Category Archives: Europe

Brexit: Another Fine Mess

‘I do declare that no foreign prince, person, prelate, state or potentate hath, or ought to have jurisdiction, power, superiority, pre-eminence or authority within this Realm.’  The Bill of Rights (English Parliament, 1689)

‘Well, here’s another nice mess you’ve gotten me into!’ Laurel and Hardy’s catchphrase seems particularly appropriate as Britain approaches Brexit, due on 29 March 2019.

Few of us can remember a more confused and troublesome time in politics. From Donald Trump’s surprise election as president, to Italy throwing its Euros out of the pram; and from Korea’s nuclear threats to the collapse of ISIS, none of these cataclysmic events has caused as much heart-searching among Britons as the vote to leave the European Union: Brexit.

It is important to record two key facts from the start; first, the vote was on the largest turn out in British electoral history, with 30 million voting and a majority of over one million to leave. Second, the very generation that voted the UK to join the European Common Market back in the 1970s was the very generation that voted to quit forty years later. (Under forties mainly voted to remain.)

This poses the question, what has changed? The answer is simply, Europe. What Britons joined as a Common Market has morphed into something quite different. Today’s EU has taken on all the trappings of a superstate, with its own flag, anthem, currency, budget, courts, diplomatic representation, unelected bureaucracy in Brussels, border police, and is even trying to build its own army. What we see today is not the Common Market Britons thought they were joining back in the 1970s. The electorate was tricked into joining Europe – and quite deliberately, too.

We now know from three impeccable sources that what Christopher Booker called The Great Deception was based on a barefaced lie. Sir Edward Heath, the British Prime Minister who took Britain into the Common Market, lied consistently to the British people about the true consequences of joining Europe. He knew he was signing away Britain as an independent power. He admitted it years afterwards. Moreover, his highly classified Foreign Office briefing notes are now available (FCO 30/1048, April 1971) and confirm his lies beyond all argument. Sir Con O’Neill, the Whitehall mandarin behind this astonishing briefing paper, warned Heath that Britain would, by ceding judicial and executive powers, eventually end up as little more than a vassal state taking orders from Brussels. They knew: and so did Heath. O’Neill advised Heath to ‘swallow the lot and swallow it now’, according to the hitherto secret official record of the EEC talks.

Astonishingly, the faceless authors behind the briefing paper made an even more sinister recommendation; they advised ministers to hide the truth from the British public. The result of this deception has been that successive governments have deliberately kept the British public in the dark about what EEC membership really meant, hoping that it would one day be too late to leave. What Heath and the civil service never anticipated was that sooner or later the British public would see though the fraud and vote to quit Europe in a fiercely contested referendum half a century later.

Britons cannot pretend that they were not warned. There can be no doubt that the avowed purpose of the EU has always been to create a single European super-state, governed from Brussels, absorbing formerly independent and autonomous nation states. But don’t just take my word for it. Here are some quotes from European politicians over the years to confirm the point:

‘A United States of Europe is our goal’. Arthur Salter and Jean Monnet, 1923.

‘Europe’s nations should be guided towards the superstate without their people understanding what is happening. This can be accomplished by successive steps, each disguised as having an economic purpose, but which will eventually and irreversibly lead to federation.’  Jean Monnet, 1952.

‘We have sown a seed … Instead of a half-formed Europe, we have a Europe with a legal entity, with a single currency, common justice, a Europe which is about to have its own defence.’ Valery Giscard d’Estaing, President of the EU Convention, June 2003

‘The European Union is a state under construction.’ Elmar Brok, European Parliament’s Committee on Foreign Affairs.

‘We need a true political union … we need to build a United States of Europe with the Commission as government and two chambers – the European Parliament and a “Senate” of Member States … European Parliament elections are more important than national elections …’ Viviane Reding, Vice-President of the European Commission, January 2014

Even the UK politician, Kenneth Clarke, former Conservative Chancellor, in a rare moment of honesty from a British politician takes a similar view:

‘I look forward to the day when the Westminster Parliament is just a council chamber in Europe.’ International Currency Review, Vol 23 No 4, 1996

All this flatly contradicts Heath’s famous 1971 speech on joining the Common Market.

‘There are some in this country who fear that in going into Europe we shall in some way sacrifice independence and sovereignty, even that we shall begin to lose our national identity. These fears, I need hardly say, are completely unjustified and exaggerated ….’

If ever there is proof of a lie to the British electorate, the evidence is clear. Heath arguably committed an act of treason. He deliberately misled the British people and betrayed the Queen into breaking her Coronation Oath. Today’s inevitable backlash from a badly mis-sold electorate is what has fuelled the uncivil battle over Brexit faced by Theresa May.

Unfortunately for her, time to come up with a workable exit EU strategy is fast running out. PM May has just a few weeks to devise a new, mutually acceptable solution because, since Brussels rejected her Chequers proposals, she is trapped between the proverbial rock and a hard place: between her mutinous Eurosceptic party wing and an unyielding Commission, determined not to give an inch for fear of encouraging other increasingly rebellious EU nations. The former ‘arch ditherer’ at the Home Office now has to make a crucial decision. Britain’s timid but stubborn leader must shake off her rabbit in the headlights diplomacy.

As for the Europhiles, Britain must be punished, if only pour décourager les autres.

Frau Merkel has said so. She and France’s latest would-be Napoleon, President Macron, dare not back down. To do so would unleash a flood of anti-EU challenges, starting with Italy and its dodgy Euro, to be followed by the rebellious ‘Visegrad Four’ nations of Eastern Europe, who don’t want any more ‘refugees,’ thank you very much. The EU line must be held, at all costs. The European Commission agrees, warning that the political and economic damage inflicted by Brexit simply presents too great a risk to the EU.

Because Brussels recognises that the defection of the UK could be the capstone that collapses the EU’s arch. The loss of 10% of the Commission’s budget alone is a grievous blow: but the threat of mass defections and an unravelling of the whole European project terrifies the EU Federalist elites, let alone the nervous European banks. Their gravy train could hit the buffers.

The irony is that this bitter and protracted struggle to stifle dissent and lock the stable door is caused by an organisation that was meant to foster European harmony. The Europhiles and the Commission appear to have allowed their dream of a united Europe to over-ride the genuine concerns and anxieties of democratic voters in free nations. They don’t understand, for example, that the annexation of Northern Ireland into the EU means political suicide for any British PM.

What is now clear is that the biggest change to the unwritten British political constitution since 1689 was based on a politician’s lie and the British electorate was deliberately deceived. It was also legally questionable, according to the Bill of Rights.

Whether you agree or disagree with Brexit is immaterial. Brexit goes to the heart of what the UK is. Will Britain be self-governing? Or part of a new federal state?

That’s why it matters.

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Democracy?

Sir Winston Churchill famously growled, ‘Democracy is the worst form of government – except for all the others.’

The great man had a point. He understood the dangers of ‘the tyranny of the majority’ very clearly, even adding on one occasion, ‘the best argument against democracy is a five-minute conversation with the average voter.’ Despite this, Churchill was a genuine democrat. He believed in the people and accepted their judgments.

‘Let’s do this the Democratic way …. Hands up all those who agree with me?’

This is highly relevant today, because democracy is under attack. The most obvious is Britain’s undeclared civil war over Brexit, where a narrow majority of voters – albeit on the biggest recorded electoral turn out – voted to quit the European Union. The subsequent uproar and the blatant attempts to pervert and obstruct the people’s decision to leave have shown that the democratic will is only recognised by some when it suits them. That is profoundly undemocratic. But, as in some many things, it all depends on what you mean by ‘democracy.’

Democracy as a political idea dates back to ancient Greece. Literally, it means, ‘rule by the people.’ The word comes from the Greek word dēmokratiā, which is a combination of ‘the people’ (demos) and ‘to rule’ (kratos). The first major exponent of the system was the city state of Athens, around 400 BCE. Not every Greek agreed with the concept. When a Spartan aristocrat argued for more democracy, he was put down firmly by the retort, ‘I’ll believe it when you run your own family as a democracy!’

Since then, both the theory and the practice of democracy have undergone profound changes.  What worked for certain types of male citizens of Athens centuries ago (women, slaves, foreign residents and children under 18 years of age had no vote) clearly does not work for hugely diverse countries like the USA or complex modern societies like the UK.

However, the idea of the people as ‘sovereign in their own affairs’ persists at the heart of democracy. Lincoln spelled it out simply in his Gettysburg Address: ‘… government of the people, by the people, for the people shall not perish from the earth’. From this, three principal systems of democracy have emerged; ‘direct’; ‘delegated’; and ‘representative’.

  • Direct democracy means every voter has a direct say via referendums. The Swiss and Californians like these.
  • Delegated democracy means that the people elect an individual to carry their views to a governing body such as a Senate, as in Ancient Rome. British Trades Unions are a modern example. Shop stewards are given instructions from their members and send delegates to the TUC with ‘a mandate from their members’.
  • Representative democracy means that elected officials represent a group of people. This is the theme of the rest of this article.

Colonial America favoured a system of representation because of the new country’s enormous size and widespread population. The Constitutional Convention (1787) realised that ‘the People of the United States’, could only govern themselves at the national, Federal level by electing Congressmen to go to distant Washington DC to represent their wishes.

The key word is ‘represent.’  Whereas a delegate is merely a mouthpiece, a representative is sent to use his (or her) best judgment on behalf of his constituents. The English political thinker Edmund Burke described his role as an MP to the voters of Bristol in 1774: ‘Your representative owes you … his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.’ This explains why, for example, hanging is not put to the popular vote. Polls show that any referendum of the people would reimpose capital punishment, but Britain’s elected representatives in Parliament disagree. MPs think they know best, so they use their judgments to represent their constituents; they do not take their instructions from the people between general elections, which gives rise to the saying: ‘If you don’t like me or my views, then you can vote me out.’

Democracy therefore can mean different things to different people. What is clear, however, is that representative democracy requires mutual trusttrust of the representative by the people; and trust in the people by their elected representatives. Somewhere in the past 20 years that trust has begun to break down. We live in a world where politicians spout democracy – but do everything in their power to overturn it when the people give the ‘wrong answer’ at elections.

Nowhere was this more in evidence than the 2008 farce of Irish voters rejecting the Lisbon Treaty, only to be sent back to vote again after EU officials’ behind-doors deal to force a second referendum. Similar European Commission’s contempt for democratic majorities – and for democracy itself – has been seen in Denmark and France. For Brussels, ‘the people’ cannot be trusted and must be forced to vote again until they come up with the ‘right answer.’ This is dangerous stuff and reflects Bertholt Brecht’s sardonic comment on Communist elections: ‘Would it not be simpler, if the government simply dissolved the people and elected another?’

Closer to home, the UK’s Brexit referendum and Trump’s election in the USA sent shock waves through liberal elites, by coming up with the ‘wrong answer’. The chattering classes were horrified. What these events revealed across the Western world is a widening chasm in far too many countries between voters and the cosy governing class represented by the likes of Davos, the Bilderburg Group, Brussels, Westminster, Washington, politicians, intellectuals and civil servants. This gap is made worse by the refusal of these elites to accept the will of the people; vested interests do everything in their power to block resolutions using non-elected institutions, such as supreme courts and the European Commission, to clamp down on dissent and liberty. For the EU it’s the (deliberate) ‘democratic deficit’; for the chatterati it means finding some way to ignore or neutralise voters’ wishes.

So, when added to the alternative-fact extremes of frightened metropolitan-elite politicians who wish to bash the masses using phrases like ‘post-truth politics’ to control the ‘unqualified simpletons of the great voting public,’ something sinister and profoundly undemocratic is emerging.

Democracy itself is under attack across Europe and the USA, a fact becoming plainer with every daily headline. The idea that the ‘common people are too ignorant and too driven by base emotions to really understand what they voted for’ has gained ground in political circles ever since Trump was elected and Britain voted for Brexit. This is sold as defence of human rights, and especially minority rights against the ‘tyranny of the ignorant majority’. These days it’s not the aristos who fear the mob – it’s the ivory-tower academics and intellectuals who think only they know what is best.

Their solution? ‘Ordinary people are too ill-informed to know what’s best for them – leave it to the experts.’ Well, the experts of the IMF, CBI, the EU, most of the media, the Chancellor and the Bank of England forecast instant ruin, famine, unemployment and plagues of frogs if Britons dared to leave the EU. They’re still waiting.

Another chestnut touted by the new anti-democrats is that ‘Democracy leaves semi-illiterate voters at the mercy of fake news and media lies.’ The high-minded BBC naturally does not agree; but heartily agrees that Fox News and the Daily Mail’s ‘propaganda’ only confuses ordinary, simple folk – quite unlike the BBC and The Guardian, of course ….

The truth is that democracy itself is under attack. Nowhere can this be seen more clearly than in today’s struggle over Brexit, but showing contempt for the masses can only end one way.

As Chairman of the Public Administration and Constitutional Affairs Select Committee, Sir Bernard Jenkin MP has said he ‘dreads to think’ what will happen to British politics if the Establishment fails to implement the people’s verdict in the Referendum. He warned: ‘That’s not what democracy looks like in my book. Of course, the EU has always tried to reverse every adverse referendum … but if they defeat the British people in this endeavour, that would be a disaster for our country.’

And for democracy? Watch out for forthcoming variations on the ‘I’m a democrat, but …’ theme before politicians and bureaucrats then ignore the will of the voters. Be very careful; the ‘post-Democratic’ age is being touted as the way ahead.

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Money Makes the World Go Round

For the second time in a month, to my surprise, I find myself agreeing with President Putin.  Speaking at the International Economic Forum recently he warned: ‘We don’t need trade wars today … we need a comprehensive trade peace.’

Cuddly old Vlad was really warning us that there’s a financial firestorm brewing. Looking at what is going on with the euro and the Turkish lira, it’s hard to disagree.

The euro is really our old friend the Deutsche mark, cunningly devalued and disguised to pay for German re-unification, and now Europe’s chokehold currency of no choice. For example, any independent Scotland joining the EU would nowadays be ‘forced’ to accept the euro. Difficult for the Scots: not for nothing did Thomas Carlyle call economics the dismal science.’

Dismal science or not, money makes the world go round – and always has done. Even St Paul admitted: ‘The love of money is the root of all evil.’ This titanic battle for economic power rages around us every day, as China and America tussle behind the scenes over who owes how many dollars to whom and what they are worth, whilst a worried Commission in Brussels watches nervously as its great dream of a superstate called ‘Europe’ begins to disintegrate.

Because the UK’s ‘Brexit’ is the least of the EU’s problems. With Poland refusing to toe the Merkel party line, the Balkan states disobeying Juncker’s ‘diktats’ on immigration, and now a major trade war looming with the USA, Brussels has its hands full. Money is at the heart of it all. The unfolding Italian political train crash that is the new populist, anti-establishment Eurosceptic government is Brussels’ worst nightmare. It threatens their euro. Austrian chancellor Kurz gives the game away, bleating: ‘We saw in Greece how dangerous it is if a country has a bigger and bigger debt and I hope that we will not have a second Greece in our neighbouring country, Italy.’

The reason? Money and debt. Frightened hard currency has been haemorrhaging out of cash-strapped Italy for months, driving it even further into the red, amid fears of a Greek-style euro debt crisis which would bring the country to its knees. The new Italian government is even threatening to quit the euro and set up a parallel currency.

This is serious, because Italy is the eurozone’s third largest economy, nearly ten times the size of Greece’s.

The former chief economist of the IMF – Olivier Blanchard – believes the eurozone is heading for an ‘horrific crisis,’ denouncing Italy’s popular new government’s plans as ‘likely to violate all EU and domestic fiscal rules and put debt on an unsustainable trajectory’. What he means is that Rome is inviting an economic and political war, because the big French and German banks risk losing billions if Italy says, ‘no more pay offs.’

Brussels now has the beginnings of a serious rebellion on its hands. However, once again Italian voters have been over–ruled by EU technocrats, pressuring President Mattarella to ignore the voters, just as the Berlusconi government was toppled in 2011 by Brussels and the European Central Bank, in what was effectively a ‘soft coup.’

This is dangerous territory.

The Italian president’s refusal to accept the Lega-Gillini finance minister because he ‘could provoke Italy’s exit from the euro’ is dynamite. The political message to Italian voters is clear: whoever you vote for, the eurozone rules. A Lega spokesman explained: ‘You have to swear allegiance to the god of the euro in order to be allowed to have a political life in Italy. It’s worse than a religion.’

In Brussels,  Juncker openly threatens: ‘There can be no democratic choice against the European treaties. One cannot exit the euro without leaving the EU,’ and Günther Oettinger, European Budget Commissioner for Budget, actually said: ‘This will teach the Italians to vote for the right thing.’

Because the ECB and Brussels will fight to the last drop of Italian money to stop anyone escaping from their eurozone straitjacket.  The French Finance Minister warns: ‘If the new government takes the risk of not respecting its commitments [in other words, “If Italy doesn’t pay its huge debts to our big French and German banks”], the financial stability of the eurozone will be threatened. Everyone must understand that Italy’s future is in Europe and nowhere else. … there are rules that must be respected.’

This push to smother Italy’s eurosceptic rebellion, as they muzzled Syriza in Greece, comes from a worried Berlin, Brussels, and the EU power structure. But this time they may have blundered into a trap, because the EU’s economic problems grow worse every day. Now debt-ridden Spain admits it is in serious trouble. And Spain owes euro banks ‘zillions’, too. The bottom line for the EU is that if the Italians and Spanish welch on their euro debts, then the euro is finished – with huge international bankruptcies on the cards.

‘So what?’ says the man in the Kyrenia café, ‘How do big economic problems affect me, my family and my bank account? Who cares?’

The answer to the puzzled denizens of Turkish North Cyprus is ‘look at your money.’ Something very odd has happened to their Turkish lira. One year ago, 1 GBP pound sterling bought you 4.30 TRY; ten years ago, on 31 May 2008, a quid bought just 2.12 lira. And today? Going to press, a pound buys you around 6 lira. That’s what international currency fluctuations do to the expat, watching his pension. That’s how small Turkish Cypriot businesses, being paid in lira whilst paying for their rents in sterling, go bust. The reason? Money: because the Turkish lira is now in deep international doo-doo.

For years, Ankara’s AKP government has funded its massive vote-buying economic programme with money borrowed from overseas investors, attracted by Turkey’s generous interest rates. No less than 70% of Turkey’s deficit is covered by short-term foreign loans.

The problem is paying off those loans. Interest payments were biting deeper and deeper into Ankara’s Central Bank’s precious reserves of hard currency US dollars or euros. Loans began to dry up, so the Central Bank increased interest rates to tempt the punters and keep the all-important foreign dosh flowing. The problem is that at 13.5% the interest payments were expensive – but, at 16.5%, they could become ruinous.

At which point Turkey’s would-be President stepped in, boasting that he personally intends to run the economy when he wins the election on 24 June to become all-powerful leader. On his orders, interest rates will be slashed to 10% to save Turkey’s money. Result? Instant panic and predictable flight by spooked, nervous lira investors. Consequence? A market panic with foreigners desperate to unload their lira while they can. ‘Cheap? Your real, genuine Turkish lira. A real bargain, guv … Gotta sell.’

Because that’s what markets do. That’s how economics works: supply and demand. No demand for lira, they go dirt cheap. The result is that Turkey will either have to devalue, introduce capital controls or accept that, whatever their ‘Dear Leader’ thinks, foreigners will decide just what the Turkish lira is truly worth: and foreign investors are not impressed.

As an anonymous fund manager at a major asset management firm, complained: ‘Erdogan is fighting the extremists, he is fighting after the failed coup – now he is fighting the financial markets, and that is dangerous …. You can fight your domestic foes all you want; but when you are trying to take on the global financial market, that is a battle you can’t really win.’

And the EU? Watch this space. Of one thing we can be sure: the Commission, Berlin, Paris and Frankfurt will gang up in a darkened alley, ready to bludgeon, beat, bribe, browbeat and bully Italy to keep their precious euro together at all costs. Once again, the financial gloves are off. It’s going to get ugly. Just ask the Greeks.

Money really does make the world go round.

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