There has been much sound and fury but little progress in Euroland in the last few days. Far from them saving the Euro, they agreed to differ on some things, and agreed to delay on others. We were told the Uk was isolated, yet most of the nine non Euro members have reservations and none have finally signed up to the package.
At the end of the long meeting of Heads of government in the EU in Brussels last week, the Heads of State or government of Euroland issued a statement. Ā They agreed a ānew fiscal compact and strengthened economic policy coordinationā, and āthe development of our stabilisation tools to face short term challenges.ā
The Statement was not also made by the nine non Euro members of the EU. We were told verbally they were in support but they did not put their names to it. Ā Ā At the end of the Statement it saysĀ these other countries āindicated the possibility to take part in this process after consulting their Parliaments where appropriateā. That is very weak language, and implies the nine did not sign up to the whole agenda of the 17, and decidedĀ to play it long to gauge Parliamentary and public reaction at home. Ā It is not quite the UK isolated story we read about. It appears that several countries outside the Euro have reservations about agreeing to major controls on their budgets by the rest of the EU.
The aim of the agreement for the 17 is to create a stronger central economic government for the whole area.Ā They wish to build on the Stability and Growth Pact, the European Semester (budget approval and control), the new macro-economic imbalances procedure and the Euro Plus pact.Ā They want theseĀ rules to be more legally binding on the 17 than the old rules proved to be.
At the heart of the new elements in the proposal is the fiscal rule. Each state is to run a balanced budget. They are not allowed to run a structural deficit of more than 0.5%. Were this rule to be applied to the UK today, it would mean additional spending cuts and tax rises to the tune of Ā£60 billion a year to eliminate most of the structural deficit. There would also need to be additional cuts or tax rises for countries with an overall debt higher than 60% of GDP.Ā Any country failing to produce a budget which conformed with these rules would be required to produce an alternative, and could face sanctions. Ā Again, if this applied to the UK it would mean additional cuts or tax rises to start to reduce the debt.
The Statement had less to say on stabilisation. Ā They say they will rapidly deploy the leveraging of the European Financial Stability Facility. They do not explain how they will borrow the money for it.Ā They wish to speed up the use of the new ESM to July 2012, still a long seven months away. They say they will pay more financial resources into their funds, without specifying how much by whom and when.
So where do we go from here? Ā The Euroland area countries have decided to adopt these new proposals in March or at an earlier date. They still want them to be incorporated into Treaties of the whole EU, but clearly this is not possible all the time the UK and other members refuse orĀ want to discuss and delay. The markets will judge the package by how much money it puts on the table to deal with the large balance of payments imbalances, and the state borrowing demands in the weaker countries. Little progress was made on this. When it come to completing a fiscal union, there was modest progress by the 17, but much more work to be done on what legal framework can be used, how these rules can be enforced, and how you get from the high debts and deficits today to where they say they want to be.
This article wasĀ published in collaboration with PublicServiceEurope.com.
December 14, 2011
Dear John.”Any country failing to ….and could face sanctions. As I understand it, sanctions include an EU apparatchik being installed as head of government, pace Italy and Greece. Is this the case, or do I misunderstand the intent of the proposed treaty?
December 14, 2011
You misunderstand what happened in Italy and Greece, as these countries chose their own replacements in exchange for a bailout.
December 15, 2011
Uanime5: “chose their own replacements”
1. in exchange for a bailout = blackmailed.
2. from a list of preapproved EU technocrats, who just happened to be lying around the national parliament.
Just imagine, after failing to get the popular vote in Britian, we could end up with King Kinnock!
December 14, 2011
The proverbial can that the EU/EZ leaders are kicking down the road seems to have found the Higgs-Boson particle more quickly than the scientists. It’s becoming heavy enough to be difficult to shift it very far.
However, I do rather like the idea of the deficit (not just structural) being less than 0.5% GDP. I’d welcome the reduction of
tax and wasteGovernment spending in order to achieve this immediately. The real target should be a net surplus so that the accumulated debt can be paid off, although the heart of the problem is that those fiddling with the various budgets will prefer to increase taxation instead.December 14, 2011
Indeed huge cuts in government waste in the UK is one thing that would be most welcome. A shame Cameron does not just do it.
Clearly however as you say there is no real long term Euro solution in sight yet.
December 14, 2011
Some very interesting graphs on the economy on the Newsnight website.
http://www.bbc.co.uk/news/in-pictures-16090055
One suggesting the market estimates % chance of default at about:
100% Greece
65% Portugal
47% Ireland
37% Italy
33% Spain
18% France
A 60% devaluation is assumed in the case of default to compute. Perhaps even worse on today’s markets.
December 14, 2011
Mick A
“However I do rather like the idea of the deficit (not just structural) being less…… The real target should be a surplus”.
Absolutely agree
As I have said many times.
Spending should be no more than last years tax take.
Tax take rates should be fixed to produce the most efficient means of collection, (laffer curve) and which will encourage business, and the self employed to invest and expand.
The Governmet rule should be.
You should only spend some of what you know you have got, not what you hope to have, if all things work in your favour in a following wind.
December 14, 2011
Alan,
I’m not sure that I’d make the your link between tax rates and collection efficiency. The legendary Sheriff of Nottingham was quite efficient at tax collection….
The paradox is in how much money is and should be available to the Government to spend. Many of us on this blog support a massive reduction in the number of things that money is spent on. They will spend as much money as is available, if not more, so how do we (as an electorate) limit the amounts that they are allowed to take from us? They’re hardly likely to pass an effective law to limit themselves!
However, moving across to flat tax, shortening the tax code, or combining NI with tax are all efficiency issues that can be done no matter what the rate of taxation is. Even if we all end up with the same amount of money taken from us, it would have been spent more productively, by definition. I’d still argue (along with you) that Government should do less, thus spend less, take less, and basically leave us alone!
December 14, 2011
Now that we have appointed Mary Portas to sort out the decline of the British high street, I suggest we ask Alvin Hall to sort out the Euro zone.
December 14, 2011
Inspired. In his words “discipline, patience … and a little luck”
December 14, 2011
Or perhaps Jim Slater’s ‘run your profits and cut your losses’ would be more appropriate for Ireland, Greece and Portugal.
December 14, 2011
Start with dropping the 5.2% welfare increase demanded by the Lib Dems; or demanding that welfare should not be capped at Ā£26,000 per household. It should pay to work, what an insult to low paid people and pensioners. Everyone should get help if they are out of work temporarily, those who make it a life choice should have a time limit put on their claims. 370,000 households where no one since the age of 16yrs has worked- well done LibDems all you want to do like Labour is to increase taxes, you are so out of touch with the public.
December 14, 2011
There are 2.46 million unemployed people and only 455,000 jobs, so for 2 million people there’s nothing they can do to get a job. Giving them even less money won’t fix this.
December 15, 2011
Let’s start with not cutting immigration but stop immigration altogether until we are assured by the government that there is a proper system in place to regulate immigration. It would also help if Green was sacked for his appalling slow record to date.
December 15, 2011
It’s a question of motivation.
Welfare removes it.
December 14, 2011
I agree. The so called cuts havent really happened and it would appear this Coalition Government wants large public services and non jobs retained. There’s loads that could be cut if there was a political will. Canada went through this process years ago. The big spenders like the NHS, EU, foreign aid. immigration should NOT be off limits and a whole review of what Government provides should be reviewed. Why are we paying for significant numbers of foreign nationals health and education? Cuts before tax rises every time. We already pay too much tax and it inhibits our spending.
December 14, 2011
Everyone knows that euro land is beset with imbalances and mountains of debt that are causing stresses that threaten it’s very existence. It is also known that there is only two solutions either to create a fully functioning superstate that is funded mostly by Germany or to break up the euro-zone. The former as sane rational people know will impoverish Germany and reward failure in the rest of the euro-zone and only temporarily solve the crisis because it does not address the imbalances or the debt mountains. The latter will solve the imbalances and defaults will solve the debt mountains. However that will cause a complete collapse of the banking system for a while and a long period of austerity for most of the euro-zone states but at least the cost will be a one off and not ongoing. So what are Merkozy doing well neither of those two things unless like Blair they have they found a third way hopefully if they have it will be more successful than Blair’s.
December 15, 2011
The French anks are the worry at the moment. They have huge longer term debts (e.g. Paribas 500bn) and fund through the wholesale money markets (which is drying up due to funds avoiding counterparty risk) and the repo market (which is drying up due to funds no finding enough collateral).
So the 3 biggest French banks are in (a difficult position-ed – they can of course borrow from the ECB).
December 14, 2011
We have heard it all before; solemn and binding undertakings,dire warnings for miscreants and regular reviews to ensure compliance. Their undertakings were disregarded by pretty much all of the members of the Eurozone, Germany included and apart from the odd raised eyebrow nothing happened, so why should anyone believe them now?
December 14, 2011
I am so glad that instead of peddling the usual line, you have actually looked at the detail of what was proposed. The ESM seems to me utterly intolerable.
If the EU was a broadly Conservative consensus, insisting of freedom, on very low taxation very carefully controlled from Brussels, with a tight little bureaucracy composed of the finest minds and run on truly democratic grounds where the parliament was really integral to the whole arrangement, I should probably feel very differently.
But this is simply a demand for Ā£150,000,000,000 – to catch up with Germany, France and their closely associated Italy – by an unelected, Socialist bloc which seems to regard us as their rival to be stripped of everything we possess. It would never (I hope) have got past our parliament – or I presume – that of any of the other countries with things to pillage.
I am getting to agree that we are dealing with the USSR in 1945, when everything was simply lifted from Eastern Europe and carried home to Russia.
December 14, 2011
“bureaucracy composed of the finest minds and run on truly democratic grounds”
That statement is incompatible you cannot be a democracy and a bureaucracy at the same time.
December 14, 2011
Yes, of course, you can.
The executive is the bureacracy even though the top layer of it may be elected. Every democracy has had a bureaucracy-otherwise what is decided democratically cannot be put into effect.
The problem arises when the bureaucracy escapes democratic control and is self perpetuating-such as the quangos which have proliferated in this country. All quango positions should be subject to election.
December 14, 2011
I hope the 1922 Committee, John, Boris, IDS, Eustice ,Cash realise that Cameron has actually not achieved anything in relation to repatriation of powers for the UK from Europe so far. Cameron needs to go because he will keep the coalition going for the full term- it became law on 15th September that governments will last for five years. Why the country would want this shambles is beyond anyone’s imagination. Three more years of Clegg, Huhne, Cable and their disastrous policies that the country did not and do not want. All because Cameron did not set out what the Tory party would do to bring about change- all hot air what change?
Clegg, BBC and all the Euro elites are still making threats to the UK including how they will not give the British public its rebate back. Even more reason why we should leave the EU, they want to penalise the UK for exercising its right within the rules of the EU!
Clegg denigrates the UK and its people and expects us to vote for him- no chance.
Clegg does not learn from experience- he got thrashed at the last general election, he was thrashed on the AV vote, he was thrashed earlier this year at the local elections. When is he going to realise that people do not like his policies and do not believe a word he says? He appears to be deluded like Gordon Brown. he does have the support of the vindictive unelected European elite. Wake up Tories unless you want to spend a long time in opposition again. Cameron must go.
December 14, 2011
What the EU is doing to the UK is also within the rules. You reap what you sow.
December 14, 2011
There was an agreement involving the non-Euro Group countries apparently and that related to ā¬50 billion of bilateral loans to the IMF. I spent last Friday trying to get the facts on that and only managed to learn that the Czech Rebublic share was ā¬3.5 billion, as revcealed by President Klaus, later confirmationof the package came from Mme Lagard. Links and posts on this search are on my blog.
December 14, 2011
I can tell you exactly what our host thinks and I can even tell you what Dawn Primarolo thinks. How? Well, you see, they were speaking in public and were recorded. That is why I believe parliament ought to be the centre of the debate.
Everything discussed at this summit went on in private, leaving us all guessing. Justice has to be seen to be done.
December 14, 2011
It’s good to see that you don’t want the UK isolated, almost nobody does. There are different degrees of willingness and cooperation though and it is is Cameron himself who makes a big thing about his āvetoā. You yourself also often engage in āus and themā language, probably much more so than e,g, any Danish commentator, Denmark also belongs to the 10.
December 14, 2011
Peter van Leeuwen: “Itās good to see that you donāt want the UK isolated, almost nobody does.”
This is really quite tedious. ‘UK Isolated’, who is going to isolate us, Peter?
The EUro bullies if they don’t get their way?
Outside the EU is the WHOLE WORLD, including the EUs biggest trading partner CHINA.
Setting aside for the sake of argument, that China, the US and just about everyone are experiencing serious economic problems, if Europe wishes to extract revenge, then we will just trade directly with China, we by ourselves are still the 3rd, 4th or 5th largest economy in the World.
Are you suggesting that the EU is going to apply trade sanctions against the (worst cast ) 5th largest economy, because we refused to join their club with in a club?
Come on!
December 14, 2011
May I contribute a few hard facts to your rather hysterical rant.
Source: Office of National Statistics
Destinations of UK export of goods in 2010:
Total EU 27: Ā£142.2 bn, ie 53.5% of total exports (goods) of Ā£265.7bn (not 40% as often reported).
China & Hong Kong: Ā£12bn (For reference Germany exported Ā£50bn worth of goods to China in 2010).
Just as well the UK has a strong financial industry with such innovative products as Northern Rock 125% mortgages, Bradford & Bingley buy-to-let and self-certified mortgages, HSBC care-home fees investment products and RBS commercial property lending.
We must not forget the financial and commercial wonders performed by the private equity and PFI industries.
Selling such expertise to Chinese consumers should be a piece of cake !
Tough luck on those pesky Germans and French for not having such wonders of financial engineering.
December 14, 2011
Albion: “Tough luck on those pesky Germans and French for not having such wonders of financial engineering.”
Oh, they have wonderful banks alright. Don’t for a second delude yourself into thinking the ‘hookey’ financial engineering is the exclusive domain of the City.
Since you have the figures, where is the UK economy in the world rankings?
Albion: “Total EU 27: Ā£142.2 bn, …”
I think you have the wrong end of the stick, I am not suggesting the UK should apply economic sanctions against the EU. I am perfectly happy the UK should trade where-ever and with whomever we can make a profit.
By the way you seem to have missed the imports from the EU 27?
That might help to produce a more rounded picture.
And yes, the British economy weighted too much toward the financial sector.
125% mortgages? NR shouldn’t have been bailed!
December 15, 2011
APL, according to the World Bank and the IMF the UK is ranked sixth in the world in terms of nominal GDP, behind the US, China, Japan, Germany and France.
Interestingly, when it comes to export of physical goods, the UK is ranked 9th in the world (it is 4th in Europe behind Germany, France, The Netherlands and Italy ……)
According the ONS, UK imports of goods from EU countries was Ā£186.046bn in 2010, so a deficit of Ā£43.84bn. Trade in services with the EU showed a surplus of Ā£11.138bn. So the famed ‘world beating’ service sector of the UK only offsets 25% of its imports of physical goods.
Regarding your comment on 125% mortgages, these ‘products’ would be illegal in most of continental Europe, along with other fine exemples of British ‘innovative’ financial ‘products’ such as self-certified mortgages and 3,500% APR payday loans.
Yep you’ve guessed it, this is thanks to strict and effective state regulation in financial matters.
On the other hand, this means that the UK is top of the league in Europe when it comes to personal debt level, so cheer up !
December 15, 2011
albion: “According the ONS, UK imports of goods from EU countries was ”
So by my calculation Ā£32.71bn is what we are worth in trade to the European Union add in my admittedly rounded estimate of Ā£10bn per year subscription and bingo, the EU is set to lose Ā£42.71 bn per year if – (a). we leave and ( b) they impose trade sanctions against us.
As I have repeatedly said, if we leave I hope the EU would be happy to trade with us anyway.
UK = sixth largest economy. OK
Albion: “125% mortgages, these āproductsā would be illegal in most of continental Europe,”
Good for them, over here the market should have been allowed to make them ‘non attractive’. But the Politicians stepped in and made such foolish deals viable.
Albion: “top of the league in Europe when it comes to personal debt level, so cheer up !”
My personal debt level is fine thanks. Yes, I am angry about the Political inspired artificially low interest rates.
December 14, 2011
Try these facts for size……http://www.independent.co.uk/news/business/comment/hamish-mcrae/hamish-mcrae-its-the-clash-of-the-eu-titans-political-will-vs-financial-maths-what-next-6275218.html
* Europe needs the British…….
*We have a current-account deficit of a bit less than Ā£40bn
*This includes a deficit of nearly Ā£100bn on trade in goods – we import more than we export
*This was offset by a surplus of nearly Ā£60bn in services. The UK remains the second-largest exporter of services in the world, after the US.
*We have a deficit in our trade with Europe……
*This is offset in part by a surplus in trade with the US and Australasia
*Europe sells Ā£66bn more goods and services to the UK than it buys from us. (Germany alone has a surplus of more than ā¬ā¬20bn with the UK)
*The Americas buy Ā£35bn more from us than they sell to us…we are in a good place with Australia and New Zealand too
* Europe needs us badly…..
*The headline surplus on trade in financial services is Ā£32bn (a bad year but still more than in 2005 or 2006) against a peak of Ā£42bn in 2008
*The City’s surplus covers roughly one-third of the country’s trade deficit……That is why the Germans and French lust after it….
zorro
December 15, 2011
According to the official figures from the ONS, the UK’s trade surplus with Autralasia and the Americas in 2010 was as follows:
Autralasia: Ā£592m (goods) / Ā£3,085m (services)
Americas: Ā£7,214m (goods) / Ā£19,738m (services)
That’s a total of Ā£30.629bn, a somewhat lower figure than the Ā£35bn you quote for the Americas alone.
Would you care to tell us the source of your figures.
As for your comment that ‘Europe needs the British’, I fear they are more rooted in jingoism than in a dispassionate analysis of economic realities.
The truth is that after over 30 years of Tory/NewLab gross neglect of the manufacturing sector, the UK is almost entirely dependent on foreign manufacturers for a wide range of machinery and products.
Triumph motorcycles for exemple import 90% of the components used to build their products.
You could also look at how few British exhibitors there are in manufacturing trade fairs in comparison with exhibitors from Germany, France, Italy, Holland or even Spain.
I find it puzzling we should face this depressing reality despite years of record foreign direct investment, unless of course these investments were mostly about flogging
natural monopoly utilities (Thames Water is a prime exemple) and valuable brands (Mini and Cadbury’s) to greedy multinationals.
Mind you, City lawyers, ‘investment’ bankers and assorted PR firms have done very well out of this and may even have generated export earnings from the likes of Kraft and EDF !
There is an excellent book I suggest you read – “Fantasy Island ‘ by Larry Elliott and Dan Atkinson. It’s all there.
December 14, 2011
Dear Albion,
Fail,
I think you need to go back to the ONS and try again.
You also don’t seem to understand that domestic mortgages are loaned to individuals mostly within the UK, where as our exports of Financial services OVERSEAS actually create a large surplus
You obviously also missed the German car maker Porsche and their foray into er er financial engineering
See here http://www.telegraph.co.uk/finance/newsbysector/transport/3281537/Porsche-and-VW-share-row-how-Germany-got-revenge-on-the-hedge-fund-locusts.html
So I’m afraid your entire post turned out to be drivel
December 15, 2011
Would you care to tell us which ONS statistics do you not accept? and why?
My point about all these dodgy UK mortgages is to illustrate the fact that large parts of the UK’s financial ‘industry’ are pretty shabby.
As for Porsche’s cunning financial dealings, I applaud them for taking all these ‘financial locusts’ parasites to the cleaners.
Please do not use such an aggressive tone – it makes you sound like a Daily Express/Mail reading little Englander ….
December 14, 2011
I’m glad someone decided to point out just how valuable the EU is to the UK. For comparison how much did the UK export to the USA and Commonwealth?
December 15, 2011
uanime5: “Iām glad someone decided to point out just how valuable the EU is to the UK. ”
Should John Redwood choose to post my reply to Albion, and should Albion choose to give the additional information I have asked him ( or her )to provide, we might just find out how valuable the UK is to the EU.
By the way, I am pretty sure I can source the information myself from the same source as Albion used, it’s just I’d like Albion to have the opportunity to present all the pertinent information.
December 14, 2011
You should try viewing yesterday’s video clips of the European parliament. There are quite a few people who not only want us to be isolated – they also want us to be punished.
December 14, 2011
@APL: You seem to be going off on a tangent, I’m just expressing my joy that Britain doesn’t want to isolated … within the EU of course!
I didn’t use any aggressive language, did I?
December 14, 2011
Peter van Leeuwen: “Iām just expressing my joy that Britain doesnāt want to isolated ā¦ within the EU of course!”
It’s just that we have heard variants of the; UK may …
‘be left behind’
‘be stuck in the European slow lane’
‘end up in a two speed Europe’
‘be isolated in EU’
For about thirty years now, and it is usually a lead into …
‘.. the UK is going to lose 3 million jobs if we don’t do what the EU demands..”
or,
‘.. the End of the World will arrive if the UK doesn’t do this latest ittybitty EU thingy ..’
So, it just gets a little tedious, that is all.
Peter van Leeuwen: “I didnāt use any aggressive language, did I?”
No, you didn’t. If my reply was rude or too rumbustious, I apologize.
December 14, 2011
@backofanenvelope: I DID see quite a number of these clips and saw only one (EPP) that put the rebate into question.
There obviously will be a lot of people who think that when the one who’s putting his foot on the breaks has fallen off, the ride will be faster, and indeed an intergovernmental agreement is faster than a treaty-amendment, but I think that the frustration about the British stance is more about the disadvantages of such an agreement, e.g. how is the 17+ group to be made accountable to parliament if an intergovernmental path is chosen.
December 14, 2011
Peter
What of the behaviour of Sarkosy? According to reports it was well known in advance that he intended to back the UK into a corner for his own political ends.
December 14, 2011
Today Sarkozy as visited a factory and he said the following: ‘any business operating abroad is welcome back, and we are looking to support their return, to make goods for French men and women, and employing the verys same, with a special stamp of approval’ is this the beginning of self protectionism?
December 14, 2011
@Mactheknife: Our little Napoleon? For some time it was known that Sarkozy favors a group of 17 to integrate further, while Merkel preferred the group to be 27 (all). In the group of 17 the proportion of Southern EU members is larger which makes it harder to prescribe a German approach, the smaller countries also favor 27 for reasons of using commission + parliament rather than only the eurozone intergovernmental group. Cameron’s stance (although clumsy or naĆÆve, he may not have had much choice) made Sarkozy āwinā for the moment. This is good for his re-election: he may suggest that France isn’t giving up much sovereignty, as he would portray himself as the co-leader of this group.
I don’t think that being anti-British scores election points in France, and although a little Napoleon, he is still a professional. So is Cameron, although in my view he had a little misjudgment (overplaying his hand).
December 14, 2011
According to today’s papers, Sweden, Holland, Denmark, Finland and the Czech Republic all have difficulties with the proposed treaty. So it seems that we were merely the first country to say that we couldn’t agree; we will never know if one of these other countries would have used the veto.
Cameron should be mounting a concerted diplomatic effort to bring these countries and any other waverers around to our way of thinking – if we are to remain in the EU, why shouldn’t we form a “bloc” just like the Franco-German one.
December 14, 2011
Cameron will not form a bloc because of the fanatical LibDems dream of making the the UK part of a pan European state. Cameron does not have the courage to change the status quo, weak minded PR man. It was reported yesterday that the LibDems were demanding to be at the negotiating table next time- God help us!
You might also want to ask why Cameron did not give LibDem critics a short sharp shrift to rebut their stupid claims and criticisms. Additionally why has Cameron sacked a Tory for making inappropriate comments and in contrast has done nothing to Cable, Huhne and Clegg for their outbursts?
December 14, 2011
lots of potential for lots of referendums.They wont be able to install the puppet governments fast enough
December 14, 2011
Cameron can’t claim that it’s the UK against the EU if he has the support of other European countries. Also the Europhobes will oppose anything if it isn’t the UK against everyone else.
December 14, 2011
Government warnings about how the euro-zone crisis could badly effect the UK appears to be starting to come true. In the last few days the Ā£ has been strengthening against the ā¬ if that trend continues it does not bode well for UK exports to Europe. Finding other world markets is now becoming even more imperative.
December 14, 2011
Perhaps not, but it will reduce the cost of our Imports from Europe thus reducing the trade imbalance by a significant amount.
December 14, 2011
And this summit was trailed as the last chance to save the euro! If they want the fiscal rule where they are not allowed to run a structural deficit of more than 0.5%, given the fact that they have previously ignored their own rules, then I suggest the sanction for failure should be against the ministers personally – massive personal fines, disqualification from office and/or imprisonment. I don’t think there would be any takers for such a scheme which shows how much this is just another load of guff.
December 14, 2011
As usual the left wing UK hysterical media went totally overboard lead of course by the Beeb. This summit has solved nothing as JR has pointed out, but to listen to our own media you’d think it was the end of the UK as a trading nation. Its a long road ahead for the Eurozone and there will be many casualties when the full extent of what Merkosy is proposing is understood by those supposedly standing alongside the 17.
December 14, 2011
I’d say the right wing media went even more overboard with their calls for repatriating powers and leaving the EU.
December 14, 2011
Thank you for telling it like it is, as so often. So few reporters seem to check the actual facts and instead get fixated on analysing the big sound bite rather than the detail.
It’s just one of the things that makes this site essential daily reading.
December 14, 2011
These people are still in LalaLand not Euroland. The meeting failed to address the Euro issue and despite all the talk of what will be the approach to dealing with the Euro is still smoke and morrors. How is the bail out funds to be financed likewise monies to IMF – is this a legal process?
Depsite there being some doubt as to what DC achieved I think is was appropriate to draw a line in the sand lets hope the UK banks use the time to reduce their exposurer to the EU banks
December 14, 2011
Yes, that summit was indeed misreported, by the Eurocrats themselves and by our own, homegrown Labour propaganda ministerium, the BBC. Never mind the Grauniad, we’re not forced, by pain of imprisonment, to buy that.
Why they did it – it is the usual shell game by the EUrocrats, who blew up the Cameron veto, mis-representing it to boot, in order to hide their failings of rescuing the Euro.
As for the BBC – well, isn’t it time Parliament dealt with the manifest bias of the corporation? This bias feeds the reporting of continental MSM which still think the BBC is as trustworthy as it was in the 1930s and 1940s.
It is insufferable that this country is forced to listen to biased reports in matters which affect us all.
If the Tories want to win the next General Election, they better start house-cleaning the BBC now.
December 14, 2011
Viv wrote: “It is insufferable that this country is forced to listen to biased reports in matters which affect us all.”
My audio-visual equipment comes with an on/off switch.
A number of contributors claim the BBC is biased yet go on torturing themselves by continuing to view (or listen to) the BBC’s output. Why?
December 15, 2011
SJB: “Why?”
How else could be speak to its bias if we don’t hear/watch it?
The obvious repost to, for example me saying I never watch the BBC now, is:- ‘Then how do you know it is biased?’
Well, because I do watch it if much less than I used to, that’s how I know.
December 14, 2011
Well said Viv.
For anyone interested, the BBC Royal Charter requires that:
“The BBC shall be independent in all matters concerning the content of its output, the times and manner in which this is supplied, and in the management of its affairs.” [My emphasis.]
For source, Google BBC Royal charter, and look for page 10 of the PDF.
On page 15: the BBC Trust must “secure (sic) that the independence of the BBC is maintained.”
Somewhat at odds with that – BBC Accounts for 2010/11 show a Ā£50M loan from the European Investment Bank.
“The European Investment Bank is the European Union’s bank. Its mission is to promote EU’s objectives by providing long-term financing on favourable terms for viable projects.” (Description meta tag).
Source for the EU bank’s Ā£50M investment in the BBC, both in 2010 and 2011, here in PDF form, page 83 (or F79)
http://downloads.bbc.co.uk/annualreport/pdf/bbc_ar_online_2010_11.pdf
(2.94MB PDF)
I don’t think it’s possible to be impartial with a sum of that magnitude being handed over.
December 15, 2011
Alexis: “Somewhat at odds with that ā BBC Accounts for 2010/11 show a Ā£50M loan from the European Investment Bank.”
Why is an organization that has an assured income even going outside it revenue source (the UK government/TV license payer) to raise money.
December 15, 2011
Bob Spink raised this matter about five years ago. The BBC’s reply can be found at the following url: http://www.parliament.uk/deposits/depositedpapers/2008/DEP2008-0175.pdf
December 15, 2011
sjb: thank you, the link is appreciated. That warrants further scrutiny.
December 14, 2011
The Conservatives also blew up Cameron’s veto and have been talking non-stop about how this is a turning point which will lead to a full repatriation of power from the EU and the right of the UK to ignore any laws it find inconvenient.
December 14, 2011
Yes indeed! Sack Paten and install Norman Tebbit, that should do it!!!
December 14, 2011
I was speaking with someone yesterday about the situation in Portugal (incidentally Barroso’s home country). Apparently the price of bonds is vital to the payment of public sector workers. Each time they successfully buy bonds, public sector workers can breath a sigh of relief until the next batch becomes due.
What seems to me to be happening (and I would welcome responses) is that money is continually being borrowed against future tax revenues. Thus, future generations are having more and more debt piled on them. So this whole farrago is about protecting the current generation and leaving an impossible legacy for the next generation. It seems to me that one thing we can leave those who are born today is a good infrastructure and a good education system; if we leave them debt they will not thank us. Indeed, as I understand it one of the ‘cures’ for debt is inflation: this has the effect of making the debt lower because the currency in which it is paid back is worth less.
December 15, 2011
Bill: “money is continually being borrowed against future tax revenues. ”
Exactly. And we are poorer for it today because folk yesterday wanted to spend more than they could afford.
A question for Mr Redwood. Do the UK GDP figures include government borrowing?
Reply: Yes
December 15, 2011
JR: “Yes”
So the government borrows and calls it GDP.
December 14, 2011
According to official EU budget figures (see report below), it would appear that the UK’s net contribution was, in 2009, much lower than that of Germany, France, Italy and the Netherlands.
The UK’s net contribution in 2009 is reported as being ā¬1.36bn, as op;posed to France’s ā¬4.74bn !
Would anyone care to comment?
Figures for 2009 show that Germany was largest net contributor to the EU budget.
Poland has overtaken Greece to become the largest net beneficiary of EU funds, according to the latest figures released by the European Commission.
The report on the 2009 budget shows that Poland received ā¬6.49 billion more than it paid in to the EU budget last year. In 2008 Greece was the largest net beneficiary, receiving ā¬6.2bn more than it paid in. Poland received ā¬6.1bn in cohesion funds in 2009 and contributed ā¬3.13bn.
Germany continued to be the largest contributor to the EU budget with a net contribution of ā¬8.12 bn. Its gross contribution was ā¬20. 6bn and it received ā¬11.71bn, with ā¬6.68bn of that amount coming from the budget line for natural resources which includes farm support. The next biggest net contributor was France with ā¬4.74bn followed by Italy with ā¬4.1bn. The Dutch government made a net contribution of ā¬2.03bn. The UK’s net contribution was ā¬1.36bn after the ā¬5.66bn rebate was counted.
Source
http://www.europeanvoice.com/article/2010/09/poland-biggest-beneficiary-of-eu-funds/69010.aspx
December 14, 2011
EU budget figures….reliable sources of information? You are joking, aren’t you?
zorro
December 14, 2011
It suits the Europhobes to lie about how much the EU costs the UK.
December 15, 2011
uanime5: “It suits the Europhobes to lie about how much the EU costs the UK.”
If our figures of EU cost vary it is because the government has refused to produce a ‘cost benefit’ analysis of our membership of the EU. One might ask why if the benefits are so clear cut, they would do that?
Albion: “The UKās net contribution in 2009 is reported as being ā¬1.36bn, as op;posed to Franceās ā¬4.74bn ! Would anyone care to comment?”
If that is true, then it is excellent news. But we should be working toward a net contribution of ā¬0 (zero) or Ā£0 (zero).
Could you provide the rationale to support providing money to the EU, and of course as a result paying the EU bureaucracy out of that money, only to receive less of the money back in grants.
When we have a perfectly acceptable civil service in this country which could easily administer the grants without the added overhead of the EU civil administration.
On that basis alone, channeling money through the EU is a wasteful and inefficient process and the grants we get in return must by necessity be less than we paid out in the first cast.
Much irrelevant stuff about German, Poland , Greece and France. Albion, WHO CARES how much money Germany wants to give Poland or Greece or France, I don’t. It is a matter for the tax payers in those countries.
I care how much money we give to the EU, if we want to make payments to Greece, then we can do so through a bilateral agreement and cut out the middleman (the EU and the EU bureaucracy).
Why make people in Brussels rich if the target of our largesse is Greece?
December 15, 2011
“But we should be working toward a net contribution of ā¬0 (zero) or Ā£0 (zero).”
Actually I would prefer a gross contribution of Ā£0.
December 15, 2011
APL, you are missing my point which is that, contrary to ‘popular belief’ the UK is a relatively small net contributor to the EU budget.
Both France and Italy are much larger net contributors.
I appreciate this is an inconvenient truth for all Europhobes who like to rant about Italian and French farmers living at the expense of hard-working UK taxpayers.
Reply: Not so – I have set out the gross and net contributions. They are larger than French contributions.
December 15, 2011
albion: “you are missing my point which is that,”
I do take on board what you said, and note that JR disagrees with your statement.
But my point is: Suppose as government you wished to make grants to sectors of your industrial or commercial economy and given you already have an existing civil service, is it more efficient to use your own civil service to administer the payment or better to create a whole new civil administrative corp and pay them out of the money you want to give to your industries, which must of necessity mean your grants are smaller than they would have been.
Personally, I think the first course of action is more sensible than the second.
albion: “Europhobes who like to rant about Italian and French farmers living at the expense of hard-working UK taxpayers.”
I am none too happy about the large land owners in this country benefiting from the ridiculous CAP.
Some are more engaged in Subsidy farming than actual farming.
December 15, 2011
ONS figures show that the UKās contributions to Brussels rose by 5.7 per cent last year to a record Ā£18.5 billion…
The money Britain received back from the EU fell by almost a quarter to Ā£8.1 billion, a fall of Ā£2.6 billion in a year.
Therefore, the UKās net contribution to Brussels rocketed by 54 per cent to Ā£10.3 billion.
There is also another useful site which sets out net contribution rates for EU members……. http://www.money-go-round.eu/Country.aspx?id=UK
Albion, please provide the sources for your assertions.
zorro
December 14, 2011
And the DUP debate not reported.
December 14, 2011
Is the IMF morphing into the Euro/EU bailout fund?
Just as with all rotten setups suddenly the majority see the light and wonder how did this happen. How long before the EU is universally realised as the shambles it really is.
December 14, 2011
“Mis-reported” = media spin from the Cameroons. Very successful if you see today’s polls. It will all unravel.
December 14, 2011
John,i dont mind the lib dems voting the way they choose to if they join in these eu debates.The fingers in your ears routine is running out of steam for them.No steam coming out of my ears today.Hannan has cheered me up,check his site
December 14, 2011
Merkel says ‘Britain is a key player in Europe’ – beware Greeks bearing gifts…
December 14, 2011
This is not what we hear from the British Brainwashing Co-operative. The behaviour of this organisation goes from bad to worse. On this issue Sky News, to its shame, is not far behind. Equally unpleasant are some of the noises off coming from assorted LibDem MPs, including its leader, MEPs and ministers from other countries on their desire to belittle and/or punish the UK for its temerity.
The EZ, as you have constantly pointed out, is deeply flawed. Its leading lights seem to spend most of their time trying to get someone else to pay the bill for its defects. One day it is private sovereign bond holders, the next it is the Chinese wealth fund, more recently it has been the attempt to saddle the UK via taxes on financial services – with menaces if we do not cave in. It looks and sounds more and more squalid with each day that passes. Quite why the UK should wish to remain a member of the EU, in such circumstances, is becoming difficult to discern.
December 14, 2011
Could it be that the BBC and Sky are right while you are wrong. This might explain why they don’t agree with you.
December 15, 2011
I watched both BBC TV news and Sky News on the Friday morning. Both lots were semi-hysterical in their coverage.
December 14, 2011
Good article – I dont really understand the dymanics of the EU or current treaties in place but what I don’t get is that seeing as the stated aim of this whole thing was to stabilise the Euro, why not go ahead with an EU treaty with financial stability rules within it that only apply to the 17 in the EZ?
If they are happy with the proposals then they should feel comfortable enough to apply them to the EZ only, then any country wishing to join EZ in future will have to accept the new rules of the club (if its still around)
Or am I being Naive and was this a cynical french idea to build a vehicle for a large tax grab then power from mainly the UK? – some NI politicians painted a very grim picture of fishing fleet decimations and CAP in the house of commons last night.
Given what is apparent and what I and many others are seeing, what on earth is the problem with too many people at the top of the Lib Dems and Labour?
Are they that detached fom the public that they dont see serious future consequences of signing treaties like this?
December 14, 2011
Pete,
Eurofiles hope to get plum jobs in the EU when they are voted out of office. An EU commisioner gets Ā£150k and a nice pension. But you have to be seen to be supporting the entire con or else you get nowt.
Its gravy train or snouts in the trough politics.
December 14, 2011
Pleased as I am that we are not part of the Euro and the fiscal pact, I do wish our own government was as committed to sound currency as the ECB.
December 14, 2011
Helen Boaden, BBC Director of News, has written a defence of the BBCās weekend coverage of the summit and its fallout.
She states:
Trust must be at the heart of the BBC’s relationship with its audiences and that is why we listen carefully to the range of feedback audiences give us. We’ve had some criticism of our coverage over the weekend claiming it was too “pro-European”.
The bias is in this very statement.
She confuses pro-eu coverage with pro-European.
This is a valued judgement. It is bias, plain and simple. Perhaps it has not occured to her that many, like me, consider eu-sceptics to be Pro European.
And what of the very specific and detailed criticisms that have been levelled in the press and no doubt in individual complaints? Her answer:
I’ve watched, heard and read a great deal of what we did and without any sense of complacency, I think we reported events fairly and accurately and tried hard to capture a very wide range of views about last week’s summit.
Oh, thatās all right then.
She asks us to trust the BBC but shows in her own words why she cannot be trusted herself.
December 14, 2011
Judging by recent history the new pact will not suceed….
http://ftalphaville.ft.com/blog/2011/12/12/793241/fines-all-round/
December 14, 2011
I always said once the details were scrutinised others would fall foul of signing. Freedom and government is not easily given up especially when you already been under the mantle of another form of dictatorship, like many of the states who have recently joined. We all remember history, I do, although born during the last conflict, after it was just as bad. The thought then of the Germans having such power, and Brussels make me angry, when I think of all those who died defending this island and it’s people. Many say that’s history, well may be so, but sometimes memories help to protect the present.
The Germans won’t be the lender of last resort, won’t make themselves poorer for others, it’s all a myth, they have always been self centred and nothings changed. The French will find this out much to their cost eventually. They will have to learn from their own mistakes. Cameron last week, by using his veto, made others rethink, as we see it happen. This is a step to far for many, it’s doomed to failure. What they should be concentrating on is the currancy the euro, but the thought of land grab and power grab is so strong for some, they have lost the plot. They are dangerous men inside the EU parliament, like Nigel Farage says, democracy is in danger of being swallowed up and spit out in another form, and a form that will be unpalitable. Cameron was right to do what he did, he’s opened may countries eyes for the first time, its up to us to keep them open and be viligent for they won’t give up. How angry they must have been when they realised they would not get their grubby hands on our tax revenues, and gold reserves, and the rest.
Miliband’s and Clegg’s responses this week shows those two in a clear light, if they gained No 10, we would be sold down the river, hook line and sinker. That should be avoided at all costs.
December 14, 2011
Dear John, I trust that David Cameron has not missed the ‘co-incidence’ where the very first time he has ever stood up for Britain, and not betrayed us, he regains his leadership in the opinion polls. More of the same please. It will be rewarded.
Secondly, that gain in the opinion polls was attained very much against the flow of news, opinions, articles and ‘guest speakers’ delivered by the BBC. Truly, they do not deserve to be paid from public money because they do NOT represent the public, being pro-Labour (anti-Tory), pro-EU (anti-Britain), pro-Palestine (anti-Istael), pro- Democrat (anti-Republican), pro-Global warming theory (anti-Logic and science) and pro-Rioters (anti-Police). How can this be allowed to continue?
December 15, 2011
lojolondon: “I trust that David Cameron has not missed the āco-incidenceā where the very first time he has ever stood up for Britain, .. ”
Yes, isn’t that an odd co-incidence. British politicians standing up for the interests of Britain is popular with Britons.
It would take an Advertising executive to figure that one out.
Problem is Lojo, it was an accident.
Cue: John Redwood saying EU skeptical policies are not popular and that John Major, Ian Duncan Smith, Michael Howard ( that fellow disguised as a EUrosceptic) all tried such policies and were rejected by the British electorate.
Any second now …..
Reply: For heaven’s sake, I am one of the Conservatives who does think Euroscepticism is both right and popular, and am advising the government to enjoy the current popularity of saying “No” and move forwards with the agenda on the Eu we often talk about here.
December 15, 2011
JR: “I am one of the Conservatives who does think Euroscepticism is both right and popular, ”
John, I know perfectly well who you are. I admire your record, I would just like to occasionally nudge you a little further in the right direction*.
I just find it difficult to accept your revisionist touch ups of the record of the Tory party. Largely they don’t accord with my experience.
* along the conventional left right spectrum.
December 14, 2011
Kyle Bass,
Not very encouraging about the Eurozone, nor China, nor the US.
http://watch.bnn.ca/the-street/december-2011/the-street-december-13-2011/#clip584881
http://watch.bnn.ca/the-street/december-2011/the-street-december-13-2011/#clip584882
Canada, who would have thought it??
December 14, 2011
I read that a French MEP stated that the UK will be punished for not signing by losing it’s rebate. Would that it becomes so. Do you then see how any government could resist giving us an in/out referendum and can you, in those circumstances, envisage anything other than an overwhelming out vote. Sadly, I fear the said MEP is living in cloud cuckoo land. The EU will do nothing to put our massive contribution to their coffers in jeopardy.
December 14, 2011
Just because the 9 non-Eurozone members of the EU don’t full agree with the new treaty doesn’t change the fact that the UK is currently alone in it’s opposition. As the UK’s objection is purely based on what’s best for the UK (specifically the City) there is very little chance of the UK encouraging other EU countries to support them. Thus the UK will continue to be in a minority of one.
December 14, 2011
I have spent this week in Sweden. Sober-minded and moderately spoken business people told me they thought there would now be an approx 90% majority against any sort of further Euro integration of the kind contemplated by this agreement, up from some 70% pre-crisis. This ‘treaty’ has no chance of ratification in the Parliaments of Europe.
December 14, 2011
When will politicians realise they cannot run economies, only destroy them? Never.
December 14, 2011
John – Did you notice the spike in the polls today for the Conservatives. I have long held the belief that if you had a leader which had policies which appealed to the patriotic working class then the Tories would have won a landslide at the last election.
EU Referendum – Take control of EU immigration – Cut income tax.
John – I do not say this lightly but I have come to the conclusion that Cameron must be removed. He cannot be trusted and will not give the people a referendum.
December 15, 2011
Phil Richmond: “I have long held the belief that if you had a leader which had policies which appealed to the patriotic ..”
Good Lord Phil, you don’t think people like David Cameron, Ken Clarke, Oliver Letwin, want to be associated with us grubby working class patriots, do you?
December 15, 2011
Good point APL. I remember David Starkey once talking about how Cameron and his gang were idiots for trying to appeal to the “soft left” (Guardian reading middle-class) who would never vote Tory in a million years. He went on to state that the “soft right” would vote Labour (see Tony Blair 97).
His point though is that there are millions of patriotic working class just waiting for a reason to vote Tory (see Margaret Thatcher).
I am one of those Patriotic working class and have voted Tory since I turned 18 in 87. Im now a member of UKIP thanks to Cameron.
John Redwood & his ilk are fools if they trust this man. They should remove him.
December 14, 2011
Interesting in the misreporting is, that I happen to see that this MEP Hannan posted a clip on his website where he is complaining about other MEPs’ scornful comments about the UK but he fails to include the clip in which, during the same debate, he was shouting …. at his colleagues (drawing on the double meaning), as he also, earlier had sweared at the leader of the liberal party in the UK. Misreporting is a tabloid art and Britain is big in tabloids.
December 15, 2011
Has anyone read Frederick Forsyth’s LETTER to Mrs Merkel in tuesday’s Express,if not I urge you all to do so,this puts it in a master writer’s style exactly as I would want and also I think most of you.This is exactly HOW to talk to the EU and EUROPHILES here,coupled with a DEMAND of an explanation from them all WHAT DOES THE EU DO FOR THE UK.
Seeing as we put much more in than we get out,NO laws or regulation favour us in fact quite the opposite,ie Losing our own fishing grounds,the stupid agricultural policy which favours
especially france and disadvantages us,PLUS we run a Ā£48 billion balance of trade deficit with them,our unemployed figure hits a record for 17 years today YET we as a country allowed 2.5 million migrants in in the last 15 years,I see an absolute correlation does any one else do,for instance WHY does almost every petrol station have cashiers (who may be recent immigrants-ed) and not from the UK,is there a REVERSE example, in the greater london and
home counties that has to be 10,000 stations at least with an average of 5 staff.That SHOULD be 50,000 less BRITISH workers on the dole and 50,000 OFF these latest figures.My South African wife [Coloured]and her entire family down there think we are mad including my Headmaster brother in law AND cape Town ANC councillor ,he says that were this to happen down there there would be HELL TO PAY.
December 15, 2011
By the way I personally would like a time machine so I could sabotage Heath’s getting us in all those years ago especially IF I could take back videod and recorded proof,maybe then
the tory party could have dumped him then before he could do his harm.
December 15, 2011
I just noticed that MEP Hannan had actually put his more abusive clip in an earlier posting. My apologies.
December 15, 2011
Cameron may not have been 100% sure when he walked out of the summit – but Im sure he will be 100% confident now.
I’m looking forward to Sarkozy nationalizing his 3 big banks in the middle of an election campaingn and claiming he saved France.
December 15, 2011
In my assessment, this new treaty will only be signed up to by those with no option but to sign up – the Eurozone countries. We will not be a minority of one at all. I also feel that the Irish will attempt to ratify the treaty without a referendum, and there will be delays while the constitutional issue is considered in the courts, while in Germany the treaty will be signed but a legal challenge to it will be embarked upon in their constiutional court – at which point open season will be declared upon the Euro.
The question I have (from a purely self interested perspective) is that I am still enjoying rock bottom variable rates on my mortgage. I realise that John never gives investment advice, but I would appreciate his thoughts as to what might happen to mortgage rates generally if the Euro goes to the wall. I recall someone saying that if the cost of borrowing for the UK government rises quickly, this could increase mortgage rates even if official interst rates remain at 0.5%.
Reply: Mortgage rates are much higher than current base rate (other than trackers) already. Yes, they would likely go up more if government borrowing rates rose, even if the official base rate stayed down.
December 15, 2011
Surely to God Nick Clegg will now see sense. Only an idiot would support Cameron, then go on the offensive against him, and then realise he was wrong to deny him all along. As for the BBC… what good is it if it only reports what the EU worshipers say?
This is a sick country alright, and it starts at the top.
December 15, 2011
Cracks emerge in Euro pact as Hungarian and Czech leaders warn they won’t join if it means giving up control over taxation
http://www.dailymail.co.uk/news/article-2074655/EU-treaty-Hungary-Czech-leaders-wont-join-means-giving-taxation-control.html
Who would have guessed it?
December 16, 2011
I couldnāt be the architect of a tax system, but the design should deliver a structure where the UK becomes attractive to both attract and to keep the brightest the best to these shores.
As long as people have to work until the height of the summer, before they bank any money themselves then we wonāt attract the investment we need.
Thatās the way to economic growth and the solution of some of the social problems, such as youth unemployment.
Plus simplicity in the tax system, then the harder it is to evade.
December 16, 2011
Now is the time for actively seeking the support of those other nine non-Euro nations. We boast about our independent foreign policy; it’s time to show it. Now is also the time to push for a two ring Europe. It’s not a question of resisting more integration; there is far too much already. And we should be willing partly to finance Greece, Ireland and Portugal leaving the Euro zone; every little helps.