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Thursday, November 30, 2006

Nothing to do with Europe

Colin Powell has joined the list of people saying Iraq is a "civil war".

He isn't the only one. Foreign Policy are listing who is, and isn't using "the c word".

The whole thing is becoming a bit of a shibboleth - like the use of "disproportionate" during the war in Lebanon in the summer. Egged on by the Indie the Conservatives said it, but Blair refused to.

Not sure how far the word games really take us... rather more pressingly, Hot Air picks up on the news that the Saudis are considering using their own "oil weapon" against Iran if things get messier still, and are going to get (even) more deeply involved in Iraq anyway.

What a mess. One thing's for sure - in the future UK politicians are going to have to spend more time thinking about hard-edged foreign policy issues and less time worrying about their inner tosser.

Wednesday, November 29, 2006

Chirac's NATO swansong

The NATO summit, which has just finished, will almost certainly be Jacques Chirac's last as French President. True to form he has been the centrepeice of attention, causing offence, blocking proposals, and generally making a nuisance of himself:

  • First of all he annoys the Latvians by inviting over his mate Vladimir Putin to Riga to celebrate his 74 th birthday. He didn't come in the end but Le Figaro noted that it would have been the first visit by a Russian leader to the Baltics since 1991 and was seen as “a real provocation” by France which had "brought a cold chill" to the country.
  • He then provoked a bust-up with the Americans by attempting to block plans for partnership agreements with countries like Australia, Japan and New Zealand. Curiously he argued that NATO shouldn't "reward troop providers". Instead Chirac called for NATO to give Iran a greater role in the rebuilding of Afghanistan.
  • To be even-handed Chirac then annoyed his Central European counterparts by dismissing their pet plan to increase NATO's role in energy security.

Political summits will certainly be less colourful without Chirac's remarks about British food and refusal to listen to speeches in English. On the other hand, with Le Bulldozer gone a little more might get done...

Tuesday, November 28, 2006

The news Today, oh boy

Rule number one of journalism. The only thing the media likes nearly as much as a top Tory totty scandal is a story about... the media.

Hence Michael Grade's decision to leave the BBC to join ITV being headline news on the Today programme this morning.

By quickly looking at this morning's Today schedule we can see that:

Michael Grade was the lead story with 16mins of featured coverage.

The NATO summit was the second most important story with 11 featured mins.

The Israeli-Palestinian peace negotiations were of no importance and were not worthy of a feature.

Monday, November 27, 2006

Playing the game

Now you too can wield terrifying power... by taking part in the "be an MEP" internet game.

(expenses not included)

In or out?

Interesting argument over on Sinclair's blog about the EU.

35 hour week? Non merci

Does long-term support for the euro have wider effects on your mental health?

Ask John Gummer.

We assume its just another "Polly Toynbee is greater than Churchill" moment. But is that strategy getting a bit old now?

Friday, November 24, 2006

Fantasy migration manager

Two interesting papers here and here from National Institute for Economic and Social Research, on the effect of migration within Europe.

Also an interesting factoid: 11.6 per cent of 25-34 year olds in the UK have arrived since 1997. (some of them are in the OE office)

Interestingly, NIESR are much more pessimistic about unemployment than the Home Office. In their modelling experiment 500,000 people arriving in the UK over five years (rather slower than the real rate so far) is predicted to cause unemployment to rise by 0.4 - 0.5%

Meanwhile in Poland: "There is likely to be a decline in the unemployment rate during the first five years after the emigration shock and productivity growth would increase over this period, as employment declines more rapidly than the capital stock can adjust so the capital–labour ratio rises markedly, albeit largely temporarily."

The Commission strikes back

More from the EV:
Commission and UK officials have confirmed that next week the Director-General for Regional Policy Graham Meadows will write to the UK authorities highlighting weak audit controls over spending in 2005 by payment agencies in England. The UK will have six weeks to convince the Commission that it has taken appropriate steps to address the shortcomings. But if it fails to do so, the Commission can suspend payments until the problems are resolved.

The structural funds problems come on top of difficulties with Common Agricultural Policy payments. The UK’s Rural Payments Agency, which administers the EU’s single payments scheme is in disarray. The UK’s National Audit Office warned last month that errors and procedural mistakes were likely to lead the European Commission to disallow substantial amounts of EU funding, forcing the UK government to foot the bill.

...The warning on structural funds will be a further embarrassment for the British government which this week announced strengthened audits of how it spends EU funds, following similar pledges by the Dutch and Danish governments.
Message - if you are going to mess with the Commission, you shouldn't be surprised when they mess with you.

Thursday, November 23, 2006

EU democracy in action

This week's European Voice has a cracking interview with the man behind Nicolas Sarkozy's mini-treaty proposals on the EU Constitution - French MEP Alain Lamassoure. His comments speak for themselves:

"He told European Voice that the premise for Sarkozy’s approach is that any
attempt to relaunch the institutional reforms “could not be allowed to fail”.
This meant that EU leaders had to agree not to hold a referendum on a next text,
except in Ireland. The constitution would not be renegotiated as such but there
would be an agreement to retain the “heart of the constitution” on which there
had been a strong consensus... As this would be only an ordinary treaty, there
would be no need to “annoy the people” with another referendum, he said."

"The MEP said UK Prime Minister Tony Blair had received the ideas “with
interest” which increased the need to proceed fast with the plans. He said that
contacts with Blair’s likely successor, Finance Minister Gordon Brown, had been
“more complex”."

"Lamassoure rejected the suggestion that Sarkozy was proposing a
technocratic fix to a political problem, saying that the mini-treaty would give
more power to EU citizens. “But in order to do that, we have to go via national
parliaments,” he said. “It’s not a way to contradict the people.”"

We love the idea that in order to give people a say in the EU it's first necessary to take away their right to a say. They're determined not to let anyone get in the way of their plans - not even Gordon Brown...

The spirit of ’68 lives on at LSE

Extraordinary scenes at the London School of Economics last night. Peter Sutherland, ex-EU Commissioner and Chairman of BP, was physically stopped from giving a long-scheduled public speech on European foreign policy by a handful of undergraduates wielding “Out Sutherland!” banners. They blockaded the stage and refused to move, to the almost violent frustration of the audience, eventually forcing the lecture to be given elsewhere, almost an hour behind schedule.

Sutherland has recently been appointed Chair of the LSE Council and it seems not everyone is happy about it, on the grounds of BP’s environmental record, and a feeling that “big business” is in danger of jeopordising the LSE’s “social science and Fabian origins.” Someone has posted photos of the protest here.

Eventually, in his long-coming speech Sutherland talked about the need for a “stronger and more integrated Europe”, arguing that single member states cannot be “effective or even relevant” acting alone on the world stage. His justification? “Eurobarometer polls across Europe, including the UK, highlight strong support for “more Europe” in foreign and security policy.”

Only yesterday we suggested that the Commission uses its Eurobarometer polls as a propaganda tool to justify new integrationist policies, as it emerged that it had delayed releasing a poll which found a drop in support for a common EU energy policy. On the pretext that “European citizens clearly expect the Union to use its substantial influence to protect and promote their interests”, he argued for QMV in foreign policy-making, an EU foreign minister, the creation of a European diplomatic services, a legal personality for the EU, and the end of the rotating Presidency role in foreign affairs – all elements of the rejected EU Constitution.

The whole tone of Sutherland’s speech – the undemocratic, press-on-regardless mentality – was just as much a throwback as the protesting students.

Hug a Hoonie (he needs it)

Poor old Geoff Hoon. It seems that hardly a week goes by without him suffering another humiliation. It all began with the cabinet reshuffle in May. According to Dominic Lawson, Hoon was confident he would be moving back up the ministerial ladder. The night before the local elections - Lawson tells us - Hoon was interviewed by David Dimbleby on the imminent reshuffle:

"Will you be standing by your phone, Mr Hoon?" Instead of the studiedly modest
response that one would expect to such a question, Hoon replied: "I suspect I'll
be doing rather more than that. I suspect I'll be heading for Downing Street in
the morning." The smug smile accompanying that gratuitous remark suggested to
the other guests in the studio that Mr Hoon was in line for a promotion."
But it wasn't to be. According to the press reports at the time, Blair initially promised him a new department for Europe to ease the blow of his demotion from Leader of the House, only to go back on his word before the end of the day was out.

In his first major Commons debate in his new role he had to listen to William Hague predicting that he would become "Junior Under-Secretary for paperclips in no time".

Margaret Beckett seemed to confirm Hague's prediction by barring him from answering Commons' questions on his own portfolio, suggesting that he answer on Northern Uganda instead, or better still not bother to turn up...

Open season on Hoon now seems to be in full swing. The Sun informed us that his officials have changed his nickname from Buff(Hoon) to Odd-job. Tory MP Keith Simpson tabled a parliamentary question asking "What is the point of Geoff Hoon?". And Shadow Europe Minister Graham Brady is investigating how much it cost for Hoon to change the plaque on his door to add to "Minister for Europe" the rather desperate rider, " - Attending Cabinet".

Summing it up in the Times today Anne Treneman wrote:

I began to concentrate on the lonely figure of Geoff Hoon, sitting on the
front bench. You may remember that he had a spat with Mrs Beckett and so now he
is the Minister for Europe who isn’t allowed to talk on Europe. As I understand
it, he is now piloting our transport strategy with Kazakhstan. Yesterday he
clutched a binder that held, I presume, his children’s homework.

It's probably this seeming shortage of friends that has driven Hoon to become the Cabinet's foremost leakmeister. Perhaps David Cameron needs to come up with some kind of new strategy for socially excluded people in Westminster...

Wednesday, November 22, 2006

Those numbers again...

The Government has released the latest quarterly update of the numbers of Eastern European workers who have registered to work in the UK since 2004. The figures generated headlines in this morning's papers. Most focused on the overall level of migration, but the Express led with the revelation that Eastern European migrants have made nearly 55,000 successful benefit claims in the UK since EU enlargement.

We’ve had a look at the numbers and there are some interesting results. It's now widely known that the Government hugely underestimated the number of people that would come to the UK after enlargement. But it’s also becoming clear that their claims on the numbers claiming benefits are wrong by at least a factor of 10.

As we've written before, in 2004 the Government promised to put in place a system which would stop EU migrants coming to the UK to claim benefits. Only a month ago they told Parliament that this had been successful; the proportion of Eastern European migrants claiming benefits was "under 1%".

For the first time yesterday the Government published figures for the number of repeat applications to the Worker Registration scheme – which gives us a more accurate (and lower) total number of people who have worked in the UK. If we divide the update figure on welfare claims by the new lower total we get a ratio of benefit claims of one in six or 16% of A8 migrants drawing benefits in the UK. The proportion claiming is also rising at quite a rate. So far this year 45% of migrants have made successful claims for welfare payments. We have said it before – but what we want is people free to move around to work, not to claim benefits.

Tuesday, November 21, 2006

Meanwhile in Brussels

The FT diary this morning mentions that:
David Cameron is finally slipping over to Brussels next month. The Tory leader who has studiously avoided the E word since taking charge, has realised that an aspiring party of government eventually has to admit that the European Union exists.... Cameron's path is being smoothed this week by Oliver Letwin. Letwin is the first senior Tory to visit Brussels since the attempt to pull their troops out of the centre-right European People's party in the European Parliament. He will dine with MEPs tomorrow and launch a set of five strategy groups to come up with a European policy.
Apparently the strategy groups the FT mentioned are a way to connect the tory MEPs to their policy review. Appa the five groups are going to be run by the tory MEPs and will be doing stuff on:
  • Economic reform
  • The EU budget, CAP, and waste
  • Democracy promotion / global human rights
  • Quality of life and the environment
  • The EU institutions
Not sure what to make of it. It probably makes sense for them to try and link up more with their MEPs - our impression is that it's very easy for MEPs to get stranded out of the Westminster loop (and thus never called by hacks) while on the other hand quite a lot of MPs don't really know that much about what goes on in Brusssels. Should be interesting to see what they come up with.

Dinner with Putin

EU ministers are having dinner with Putin on Friday. Presumably Sushi is off the menu.

The Poles won't enjoy it very much either. As the blog of the Finnish EU Presidency points out - they are coming under a lot of pressure to agree an EU-Russia framework treaty - which they are currently blocking for various reasons, at least until Russia agrees to open up its pipeline system to other countries.

The EU says everyone has to negotiate together with Russia to get a better deal. The Poles ask why pipleines are routed around their country, and say that its them that suffers when Russia cuts off the gas and it's minus 20c outside. Fair point?

Give a man a fish

Oxfam New Zealand report on the EU's negotations to access Pacific fishing grounds.

Sounds like the EU might do for Fiji and other developing countries what they have already done for Grimsby, Hull and other fishing towns here:
This could result in domestic fishing being curtailed, or ... being reduced while EU access continues. In theory this should not be possible as EU policy only provides for access to ‘surplus’ stocks, and this access would be subject to the regional management bodies. Experience in Africa, however, suggests that EU boats have often competed directly with local fishers and have overfished until the point of fishery collapse.

Speak up

Dull press releases of the world unite. The European Movement is planning to launch a new "Speak up Europe" campaign later in the week, as part of the EU's ridiculous "plan D for democracy" initiative.

According to the blurb, as a symbol of their passionate desire to reach out to real people they are going to be working with lots of other groups:

One of the strong elements of the Speak up Europe campaign is also the extensive partnership supporting it. A large international partnership was involved in the planning and will subsequently take care of the implementation: European Movement International (EMI), Fondation EurActiv, Young European Federalists (JEF), Union of European Federalists (UEF) and European Students' Forum (AEGEE).

In other words - Brussels loons talking to other Brussels-based acronym-loving loons.

Just slightly annoying that we have to pay for them to come up with this rubbish.

In Committee

We're just back from giving evidence to the Home Office select committee. They're doing an inquiry on the future of the Hague Programme - the EU's ten year plan to harmonise member states' criminal and civil legal systems.

The MPs on the Home Office Committee are off to Brussels later in the week and seem very interested in the whole issue of better scrutiny of EU law - which is a bit of a joke at the moment in the UK, despite the best efforts of the MPs on the relavent committees.

We wish them luck - the EU's powers over home affairs have grown amzingly quickly in recent years. The only thing the Hague Programme is really comparable with is the single market programme in the 1980s - it is enormous.

The Blair government seem to be hoping to ride the tiger and hoping to steer the whole thing in a direction they can live with. But given the sheer number of controversial measures in the pipeline - that may not be do-able.

Meanwhile, the Enviroment committee have got the Environment Agency to fess up that the EU's Emissions Trading System isn't working. Responding to questions from the Committee this morning, the Environment Agency was unable to name any individual case in which a firm had reduced emissions as a result of the scheme, saying “it’s not clear whether we’re seeing any environmental benefits as yet”.

The Committee alluded to the fact that the ETS had cost businesses £500m so far, and then asked whether the ETS has had any tangible effect in reducing carbon emissions. Pressed further on this the people from the Agency said “we have not been aware of any significant impact”.

The Committee then went on to cite Open Europe’s research on the costs of complying with the ETS for the NHS. The Agency expressed concern over “the proportionality of allocations” and admitted that including smaller activities in ETS may not be appropriate: “There is a case for changing what’s in it…excluding smaller activities”, arguing that excluding such activities from the ETS would have a “negligible” effect on the levels of emissions. Asked whether they agreed that the allocation of carbon emissions has been "inherently irrational” the Agency said “we can only agree with that”.

Monday, November 20, 2006

Make it fair

We’ve launched a petition on the new downing street site to ask the PM to end Europe's unfair trade barriers against developing countries, and scrap the CAP.

Some facts:
  • Getting rid of global trade barriers could raise African GDP by up to 6%, lifting tens of millions of people out of poverty. (Oxford Economics 2005)

  • If Africa could regain just an additional 1% share of global trade, it would earn $70 billion more in exports each year – several times more than the whole region currently receives in foreign aid. (Commiussion for Africa 2005)

  • Despite trade preferences, developing countries still face higher trade barriers in practice than rich. Poor countries with a GDP per capita of under £5,000 a year face an applied EU tariff of 5% on average, while rich countries with a per capita income of over £15,000 a year face a tariff of just 1.6%. (GTAP database v.6)

This is a good cause, and the online form takes about 15 seconds to fill in. Please do forward it on. Or even link to this post.

Please help us at least match the numbers wanting to replace the national anthem with ‘Gold’ by Spandau Ballet...

She's not Blair, and he's not Thatcher


Horribly superficial article on French politics by Martin Kettle in the Guardian.
"Royal also won because she represents a general break from the failed past. This is most obvious in her gender and her nice smile."
Great analysis.
She may as yet be extremely unspecific about how she intends to achieve her goals, but there is no missing the recognition that things must change... Royal's acceptance speech yesterday spoke of modernisation, individual choice, respect, justice with order, and even "education, education, education".
Kettle talks about:
Royal's neo-Blairite concoction of economic flexibility, cultural liberalism and reducing social exclusion.
In contrast to:
Sarkozy's neo-Thatcherite cocktail of tax cuts, big-bang institutional upheavals and tough law-and-order.
Hang on a minute. Sarko might be tough on banlieues - but he certainly isn't a Thatcherite. In a speech just last week he said that globalisation was "the cause of the protest vote and the rallying of increasingly large parts of the population to protectionist arguments." He said, "Europe needs protection. The word protection does not frighten me." He went on to say that the high euro needed to be brought down to save European companies. Hardly Iron Lady territory.

Sarko also proposed a European import tax on pollution, which would include taxing imports from third countries and which would be used to finance research in clean energy sources. He said, "There is no reason why we should have to respect the environment when we are in competition with countries and businesses which don't respect environmental rules at all."

Nor is Royal really a Blairite. That tag has been stuck on her mainly by her opponents.

So far Sego has said that “the banking system gets rich at the expense of the poor”, and called for looser monetary and fiscal policies.

According to the Economist on Friday, Royal will campaign on a programme of calling for a increase in government spending of 32%. Even the FT think that she is "firmly grounded in the tradition of French socialism of the 1990s."

The joy of opt-outs

A paper for the Swedish Government says the forthcoming Rome III regulation - intended to harmonise laws on divorce - could see Iranian divorce rules applied in European courts in future.

Britain and Ireland are using their opt-outs to bail out of the plan.

Balls to the euro

People have said for a long time that Brown would look for ways to reposition Labour on Europe, and even for ways to outflank the Tories.

There are a couple of straws in the wind this weekend. The Guardian this morning has Ed Balls' speech to the Institute of Chartered Accountants today, in which he will say that the EU's failure to sign get its accounts signed off for twelve years is a "dissapointment" and an "annual embarassment." He'll argue that: "By giving national parliaments greater opportunity to scrutinise how EU funds are managed I believe we can help give taxpayers the reassurances they rightly expect".
Mr Balls will tell MPs that in future parliament will be given an annual statement on all EU budget spending within the UK, which will be checked by the National Audit Office. He will use tomorrow's debate in Brussels on the 2007 budget to urge other member states to follow suit, arguing that they should show they can account properly for how money is spent and strengthen their controls against fraud. The Netherlands and Denmark are understood to be considering similar plans.
The Treasury have also been briefing that 'Gordon hasn't got enough credit for stopping us joining the euro' for a while. In Scotland on Sunday Brown's people up the ante a bit by (sort of) hinting that he would never join the euro:
"Gordon has made it clear, repeatedly, that this will be decided on the economics," a Treasury source said last night. "He has always harboured doubts over whether the time would ever be right to enter. This was last looked at three years ago and I don't see us getting any closer now. I think Gordon's going to be happy to kick this way past the long grass for as long as he's around."
This is all interesting stuff - but hardly revolutionary so far. Maybe the most interesting thing about Brown's positioning is that having marched himself up the hill as a sceptic, he will be in a very different dynamic to Blair when negotiating in Brussels.

When Blair was defeated on a particular issue it was easier for him to get some kind of face saving-agreement and then go out and sell it as if it were his own idea. He was happy (at least while high in the polls) to position himself as our "most pro-European PM ever", and to cover up the extent to which the UK was outvoted.

If Brown is going to position himself as a sceptic, things will be very different. In broad terms 'standing up to' the EU more will take him closer to the average voter. But on the other hand it means that there are no excuses if things go wrong. That's when we will know which way he is really going to jump.

Friday, November 17, 2006

Boring but important

The Commons European Scrutiny Committee has published a report today on the EU Commission's proposal to move criminal justice and policing into the first pillar of the EU's treaties. This would almost certainly abolish the UK's veto over things like a new proposal on rights for suspects in custody and the creation of harmonised criminal laws across the EU. It would also make the ECJ Britain's highest criminal court, giving it the power to decide our substantive criminal law.

Reading the conclusions of the report I feel sorry for the clerks who - you sense - really want to rip into the proposal, but are required to be more balanced than they would like to be. Nonetheless, despite the necessary "on one hand and on the other", they still produce a pretty tough conclusion:

"it appears to us that the proposal to use the passerelle does not offer significant gains for the UK."

We couldn't agree more. The report goes on to argue that if the proposal went ahead:

"the present certainty about the existence of the means to protect the UK's interests would be replaced by uncertainty and risks."

This report follows on from an in-depth analysis by the House of Lords on ths issue. The Commons Home Affairs Committee is also about to begin an investigation into the proposal. I would guess that just like the Commons EU committee they will be just as opposed to attempts by the EU to reduce their role in deciding what constitutes a criminal offence and how it should be punished on behalf of their voters.

One final observation - the EU Scrutiny Committee reports that the Government told them that the proposals are a non-starter and that the debate around the proposal is "over".

Sounds like wishful thinking to us... Any bets on how long it will take before the Government has to eat its words?

Thursday, November 16, 2006

Massive massive cynicism

If you were wondering whether the government's "strategy" of making green issues the new rationale for the EU was driven by (a) massively cynical politics or (b) genuine heartfelt environmentalism, wonder no more.

This from Milliband on the CER site:

For my generation, the pursuit of peace cannot provide the drive and moral purpose that are needed to inspire the next phase of the European project. The environment is the issue that can best reconnect Europe with its citizens and re-build trust in European institutions. The needs of the environment are coming together with the needs of the EU: one is a cause looking for a champion, the other a champion in search of a cause.

Tory Europe row - or not?

Francis Maude has written to Tim Mongomerie to say that the Conservatives are thinking about changing the way they select people for the next European elections.
"There is some preliminary thinking going on about whether any changes are needed."
The implcit message in the letter is that they would centralise control if they felt that there was a chance that there might be a messy campaign to get rid of incumbent europhile MEPs (who are still - amazingly - the majority of the tory group).
"How do we avoid these selection processes from becoming divisive and acrimonious? Of course there will be differences in the various candidates’ stance towards the EU, and it’s right that those making the choices are fully aware of the candidates’ views. But there is a big prize for the Party in this process being conducted in a manner that is open and honest, while remaining civilised and courteous. I suspect that this is not really to do with the exact details of the process. I guess it’s more about how we all behave".
You can see why the tory leadership have the fear. Last time round a couple of sitting MEPs got dumped, but only a few. But now (1) Conservative activists have become much more sceptical about the EU; (2) the europhile MEPs have done more do wind up the membership - particularly with their behaviour over the EPP issue; and (3) internet based grassroots activity has the potential to focus anger into an effective campaign against the incumbents.

Add to that the liklihood that the euro elections are likely to fall at roughly the same time (summer '09) as the general, and that Brown will be keen to see if he can trigger some kind of tory euro row, and you have a cause for Maude's concern.

Its not totally inconcievable that the leadship would think about some kind of radical tightening of control. Taking away people's votes altogether might be a step too far. But some kind of tight A-list approach might serve the second purpose of heading off a sceptical 'decapitation' campaign against europhile incumbents.

In fact there might even be some people who would relish the idea of trying to impose "a list that looks like Britain" (no bad thing) in the teeth of sceptical opposition. The tories haven't said yet whether the a-list will be extended to the euro elections - there will be pressure to do so, and why not kill two birds with one stone?

However, that strikes me as a nuclear option. Maude says that:
"we can all therefore simply decide for ourselves that we will take shared responsibility, to coin a phrase, for making this a process that enhances rather than damages our Party’s reputation."
Which is a totally fair point. The Republican right did themselves no favours with their 90s witchhunts. In translation it sounds like Maude means: "If people who were a bit innefective were to get deselected without triggering an embarrising row, that would be one thing. If things got nasty, that would be another."

Can the tories find a way to make the election process work for them? One mild reform might be simply to allow postal voting (at the moment party members have to turn up to a hustings to get a say). That would probably strengthen the incumbents because of the name-recognition factor. Some of the tory MEPs like Dan Hannan call for open primaries to select the candidates - arguing that people who can reach to the uncoverted are likely to be the most effective candidates for them.

There might be something in that, and - as the Conservatives' own leadship election showed - a bit of controversy is not necessarily a bad thing for a party. If tory members really don't feel represented by their MEPs - wouldn't it be better for them to get some they can support, rather than voting for someone else later?

Our mirror image...

...have a new blog.

Hey! It looks like a negative of ours!


The CER are interesting - and just down the street from us. Charles Grant (its current Director) and Ben Hall (now at the FT) are the people most responsible for Blair's Europe policy. We wrote about the formation (and collapse) of their policy of a bit ago.

...stick a tail on it and call it a weasel

According to Mannekin Pis cunning EU leaders are planning to include large chunks of the EU Constitution in the Berlin Declaration next March.

The idea is that EU leaders will pay lip service to the "largely rhetorical" preamble to the Constitution and its other "declaratory flourishes". This would then clear the way to push through the more "practical" changes - such as creating an EU Foregin Minister and EU President - in a mini-treaty.

They basically think voters are like tiny children - they hope that if they cut it up into small enough pieces we'll swallow it.

Iranian Ju-jitsu

The IAEA have found plutonium and more enriched uranium in Iran.

Red faces? No way - in fact it's surely time for them to complain to the UN about Israel.

All this stuff makes the Indie's ludicrous front page yesterday (about whether we should have annual or multi-annual carbon emission targets) - look a wee bit irrelevant.

Hoon's Cantona moment?

Elaib picks up on the existential crisis of Europe Minister Geoff Hoon.

It's all very left bank. Reminds us of Guy Debord's answer to the question "What is situationism?"

The trouble with being a bridge...

Ben Brogan picks up on John Hulsman's controversial speech at our dinner the other night.

Wednesday, November 15, 2006

They're giving up

Aha - now Geoff Hoon is telling people in Strasbourg that the much vaunted 'controls' on Bulgarian and Romanian workers will be lifted after a year. This comes after the Home Office did a screaming u-turn and halved the number of legal places, after a fight with some farmers.

Can we officially declare it a joke policy yet?

The Foreign Office has a cunning plan

Apparently the Foreign Office are planning soon to release their own new draft treaty for the future of Europe.

The idea, presumably, is to try and steer Nicolas Sarkozy's "mini treaty" idea - around which a considerable consensus has formed in Brussels - in a less dangerous direction for the Government.

Can they pull it off? Seems to us that the basic elements that are always mentioned as part of the mini-treaty idea are enough to prompt calls for a referendum in the UK (and trigger votes automatically in Ireland and Denmark too). Sarko talks about an EU President, an EU Foreign Minister, more majority voting and a changing in the voting system to make it easier to pass legislation.

Our view: doing all that without giving people a say won't wash.

Brown out

So UK unemployment is the highest for seven years.

This is obviously bad news for the 263,000 extra people without a job. But it'll have an impact of the Europe debate too. As/when the problems with the UK economy get worse loads of idiots will probably crawl out of the woodwork to start banging on about how we should have joined the euro, and restart Will Hutton-ish droning on about how wonderfully the core EU countries are doing... etc etc until you die of boredom.

The weird thing is that there is loads of coverage of the UK dole figures in the Scandinavian papers this morning. Why? The reality is that - not to put too fine a point on it - how well different member states are doing has a big impact on their clout in Brussels. In those terms Brown is pretty screwed.

Clearly the winning move - assuming you are going to play the Brussels game - is to be friendly, but hammer things you don't want, and lead by example at home.

Brown has that all the wrong way round. He's lectured all the other Finanace Ministers to the point where they hate him - but at home he's allowed the UK economy to drop down the competitiveness tables like a dead cat. Meanwhile, despite spinning himself as a scep, and sniping from the sidelines, he has always failed to stop Blair from going into full surrender monkey mode on issues like the Budget.

When he becomes PM he is in for a rough ride on things European - both in Brussels and London. As unemployment goes up, his clout goes down.

Monday, November 13, 2006

MEPs in £200,000 trip to Barbados

The Sunday Times has learnt that Glenys Kinnock is to lead a group of 70 MEPs (accompanied by 84 officials) to a Barbados resort for a conference on ‘development and deprivation’ where they will meet leaders from some of the world’s poorest nations.

The five-day trip will cost taxpayers £200,000 and includes a four-hour chartered cruise on a 100ft ship billed as “the longest floating bar in the Caribbean”. Meanwhile politicians’ spouses can enjoy water sports and a trip to the “eighth wonder of the world”, Harrison’s Cave. MEPs are also entitled to a further £90 a day in expenses.

7 British MEPs are expected to attend, and one explained they had “no choice” about the location. “Everybody laughs when they hear it’s in Barbados,” said Fiona Hall, a Lib Dem MEP. “But why shouldn’t they organise the meeting in the Caribbean just because of European sensitivities?”

Move along... nothing to see here...

The europhile-dominated House of Lords European Union Committee has released a report saying that the EU Court of Auditors is too hard on the poor old European Commission.
Lord Radice, chairman of the House of Lords European Union Committee, criticised press coverage which suggested there was a "significant culture of corruption" in Europe's institutions."Our investigation has uncovered no evidence to support this suggestion," said the Europhile peer.
Hang on a minute. The House of Lords "investigation" into this was based on what? A massive in-depth EU wide audit? Did crusty peers go and raid Brussels institutions and rifle through filing cabinets?

No - in fact their "investigation" consists of them interviewing various sympathetic bods in their committee.

Looking at the Lords' reccomendations makes it even clearer that this is just a political press release. It reads like they have never read a CoA report:
  • "Make a clear separation between the audit of the Commission's accounts - which has always been positive - and the statement of assurance on the regularity and legality of underlying transactions - which has always been qualified" (They already do this, as the suggstion implies)

  • "Give separate verdicts on each different category of spending, instead of one overall verdict" (They do this)

  • "Make a clear distinction between fraud and other kinds of irregularity, giving separate figures for each" (This is very hard to do, although they already do it to some extent)

  • "Stop drawing conclusions about how EU money has been spent on the basis of an examination of a small number of transactions, which cannot "lead to an accurate picture of financial management" (This is just ludicrous - this is how every audit of a large organisation in the world works)

  • "List member states which demonstrate poor management of EU funds" (They do this as far as possible - Its not a single 'list' though, as different countries and DGs do things badly in different ways).
Amazingly they also go on to argue that so-called anti-fraud unit OLAF should remain part of the Commission.
"We are convinced by the arguments presented in favour of keeping OLAF administratively within the Commission. On the basis of the evidence we have received we emphatically refute claims that OLAF is too close to the Commission."
Doh. No problems at OLAF then. Apart from this and this and this.

There is only one silver lining. From time to time the pro-euro camp show signs of better spin. They say that they are as keen as anyone to clean up brussels. They say that they want "reform". They talk a very good game.

However, moments like this are a useful reminder for everyone that, when push comes to shove, they would still rather try and cover up problems than attempt to change the system.

Friday, November 10, 2006

A load of soft propaganda

The Commission have started spending a whole lot more on web-based propaganda. Their jazzy new EU culture website has blogs and everything. Sadly the content is the same mix of:

(a) the slightly desperate:
"Over the summer I met someone who although resolutely eurosceptic has the practical drive to know that if EU funding can help the causes he believes in then good use should be made of what is on offer"
(b) meaningless pap
"Europe's cafés seduce us with the wealth and variety of their cuisine. Thanks to The Institute of the Regions of Europe and its Cafés d'Europe project, we can offer you recipes for typical cakes and desserts from 27 European countries."
Yep, thanks for that.

Sorry to be boring, and to keep coming back to first principles. But why should people pay taxes to fund political propaganda about how great the EU is?

Weird news network

The Indians have detained a giant empty North Korean ship headed for Iran, after it broke down and drifted into their waters.

The North Koreans say they were just taking it for a test drive. Hmmmmmm.

Europe's ethical foreign policy in action

The EU has decided to lift sanctions against Uzbekistan. Sure - they haven't actually met any of the conditions the EU set for the lifting of sanctions. Yes, they haven't set up an inquiry into the shooting of at least 180 civilians in Andijan like we asked them to. And, like yeah, the human rights situation has actually got worse since then.

But - as one EU diplomat so rightly points out: "The sanctions would probably be dropped sooner or later with no political gain for the EU, but now there is still an opportunity to sell them for some kind of closer cooperation. Everybody wants to be politically correct, but the [German] calculus is quite persuasive."

Its great that the EU is taking an ethical lead here and not being distracted by loads of loot.

Thursday, November 09, 2006

McCreevy gets short shrift in the City

Word has reached us that EU Internal Market Commissioner Charlie McCreevy was given a less than charitable reception at a top level City of London dinner last night, where he was meant to be guest of honour. It strikes us as yet another indication of how the captains of UK industry seem to be getting fed up with the sheer volume of regulation coming out of the EU, and in particular the Financial Services Action Plan. This costly attempt to impose a one-size fits all regulatory structure on European financial services has been described by the Paris-based Conseil D’Analyse Economique as “a heavy, complex, partially contradictory regulatory arsenal which is incapable of delivering the anticipated results.”

Speaking at the Association of Corporate Treasurers’ annual dinner at Grosvenor House, attended by 1500 bankers, and one of the major events in the City calendar, McCreevy apparently spoke of the light touch, principles-based approach of the FSAP, even going so far as to use the word “tip-top” to describe Brussels regulations, and to sing the praises of the notoriously costly “MiFID” directive as “an example to the world”.

According to our man at the dinner, “He completely misjudged his audience. He spoke as if to a crowd of Brussels-based eurocrats…He lauded the EU's important role in world financial markets and only passingly acknowledged the fact that most of this was due to London. His audience quickly became restless and ignored him. The MC had to ask for silence several times. When McCreevy finished there was mocking applause.”

Worse was to follow; Ruby Wax gave the next after-dinner speech, wryly thanking McCreevy for "warming up my audience", before going on to say "He spoke for 20 minutes. It seemed like 20 years."

As our recent poll highlighted, British businesses are becoming increasingly disenchanted with the EU. In particular the City is increasingly worried about the effect that the FSAP will have on the global competitiveness of London, the continent’s most important financial centre. McCreevy either failed to recognise this or chose to ignore it.

Similarly, in the Times today, a survey of the 100 most powerful men in UK business found that only 19% thought that the UK should change its mind and begin using the euro. That 81% disagreed just underlines the shift in business opinon from the early days of the Blair adminstration when nearly all major businesses and groups like the CBI supported the drive to introduce the single currency.

Unfortunately for the Commission, its fine talk about "tip-top" regulations and cutting back red tape is getting short shrift from businesses who know that the reality on the ground is that they are being burdened by more red tape than ever before, much of which comes from Brussels, as our research has shown.

But until the Commission wakes up to the fact that the City is tired of empty rhetoric from Brussels – and will start to vote with its feet, relocating outside Europe unless something concrete is done to deal with the problem – even relatively liberal figures like McCreevy can expect to find the Square Mile increasingly hostile territory.

Wednesday, November 08, 2006

Has video killed the EPSCO stars?

Some poor people here spent yesterday watching EU ministers squabble pointlessly over the Working Time Directive at the Employment, Social Policy and Consumer Affairs Council (EPSCO).

To be honest it wasn't great TV - but the fact that we could watch at all is a big change. If British Foreign Secretary Margaret Beckett had got her way the public still wouldn't be able to watch EU Council meetings, but thankfully Blair let her "hang out to dry", (to the great amusement of Geoff Hoon) and a new era of transparency was (supposedly) ushered in.

Or was it? Telegraph journalist David Rennie has criticised the new arrangements saying that they make it "impossible" for countries to hold real discussions. Instead, deal-making gets done over lunch, or when the cameras are turned off. Interestingly, Rennie argues: "With 25 countries round the table, there is almost no secrecy at closed-door Brussels meetings. Any half-decent journalist can usually find out what happened in a private ministerial meeting within 20 minutes of its end. So the openness is phoney, gains us nothing, and is utterly counter-productive."

There is something in this. But the new access is not a total waste of time - and these kind of arguments must not be allowed to become an excuse to prevent further opening up.

Firstly, as members of the non-press-pass carrying public it certainly makes it a lot easier for us to find out the background details and get a sense of what's going on, if we can watch the meeting. Naturally deals are still getting cut in smoke-filled corridors and over generous Brussels lunches, but at least the ordinary punter can now find out a bit more about what their government thinks on the issues rather than having to rely on press reports.

Secondly - in practice not all deals can be done "in the corridor". With 25 or 27 members you would need a really big hallway, quite apart from anything else. So they are forced (in the limited areas where some transparency now applies) to have at least part of the discussion in public.

So yesterday for example, we could get a sense of the bizzare posturing of some member states, which we (outside the Brussels lobby) would not otherwise have heard about - for example the Luxembourgers describing the opt-out as a "heresy" and the French complaint that their businesses were suffering from "unfair competition" (even though they are subject to a 35 hour week not a 48 hour week, but anyway...).

Quote of the day was from the the German minister who said, "What exactly have we achieved today? We've had a nice few hours together but that's about it." (BTW - you too can join in the fun by watching the meeting here.)

We seem to remember that there were a lot of similar arguments made in the UK about the introduction of TV cameras into the Commons. MPs, it was said, would always be acting up for the cameras and not take the issues seriously. It did take some a while to adjust. But they got over it. Today almost no-one thinks the Commons should go back. Perhaps EU ministers just need to learn to 'agree to disagree' in public...

Sunday, November 05, 2006

They screwed up, then they covered up

Today's Sunday Telegraph has a story about an issue we have been working on for a while now.

The story so far

Back in the Summer David Miliband and Geoff Hoon argued that "The EU's emission-trading scheme (ETS) is the most innovative and efficient method yet invented for reducing carbon emissions to manageable levels."

In fact they went as far as to say that the environment was going to provide a new purpose and rationale for the European Union. The wrote that the EU, "could be as important to the environment in the first half of the 21st century as it was to peace in the second half of the 20th". In fact, they suggested, Labour could use it as an issue to beat the tories with. "David Cameron's hostility to Europe makes a mockery of his claimed green credentials," they wrote.

But even our initial research revealed that in reality the ETS was a disaster area. Overall, the EU members had printed more permits to pollute than there is pollution. Member states handed out free permits for 1,829 million tonnes of CO2 in 2005, while emissions were only 1,785 million tonnes. Emissions would have to be 44 million tonnes higher for the system to actually “bite”.

However, that doesn't mean it hasn't cost some member states. In particular, the UK has set a tough target on emissions, while other member states have set very loose targets. All this means is that UK firms have to buy permits from rival firms in other member states, resulting in a cost of just under one and a half billion pounds over the first three years, while firms in Germany will make just under a billion pounds selling off their surplus permits. In other words UK companies transfer money to other member states, without getting any reduction in emissions.

Worse still, instead of auctioning off permits to the highest bidder to create a proper market, the permits were simply allocated to individual firms by national governments under 1960s style National Allocation Plans.

Under the NAP the public sector is being forced to take a hit. Under the UK National Allocation Plan, NHS trusts were not given enough permits, and we estimated that they would have to spend between 1 - 2 million a year buying up extra permits and running the scheme.

The plot thickens

Michael Gove MP, (who sits on the European Scrutiny Committee), asked the Government to confirm how much the public sector was paying. He asked various different government departments. The MOD responded with military efficiency, immediately providing a detailed breakdown of how much each RAF base had paid and for what.

But the Department of Health were less forthcoming. Junior Health Minister Andy Burnman replied only that such figures were “not held centrally”.

That struck us as rather odd.

We made a freedom of information request for internal correspondence within the NHS about the question.

The emails we have been given as part of the FOI request show that DoH had been given the answer to the parliamentary question in a spreadsheet by the NHS Purchasing and Supply Agency (PASA). However, the DoH chose not to answer the question. Indeed, the DoH Press Office (neutral civil servants, you remember) had spent quite a while trying to "scotch" our research.

The FOI request came back with about a hundred pages and all the relevant stuff buried in loads of irrelevant emails. (Hint: You can normally tell the key pages because they are particularly badly photocopied.)

The docs are here, here and here. Key points:

* Patricia Nicholas at the DoH press office sent round an email asking for figures to "robustly scotch" the £1.3 million figure. She wrote: "we need tackle the £1.3 million bit, and emphasise that in no way will frontline services be affected".

* After receiving the figures from PASA, Shumon Rahman (also at the DoH press office) complains to PASA that "the last thing we want to do is come with a speculative 'what if...' all trusts spent money on carbon credits only to find that 10% have already spent a ridiculous amount and the journalist has managed to uncover them." In another email he notes, "If we cannot rebut the £1.3 million figure we will be getting negative publicity."

* In fact PASA told the DoH that our £1.3 million figure "would have been right at some point in time".

* PASA warned DoH that there was "no way of knowing" how many trusts have bought permits at an overpriced rate "short of ringing them up" and complained that: "PASA advice has been for them to wait, but as they do what they want anyway I've no way of knowing"

Seperately, we had also asked each affected trust how much it had cost them (a) to buy permits and (b) to administer the scheme. For the 85 hospitals which replied to our FOI request, the net cost for the first phase of the ETS (05-07) was 5.8 million (even taking into account the couple of trusts that made money).

That’s the equivalent of employing 309 extra nurses (starting pay for nurses is now £18,698, using 2005/06 rates).

For Glasgow the net cost for the four hospitals in that trust is just under half a million.

The one from Epsom gives a sense of just how much admin is involved. At the end it notes that “Our non-pay total compliance costs for 2005 are circa £28K. Had we spent that money on upgrading lighting installations (say) we could have put an additional recurring £10K p.a. of public money towards patient care and reduced national CO2 emissions by circa 8t p.a.” It also notes that “An email search on ‘EU ETS’ finds 1190 messages on my PC. Many of these are to and from NHS colleagues.”

Earlier, the DoH had confidently predicted that there would be a surplus of permits in the NHS. A DoH document said “Based on the trusts that have responded to PASA, there appears to be an overall surplus of allowances in the NHS. The majority of trusts have small deficits but a minority have significant surpluses.”

As a point of comparison - if they sell at the prices NHS trusts have been buying at, Shell will make £49.9 million out of the scheme during the first phase selling off surplus permits, BP will make £43.1 m and Esso £24.7 m… clearly the private sector are a bit better at lobbying...

Does this matter? What's 6 million quid out of the NHS budget? The EU has probably cost the NHS rather a lot more via the working time scheme for example. The Observer reported recently that 60 NHS hospital wards are threatened with closure in large part due to the expansion of working time rules to the NHS.

What all this does demonstrate is a lack of grip and a lack of thought about the policy. There is no good reason for the NHS trusts to be part of the scheme. Most of them only qualify because a quirk in the rules means that their masses of backup generators get included in the calculation of their potential output, taking them over the 20 MW threshold.

Nor is it the cheapest way to reduce emissions in the public sector. The NHS trusts have been on "green" programmes for years. For example, one reply notes that their hospital had just shelled out £28,000 on the scheme, and that "Had we spent that money on upgrading lighting installations, say, we could have put an additional recurring £10,000 per annum of public money towards patient care and reduced national CO2 emissions by circa 8 tons per annum."

That could stand for the scheme as a whole. Gordon Brown is still calling for the ETS to be expanded when what it actually needs is a total overhaul. At the moment the UK could save billions and reduce its emissions by more, by going back to a UK-only trading scheme. Unless someone can knock heads together in Brussels and sort it out, UK participation is going to carry on being a waste of time and (NHS) money.

Those figs in full...

Some trusts have been far more helpful than others.

Some have given us final figures, some only partial figures.

Calderdale / Huddersfield have been completely unforthcoming, and just confirmed what was in the public domain before.

Download a table of the figures here

Friday, November 03, 2006

Do the numbers add up?

Various papers have picked up on the latest migration statistics which were published by the ONS yesterday. Most of the attention has focused on the overall numbers of people deciding to settle in the UK for over a year, or are choosing to leave these shores to head for sunnier climes.

In many ways however they are missing the point, because - as Mervyn King argued the other day - the figures are pretty unreliable. They generally underestimate the numbers and are based purely on surveys of people entering and leaving the country in airports, ports and the tunnel. As the ONS admit themselves the numbers should be seen only as a rough guide.

They do however provide an interesting indicator of the trends of immigration. Someone in the office has noticed that of the 80,000 immigrants from Eastern Europe who said they intended to stay for more than a year in the UK, 40% of them were not intending to find a job here. This is the first time we have seen statistics which contradict the assertions made by the Government, the IPPR and others that "Eastern European arrivals continue to be young, single people wanting to work temporarily in the UK." The Government's system for collecting figures - the Worker Registration Scheme - only captures data on people as they arrive, not connecting them with the subsequent arrival of dependents.

If we're honest - one of the main reasons that there has been such a public backlash against Eastern European migration is that people feel like the Government has not been straight with them and that is doesn’t have a "grip" on the process. The classic example being that they were told that only 5-13,000 would come from the A8 when the Government's own figures show that the numbers are at least 30 times that.

As we explained recently, on the one hand, the Government's figures are likely to significantly understate the number of migrants that have arrived here from Eastern Europe. They only calculate the number of people that have registered on the Workers Registration Scheme, and do not count the numbers of self-employed migrants, and those who are not looking for work.

Ministers have claimed that the true number is more like 600,000, once the self employed are taken into account. If, for argument's sake, we take them at their word and simply add on the 40% who say they are not looking for work, the total number of people that have come here from Eastern Europe will be around the 1 million mark.

On the other hand, it has to be remembered that no one is counting the number of people leaving the country. Anecdotal evidence suggests that many Eastern European workers tend to come for a couple of months, mainly in the summer, work as many hours as possible, and go back home having saved up a decent pile of cash, planning to return the next year. These people could have been included 2 or 3 times in the statistics but only spent a few months in the UK.

In other words, no one really has a clue how many migrants have come and actually stayed in the UK - that's why we need embarkation controls (which Labour abolished and are now going to reintroduce in 2012) to count the number of people in and out of the country. Only then can local services be given adequate funding to cope with the extra demand. But the Government are sitting on their hands waiting for the EU "e-borders" biometric scheme to come into effect. Does anyone else see a giant public sector I.T. disaster in the making?

On the subject of porkies - we noticed another interesting claim from the Government a couple of weeks ago. They told Parliament that only 1% of Eastern European workers have claimed benefits since they arrived in the UK. But their own statistics show that the figure is more like 10%.

Before the last enlargement in 2004 David Blunkett insisted that the Government would put in place a system which would mean that migrants would not be able to come to the UK to claim benefits. He said, "If people want to come and work in Britain openly and legally, that is right. If they want to come and claim our benefits, that is wrong". Spot on.

But Immigration Minister Liam Byrne admitted to one of our team just the other week that the Government has no plans to restrict access to non-contributory benefits like child benefit and tax credits for Bulgarians and Romanians when they join the EU next year.

In our opinion, unless the Government changes its ways and begins to approach the immigration debate honestly, and provides statistics that tell the full picture, it can expect the current hysteria over EU migrants to continue, endlessly.

Thursday, November 02, 2006

Bad news all round

The post-cold war peace is - as the Americans would say - soooo over. On just one day you have good examples of three different levels of new threats – a failed state, a rogue state and a newly assertive great power.

Firstly, it looks like a Horn of Africa conflict could be in the offing, with renewed war in Somalia now seeming "more likely than not", according to the Foreign Minister of the transitional government. He claimed that “the ICU (Islamic Courts Union) is not a partner in peace, it's not a partner in bringing it about". Peace talks in Khartoum look set to break down, and the two sides seem to slipping towards open conflict. Eritrea (backing the ICU with arms supplies) and its old enemy Ethiopia (currently occupying a border town within Somalia) could also be drawn into fighting one another through their proxy war.

One Western diplomat has warned of the potential for an “Iraq-style situation” developing in the region, possibly even spilling over into Kenya. It’ll also be interesting to see how Tehran reacts to any escalation in fighting in the Horn, and whether it might see an opportunity to extend its influence along a new axis, given that the Red Sea is a strategically significant point for global energy flows.

Also concerning energy, this story appeared on the BBC website today – Gazprom is planning to hike gas export prices to Georgia to over double their current levels. Although it was clear before, this is another good example of Gazprom’s commercial strategy and the Kremlin’s political strategy once again working in perfect harmony. Should we be considering letting them buy into the UK?

The EU has been horribly split in its approach to Russia. On the one hand verbal condemnation of Moscow’s bullying of Georgia - but then on the other, a collective attempt to play nice in order to get Russia to guarantee supplies - and then again, a race by some member states to do individual deals.

The bottom line? The EU isn’t going to do anything to stop Russia pursuing its interests in its own ”near-abroad”. The screw is likely to tighten further - Russia may be reliant on European energy demand for now – but will soon be able to sell to China instead, giving it further leverage to exert itself using energy.

Maybe worst of all - ten days of Iranian war games have begun, mainly in the Gulf and Sea of Oman. The drills are codenamed "The Greatest Prophet". State television reported that "Dozens of missiles were fired including Shahab-2 and Shahab-3 missiles. The missiles had ranges from 300 km (190 miles) up to 2,000 km (1,200 miles)" – potentially far enough to hit Israel.

We had an interesting chat to Ian Bremmer about all this earlier in the week. He’s amazingly well plugged in. His take was that theo-conservatives in Tehran are intentionally ratcheting up international tension to shore-up their position at home. His suggestion - to try to get the price of oil down (via Saudi), and take away the regime’s opportunities to blame the outside world with some serious détente. “Invite them to the ranch – they won’t come”.

Even then he thought that the chances of a successful outcome to the diplomatic process were low. Israel sees the situation as “an existential threat”, and people who favour a tougher approach are now steering things in the Israeli government. Bremmer reckons there’s a 60% chance it will launch pre-emptive strikes against Iran within the next two years…

The euro is literally falling apart

Now this is a weird story.

"Hundreds of the brittle notes have appeared in at least 17 German towns and cities, German media report."

Your accession is important to us... please continue to hold

Sentiment against further enlargement continues to harden in Brussels. The Commission is going to say that the Western Balkans (Macedonia, Serbia, Bosnia and Albania) are no closer to joining than a year ago. Turkey already got their slapping earlier in the week.

In fairness - Turkey is in a very different situation to the Balkans. The Balkans have more friends on the inside, and the EU is barely going to notice their fun-size economies joining the club.

The Turks are not stupid. They know that various EU members are negotiating only in the hope of provoking a crisis to make Turkey walk away (like when Chirac piled on the pressure on the Arminian genocide a couple of weeks ago).

Last week their FM Abdullah Gul said that, "Some countries and leaders are trying to block (Turkey) using the Cyprus issue. We disscern that there are some European leaders who wish that Turkey goes away by itself. We will not fall into this trap."

Nonetheless, new hurdles seem to be appearing all the time for potential new entrants.

According to El Pais, the European Commission has outlined plans to make future EU enlargements after Bulgaria and Romania subject to the approval of European citizens, in order to “increase the democratic legitimacy” of future enlargements.

Its wonderful that the EU has suddenly discovered a deep love of democracy so late in its life. But we know that the bottom line here really is to use popular opinion (when it suits the EU) to say "no" to Turkey. The last poll in Austria showed something like just 11% support for them joining. That looks like game over. So much for Mark Leonard's claim that "Europe will run the twenty-first century" by sucking more and more countries into its sphere of influence.

EU Enlargement Commissioner Olli Rehn is quoted on the Coulisses de Bruxelles blog saying that there is also no question of letting anyone in until a new EU Treaty is agreed. “We need a new agreement reforming the community institutions before any new accession. This new treaty will have to be prepared in 2007-2008 so that at the end of the French Presidency in December 2008 we can reach agreement.”

Technically there would indeed need to be one or two changes to the Treaty of Nice, because there are only voting weight numbers for Romania and Bulgaria in the Treaty of Nice - not any further potential members. And there is a provision that means that in the next Commission after Bulgaria and Romania join, the principle of "one country one Commissioner" is going to be dumped.

But the real point here is that the EU institutions, and the more integrationist member states, are going to demand a political price in the form of further deepening if - and its a big 'if' - new members are going to be allowed in.

That's completely the wrong way up. If new members are going to join we need to come up with a far far lighter and more flexible structure, not a more centralised one. Only by reducing the regulatory burden of membership compared to membership of the EU today could you make enlargement an economic success story for poor new member states - many of which have very limited administrative capacity. It is ludicrous, for example, for the Romanians to have had to spend billions on satelites in order to build a rural payments system to administer the CAP.

In a wider sense too, a flexible Europe would be the only way to reconcile three conflicting desires: it's the only way to meet the desire of some member states for more integration, while meeting the desire of other member states to roll back integration. But it’s also the only way to rescue enlargement.

Only a more flexible Europe, (particularly not insisting on free movement with Turkey) will persuade voters in the existing member states to let new members like Turkey into the EU.

A flexible Europe might put new members like Turkey on the same footing (a sort of EU 'lite') as Britain, whereas offering them some kind of second class “associate” status would - quite understandably - be rejected as insulting by the applicant countries.

Right now the idea of a flexible Europe sounds like pie in the sky. Brussels certainly doesn't want it. But there is going to be a hell of a crunch within the next few years. The new treaty which is supposed to by drafted in '07 and '08 has every chance of being shot down just like the EU Constitution was. And if the EU abuses the Turks enough - given that the current Government has staked everything on membership - there is every chance Europe will create a major crisis on its own doorstep, with Turkey leaving the West.

For now, day-by-day life in Brusssels continues. But a crisis is in the pipeline.

Wednesday, November 01, 2006

Incoming row at 12 o'clock

Just getting back home from the office. Coming past Victoria they have the first editions - the Sun splash is something about a "Romanian crime wave" based on some leaked report...

Whether you think that's at all likely or not, the reality is that there are going to be more and more of these sorts of stories until the Government (or the opposition) is seen to have 'got a grip' on the issue... Which is far from the case at the moment.

On a completely different subject - there really is one group of theiving, and frankly feral new arrivals in London we all could do without: I've just arrived home to find an urban fox eating my bin.