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Friday, March 30, 2007

Crisis looming over Constitution?

V interesting peice by Charles Grant from the CER on the German plans to bring back the Constitution and the deal that the British government might accept.

Download the article Britain and the EU: a crisis looms

All talk and no action

As we've noted before EU government's refusal to stop spending tax payers money supporting business ventures in Iran - let alone agree to more general economic sanctions - is helping the mullahs continue to defy the international community.

Since the 15 British sailors and marines were kidnapped last week the British government has been attempting to use its diplomatic influence to ratchet up the pressure on Tehran. Unfortunately they are not doing too well. The UN Security Council issued a watered down communication yesterday which stopped well short of demanding the release of the sailors and instead spoke of their "grave concern" about the situation.

Now Reuters tells us that EU Foreign Ministers - meeting in Bremen today - will back Britain: as long as they don't actually have to do anything about it.

German Foreign Minister Frank-Walter Steinmeier said, "It is clear that a message of solidarity with Great Britain must be sent from here".

But EU countries have rejected British requests to stop doing business with Iran. French Foreign Minister Philippe Douste-Blazy told RTL radio this morning, "We must avert a course towards confrontation, any escalation. The Iranian authorities must simply return to dialogue."

Luxembourg Foreign Minister Jean Asselborn told Deutschlandfunk radio: "While we are in complete solidarity with Britain, we have to do everything to build in the necessary brakes so that things don't explode. We have to be careful that we don't go on outbidding each other with sanctions on Iran and talk of freezing relations".

pro-euro astroturfing

Get out there and get posting, say the Labour Movement for Europe.


Mark Mardell's blog seems to be the top target.

Thursday, March 29, 2007

The topsy-turvy world of the EU

At a seminar we held on Monday on EU trade policy one of the experts - Chris Stevens - said that dealing with the EU reminded him of the topsy-turvy world of Gilbert and Sullivan.

Two stories in today's papers illustrate his point nicely:
  • Angela Merkel has claimed that unless the EU presses ahead with bringing back the EU Constitution the gap between EU politicians and ordinary people will widen.
  • The EU is rocked by yet another fraud scandal. EU officials argue that this shows there is a need for even more integration. They want an EU Public Prosecutor to be appointed.
PS - for a much more eloquent description of the surreal world of the EU (such as official's arguments over "non non-papers") check out this recent FT article by Gideon Rachman .

Plans to save pro-euro Conservative MEPs from members?

Interesting snippet from Charles Moore's notes in today's Spectator:

"Meanwhile, the Conservative party continues its devotion to openness, localism and modernised democracy in everything except its own organisation. The party has a little-known body called the National European Forum which has come up with a plan to deny party members the right to choose their candidates for the European Parliament. It wants ‘regional selection colleges’ (dominated, naturally, by Europhiles) to vet existing MEPs before they can stay on the list of candidates for the next elections. All new candidates would be nominated by the central party organisation. The current system of regional hustings would be abolished, and so ‘one member, one vote’, a quite widely known democratic concept, but one which has had only a brief and fragile life in the Conservative party, would be no more."

For more information check out a letter from Tim Montgomerie to David Cameron on the MEP watch website.

Wednesday, March 28, 2007

When is an agreement not an agreement?

A mole on the European Scrutiny Committee has just got in touch about a session that took place this afternoon:

"One of the few influences Parliament has on EU matters is operated by the all-party European Scrutiny Committee. Basically if the Committee decides a proposed law is important the Government is not allowed to agree to it in Brussels until the Commons has had a debate. Unfortunately the Government ignore the rules when it feels like it. This became evident to all an sundry this afternoon when Joan Ryan, Home Office Minister, stepped up for a session of the Committee.

Ryan had MPs and journos falling off their chairs in disbelief as she tried to justify the Government's decision to bypass Parliament and sign up to a measure which will allow UK criminals in European prisons to be transferred to UK custody, even if their offences are not recognized by UK law (e.g. homophobia and holocaust denial). Ryan claimed that the reaching of a "general approach" in Brussels on the measure was not the same as an "agreement". She persisted with this hair splitting despite her own admission that all member states were agreed on the substance of the measure. That sounds like an agreement to me...

Even Labour members on the Committee were spitting. Michael Connarty, the Committee chairman, spent most of the session with his mouth wide open, and Chorley MP Lindsay Hoyle told Ryan to her face that she was ridiculous and should apologise to the Committee. Usual champions of Parliamentary supremacy like Bill Cash didn't really need to speak as Ryan's own backbenchers rounded on her. Happy days."

This isn't the first time Joan Ryan has given a below-par performance at the Scrutiny Committee. Watch a session with her and you realise that it takes quite a lot of skill to 'pull a Geoff Hoon' and not actually answer MP's questions for two hours. Her last appearance led Simon Carr to write that she had "a brain like a box of Cheerios". The following week he went even further saying, "It's not just that she's out of her depth, the problem is she can't swim".

Update: Read Simon Carr's description of the proceedings here

The EU's environmental failures

Sorry for the lack of posting recently, we've been pretty busy. Neil's got a piece up on Conservative Home today on how the Government is attempting to use "the environment" as an excuse to give the EU even more power. He looks at how the EU's current policies are actually making things worse and argues that the last thing we should do is give "more power to the hopeless EU".

Be sure to let us know what you think...

Saturday, March 24, 2007

A blank cheque

The EU - cockups from day one.

Alan Little on the Today programme reveals that the six leaders of the EEC actually signed a blank bundle of papers fifty years ago because the Italian state printers hadn't got the treaty of Rome ready on time.

A slow motion coup d'etat

says Christopher Booker in the Mail.

Mark Littlewood (formerly of Britain in Europe) seems to agree.

On Newsnight he fessed up that we were heading for a "United States of Europe." He said, "I think that is the process we are going down".

Thanks for the refreshing clarity.

Biased BBC online

BBC Online's coverage of the EU's 50th anniversary has been absolutely extraordinary. They have missed a great opportunity to deal with EU issues seriously and instead have presented the punters with pathetic, whimsical, biased nonsense.

A quick look at BBC online's list of EU stories gives a sense of what they have served up this week:

This could have come, and probably did come, straight from a European Commission or FCO press release. What about all the negative stories that were rubbished but turned out to be true (like Campbell saying Andrew Gilligan's story that there was going to be a "European Constitution" was "bollocks").

Celebrating the Environmental Union

At least this overtly written by the Commission. Its complete bull - but will there be a critical piece allowed on in response? Zero chance of that.

Ten things the EU has done for you.

This is just getting silly. It's 10 good things of course. Where are the ten bad things? Dumping on the devoping world, damaging our economy, undermining democracy? No chance of that on the BBC.

How Brussels has changed

For the better, it would seem. Half a dozen people quoted puffing the EU, but no critics, obviously.

The EU at 50: Your reflections

A spurious voxpop of the kind that the BBC's own Wilson review warned against. Three people saying the EU is absolutely great and then one person who says it is good for the countries that are in it but bad for Kosovo.

"For me, the positives definitely outweigh the negatives."
"Generally I think the EU has really helped our lives."
"I think many countries outside Europe envy the success of the Union."
"The EU may be good for those countries inside the club, but for us - on the outside - it's as if they have built a great wall all around the union."

This is balance?

Is EU good for economic health?

It would seem so:

"Looking back, it is tempting to declare euro a resounding success."

Nggggghhhh.... no chance of balance here either.

It seems to me that the higher-up journalists at the beeb have partially learned to at least present both sides of the argument. But they are atop an iceberg of dross - and too many BBC journalists still think that their job is to "balance against the press" (by which they mean the Sun and Mail, casually forgetting the FT, Indie, Guardian and Mirror).

This is pathetic journalism. What is it going to take for BBC online to present the issues fairly?

Tuesday, March 20, 2007

Too much explanation

The Government’s present strategy on Europe (other than praying that whole issue of the Constitution will somehow disappear) has largely focussed on trying to "explain the benefits” of the EU to a reluctant British electorate

Their PR people will certainly have their work cut out for them. The FT/ Harris poll, released yesterday suggested that by 41% to 25%, UK voters think Britain would be better off outside the EU, while 51% think life has got worse since joining.

One shed of comfort which the pro-euro camp have clung to is the rather patronising idea that idea that when people "know more" they will become raving supporters of a federal Europe.

However, the FT’s debate last night (on the motion “Thank God for Brussels”) suggests that the more people see of the EU, the less they like.

Date March 19, 2007
Votes Online
For 40.0% 52.6% 55.0%
Against 57.5% 27.6% 45.0%
2.5% 19.8% 0.0%

In a vote at the beginning of the debate, 52.6% supported the motion, 27.6% voted against, and 19.8% were undecided (this is an FT event, remember). However, by the end, the ‘undecideds’ had emphatically shifted against the motion, with 55% voting in favour and 45% against. In other words, the EU critics picked up nearly all of the undecided voters. Perhaps too much “explanation” of the reality of the EU doesn't help the ‘project’ much.

Monday, March 19, 2007

Terrorists: run in fear...

...the EU has published a list of all the things it has done to fight terrorism since the Madrid bombs.

Psychologically interesting that it is a list of micromanaging legislation passed, rather than a list of results actually achieved.

Highlights include:

The Council Decision approving the conclusion of the Convention on Early Notification of a Nuclear Accident (Hint: you know one has happened because everyone is glowing, and its on the telly)

Guidance on General preparedness and response planning and integration of EU dimension in all national health emergency plans is being prepared (I know the first thing we would be wondering after a massive terrorist attack would be 'how can we mainstream the EU dimension here?')

Some of them have patently got nothing whatever to do with terrorism but have been "tagged" as such so that the EU can be seen to be "doing something". For example the "Directive on Insider Trading and Market Manipulation (Market Abuse) has nothing to do with terrorism whatsoever. And as we pointed out before, the UK Government's own impact assessment helpfully pointed out that it would yield no extra benefits as the UK already had market abuse legislation.

More seriously, so much of what the EU is "doing" on terrorism is just displacement activity. The third directive on money laundering is badged in the report as an anti-terrorism measure. The reality is that (a) mass terrorism does not require lots of money (b) money laundering regulations are almost pathetically easy to circumvent and (c) the third directive (which requires all transactions over €15,000 to be reported to NCIS) simply leads to a mass of bureaucratic reporting - so any "signal" about terrorist activity is lost in the "noise" of millions of false positives. And terrorists (along with everyone else) can still transfer lots of chunks of €14,999 without generating a report. A report for the Corporation of London found that the cost of generating all this useless data is just under £300 million a year.

I could go on and on. Other highlights are

Promotion of the implementation of relevant international norms and legal
instruments, through targeted technical assistance, political dialogue and cooperation
in international and regional organisations. Actions taken to combat
terrorism are balanced against the need to protect individual rights and

Support for the United Nations, including regular contacts and meetings with UN

Woo hoo! And of course, if all that doesn't scare bin laden to death, he can rest safe in the knowledge that if he is ever caught and brought to the EU he could probably sue for abuse of his European human rights...

Htp EU law blog

Friday, March 16, 2007

With experts like these...

As we've remarked before relations between Germany and Poland are a little strained at the moment. They're in the midst of a number of different rows at the moment which are likely to overshadow Angela Merkel's trip to Warsaw today.

So it probably hasn't helped that the Polish government "expert" on bilateral relations with Germany has attacked Merkel in the Berliner Zeitung for knowing "little about Poland". He wrote: "We are dealing with a country whose national policies are essentially egotistical and not exactly friendly towards Poland."

PS - for all those following the negotiations on the Constitution, the Kaczynski’s advisor on European issues Marek Cichocki has said that Poland will not accept attempts to bring back the voting weights that were in the Constitution. He wrote in a Polish newspaper editorial that: “Poland will never resign from the votes in the council given under the Nice voting system, because it is a fundamental instrument of real influence in the internal and external policies of the union."

The last time Poland tried to block the Constitution in 2003 it very quickly met with threats that a flow of subsidies would be cut off by large member states. Once again we seem to be heading for a head-on collision.

Wednesday, March 14, 2007

First pasta the post

Once more into the breach... the Italian Government under Prodi are now calling for a return to first-past-the post-elections, introduced after the fall of the so-called first republic in 1992, and abolished by Silvio Berlusconi.

All this raises an interesting question about the connection between institutions and economic reform. Electoral systems are probably the most important institution in determining whether governments can push through painful reforms.

Compare the performance of Italy, with its hundreds of parties, chronically poor government, with that of Spain - with first past the post, and regular stable majority Governments. No surprise that Spain is due to overtake Italy in wealth per head by 2009 according to the Economist.

But, as has been pointed out in the past, as long as the majority for governing is lower than the majority for constitutional reform, Italy is unlikely to see further reform without a crisis. Is FPTP the right idea? FPTP works well in keeping a simple party system stable and avoiding what Sartori called 'centripetal competition'.

But if there is already high fragmentation, particularly along regional lines, FPTP might not reduce the number of parties. Much as FPTP is right for the UK, maybe proportional representation with a high threshold (say 7% to get any seats) would simplify things quicker in Italy...

Monday, March 12, 2007


The "EU fiftieth birthday" match against Man U is in danger of turning into some sort of metaphor. The "Europe XI" team is a great reflection of the EU:

Beckham has pulled out citing injury / Far too expensive, and slightly past its best?

They have had to bring in three Brazilians to make it any good / Overtaken by globalisation and international competition...

Maybe the whole state of football is a reflection of the EU - how did something that everyone likes get hijacked and turned into a massive corporate enterprise remote from ordinary punters... (one controversy at a time please - Ed.)


At the press conference yesterday Marcelo Lippi admitted that they struggled to find players to play in the EU team, and that high profile names such as Zinedine Zidane turned down the opportunity. "It was initially supposed to be a European team only, but there are players from other continents to now... so many people dropped out". Jose Barroso said "I think that it is very good that there are non-Europeans in the European team... I think football is a globalised activity now, it is something that was invented in Europe and we can be proud of it."

Bobby Charlton was asked whether he thought this is the first step to the UK joining the euro (cue chortling from Brussels journalists): "No I don't... but as far as being together in Europe I think what we're doing today is our contribution at the present time."

Why is this happening?

So often the media report events without mentioning their real causes.

Take today's Times front page:

Hundreds of thousands of men working in the public sector are facing salary cuts of up to £15,000 a year as equal pay agreements take effect, The Times has learnt.

Compensation claims for up to 1.5 million workers could cost the taxpayer more than £10 billion and mean that male staff lose up to 40 per cent of their salary.

Another piece
on the inside of the paper follows up:

“We are trying to keep the pay bill rise across the country to 4 per cent, which will cost us £1 billion,” one employers’ official said. “If we paid the rises in full without cutting any salaries it would cost us nearer £4 billion. This is the inevitable outcome of job reevaluation."

The crisis has come to a head this month because, under an agreement struck by the unions in 2004, all town halls have to evaluate jobs and have new pay structures in place by April 1.

However, it's not until you get the little analysis box that you find out that all this chaos it is the result of a European Court of Justice ruling from a couple of years ago.

Basically the ECJ ruling set up a field day for lawyers by deciding to revise the Equal Pay Act 1970 - which allowed for two years’ back pay to compensate for different wages between women and men - by extending it to six years’ back pay.

Most town halls couldn't afford that without laying people off, so, as the Times points out, trade unions "reached compromise agreements with employers to provide three to four years’ back pay while protecting other staff from losing their jobs. Now no-win, no-fee lawyers are unpicking these agreements, on the ground that they are a breach of the EU ruling."

There is lots of classic EU stuff in this story: a totally resources-blind decision from the ECJ, followed by the unions and employers havening to construct careful compromises to stop thousands of people from being sacked, followed by the lawyers getting at it, and causing chaos.

We're all in favour of equal pay. But if the UK Government and unions were happy to come up with a realistic compromise to implement it without job losses, based around allowing two years back pay, why should the ECJ decide, arbitrarily, to change it to six? Why not three, or ten, or twelve?

Why should this call - which is all about the practicalities of implementing equal pay - be one for the unelected ECJ? Would any of our readers from the Commission like to explain why?

Friday, March 09, 2007


We hadn't realised that the plan for a 100% elected lords would involve having the "senate" (or whatever) elections on the same day as the euro elections.

Presumably that would mean that parties that do better in European elections would be more likely to get seats in the Lords. That would be good news for UKIP and maybe the tories. Bad news for the Libs (in fourth in 2003) and the poor old broadcasters - do you give people time in proportion to their senate seats or share of MEPs? Nightmare.

More Sarko madness

We thought we'd seen it all when Nicolas Sarkozy's campaign team launched Disco Sarko.

But now some Sarkonauts have taken it upon themselves to try and look even more ridiculous than their moon-walking hero. A bit of light relief for a Friday afternoon.

Thursday, March 08, 2007

Is the EU making war with Iran more likely (II)

Just noticed some more worrying news from yesterday’s FT. Apparently Eon, Germany’s biggest importer of natural gas, is pursuing its first gas supply contract with Iran. The company told the paper: “One of the producer countries is, of course, Iran.” But it’s not just the Germans. Centrica, the UK’s biggest residential energy supplier, also has said it was looking at Iran as a potential source of gas supplies.

A British official said, “No one is discussing full-blown trade and economic sanctions at this stage. All we can do is to suggest to companies that when they are looking at the Iranian market that they want to bear in mind that Iran is essentially in the international dock. Is it a good investment prospect at this particular point in time?”

Despite being seen as a risky investment Iran has also attracted AngloDutch Royal Dutch Shell and Spain’s Repsol as potential foreign partners in its Persian Liquid Natural Gas project, and Total of France and Malaysia’s Petronas for its Pars LNG project.

Not exactly a joined up foreign policy...

Sarko shows his true colours (or does he?)

Just in case anyone is still under the illusion that Nicolas Sarkozy is some sort of free-market crusader preparing to drag France (and the EU) into the modern world, take a look at his speech this week in Cormeilles-en-Parisis.

It’s too long to translate in full but it's worth noting that he used the word ‘Etat’ meaning ‘State’ 84 times, and the word ‘protect’ 53 times, including 10 different instances of “I want to protect” and 4 of “Europe must protect”.

A few snippets:

“If there was a time when there was too much policy and too much State, today it is the opposite: there is not enough policy and not enough State…

I do not believe in the doctrine of a minimalist state. I do not believe in the doctrine of laissez-faire. I do not believe that in France the State should be reduced to a secondary role… I do not think the nation can continue to exist without a strong State…

If Europe and globalisation are synonymous with dumping and unfair competition for too long and on too big a scale, there will soon be no more Europe, nor free trade…

If our economy, if our jobs, if our businesses, if our technology remain at the mercy of the predators of the whole world then the situation will quickly become unbearable…

Europe must protect, and for that reason I will propose to our partners if I am elected that the policy of over-evaluation of the euro, which is at the moment exacerbating all the problems at Airbus and accelerating the de-industrialisation of Europe, is abandoned. I want the currency to be at the service of jobs and growth… Europe needs a real economic government…

Europe must protect and for that reason I will propose to our partners that we establish a community preference which allows us to face up to unfair competition and confront dumping. Europe… must contribute to the moralisation of financial capitalism. If I am elected, I will propose that moralisation of financial capitalism be one of the main objectives of the eurozone…. I will propose to our partners that in no case must European aid be used to finance fiscal dumping between member states…

But then after all that he announced:

I refute l’├ętatisme and le dirigisme. I believe that the State is not authorised to get involved in everything, to intervene everywhere.”

We're just as confused as you are...

Ethics for robots?

This is one firmly for the 'etc' section of the blog.

The Telegraph tells us that the "technology obsessed" South Koreans are drawing up an ethical charter for robots. The Korean ministry of commerce, industry and energy said, "The government plans to set ethical guidelines concerning the roles and functions of robots. The move anticipates the day when robots, particularly intelligent service robots, could become a part of daily life."

According to the Telegraph, "The Koreans have an ambitious robot programme, in part inspired by a predicted shortage of manpower as the consequences of its birth-rate, the lowest in the world, begin to sink in. The country has plans to develop robots capable of looking after the elderly, as well as performing household chores."

Apparently, the Korean Government is also developing a new armed robot in tandem with Samsung which is being designed to guard the border with Japan and fire automatic weapons. It will be interesting to see how they reconcile that with the new charter...

Wednesday, March 07, 2007

Gizzajob mister

From the Herald - Mandelson is backing Cameron's "3G" agenda to the hilt... he just thinks that he needs to sign up to a new EU Constitution to achieve it.

Peter Mandelson, EU trade Commissioner, said he agreed with Mr Cameron's globalisation agenda but said the Tory leader risked denying the means needed to achieve globalisation goals.

"The EU needs to be properly equipped to fulfil its role in relation to the global economy, global warming, and global poverty. This requires rule-book changes. Few in Europe are advocating a whole new constitution but we should acknowledge the difference between this and the more limited institutional reform needed to create a more effective EU," Mr Mandelson said.

Thursday, March 01, 2007

Is the EU making war in Iran more likely?

EU enthusiasts boast about the EU’s “soft power” – its ability to use its economic weight and influence to influence world events without having to resort to force.

EU leaders also say they don’t want Iran to build nuclear weapons, but also don’t want to see military action. So why aren’t EU leaders using the economic clout they do have to help head off a seemingly inevitable conflict?

The prospects of either Iran acquiring nuclear weapons, or military action to prevent this happening, both represent potentially disastrous scenarios for global peace and stability.
Although European leaders have publicly stated that both are totally unacceptable, by not taking a tougher line on sanctions against Tehran, EU leaders may be increasing the chances of a war.

The Iranian leadership’s determination to build a bomb remains undimmed: Iran has ignored the February 21 deadline to comply with UN demands for a halt to uranium enrichment, and on Sunday President Mahmoud Ahmadinejad vowed to press on with the programme, which he claims is now as “unstoppable” as a “runaway train” with “no reverse gear”. Iran has also begun tests on longer range rockets (and is already able to hit the eastern edge of Europe) and it will soon be able to enrich uranium on an industrial scale.

A recent editorial in the Jerusalem Post argued that “Iran’s ambitions, unlike those of Libya and North Korea, are not just regime survival but regional and even global domination”. The article goes on to argue that a nuclear armed Iran would not scale down the scope of these ambitions, but rather would have additional leverage over its rivals in the pursuit of this agenda of aggression. This thought is the top concern of negotiators in Europe, the US and, most of all, Israel, who are trying to stop Iran building a bomb. It is also widely argued that Iran acquiring nuclear weapons would lead to a regional domino effect, with Saudi and other countries in the region following suit and building nuclear weapons, potentially creating an even more unstable situation.

It is more or less certain that Tel Aviv will not countenance a nuclear armed Iran. As several recent news reports have made it clear - if Israeli leaders believe it is necessary they will take military action to prevent what is seen by many in Israel as nothing less than an existential threat to the state.

The real deadline for resolving this situation therefore is not dictated by how long it will take Iran to produce weapons-grade uranium – but rather how long Israel will restrain itself from launching military strikes against nuclear facilities. The odds are that unless Iran changes course this will happen sooner rather than later – possibly later this year.

That means there is less time available than is often assumed for negotiators to secure a settlement with Iran that will halt uranium enrichment and prevent Iran getting the bomb. The more the process of reaching agreement is delayed, the more likely a war becomes.

For this reason, it is all the more astonishing that EU policy towards Iran is not contributing to an expeditious solution. In fact, it may be doing the opposite.

The US has for some time been urging the EU to impose tougher and wider-ranging financial sanctions on Iran, including a halt to export credit guarantee programmes for European companies doing business in Iran. With UN-wide sanctions stalled in the security council by Chinese and Russian opposition, the US has already imposed a raft of its own economic sanctions.

Iran is acutely sensitive to such economic pressures. Because of a huge baby boom following the revolution (70% of Iran’s 70 million people are under the age of 24) Iran now needs to create 800,000 to 1,000,000 new jobs a year just to hold unemployment constant. With the unemployment rate among young people estimated at nearly 50%, the current regime is rightly concerned that economic slowdown could lead to their overthrow.

Even on their own, American financial sanctions have begun to bite in Iran. With inflation rising sharply and the economy in trouble despite record oil prices, less extreme Iranian leaders have begun to openly criticise President Mahmoud Ahmadinejad. After the fiery speech in which he said the nuclear programme was like a runaway train, there was unprecedented criticism of the president in the Iranian press, with one political rival openly attacking him for using “the language of the bazaar” and making an “unhelpful” speech.

But the EU members potentially have far more economic clout with Iran than the US, which has had only limited ties to Iran ever since 1979. In contrast EU members are Iran’s largest trading partner – taking 36% of all Iran’s exports and providing 40% of all its imports. However, EU leaders are not only reluctant to agree sanctions, but in fact continue to subsidise trade with Iran via export credits.

Europe’s resistance to a tougher sanctions regime is easily explained. A recent leader in the Wall Street Journal noted that Iran tops Germany's list of countries with the largest outstanding export guarantees, totalling €5.5 billion. France's export guarantees to Iran amount to about €1 billion. Italy's come to €4.5 billion, accounting for 20% of Rome's overall guarantee portfolio. Even Austria had €800 million of its exports to Iran covered by guarantees in late 2005. The UK provided £111m in export credits to the country in 2005-06.

The continuing export guarantees to Iran mean that taxpayers in Europe are underwriting trade and investment that would otherwise be deterred by the risk of doing business with a rogue regime. Since most of Iranian industry is state controlled, much of this continued European investment effectively supports the regime quite directly, and by extension, its weapons programme.

This situation was hardly improved when the EU’s High Representative for Foreign Policy, Javier Solana, circulated a controversial report to member states’ foreign ministers in early February. It argued that although Iran is well on the way to developing nuclear weapons, little can be done to prevent it, and that sanctions would not work in any case.

In response to this report, Israel suggested that the EU was the ‘weak link’ in international efforts to halt Iran’s weapons programme, with Avigdor Lieberman, the Minister for Strategic Affairs saying “This report illustrates an attitude that suggests ‘nothing can be done’. However any surrender can only encourage the aggression and ambitions of Iran to become a regional force capable of imposing its power across the entire Middle East.” (Le Figaro, 14 February)

These statements would not have gone unnoticed in Tehran, and risk undermining Europe’s negotiating clout. Denial of the effectiveness of sanctions risks creating a self-fulfilling prophesy. Moreover, there is evidence to suggest that the US-only sanctions so far in place, burgeoning economic crisis in Iran, and fear of military intervention are strengthening the hand of opposition groups, who want to see a step back from what they see as irresponsible brinksmanship on Ahmadinejad’s part.

The failure of European governments to take a tougher line on financial sanctions towards Iran blunts the effectiveness of existing sanctions, weakening domestic pressure on the Tehran government to come to the negotiating table.

Europe is in a position to impose such sanctions without international authorisation, but the current climate of myopia – placing business interests above security concerns – merely allows the present regime in Iran to buy more time. Ironically, the EU approach is probably making a dangerous war ever more likely.

“British euros” enter circulation

According to Eurocoins, “euro-collectors have been going wild”, for sets of "British Euros". Euros are also being sold for other non-eurozone countries such as Denmark, Sweden and Andorra.

But before you rush out and order some for yourself just remember that unless Gordon Brown suddenly changes his mind they won't have any value.

The great firewall of China

Ever wondered if your blog is available in countries with heavy censorship? Now you can find out. Check out the Great Firewall of China to see if people in China are allowed to view your website.

When we first checked, our home page was accessible but our blog wasn't. Perhaps the People's Republic weren't happy with something we said about the EU's attempts to lift the arms embargo? However, further tests have revealed that those lucky Chinese are indeed allowed to read our blog.
Bet that won't last for long..

Hat-tip: FP