Wheeler.

Mr Wheeler, a prominent Conservative Party donor, told the BBC he had issued a "letter before the claim" to Prime Minister Gordon Brown.

Mr Brown has rejected a public vote on the treaty as he says it does not change the UK constitution.

But Mr Wheeler says he wants a judicial review of the PM's decision.

He told BBC Radio 4's Today programme he supported the campaign for a referendum but said he felt a legal challenge might be the best way of forcing one.

This is a very serious attempt to get a referendum
Stuart Wheeler

Mr Wheeler has sent the letter to Mr Brown giving notice of the claim and expects to have a court hearing to decide on his request for a judicial review.

He said he expected to get permission for the review and had been told that the EU treaty - now known as the Lisbon Treaty - could not be ratified while a review was pending.

Mr Wheeler described his legal challenge as "a very serious attempt to get a referendum".

If he is granted permission to apply for a judicial review, Mr Wheeler will claim voters had a "legitimate expectation" that a referendum would be held after one was promised on the EU Constitution.

The government will have 21 days to respond to this before the case comes before a judge.

Breach of contract?

Judicial reviews can last for more than a year, although Mr Wheeler said he expected the government to respond quickly in order to "expedite" the process.

There has never been a case of anyone successfully challenging a government's manifesto pledge in court.

Mr Wheeler said he had originally intended to claim the government was illegally handing powers to Brussels - but had been advised he stood a greater chance of success if he challenged the government over allegedly breaking its manifesto commitment.

European Council president, who will serve for two-and-a-half years rather than countries taking six month turns
New post combining the jobs of the existing foreign affairs supremo and the external affairs commissioner
Smaller European Commission, with fewer commissioners than there are member states, from 2014
Redistribution of voting weights between member states
New powers for European Commission, European Parliament and European Court of Justice
Removal of national vetoes in a number of areas

He said believed he had an "excellent" chance of gaining a referendum but he would also be happy for his legal bid to delay ratification.

In a separate case, to be heard at Brighton County Court on 7 February, former Labour activist Stuart Bower, now a member of the UK Independence Party, is claiming the government broke its promise to hold a referendum on the European Constitution.

The court will have to decide whether the government's refusal to hold one is a breach of contract with Labour voters at the 2005 general election.

The legal bid comes as MPs begin a 12-day debate on whether to ratify the Lisbon Treaty, signed last month by EU leaders.

The government is promising line-by-line scrutiny of the document, but the Tories and Lib Dems say more Commons time needs to be set aside.

Home Secretary Jacqui Smith, opening debate on the justice, migration and home affairs aspects of the treaty, said it would "speed up extradition, strengthen our borders and improve asylum negotiations".

It would also give more protection for children and new ways of sharing information "vital to our efforts to tackle terrorism and serious crime", she said.

"Our citizens are safer and our country more secure from our active involvement in the EU," she added.

Economic summit

But Conservative shadow attorney general Dominic Grieve said the treaty had the potential to "undermine the UK's criminal justice system".

He asked why if the government thought the Lisbon treaty reforms were "such a positive move" it had to negotiate "so many opt-outs and opt-ins?"

As debate continued, Gordon Brown met Nicolas Sarkozy of France, Angela Merkel of Germany, Romano Prodi of Italy and European Commission president Jose Manual Barroso to discuss the global economy.

The Lisbon Treaty replaces the European Constitution, which was rejected by voters in France and the Netherlands in 2005.

All 27 EU countries will have to ratify the treaty before it can come into force.

The treaty contains many of the reforms outlined in the constitution - including changes to voting rights and the creation of a European Commission president - but drops the name "constitution", a reference to EU symbols and an article on the primacy of EU law.

On Monday, the government won a Commons vote for a 12-day debate on ratification by a majority of 56. The opposition had wanted 18 days.

FEBRUARY 25th 2008


Wow! Superb debate going on here, with excellent contributions from all three parties. Very important being raised today on the Overseas Development policy and functions of the EU. I will in due course locate the Hansard entries and put a link here. A very interesting point was raised by Labour MP Colin Burgon who queried the validity of the default policy of trade liberalisation, with only very few exceptions on specified products in specified cases, as the unarguable way to prosperity and the lessening of poverty throughout the globe.

Earlier Gary Streeter for the Tories made a significant contribution on the efficiency, efficacy and democratic improvements he would like to see. The delivery of EU aid to the countries that need it needs improvement. It is too often late and ineffective. Tony Baldry (Cons) says the public are being cheated out of a debate, but damn it, this is it!

Many other important points raised. This demonstrates why Parliament is the place to debate and decide all these matters. The whole country can, if people have the time, watch these debates or a recording of them. We know there is much that needs improving in the EU. But failing to ratify this treaty will not help. Fortunately it will be ratified - unless rebels fed up with the Common Fisheries Policy take the opportunity to bugger the entire treaty.

Heathcote Amory's contribution I found contradictory. He is a simple 'trade liberaliser' but now finds himself hoist by his own petard and pretending not to be. We all understand the benefits of Trade Liberalisation, but every philosophy taken too far causes the seeds of its own destruction to germinate. Heathcoat Amory says the treaty will limit our scope to make bilateral trade treaties. The point is, however, that we can and should make the necessary corrections in solidarity with the EU to make them effective. Clarification is needed however and this debate will no doubt lead to it.

There is one point on which I agree even with Bill Cash; The EU is not a body appropriately tasked with alleviating world poverty. It's job is to look after the EU and to help other countries to organise their political affairs by building similar peaceful, democratic institutions that encourage competition where it is beneficial and limit competition where it is inapropriate in a world of limited resources and a problem with its population growth.

FEBRUARY 26th 2008
Another day's debate on the Lisbon Treaty (amendment) Bill
Thank God for Bob Marris, who sits there quitely and patiently and intervenes to point out when rubbish is talked or a good point needs support and further clarification. Austin Mitchell made some particularly interesting points on the Fisheries policy. It is sure the CFP is not working and what is happening is a waste, The problem is that UK fishermen SOLD all the quotas that are now held up as theft of our fish by foreigners. As usual Bill Cash and Duncan Smith bored away with their usual negative view of the entire universe except Britain. Cash asked all viewers to write in to the BBC. So I wrote:
I am watching the BBC Parliamentary Channel and Mr Bill Cash, speaking now, is asking all viewers to write in to the BBC and ask for an increase in some way (don't ask me how) of the coverage of the debate on the Lisbon Treaty.

He claims that the public are not getting access to the debate and the arguments.

I have to disagree. The public have access to everything they need. The text is at the Stationery Office. The BBC coverage is good. I understand everything Mr Cash is saying, on all the points he is raising. He is no doubt sincere but is incapable of understanding that while much of the facts he puts are correct his understanding of the EU and what the effect of the Lisbon Treaty will be is faulty.

This treaty is good, it is necessary, and will not have the bad effects he fears.

FEBRUARY 27th 2008
Today, Nick Hurd for Tories got stuck into some realistic arguments in favour of the EU taking an even more active role to get its excellent start on measures to combat climate change followed through. The carbon trading rules need carifying, updating and enforcing. It is good to have an intelligent Tory explaining to his party that we should get this Treaty ratified and move on to much more ambitious international agreements.

What a pity that Dominic Grieve, whose French pronunciation is better than mine, does not understand the use of the word SHALL in EU Treaties. I remember well from my time as Secretary to the Statutes Committee of the FAI that once one has a text in French and English it clarifies rather than confuses the meaning. Bill Cash intervened to put the interpretation that is incorrect and then criticise the clause. How dishonest, how paranoid can you get.

MAY 20th 2008
The Credit Crunch as it is now called and the associated market  and currency turmoil has shown in clear relief how the EU and the Euro single currency has saved Europe from a serious and chaotic crash. The President of the European Central Bank, Jean Claude Trichet, understood what to do, had the power to do it, and did it. It was EMU plus the Euro which gave him the power. This prevented a run on EU banks and avoided a nast mess for many companies and individuals. It was this action that gave the Bank of England the ability to follow suit a long time later. If ever there was a proof of the need for a single European currency for '"The Twelve", this has to be it. Now there are 15. It remains to be seen which further EU countries will be fit to join the monetary union, if any. There are some who are damned lucky to have been allowed to join in the first place.
All EU Member States form part of Economic and Monetary Union (EMU), which can be described as an advanced stage of economic integration based on a single market. It involves co-ordination of economic and fiscal policies and, for those countries fulfilling certain conditions, a single monetary policy and a single currency – the euro.

MAY 31st 2008
The UK energy markets have previously been thought of as a jewel in the crown of de-monoplised and competitive industries. Now, our consumers are suffering more that other EU countries. We considered that any temporary advantage for European consumers that derived from cosy relationships or even identity of producers, suppliers and distributors would give way in time to inefficiency and featherbedding of such protected monopolies. However it seems that Europe is getting the best of both worlds, with increasing confidence in free EU markets. What none of our politicians has the courage to point out is that it is the full monetary union, the adoption of the Euro, that has allowed those EU members to move forward in confidence. We gained unfairly from our opt out from the Euro. Now the British public is going to pay the price, and it is going to hurt, hard and long. The strength of the Euro has a downside too for its members, but it is its own protection against many elements of this downside and the advantages are huge.

JUNE 12th 2008
If the Irish sabotage the Lisbon Treaty it wll tell us something rather unsettling about a lot of people now living there...

JUNE 13th 2008
It has taken just over 800,000 Irish to bugger up the Lisbon Treaty.I think we should just ignore them, there are far more intelligent Irish but for some reason they didn't come out to vote.

The count showed 862,415 people voted 'No' while 752,451 voted 'Yes'. Turnout was 53.1 per cent of the electorate. The right thing to do would be to chuck then out of the EU but we won't do that because half the UK population are even more clueless. Jeezuss, I don't know why people of goodwill bother, one might as well go and live on a beach somewhere in the south seas and live off coconuts. If referenda had ever been the way to create or maintain civilization some country would have figured it out over the last 5,000 years; we all know they are a recipe for disaster.

The one unanswerable criticism of the campaign against the Lisbon Treaty is that its advocates had to base their case on lies. Garbage-in-garbage-out will get the wrong answer even from a computer.

OCTOBER 4th 2008
This is good news,,,

UK seeks £12bn EU business fund

UK Prime Minister Gordon Brown is to propose a £12bn EU fund to help keep small businesses afloat during the economic crisis.

OCTOBER 5th 2008
There was obviously not time to do anything of great significance at the meeting yesterday of the big 4 EU members and the main EU money technocrats other than declare solidarity. Howerver there is a scheduled EU meeting coming up shortly and at that I expect considerably more international coordination to move towards a new global financial system. I realise it will not be easy.

DECEMBER 2nd 2008
While the EU has shown some collective initiative and many countries including Denmark are likely to change their mind and join the Euro after another referendum, there is still a reluctance to assume collective responsiblity. John Vinocur's article in the IHT is worth a read.

International Herald Tribune
Tomorrow's Europe: Not necessarily influential
Monday, December 1, 2008

BERLIN: Way down at the bottom of the left-hand column on Page 32, the boldface type says: "Europe: Losing Clout in 2025."

The message is clear, and so is Europe's possible position not fully in the front row of the world arena projected by the U.S. National Intelligence Council in its report, Global Trends 2025.

When it appeared two weeks ago, the document was largely read for its notion of a United States that, while still militarily pre-eminent, would have diminished power and prerogatives in a changed world of multiple poles of influence. Now, the NIC report has a second resonance.

It follows a fortnight in which the European Union flailed and basically settled for to-each-his-own solutions in dealing with the crisis in the real global economy.

(And it comes after some European leaders sensed they could no longer hide from a deep recession by saying America's financial meltdowns represented creative destruction for the rest of the world - the dollar's demotion, and the end of New York as the world's financial center.)

Although its judgment is wadded by a cushion of conditional phrasing, the NIC points to a Europe that doesn't necessarily become one of the new poles of global power.

The report talks of an EU with citizens skeptical of deeper integration, distracted by internal bickering and competing national agendas and possibly, over the next two decades, "less able to translate its economic clout into global influence."

Sound familiar? It's in the moan of Europe's pre-winter winds. It's in the howl of a European paradox that wants more of a say as a global decider just when its own view of European cohesiveness is less convinced.

Examples: In France last week, Le Monde produced a banner headline that said: "Stimulus packages: American willfulness, European hesitations." At the same time, Germany's biggest financial newspaper, Handelsblatt, offered a Page 1 commentary comparing "Americans who are able to rise as a single man" in times of crisis to an EU "where everyone's own concerns are his priority."

The NIC piles it on: Shrinking populations will mean slower employment growth, taking 1 percent off Europe's gross domestic product. By 2025, non-European minorities could reach 15 percent or more in all Western Europe countries and "likely heighten tensions." If Europe fails to diversify its energy supply, its dependence on Russia will result in "constant attentiveness to Moscow's interests by key countries, including Germany and Italy."

At that point, you could easily say, this vision comes from folks who missed seeing (ahead of time, anyway) the fall of the Soviet Union or Indian nuclear tests.

But there's an unusual moment of frankness among Europeans about Europe's future these days. It's attached to the sense of crisis and drift here, and connects with Barack Obama's coming to power in America. The contrast with new optimism on the other side of the Atlantic is strong.

Joschka Fischer, the former German foreign minister, has written, "At the end of this global crisis, Europe will simply have become less important."

This is because he believes, for its own reasons of power and economics, America will diminish its Atlantic orientation in favor of the Pacific while "Europeans, doing nothing, watch their own downfall in power politics." The United States, Fischer thinks, is renewing itself through Obama at the same time that Europe, rather than seeking greater unity, "is re-nationalizing during this crisis and turning itself back to the past."

"Where are the strong leaders in Europe who will move in the direction of unification?" Fischer asked in a conversation here. There was no reply.

In France, there's something of the same tone.

Hubert Védrine, who served as foreign minister under Jacques Chirac, has argued that Obama will continue to take American leadership in the world as a given.

"Today," he told a French reporter, "for the United States, Europe represents neither a problem, nor a threat, nor an answer to its problems."

So what does Europe do to set out a credible claim for a co-equal's role in a multipolar word? Védrine's answer: create a realistic foreign policy, which presupposes the EU members agree on "what's necessary to do on Russia and China."

You may titter here. Europe's assertion of "no business as usual with Russia," while resuming strategic partnership talks with a Moscow regime whose troops remain in Georgia, looks like very much business indeed.

At the same time, in what has the appearance of a targeted affront to both the EU, and the current EU president, Nicolas Sarkozy, China has called off their summit meeting - a rising great power dressing down a more marginal player - because of Sarkozy's plan to talk soon with the Dalai Lama.

Add this: If it comes to EU foreign policy unity on a really tough initiative like new sanctions involving oil against Iran, a European official now estimates 8 to 10 members would reject them.

It's not the shining hour of a new international big-leaguer.

A stopgap answer on how to make Europe look more of a piece lies in private conversations under way to set up a kind of European presidium, involving Germany, France and Britain, and meant to give the EU the allure of sure-handed direction.

In the process, it would also brutally split the EU between big and little guys because the directorate's immediate purpose would be to remove effective control from the Czechs and the Swedes, who follow one another into the EU's rotating presidency in 2009.

All this lends some credibility to the National Intelligence Council's uncertain claim to wisdom on Europe in 2025 - only "slow progress" toward becoming the global actor it envisions; and real issues, involving the choice of painful reforms, that could leave it "a hobbled giant."

DECEMBER 15th 2008
The EU summit has been frankly disappointing on the Climate Change front. Germany, Italy, Poland all dragging us back. It is not good enough.

FEBRUARY 24th 2009

Watchdog is a provocative word which will no doubt cause a knee-jerk reaction from UK Europhobes. The fact remains that we need an EU body to oversee the new measures that are required to recover from the global recession and move forward with a coordinated stimulus to create a new type of economy, one which is not a threat to the environment, not built on personal debt, not reliant on hypocritical closed eyes to impose rules where it suits and allow them to be broken where necessary to justify the success of political obsessions, not reliant on tax havens. Perfection is a foolish goal but to survive we need to do better. We do not need to go to a watchdog with teeth, what we need is one with eyes, ears and the ability to bark. The enforcement of reasonable behaviour can then be left to the democratic instruments our nations each already accept. The sanctions can be those of exclusion and the withdrawal of privilege, membership or assistance.

Report urges EU finance watchdog

The City of London and other financial institutions should be supervised by a new pan-European watchdog, a European Commission report will recommend.

Its proposals, written by ex-Bank of France Governor Jacques de Larosiere, will include an EU-wide supervisory scheme for banks and financial bodies.

Supporters say the banking system is too big and crosses too many borders for national supervision to function.

But the UK government will wait to see the details before responding.

Tighter regulation

Fans of the proposal think that national watchdogs like Britain's Financial Services Authority no longer make sense
Mark Mardell, BBC Europe Editor

The independent group was set up by European Commission President Jose Manuel Barroso in November to look at ways of improving supervision of the financial sector.

It followed criticism that Europe's response to the credit crunch and the crisis in the financial sector was too nation-based and needed more EU involvement, possibly via the European Central Bank.

The report will run to around 30 recommendations, but it is the call for the pan-European watchdog which will attract the most attention.

Its aim would be to give an early warning of the kind of mistakes that led to the financial crisis.

BBC Europe Editor Mark Mardell said supporters of the scheme would like to see national bodies like the UK's Financial Services Authority made subordinate to the new institution.

He added that Prime Minister Gordon Brown has relaxed his previous opposition to tighter regulation at a European level, but the government will wait to see the level of supervision recommended before giving its response.

APRIL 6th 2009

Supporter though I am of the EU, Lord Hoffman is right on the button here. We must not ignore his warning and nor should the rest of Europe. In my view, it is because we take the Court of Rights so seriously, having drafted much of its constitution, that we obey it so rigorously. All the more reason to ensure it is staffed by people who know what they are doing. But it is not. Unless and until it is, we should get the situation clarified and state clearly our reservations and if it comes to it, exceptions.

Judge attacks human rights court

A senior British judge has accused the European Court of Human Rights of going beyond its jurisdiction and trying to create a "federal law of Europe".

Lord Hoffmann, the second most senior Law Lord, said the Strasbourg court had imposed "uniform rules" on states.

The judge said rulings that had gone against domestic decisions were "teaching grandmothers to suck eggs".

He said he supported the European Convention on Human Rights but not the institution that applies the law.

In a lecture to fellow judges, published this week, Lord Hoffmann said the European Court in Strasbourg had been unable to resist the temptation to "aggrandise its jurisdiction" by laying down a "federal law of Europe".

The court should not be allowed to intervene in the detail of domestic law, he said.

Lord Hoffmann - who is due to retire - added that this had led to the court being "overwhelmed" by a growing backlog of 100,000 cases.

The court's president, Jean-Paul Costa, said earlier this year there was a risk of "saturation" unless measures were agreed to reduce the caseload.

Pinochet controversy

The European Court of Human Rights aims to apply and to protect the civil and political rights of the continent's citizens.

The court, set up in 1959 in the French city of Strasbourg, considers cases brought by individuals, organisations and states against the countries bound by the European Convention on Human Rights, which are all European nations except Belarus.

In 1989 Lord Hoffmann had a decision of his overturned, after he controversially ordered freelance journalist Bill Goodwin to reveal the sources of an unpublished article for The Engineer magazine.

Over a period of seven years the case went all the way to the European Court for Human Rights, where it was eventually thrown out.

South African-born Lord Hoffmann also attracted controversy for his role in the extradition proceedings against General Augusto Pinochet.

The judge had contributed to a decision that the former Chilean leader could be arrested and extradited for crimes against humanity, without emphasising his links to human rights group Amnesty International.

He was serving as an unpaid director of the charity, and his wife Gillian was a long-serving administrative assistant at Amnesty's London office.

The case led to an unprecedented setting aside of the original House of Lords judgement.

JUNE 7th 2009
Today we had the results of elections to the European Parliament. They can be Googled of course. The turnout was not very high but I don't see that as a problem, those who understood or thought they understood anything about the issues will have voted in sufficient numbers. In the UK, UKIP got a depressingly high vote in some areas though not in London. Labour did badly but thee are many reasons for that. The Green UK vote went up a lot (50%) and that's OK though they will not get more MEPs. There was some talk that the results would affect whether or not Gordon Brown might resign if Labour did badly. I can't think why. It is true he might resign if the party does not shape up and get back to work, but not unless they force the issue by the book and come up with a better leader. It is just possible they might do that before the next election but certainly not now, that would be really stupid.

OCTOBER 3rd 2009

Finally the Irish get the message on the Lisbon Treaty.

The Czechs had better not hold this up now, there is work to do.

NOVEMBER 3rd 2009
The Czechs have signed, after getting a similar opt out on some human rights stuff that they thought might be needed, because of past history more than future. The UK has an opt out in the same part of the treaty. But at last the Lisbon Treaty, which was both essential and inevitable in order to formalise what was being done and going to be done anyway with or with out the damned treaty, is law. That means if any country tries to get an advantage by breaking the laws, sensible and peaceful proportionate counter measures can be taken by other EU members to make it not worth their while. So much better than calling on Harry Hill to organise a fight.

It also means (even better) we can soon stop listening to the two clowns William Haigh and David Cameron pretending they were going to have a referendum. If we did have one that didn't accept the treaty we would have had to do what the Irish did and have a second one, the next time explaining to the brain-damaged what it is all about.

What we really need in the UK is a new political party. The Liberals can't be that as they have their own share of air-heads and Clegg talks bollocks half the time. So it will have to be Labour again if we want a rational government. Trouble is I can't take any more Ed Balls.

NOVEMBER 5th 2009
The opinion of most European statesmen that Camerons pronouncements on the latest Tory policy on the EU are "pathetic", a word applied to them by a French politician with which practically all agree, is apt. Cameron has already put the UK at a considerable disadvantage in Europe. See  and

David Cameron's appalling behaviour as he tries to retain leadership of a party of half-baked dinosaurs is causing damage to the UK's national interest that can only be undone by the consistent goodwill of our European friends. Fortunately we still have many, but we really do not make things easy for them. If the Tories ever come to power again it would be a disaster. We can now see them revealed as a psychological and political mess worse than old Labour by some degrees.

See for the news that Cameron wants to renegotiate treaties. His remarks about having future referenda are harmless because meaningless. He has no idea what the pooling of sovereignty to get strength, as opposed to the giving up of sovereignty (not required), means.

NOVEMBER 20th 2009
EU leaders have chosen the Belgian Prime Minister, Herman van Rompuy, to be the first permanent European Council President.

They have chosen Baroness Ashton as the EU High Representative for Foreign Affairs

These are both superb choices. Yet the UK print media has spent the last few weeks writing complete drivel on the process and continues to do so. Then we have Mr Portillo, who for a brief period a year or two back I though had developed some signs of wisdom, complaining that the election of these two was "not democratic". In fact he thinks they were "not elected".

I think it would be hard to find a more democratic institution than the EU, where the heads of state, each themselves chosen by political parties made of of members of parliament elected by universal suffrage, choose beween them the people to fill the most important diplomatic representative and administrative posts. What possibe better way could there be of finding the best people. MPs are elected to represent their constituents. On their behalf they choose (the word 'elect' means to choose) their leaders who in turn consult and build their team of ministers. In parallel we also have a European Parliament to which the people in each country can send EMPs to debate and vote on issues that affect Community policy and interests. We have an EU Commission, and a Council of Ministers, all with powers of scrutiny and assembly to discuss and develop actions to help our nations work together to run our affairs in way to achieve common wealth in a sustainable way.

What would be really ridiculous would be to ask the entire EU population to pick from a list of people of whom they knew nothing and whose work they did not understand, the President of the Commission and High Representative for Foreign Affairs. It is essential that these people are chosen by the most xperienced political leaders who themselves have risen to power in democratic political systems. The claim that because  Baroness Ashton has not stood for election in a UK constituency that she is 'not accountable' is as absurd as claiming that an airliner captain is not accountable because he has not been elected by the passengers. These jobs are not for people who have talked their way to the top in the columns of the tabloid press. They are for people who have worked their way to the top like in any other business.

Baroness Ashton has hit back at claims she does not have enough experience for the post of EU high representative for foreign affairs and security, though why she should have to is not clear. She as been elected by her peers in the nations of Europe to be their spokesperson. What great vote of confidence could anyone have.

Greece is now a perfect example of the importance of Monetary Union in the EU. After joining in a somewhat dubious economic state, the stability of the currency gave Greece the chance to sort itself out. Instead, it used the security of EMU to ignore all economic problems, relying on growth to hide the truth. After a very short time it was obvious to the rest of the EU that Greece was just cheating, and blaming its troubles always on previous governments. Thank goodness the credit crunch has blow the whistle.

Now, saved from a currency collapse because part of the Euro Zone, Greece will be forced to face the music and bring some honesty into its affairs. It will not be allowed to default, nor will it be assisted in a way that will prevent it facing the truth. But for the Euro we would now have a real crisis on our hands. As things are, Greece will have to grow up and will be grateful for that ever afterwards.

There are still some dimwits like Lord Lawson who don't understand the difference between EMU and the ERM which he made a complete fool of himself over, but all those with the lights on upstairs and at home understand only too well. It was necessary to let Greece in for political reasons and in the long term for health reasons. It was not a question of naivety or optimism, just a weary process that had to be gone through, including the current crisis because we didn't have the guts to tell them to shape up earlier. I do wish BBC commentators could understand this.

FEBRUARY 11th 2010
The EU's Eurozone members have taken the right move. The markets have given up on Greece, so it will be a loan not a guarantee if Greece asks for financial support. With that loan will go some extremely serious conditions, and the means of enforcing them will have to be planned. Such means are perfectly possible providing transparency is enforced on banks through out the EU, Switzerland and various other countries. The world is awash with money because colectively it can indulge in Quantitative Easing to replace some of the imaginary wealth that went down the plug, and it has done so. It just needs great care and honesty at the highest levels in order to avoid this being creamed off by three general elements in society: the dealers who wish to capture it and play it in the financial casino at speed rather than sound investment, the wheeler-dealers at the other end of the scale who play the street cards and the manipulation of the systems designed for the support of those in genuine need, and the tax avoiders. Other countries in the Eurozone will have appropriate measures applied should they persist in what I would call the mediterranean approach to accounting. This is a problem that should be welcomed.

No need for the rest of Europe or the US to be smug as we each have our own ways of hiding the truth and exploiting systems in order to justify our pet theories about life, the universe and everything.

This sort of thing hardly helps:

EU assembly rejects U.S. bank data deal

BRUSSELS (Reuters) – The European Parliament rejected on Thursday an agreement with the United States on sharing bank data, snubbing appeals from Washington for help in counter-terrorism investigations.

The nine-month interim agreement went into force provisionally at the start of February but some deputies opposed it on the grounds that it failed to protect the privacy of EU citizens.

Washington will now have to seek other ways to access information on money transfers in Europe.

It says such data is vital to track terror suspects.

(Reporting by Justyna Pawlak; Editing by Dale Hudson)

MAY 4th 2010
I will write at length on the Greek situation in due course. There is a case for letting Greece go bust, and in theory it could do so and remain in the EU and in the Euro zone. However, the way that has been chosen is better. It may well result in civil unrest and all sorts of things, but so would the alternatives, and to no really better end. The Greek economy is easier to reform if they stay in the EU and the Euro zone. The currency dealers can do what they will, they are just one mechanism in a world of many. They have their own understanding and play by their rules, but they are not the arbiters of all social and financial progress. The Euro is a necessary currency union and it will remain. The problems with Greece were so well known all this can hardly be said to have come as a surprise the moment the recession was realised as a fact.

MAY 19th 2010
I am not at all sure what Angela Merkel thought she was doing when she decided to ban 'naked short selling' of the Euro by hedge funds. The only way to do that is through international agreement, at the very least within the Euro zone. It seems Merkel took took the Euro zone's dependence on Germany to give her the power to make a move they all must follow. and that negotiating in advance would have been self-defeating. As it turns out, what she has done has been self-defeating, due to the use of key institutions and organisations in the Eurozone actually using hedge funds to self-protect!!! I must say that somewhere on this site I have covered all this, explaining the possible oscillitory behaviour of the global system going briefly exponential, including brief gold booms, until sanity prevails. When George Osborne said 'we are all in this together' he told the truth indeed. Did he understand it? If so, why have we had to put up with absurd isolationism from half his daft party for so many years?

You will have to wait for my deeper thoughts on the future, suffice to say that all these incredibly dangerous goings-on are absolutely necessary. To get where we are going, we have to pass this way. WW3 did I hear you say? History is never the same because it is not the history of the same thing. (Feeble word, that, 'thing', but it would take me too long to find the right one and you might have to look it up).

JUNE 06 2010
There is much talk amongst economists of the imminent demise, or inevitable end, of the Euro. This is not likely, but coutries could leave the Euro. Germany could leave for one reason, Greece for another. The problem appears to be that one or the other has to go because they are not trusting bedfellows. Others might follow. However, the Euro should survive because a reversion to the EU without it is not sensible.

If the strongest economies leave, that would leave a weak Euro which would be victim to opportunistic financial games of the worst kind. If the weakest leave, that will not help trade or growth in the stronger members. Yet without a clear idea that the Euro is necessary and should be properly regulated, with support from economists as well as banks and governments, things could fall apart. What puzzles me is the complacency of the economists who accept the political failure and the idea that France and Germany should revert to separate currencies, and that the EU should become a financial casino. A currency is a political reality far more than an economic one. Money, whether denominated on paper or an electronic balance sheet is only as good as its political backing. We have to grow up politically in the UK, and economists must be told the truth, that the toys they play with are virtual, that resources, buildings, goods and services have value onkly when demand is backed by ability to pay, A barter system cannot sustain the modern world or keep the peace.

As of today, international regulatory control of banks has been ruled out, globally and even within the EU. Ruled out because action is urgent and agreement in the short term appears impossible. A strange paradox. The correct action is impossible because it has to be taken too quickly to be agreed, so every country must look to its own regulatory salvation. OK. We are back to the lady in the dentist's chair....

JULY 18th 2010
I was so glad to hear from commentators representing all UK political parties that the LISBON TREATY has turned out to be not only a valuable change of status but already allowed important measures to be taken (for instance in relation to the transparency of SWIFT international currency transactions, to avoid their use in terrorism and money laundering). The European Parliament now has more power and this is a good thing. However, there will be new problems arising from this and a potential for incoherence unless good administration prevails.

OCTOBER 11th 2010
The EU President, Hermann van Rompuy, has started to reveal why he got the job. There were few who knew him who did not think he was capable of filling the role and maybe fewer still who thought he was a danger. Now he has earned respect in a wider world. This article in the IHT is well worth a read:
Intelligence, experience and staying power is what we need in these times, and this man looks as though he has these.

OCTOBER 28th 2010
There has been substantial agreement to limit the rise in the EU budget. No problems there then. There are also some changes to financial obligations under the treaty that Germany and some others want which Europhobes in the UK say require a change to the Lisbon Treaty and therefore a referendum. Actually that is not the case as they only affect the Eurozone and there is nothing to stop members of the Eurozone coming to an agreement to add these provisions to the treaty for EMU members.

NOVEMBER 2nd 2010
Now Cameron signs two new defence cooperation treaties with France. Of course his backbench Europhobes are choking because they don't trust the French. France sees this as the first stage in a gradual move to a more effective European defence capability, able to handle our responsibilities without being quite so dependent on the United States, which they see as losing control of its own public opinion. The UK Tories see the US as our only permanent ally. "The UK has permanent interests but no permanent friends" is their mantra. They overlook the fact that while anglophone America still comprises a majority of anglophiles, this state of affairs is disintegrating as ignorance and polyphony spreads across the new world. A majority of even anglophone US citizens are seriously misinformed on most matters.

Anyway, I can't complain about the good news. Perhaps my remarks about Europe and the UK having to outsource its anti-piracy capability to China soon struck home.

NOVEMBER 25th 2010
There are views being batted around that 'the markets' can bring down the Euro by dumping the bonds of the countries that are in the greatest trouble with their balance of payments, trade and domestic budgets, causing the load on the ECB and the 'solvent' members to be politically unbearable. It is oif course true that if those with enormous delegeted financial power (brokers desperate to please their clients and with no responsibility beyond their account balance sheets) are prepared to destroy the financial system, they can do this. We can destroy our entire civilization come to that - nothing easier, if we put immense power into unaccounatble hands and the levers are pulled by people 'just doing their job'. This is the state of affairs, as it happens, when we have economists, bankers and politicians whose education and intelligence, even if it gives them a clue that there is danger, are just pawns in a game where there is no player in charge. The financail market place has no rulers and its players fondly belive they can play with nations currencies as if they were chips that in the last resort can always be cashed for better ones or gold, or some commodity. They had to be given this freedom in order to learn a great lesson. They can now either learn it painfully or by demonstrating the only sure indication of intelligence: anticipating the future and taking actions that are more than the reactions learned by the classical processes of evolution. To that extent, it matters not if the Euro and the EU survives or fails, the outcome will be appropriate. It will of course represent a natural restrain on the growth of a flawed system, flawed because of the failure of of its human components to abide by the rules they devised. We shall get the future we deserve. If we did not, life would truly be a nightmare.

JANUARY 19th 2011
UK faces £1bn in penalties over EU cash
This is not clever. It refers to mistakes or misdeeds  made over some years by the last government

FEBRUARY 11th 2011

BRUSSELS—Sharp disagreements opened up among European Union leaders at a summit here over a German-led plan to boost the competitiveness of weaker euro-zone economies, threatening to unsettle recently calm European financial markets.

The German proposals, backed by France, are viewed as the price for an agreement to expand a bailout fund for the struggling economies of the euro zone and give the fund greater powers to stem the region's debt crisis—a move seen as critical to restoring confidence in the euro.

In my view Merkel has the right ideas and if the EU and Euro are to survive - and they must - the rest of us have got to understand what it's all about

FEBRUARY 24th 2011
Outlook For those who do not share the europhobic tendencies often seen in the City, the development of the new European Securities and Markets Authorities is heartening.


APRIL 6th 2011
Given the circumstances, Portugal's call on the EU/ECB support arrangements was inevitable.

MAY 30th 2011
The oft-quoted Roger Bootle is not without experience in financial matters, but he is always thinking inside a box he can't see, being so proud to be outside the one he can see. Seeing all the problems that come with EMU, he is certain that they will eventually lead to breakdown and some countries leaving the single Euro currency. Personally I never doubted that these problems would arise, primarily with the countries on the geographical extremes unless there were countervailing factors. In some cases there are aggravating problems, both historical and novel. Some of these factors are quite complex, involving even such things as linguisitics.

However, leaving the Euro is NOT the future for Ireland, Spain, Portugal or even Greece, now or ever. It is because Bootle and his ilk do not understand that that we are in the present position with NO SOLUTION, while they balance their options. It is heading for showdown time between those who can see the big picture and those who can't. Those who can't think those who can are idealistic dreamers, not realising they have eyes that see further, very clearly, and considerably more knowledge. This applies also to Climate Change and almost every area of existence where apparently 'educated' people are at loggerheads.

There is no guarantee that the Bootles and the Nigel Lawsons and their followers will succeed in so disabling the correct collective action that something as stupid as Portugal and even Spain leave the Euro will actually occur. There is no limit to human folly. It is through mistakes that we learn and I would even go so far as to say that there are no 'principles' on which monetary independence at a particular time is driven in one or the other direction. Pragmatism rules.

He was at it a year ago:
and he will never stop until he has forced his perception into truth, or seen the light.

JUNE 17th 2011
Greece picks a new finance minister
and Sarkozy and Merkel get it together on what to do
The intention in Greece is that the new finance minister can bring Greek business interests on side with the measures that need to be taken.

People are assuming a Greek 'default' on debt is inevitable in due course, but I am not sure that this is understood in the context of the single currency. A new realism is actually forced on governments and banks whether they like it or not.

Such a 'default' is quite a complex event and can be managed in a variety of ways. The integrity of the Euro currency can be maintained providing the reserves represent real assets. Who takes the losses is another matter. If Greece can adjust its budget and balance of trade and payments toward a reflection of reality, then keeping enough liquidity to allow society to function is not an insuperable problem. It does mean all Greek salaries, which are paid in Euros, taking a big hit. That does in fact have exactly the same effect on their personal wealth as if they left the Euro and devalued their currency, though the latter course would be far worse for them in many other ways as well as for Europe. That would cause European reactions that would not help Greece in a way that most Greeks would particularly like.

I have come to the conclusion that it is impossible and impractical for the European governments to explain their thinking here in advance. They will act as events call for action, depending on how world markets and political realities develop. We could be in worse hands. However, if Greece cannot pull together it cannot make a success of it whatever happens. We do not have to go to a single European State, but bringing back the Drachma will not solve the problem either. It is precisely because none of these manipulations work that we have to face reality together. The alternative is an economic situation which, although it will not lead to a land war like in the last century, can push us toward the closing of frontiers for trade, people, and finance, toward black markets, toward all the economic activities that favour criminality and make less likely any progress on climate change mitigation.

JUNE 19th 2011

Greek Prime Minister George Papandreou has called on members of parliament to forge a "national accord" to deal with the country's debt crisis.

Speaking at the start of three days of debate, Mr Papandreou said the country was "at a crucial point" and risked a catastrophic default if it did not act.

The above may sound trite, the usual thing a political leader would call for: national unity at a time when his country faces a crisis. But this is a very particular case when it is not just a communal effort that is being asked for but an accord - to put differences aside so as to agree on the immediate steps. He is not asking for agreement on the cause of the problem or on whom to blame. He is not trying to dispense justice at this time, even that can wait. He is asking for support for a decision that has to be taken in the national interest right now, and then time to devise and explain a viable way forward that will not deprive or separate Greece from the rest of Europe and hand it over to a random mix of exploiters worse than those who got away with the mess now exposed, some of whom were Greek and some not, some of whom thought they were acting for the best, others who were just out for themselves, some who had little choice, stuck between both.

The really ridiculous truth is this. Look at this extract from a piece may AP Business writer Matthew Craft:

Q: How likely is it that Greece will default on its debt?

A: Bond traders are betting a default is almost certain. It now costs more than ever to insure Greek debt. At prices quoted Friday, the insurance contracts suggest an 80 percent chance that Greece will default in the next five years, according to data from Markit, a financial information provider.

FACT: The very idea of trying to insure against such a thing is fatuous. The global financial system is infested with organisations and individuals trying to protect themselves from the conseqiuences of their own actions, thereby building ridiculous circular games of parce the parcel in which they make money out of nothing, a recipe nforn disaster. Insuring against it ensures both its inevitability and the following - the next paragraph in the article.

Q: Why is a potential Greek default such a big deal?

A: Greece has an economy roughly the size of Washington state, but the real worry is about a domino effect. Or, to use a better analogy, says Guy LeBas, chief fixed income strategist at Janney Capital Markets, think of it as a spider web — pluck one string and the whole thing shakes.

Exactly. Most economists think governments are to blame. They are, but not in the way these economists think. Economists play in a playground with money in currencies governments alone can ever guarantee. Now, as they make it hard for governments to manage, the fools are buying gold, bidding the value beyond the sensible level. No wonder from time to time we get a Mao Tse Tung who has an urge to send them all to work on the land!

JUNE 20th 2011
An article in the Independent worth reading:

JUNE 21st 2011
The Greek Prime minister will win his vote tonight, but the leader of the opposition has said he will NOT support the austerity package which is part of the deal. In other words, political opportunism rules as usual, there is not national unity, and without that Greece and its economy must fail. It was aa bad, purely political decision to shoe-horne Greece into the single currency, I was utterly against it at the time, but once done there is no way of going back. They will have to sort themselves out. As for the 'economists' who think abandoning EMU and theEuro can possibly lead to a society than can deal with what is ahead, dream on into the nightmare. You are just part of the problem, the popes of pecuniary preposterousness. That is not to say that what you predict could not happen. Or Greece may default but remain within EMU.

JUNE 23rd 2011
How pleasant to hear Werner Hoyer, the German Europe Minister, talking complete sense when interviewed by a sometimes near hysterical Gavin Esler, whose knowledge of economics is as wide and deep as a small puddle, though for some reason he is unaware of that.

It could all come together, or it could all fall apart, Paul Mason tells us. How very, very, er, true.
The result will be that the pain will be shared, whatever happens, and Greece will have to shape up eventually regardless. The shape it settles for will be very much a matter for them.

Another man who understands economic reality is Jeremy Warner. That is not to say the solution he looks at here could be explained to a majority of politicians.

JUNE 26th 2011
Meanwhile George Soros who poses as a concerned philanthropist-moneymaker calls for a PLAN B so that countries can 'leave the Euro'. Now it is true that when GS bet the farm against the GB Pound when Lawson and Thatcher joined the ERM at a daft exchange rate, he was taking candy from a spoiled baby. But the single currency is the very opposite situation, where wayward children are faced with reality as it happens. The financial plight of Greece cannot be avoided, even were it to leave the Euro, so it is better off taking the medicine, even if it is administered over a period and with some sugar. We are in a new economic situation and dinosaur play is off the menu, George. You have a lot to learn about the money you play with. If you get your way, you will regret it along with the rest.

JUNE 29th 2011
The Greek parliament has voted in favour of a drastic package of austerity measures intended to save the country from defaulting on its debts.
At least the parliament has seen sense. The people can riot all they like but they cannot make black white. Now, however, can they apply the policy?
Christine Lagarde, now installed at the IMF, made the reality clear; but if Greeks are at war with themselves and we are going to have Athens vs Sparta all over again, it could still be self-destruction. A woman in the street shouts: "Let the Prime Minister come down here and see how anyone can live on €300 a month". The fact is they can't. It is not people om €300 a month that brought Greece to this point, and even the unemployed don't need to be kept to €300 a month now. There are a llot of people who need to be brought down to €1,000 a month from the income they are enjoying now and the pensions they have been promised, and a lot of people who need to pay their taxes.

JULY 2nd 2011
Because Greece has made a serious effort politically, the EU is rallying round. Those who say that lending more will put them in a worse position simply fail to understand that in the immediate instance there is no alternative. In due course a paced default may well have to be engineered, spreading the losses amongst creditors and creditor nations as wide as possible, providing the Greek people get together and stop making matters worse through civil disruption. Economists are divided simply because some are economists who just believe what they have been taught at school, and others actually are economists. The best are amateurs of course, as is the case for all disciplines, arts and crafts when it comes to understanding, as opposed to practising for reward. Lagarde is not an economist, thnak goodness, she is a highly intelligent woman who has had to deal with a lot of economic matters. At the IMF she will sort out whose advice to take, while bearing in mind all of it.

JULY 12th 2011
There is now talk of a 'selective default' by Greece, where the pain is shared between the banks, the public sectors, citizens and investors. Of course this is possible, and the only problem is it means some turkeys voting for Christmas. In my view those who don't vote for Christamas will find that Christmas come their way whether they like it or not, maybe from a direction they are not expecting. Governments and the IMF and ECB should hold their nerve, as they alone print and validate the cards the others hold. Italy and Spain are now targets of the gamblers who live by gaming, justifying their actions as usual as legitimate self-defense. Every man for himself in such dangerous times? Perhaps it is time to define some spheres of enlightened self-interest. An emergency Eurozone summit to produce a temporary fix attached to a restructuring to make it more permanent. Insuring and hedging against events we are not prepared to avoid is counterproductive to the wider economy.

JULY 24th 2011

Shares have risen following the eurozone's agreement designed to resolve the Greek debt crisis.

UK and French markets gained more than 1% in morning trading, before slipping slightly, with the FTSE 100 index ending up 0.6% and the Cac 0.7% higher.

Eurozone leaders agreed a new package worth 109bn euros ($155bn, £96.3bn)

As Mrs Merkel said, "The EU without the Euro is unthinkable".
It is laughable if it were not so tragic that the ignorance of Eurosceptics allows them to believe that we could go back to different versions of funny money for countries now not only contiguous but joined in so many technological, monetary and financial systems. Unfortunately there is still a great ignorance about economics and the whole concept of 'money' and the changing part it plays in evolving himan societies.

The present arrangements are only temporary. They in effect recognise a form of restricted default by Greece and this does not fit well with the conventional and quite correct rules and protocols in existence. There has been no way until now to enforce financial discipline across national boundaries and we need only to look at the USA to see that if there is not a fudge at one level there is a fudge at another. The ideological illusions and the self interest of those with a related history and status or geographical imperative lead to levels of denial that will only be broken sometimes by violence or public disgrace. But there are hopeful indications that those who gain the experience fo high office and responsibility, with access to the best available tools of analysis and observation, do start to see some light. Bringing their electorates with them when there are demagogues only to willing to lead them astray down what they promise are easier and more profitable alternatives is another matter.

I congratulate the politicians on getting as far as they have now. There is further to go, and it is far more subtle than the usual ideas about political union. The vital point to understand is that it cannot be solved by having local currencies as once it could be and indeed was.

The EU currency crisis and the US debt fiasco have together sent the international investors looking for the next victim, so they can be first out. The EU governments have play the awful game, like it or not, or call the investors bluff. But it is the UK situation that is beginning to annoy me. I realise that putting up the interest rate can send the wrong signal to people who act on signals, like sheep; but the fact is our interest rate should be at least at 1% and preferably 2% if the ordinary banks are to attract deposits on the one hand and service the legitmate demands of their business customers on the other. We have got stuck in a silly hole. It is not appropriate to do more Quantitative Easing, this is not the time. But paralysis is a killer.

European Commission President Jose Manuel Barroso has warned that the sovereign debt crisis is spreading beyond the periphery of the eurozone.

In a letter to European governments, he called on them to give their "full backing" to the euro currency zone.

The European Central Bank (ECB) has said it will offer a fresh round of loans to banks in light of continuing fears about the eurozone debt crisis.

SEPTEMBER 13th 2011
The Greeks do not seem to be getting their act together domestically, meaning a debt default gets ever more likely. The Eurozone is under very great strain as a result and I cannot for the life of me see how the strange mix of financial liberty to speculators on the one hand, with currency responsibility taken collectively by EU governments on the other, can work if we do not move to a better understanding of economics in the global political context of these times.

SEPTEMBER 16th 2011
It is being seriously suggested by people whose opinion I respect that Greece, when it defaults, even if in a regulated and controlled manner, will have to revert to its own drachma currency. I have to admit that this is a possible way to handle it. But I have to tell the Greek public that it will be economically, socially and in almost every way more painful than staying in the EMU and fulfilling the demands that EMU carries with it. These demands can be phased, and the interest rates can be adjusted, but the trend has to start very soon to reflect a commitment that matches a planned future monetary and fiscal reality that makes sense. If not, they will have taken the more painful route by default.

SEPTEMBER 27thy 2011
The EU Governments have understood what they have to do. However, it will be extremely difficult and the market dealers will not help them or trust them any more than they trust each other (i.e. not at all). Nevertheless I can see that reality is creeping into focus. The new global economy is gradually imposing itself.

SEPTEMBER 28th 2011

Bank shares have fallen in London after the UK said it would "resist" a financial transaction tax on EU members proposed by the European Commission.

The tax would raise about 57bn euros ($78bn; £50bn) a year and would come into effect at the start of 2014.

The objection raised by some people in this country are not only absurd, they are disgusting. They say that a European agreement is not sufficient, it must be global. By that they simply mean the US must be in on it, presumambly, since there is no need for the rest of the world's major nations to do it for a very simple reason: they are not running a ****ing big deficit on top of a ****ing big debt. Europe should lead the way, anyway. America has lost the leadership position on this even though for the moment the world is dependent on it like a bar that has become dependent on its drunks. The drunks can recover, but right now Europe must get its house in order and the UK being in the same boat must do the same, being part of the EU must do the same, and for reasons of simple fairness domestically must do the same. There is no argument here except with people are intellectually and morally beneath contempt.

SEPTEMBER 30th 2011
Contrary to the view of Eurosceptics, the German parliament passed its approval of the bigger bail-out fund for Europe with a big majority from the ruling coalition and the opposition. Critics say that a much bigger reserve back-up fund  will be needed. But all these people miss the point. It is not the SIZE of the fund, it is the commitment to defend the Euro. The discipline comes with the disbursement, not with the preparation. All these prior commitments are only to stop the markets, who think they rule the economic world, from betting against the governments that alone can validate the currencies they play with. Politicians, business, investors and banks are all mutually dependent. The markets are their own worst enemy when they take positions not based on real measures of human labour, production and real need.

There is the daft idea going around that it is not in Germany's interest to keep the Euro, or keep Greece, Portugal, Ireland and Italy all functioning financially. Of course the future running of Eurozone countries has got to be straight, transparent and not based on false growth. The public has got to have these matters explained to them and not ever given the chance to vote for politicians who offer a bogus financial prospectus.

OCTOBER 18th 2011

A European Union summit later this month will agree "decisive" measures to tackle the eurozone debt crisis, the French finance minister has said.

The summit would give "clear answers", said Francois Baroin at the end of talks between ministers from the G20 group of nations in Paris.

He said central banks "would continue to supply banks with liquidity".

We are still in Zeno's Paradox Mode on this issue. The latest news is that the German finance minister is trying to downplay expectations of a 'magic fix' to the Euro-zone's problems. He is right in that we have to see the whole financial world through a new lens and perspective and stop playing games. Let us accept that no legislation can replace market forces for the basic reasons that the extent, required agreement and multilingual definitions and enforcement put it beyond human capability at this time. However, we have to stop shooting ourselves in our collective feet. As I have been saying for many years now a new role for the IMF, empowered by all its members, is essential if we are to equitably maintain liquidity where it is needed and monetary and financial discipline at the same time.

The abandonment of the Euro by any one of its members could only make sense if the whole system of monetary union were to be renegotiated for all those remaining in it. Nobody has thought through such a situation. There seems to be a lacuna in the brains of many economists when it come to the real problems we face, which can only be dealt with by a progressively politically and economically united Europe even if it remains happily culturally distinctively separate at its roots. There is no separate salvation.

Climate change poses "an immediate, growing and grave threat" to health and security around the world, according to an expert conference in London.

Officers in the UK military warned that the price of goods such as fuel is likely to rise as conflict provoked by climate change increases

OCTOBER 23rd 2011
The critical meeting starts. The UK is playing its part, with Cameron, Hague and Osborne all making reasonable sense and the UK referendum freaks dealt with as they deserve.

OOPS - it seems our boys have just been throwing their weight around and getting up the nose of the continentals. According to The Sun:

Mr Sarkozy lashed out at the PM over his demand to be included in talks about the Eurozone's future.

He was "sick" of reading about advice Mr Cameron and Chancellor George Osborne were offering, EU officials said. Mr Sarkozy snapped: "You don't like the euro, why do you want to be at our meeting?"

On the other hand Hague is sticking to the line on the referendum.
William Hague has compared calls by Conservative MPs for a referendum on the UK's membership of the European Union to "a piece of graffiti".

Which is sensible, in that if the measures taken to stabilise and preserve the Euro mean a renegotiation of the treaty amongst the EMU members, then, not now, would be the moment to have a referendum as already agreed by all the UK political parties. DOH!

OCTOBER 27th 2011
European Commission President Jose Manuel Barroso has said Europe has moved closer to solving the eurozone debt crisis, as an agreement was reached in Brussels.

OCTOBER 28th 2011
French President Nicolas Sarkozy has said allowing Greece into the eurozone in 2001 was a "mistake".

Mr Sarkozy and other readers here would perhaps to be surprised to learn that my view from the beginning was that Greece should not even have been part of the EU at the time it joined. However, political and what were seen as 'defence' issues and the US connection meant that this logical view was never taken seriously. Having admitted Greece to the EU, the only way forward was actually to go further and have it join the EMU and enforce the EMU rules. But European attempts at monetary and fiscal discipline were rendered impossible by the United States approach to global politics and the Goldman Sachs approach to economics which went with it. So Greece joined the EU, then the EMU, but far from using this to ease it into living witb its real economic assets and failings, its very different pros and cons to the average EU state, it was encouraged to pretend EU growth would take the tiny Greek economy with it, allowing its richer citizens to live a life of Riley while its middle class and bureaucrats were paid from hidden budget deficits to keep them happy. I hate to say it but once again the United States, with its massive and careless use of financial and political muscle, has as much to answer for as the Europeans who also played along.

But you will want more than my views on this, so:

Eurozone crisis explained

Trichet says "crisis not over"
In an interview to appear in Sunday's Bild am Sonntag newspaper, Trichet said that he was, however, confident that euro zone governments would be able to restore financial stability provided the bloc's Stability Pact rules are comprehensively and more aggressively enforced.

OCTOBER 31st 2011
Is this the Greek PM's escape capsule, leaving the mess to others, should the referendum reject the package?
I think he is just saying they have to make up their minds. The same applies to most odf the world on a few other issues.
Greece will hold a referendum on a new European Union aid package intended to resolve the country's debt crisis, Prime Minister George Papandreou says.

The fact is he does not know the outcome of this referendum and therefore in effect he accepts the possible complete failure of his policy and the chaos of Greece leaving the Euro. However, it takes time to hold a referendum. It is just possible that in that time, quite a lot of silly people will calm down?

No, it looks like he has been forced by his party to this gamble, out of which no good can come. The solution proposed by France, Germany and the others is the only one. It has to be applied now.

NOVEMBER 2nd 2011
OK. Here is the truth. Holding a referendum for any reason other than to bind a nation to a position for the foreseeable future, when the outcome is in fact known, hopefully because it has been properly explained, is utter folly. This is no such moment, the nation is not in agreement on a simple question, it is confused on a mix of complex questions, the referendum might be lost for unpredictable reasons and that would be an unmitigated disaster. What is needed is for the political parties to come together in a coalition, or failing that to hold a general election in which they will all have to accept in their manifesto the EU package, for obvious reasons.

Greece is in default, that is clear and a real state of affairs, and all those who lent Greece money will pay for their folly. They deserve all that comes withy that default. The Euro-sceptics, who  ran with the hare and hunted with the hounds, are the most to blame. They will now learn, I hope, a lesson they will never forget about playing monopoly when you don't have a sovereign bank of your own and try taking a mixed bag to the cleaners. The Euro will survive and Greece may well remain in EMU even if it defaults and pays a price as big or bigger than others. The Euro, like all pioneering flying machines, was bound to crash. But it will be rebuilt on sounder lines. Fiscal union is not, I keep emphasizing, a requirement at this stage. Fiscal coordination and transparency is.

It has been said that in withholding the next agreed  8 billion rescue payment, the EU is shooting itself in the foot, but I think not. The deal worked out is so much better for Greece than any alternative that in spite of my agreement with the feisty lady communist from Athens who appeared on channel 4, it must be accepted. The other criticisms she made must be accepted too!

The latest news is Geremany and France have wisely insisted that if the Greeks persist with their referendum, it must be a simple choice: to stay in the EMU with the Euro as their currency, or not. If they vote to stay, then that by definition commits them to accepting the rules and the terms of the latest financial agreement. On those terms, a referendum can, as set out in my first paragraph today, if carried out quickly, make sense. I am reassured by the good judgement shown by Merkel an Sarkozy and their advisers.

NOVEMBER 3rd 2011
Much confusion today! I will write it as I see it.

Merkel and Sarkozy having realized that if they set the terms of the referendun as stark and hard as they just did it really would bind not only the Greek government but the people in an agreement to abide by the rules, decided to change tack and accept what they had at first considered an outrageous proposalit! It was a master-stroke!

It called the bluff of BOTH CAMPS in the Greek political game, and of the population as a whole. Result? A panic on all sides, as they saw they would be nailed whatever the result of the refrendum. Such clarity would be more than they could face! Such a permanent commitment  to in or out of EMU and probably the EU itself was jumping off a cliff!!!

So at a stroke,
Papandreou is surrounded by people offering support, maybe even from the opposition, if he calls off the referendum. "But of course!" he says, "providing you back the package offered by the Euro zone which I have negotiated, and back it in the face of all opposition. In that case we do not need a referendum."

How this is achieved remains to be seen, but I do believe the old fox had it figured out all along. Either they back him, or they get a referendum or an election, and most of the politicians want neither.

O Tempora O mores!! In the next few days we shall see. Maybe his opponents will agree to back him temporarily on condition he then resigns and calls an election.

Greece PM Papandreou wins confidence vote

NOVEMBER 4th 2011

Greece's PM George Papandreou has won a crucial confidence vote after promising to hold power-sharing talks.

In an address to parliament before the vote he ruled out snap elections, saying they would be "catastrophic".

He said he did not care about his post and the leadership of any government of national unity would be negotiable.

People stopped in the street by BBC reporters all blamed Papandreou and politicians for their troubles. I think they should all look closer to home and ask what choice they gave their politicians or any others who would have stood against them. However, the opposition party will not accept Papandreou as leader of a coalition or temporary aliance to pass the emergency bail-out.

NOVEMBER 6th 2011
Now is the time for the Greek President to use his position as Head of State and hold a meeting at which the bottom line on policies that Papandreou needs to ensure are carried through after his resignation, are agreed and will not be abandoned under pressure. That is the only way a government of unity can be formed as or immediately after Papandreou resigns, with or without an election.

I see this is now in hand, one way or another, and that the details of a government of national unity, it's bottom line policy and who will lead it, are being worked out. Since reaching this state of affairs was inevitable a long time back it is a pity they could not have got there a bit sooner but there you are, ideas and positions take time to form in human brains.

NOVEMBER 7th 2011
Italy's borrowing costs hit record highs over Greece and mounting political instability, as PM Silvio Berlusconi denies rumours he is set to resign.

The Italian debt and deficit can be seen in context but of course it is the situation since entry into EMU that is the issue.
In my opinion, Italians can rescue their own economy if they have the collective will, but that touches on an interesting global development. Many nations have lost or are losing their collective national identity to some extent. I don't think that is the case with Italy, which came very late to any national political unity but has a common language now and geographically quite clear borders. However, the industrial north and the rural south represent an obvious divide. Nevertheless, Italy can save itself from the economic morass - it has the means too do so in human resources, land, heritage and renewable energy. But it needs new leadership. Berlusconi has had his day, as everyone does.

Mr Berlusconi denied on Facebook reports that he was about to resign.But talk of his possible resignation caused European markets to regain earlier losses and briefly turn positive.

That says a lot: that the markets judge any unknown future rather than more Berlusconi, the status quo, to be good news.

I believe we are approaching the moment of a new enlightenment. The eurosceptics will be taught that accepting that a country in modern Europe can be run on the basis Berlusconi ran Italy, or various people ran Greece is no longer possible. Rather than scrap the Euro, they should understand that the Euro brings us face to face with reality. Denial is possible in a world where the dangers of war do not put the planet's entire life-support system at risk. That is no longer the case. We need not expect Utopia, just survival through proper cooperative management whereby problems can be contained as we go through the emergence into a new era.

Consider this lunacy: those with available funding can earn short term high interest while at the same time forcing sovereign states to print money to avoid a collapse due to illiquidity. Forcing them past the point of no return (that reminds me, what great song that is, L-Webber's best) has become a game for some, who will make money no matter what happens and write off losses without any real pain.

NOVEMBER 8th 2011
As I expected, Berlusconi has agreed to resign on condition the government first takes the measures required for EU support in the present debt crisis. He will then advocate a general election as the way forward and yes, he may even try to rally support and stand himself! It is very important to understand Berlusconi. He is a great bluff-caller and a great showman and he will always challenge anyone else to win the votes of a majority of Italians. If they want someone else, it will be up to them to choose who will impose on them the discipline that is needed now the recent game is coming to an end. In reality, this means appointing some non-political bureaucrat/technocrats, free from political cliques and vested interests, to implement the reforms to the labour and tax laws which alone can straighten the economy out.

Berlusconi says he will not stand again, and I believe him. But who is going to stand up and take the heat. Whoever does may need some media support!

NOVEMBER 9th 2011
While John Redwood, Simon Heffer and their ilk, deploring current events, pretend that the EU and EMU is undemocratic, they are reduced to admitting that being free from the EU's monetary controls makes the UK free to live beyond its means. What sort of freedom is that when we will be brought to account eventually in the new global economy anyway? In fact the EU is very democratic, if only we chose to take part instead of rubbishing it. It is the markets that are undemocratic, free from sovereign responsibilities. It is time, as a wise man pointed out this morning, to match the areas of responsibility for rights and responsibilities a little more accurately if we wish to have both democracy and freedom FROM its abuse. Freedom 'from' is always fundamentally the priority. We have no right to life, only the right we have established in civilized societies to freedom from arbitrary deprivation of the same by others.

Now here is the real key to the future. It is assumed, as a cast iron 'given' in logic, that even if a rationalisation of the Italian economy is progressively approached by better administration, efficiency and legislation, any 'austerity' measures will lead to a brake on growth, and growth is required to pay of the debt. I challenge this.

Growth of WHAT? Growing the economy as a whole by growing the national debt makes no sense. Something actually needs SHRINKING. I will give readers a little time to work out what, and then how this applies to Italy, and then if it applies similarly, or differently, to other countries. And if differently, how differently. Bear in mind that Italy is a very successful exporting nation in a great variety of produce, from agriculture to aircraft. Hint: try to separate the optional from the essential in all sorts of activity, function, inactivity and dysfunction.

NOVEMBER 10th 2011 The European economy is, we are told, stalled. I think we should live with that until it can take off on a new flight., based on different assumptions and with a goal consistent with a sustainable society and life on Earth.

In Greece, Papandreou has resigned and

New Greek PM Papademos takes on Europe's unenviable job

Germany's goal is to stabilise the eurozone in its current form, German Chancellor Angela Merkel says.

Her comments followed an earlier report that Germany and France were discussing a radical overhaul of the EU towards a more integrated eurozone.

Too right. Merkel has worked out what the alternative is to making a go of EMU, and she is not in favour of chaos.

NOVEMBER 14th 2011
So far there is no great confidence shown by the markets in spite of the technocrats taking over in Italy and Greece. Instead they are giving Spain a hard time as well.

In my view, we will have to wait till the diagnosis is completed and the operation started. Then, and only then, can the ECB legitimately supply the liquidy that matches the legitimate economic needs. The metaphorical equivalent is the proper administration of morphine to ease damage pain, rather than the recreational liquidity supplied by bogus financial growth by politicians massaging the voters egos and bankers on board for the ride. Under these cirmstances only will the ECB be able to supply non-inflationary quantitative easing with the approval of Germany. That is how it should be.

Italy crisis: Mario Monti moves to form new government

NOVEMBER 21st 2011
Mario Monti is doing OK, what we are waiting for now is the Spanish General Election to complete before any position can be taken by he ECB on 'advising' the marketeers to stop trying to fix the odds they wish to bet on.
Voters in Spain are heading to the polls in an election expected to bring in a new conservative government to tackle the country's finances.

Germany's Chancellor Merkel is correct in not allowing the ECB to substitute for Sovereign Powers when it comes to backing their sovereign liabilities. However, if the Sovereign Powers can convince the markets that they are in control, then the ECB can play a legitimate role in ensuring liquidity. Yes of course it is 'chicken and egg', but the UK plays its hands very badly some of the time and our national press is in biased hands. Cameron should understand Merkel perfectly well, but if he does he is not letting on.

The Italian, Spanish, Greek and Irish situations are all DIFFERENT but need stability in the European context, precisely because they are in Europe and can travel and trade quickly over borders by road and rail. That is why the EURO is a vital necessity and cannot possibly be abandoned. Market traders dealing in abstract wealth do not understand this real world on which their notional money depends. They can kill the goose, the fools, if not brought to heel.

I have (at 10pm) just highlighted (highlit?) in red that sentence in the 2nd para above, as the BBC's correpondent at the EU talks has just reported on the 10pm news tha Cameron DOES get it!! He understands Merkel's need for a Treaty Change to allow international financial overseeing in the EuroZone which can bring about proper management, calm the markets, and allow the ECB to ensure appropriate liquidity. In return Cameron will get some sops for his mad backbenchers who didn't pay attention in their science or geometry classes at school (if they ever attended any).

NOVEMBER 30th 2011
At last a sensible move for global financial stability. I am sorry the markets 'surged', but there was a logic in it.

Global stock markets surged as some of the world's big central banks launched plans for co-ordinated action aimed to support the financial system.

Wall Street's Dow Jones index saw its biggest gain since March 2009, rising 4.2%, after jumps on European bourses.

It came after the US Federal Reserve, European Central Bank, and the central banks of the UK, Canada, Japan and Switzerland acted to improve lending.

DECEMBER 1st 2011

Banks should brace themselves to withstand the "extraordinarily serious and threatening" economic situation, the Bank of England governor has said.

The Bank's Financial Policy Committee (FPC) said the eurozone crisis was the biggest threat to the UK's banking system.

It said banks should build up their financial buffers to withstand that.

This is one of those moments when I am going to disagree violently with the Governor of the Bank unless the moves he advocates are to cut bonuses and dividends only. The UK should support the EU in the only possible future: to stay with the Euro and manage it properly. The Eurosceptics are the most ignorant people that have ever gained credibility on the world stage. It is almost impossible to explain the realities to them, such is their ignorance. There is only one good way forward. The very last thing banks should be doing right now is filling their coffers by either not lending or squeezing profits out of a non-expanding economy. There is NO SAFETY is building buffers of cash in banks whatsoever. Britain is part of the EU. We sink or swim together.

DECEMBER 5th 2011
Over the past few days it has become clear that Angela Merkel has understood that re-establishing the ground rules of the EU is absolutely necessary, and that this will take time. In the meantime, France and Germany have to make it clear that they will do whatever it takes in the short term to make it clear that the aim is to keep the Euro, strengthen the EU, but keep it as a Federation and not a fiscal and social union. If they fail, which is quite possible given the clueless blundering of the panicking marketeers who think they can go back to a world for which the very basis no longer exists, there will be chaos.

I wrote that yesterday in fact. Today it is clear that Sarkozy has reached an agreement with Merkel on how to present this. They want the whole EU on board, but they will go ahead regardless to not just 'save' the Euro but make it clear the 'own money' trick can no longer be the method of securing national sovereignty in Europe now. It was, but in the new world system it cannot be. It is quite true that other methods have to be established and this will be difficult. So?

Once the right steps are either taken or securely planned, the ECB can take the lead in the liquidity stakes. Even Ireland can then, if it takes the right economies, get assistance on a road back to growth.

DECEMBER 9th 2011
It has been pathetic and painful to witness the Europhobic Tories and the effect they have had on British foreign policy. We really, really need our European neighbours. We are lucky to have them. We, by rallying the Commonwealth and America, once rescued them from a seriously bad scene. Now we are just a pain in the arse. Everyone with  a working brain knows the EU and the Euro have to be made to function properly. Only the British Europhobes think we should play an independent game. "The financial capital of Europe must be defended" bleat the old guard. I agree entirely with those who believe that in attempting to rebuild and empire on financial services, and keep our own currency, we are behaving very, very stupidly. National Sovereignty, if it means being run by Europhobes, is not for me. I just do  not see how the Lib Dems can remain in coalition.

DECEMBER 13th 2011
After listening to 2 days of idiots telling Cameron he did the right thing, that he protected UK Financial Services etc, that the rest of the EU countries cannot make revision to the treaty and use the EU mechanisms and bodies without permission or presence of the UK, all this has been shown to be complete and utter bollocks. Cameron 'walked away' having achieved nothing, received nothing, protected nothing and in effect devalued the veto principle by using it childishly to impress his childish colleagues. He has vetoed nothing. Fortunately, since our European partners are grown-ups with decent manners, they will not treat us like the boors we are. I am sure our industries can still thrive. However, our financial sevices and banks which might have benefited from sensible arrangements if Cameron had negotiated them will now have some difficulties. I sincerely hope they do, though not all of them deserve it. Perhaps this will teach Cameron a lesson.

DECEMBER 19th 2011
We have ahd a full week of being told that the single European currency was always doomed because of the difference in business and social culture between the northern and mediterranean states. There is indeed a difference, but there are certain elements in those cultures that can and must learn from each other. The idea that by each keeping their own rules and currencies that they can junk whenever they feel like it misses the big point: that the future of life on this planet cannot be on the same basis as in the past. All cultures must evolve, and the evolution will be affected by the interaction. The interations of the past, which depended on the rise and fall of empires, Study this please. Then understand why this method of spreading cultural methods and behaviour cannot be continued in the same way. The empires will be more virtual and abstract and allow must interaction without war, as (I hope) the latest necessary but also disastrous examples show.

The ECB has done a rescue operation for 500 European banks. It is really a wider equivalent to what the UK did to its own banks to ensure liquidity ages ago. The conventional economists and the markets shake their heads as they are still living in a dream world - the one where they though they made REAL money that was somehow a solid commodity during the times when they were not scared like they are now. It was never real, my dears, once credit was allowed, and all the value they put on assets in a an ever-expanding economy was false as it was based on the measure of supplyb and demand, thought by marketeers to be 'real. But demand is not 'real' when you create the money by any means (thought fair or foul depending where you are sitting) to provide the liquidity on a planet where people are born without bringing money into the world faster than those dying and not taking it with them.

It's very simple math, and it means there is no REAL money. Its value and quantity is agreed by convention. Its a board game just like monopoly on a global board. Going back to the Gold Standard would not work again, its an old technique for another age. But the virtual money does have to handled properly and what the ECB has just done is a bit sudden because wrong handling went on for too long. All this could be cleared up quite easily but because we do not agree on the basic facts those who oppose rescuing the Euro could end up making the efforts to save it a mess, just like those who oppose any new and unorthodox approach can end up, instead of ensuring it is properly thought through, carried out in a half-arsed way. Just like Iraqi regime-change.

JANUARY 5th 2012
Oh come on! The ECB funds taken up by the banks were largely not used or needed. Due to timidity many banks parked the money back with the ECB at a lower level of interest that what they borrowed it at.. The ECB has got to fund a proper international stabilization operation. The German government has got to allow it to do this. Fiscal union is NOT needed at this time but eh ECB must do its job. Greece and other countries can face tough labour market restructuring but not in an environment without growth. The ECB must enable growth.

JANUARY 14th 2012
Standard and Poor has announced its removal of the triple A credit rating from France and a downgrading of others. This is Standard and Poor (a) doing its job and (b) stating an opinion that the political will to control the Eurozone is lacking. We shall see. If they are right, then I shall be very interested how they will manage the alternative scenario they will have helped to bring about. It is clear that the facts must be faced. Standard and Poor's management believe they are in no way obliged to paint a rosy picture of the Euro road, and I agree. I just doubt that they have any idea of the alternative!

JANUARY 23rd 2012

Barnier urges Cameron and City to ‘play the game’
David Cameron and the City of London must learn to “play the European game” and give up seeking UK exemptions that would hurt the economy and endanger open trade, the European Union’s top financial regulator Michel Barnier will warn on Monday

I do so agree. Can we just grow up.

JANUARY 24th 2012
Lagarde calls for bigger eurozone firewall The head of the International Monetary Fund said on Monday the eurozone needed a bigger firewall to prevent Italy and Spain sliding towards default, underlining Europe’s responsibility in solving its own sovereign debt crisis. In a speech in Berlin, Christine Lagarde, IMF managing director, said that without a larger bail-out fund, fundamentally solvent countries like Italy and Spain could be forced into a financing crisis.

Berlin ready to see stronger ‘firewall’ Germany is open to boosting the firepower of the eurozone’s rescue funds to €750bn in exchange for strict budget rules favoured by Berlin in a new fiscal compact for all members of the currency union

Robert Zoellick - Blueprint for Germany to save eurozone For almost 60 years, Germans have maintained that it is their responsibility to participate in a modern Europe. Today, Germany’s responsibility is to lead in saving that Europe. This shift is not easy for Germans, who have often been urged to step forward, only then to be criticised for aggressiveness. But no other country can lead Europe out of crisis and into revival

The A-List: George Soros - How to pull Italy and Spain back from the precipice I have proposed a plan, inspired by Tomasso Padoa-Schioppa, the Italian central banker, that would allow Italy and Spain to refinance their debt by issuing treasury bills at about 1 per cent. It is complicated, but legally and technically sound. The authorities rejected my plan in favour of the LTRO. The difference between the two schemes is that mine would provide instant relief to Italy and Spain.

JANUARY 26th 2012
Cameron rebukes Berlin over euro crisis David Cameron delivered a direct rebuke to Germany at the World Economic Forum on Thursday, calling on Berlin to contribute significantly more resources and guarantees to help solve the eurozone crisis.
The British prime minister stressed that although progress had been made, particularly with the European Central Bank’s funding of the European banking system, policymakers were still far from finding a solution to the underlying problems of the crisis.

It is true that they are taking a very long time to solve this crisis, but there are very good reasons for this. First, it is not an unconditional solution that is being sought and required. It is a conditional one in which has to be 'bought into' by a number of parties all of which have to come to terms with the fact that they screwed up big time. That goes for the Greeks, the Germans, the French, the UK and big investors all over the world. A share of the blame also lies with Goldman Sachs and its group of insiders. Secondly, it is never going to a solution which can be placed on the table as a formula, at which the world's money-marketeers will look and start to place bets on its success. If it was, it would be riding for a new disaster.

So yes, Cameron will have, and indeed has now had, his say on this matter. But like all politicians who have matured in office he is like a circus rider with a foot on two horses and the end of this act, if it is to be a success, will be when after a few circuits of the ring to a mixture of applause and ooohs and aaahs he grabs a handy trapeze dangled in his face and is whisked out of sight ! If the horses are still in one piece that's good enough!

JANUARY 27th 2012
Call for EU to control Greek budget The German government wants Greece to cede sovereignty over tax and spending decisions to a eurozone “budget commissioner” to secure a second €130bn bail-out, according to a copy of the proposal obtained by the Financial Times.
In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders. The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing “all major blocks of expenditure” by the Greek government.