Europe

Tuesday

Alex Massie

The Irish Ask Another Brussels Question

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

Sunday

Peter Hoskin

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

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

Friday

Alex Massie

Prisoner: Cell Block Athens

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

Thursday

David Owen

How to remain a nation state

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

Tuesday

Clarissa Tan

The hurdles facing Greece

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

Alex Massie Alex Massie

Darling: This is a Greek Versailles Treaty

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

Peter Hoskin

Greece saved at last? Nope…

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

Friday

James Forsyth

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

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

Thursday

Faisal Islam

Bailout country | 16 February 2012

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

Wednesday

James Forsyth

The steady erosion of Greek democracy

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

Monday

James Forsyth

Will Germany let Greece stay in the euro?

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

Friday

James Forsyth

Greece needs to quit the eurozone

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

Wednesday

Alex Massie

Size Matters: Dysfunctional Government Edition

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

Tuesday

Douglas Murray

Ignore the European Court and deport Abu Qatada tonight

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

Daniel Korski

Where has the pro-EU camp gone?

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

Monday

James Forsyth

Cameron’s coming battle over the ECHR

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

Thursday

Daniel Korski

Don’t expect repatriation in this Parliament

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

Tuesday

Peter Hoskin

Cameron cheered by the Lib Dems, spared by the Tories, mocked by Labour

If you wanted proof that Cameron has softened his stance towards Europe since the hard chill of December, then just look to the Lib Dems. Nick Clegg, unlike then, was sat next to the Prime Minister as he gave his statement to the Commons this afternoon. And the questions that followed from the likes of Menzies Campbell and Simon Hughes were generally warm and approving. Campbell started by, in his words, ‘praising the pragmatism of the PM’. Hughes celebrated a ‘more successful and satisfactory summit than the one in December’. That praise, while friendly enough, creates obvious problems for Cameron — and it was those problems that Ed Miliband sought

Monday

Peter Hoskin

Cameron softens his stance on Europe — but who benefits?

‘We will insist that the EU institutions — the court, the commission — that they work for all 27 nations of the EU.’ So said David Cameron, back in December, suggesting that he’d block Europe’s ‘fiscal compact’ countries from using EU-wide institutions to enforce their, er, fiscal compact. But now this component of his ‘veto’ appears to have come to naught, and that veto is looking all the thinner for it. On the Today Programme this morning, William Hague confirmed that Britain wouldn’t block the use of EU institutions, such as the court, for the fiscal union. ‘We’re not intending to take action about that now,’ is how he put

Peter Hoskin

Greece is still the word ahead of today’s eurosummit

How about this for a claim by Nicolas Sarkozy, made in a TV appearance yesterday? ‘Europe is no longer at the edge of the cliff.’ It’s quite some statement, so let’s hear it again: ‘Europe is no longer at the edge of the cliff.’ Of course, Sarkozy has reasons for saying it beyond mere pre-electoral braggadocio: the rates paid on Italian and Spanish 10-year bonds have generally been falling since the the beginning of the year; the euro has been making some tentative progress against other currencies; and so on. But it still constrasts heavily with much else that is being said around the eurozone. Only last week, Angela Merkel