Posts Tagged ‘euro crisis’

Hope lies with the (eastern) proles

15/12/2011, 07:59:14 AM

by Jonathan Todd

In the summer between the Arab Spring and the European Autumn, my wife and I were naturally delighted about the birth of our first child, Stanley, which helped push the world’s population over 7 billion.

It is autumn in Europe because, notwithstanding the UK’s estrangement under David Cameron, the comparisons between the euro and the titanic continue to hold water. And they will continue to unless the euro is fundamentally reformed.

Cameron has swallowed the City of London’s line on a financial transactions tax. This tax would not be the end of the universe. Indeed, it could contribute towards a rebalancing of the UK economy. However, the move towards this tax seems driven by a determination to punish “Anglo-Saxon capitalism” for the euro’s failings, rather than correct the structural flaws within the currency union, which remain largely in place.

In spite of the persistence of repression in Egypt, Syria and elsewhere, spring continues in the Arab world, as democratic flowerings have begun that seem to have an irresistible force. These flowerings were never going to be quick and painless, but the drawn-out process of moving from the left to the right of Ian Bremmer’s J Curve.

Stanley is named after his great-grandfather, who remains as optimistic about America as he did when he emigrated there from Poland over 70 years ago. Hope carried him across the Atlantic. Now hope moves eastwards. Hope powered the Arab Spring, the protests in Russia and the rise of the BRICs. In the decade since the term BRIC was invented these countries have contributed seven UKs (2001 vintage) to the global economy.


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The coalition is on life-support

13/12/2011, 10:12:36 AM

by Rob Marchant

“Mummy, what is that man for”? This exquisite, though probably apocryphal, comment from a small child has been variously said to be about many politicians over the years, including Herbert Asquith. But Asquith’s successor a century later, Nick Clegg, may suddenly be finding that a real and painful question, as he reflects on the wreckage of last week’s European summit.

But first, what happened: Cameron vetoed a treaty amendment on European integration, leaving the remaining countries no alternative but to set up a separate group which would implement the deal outside the EU. It was technically a veto, but only technically: it stopped nothing. The sticking point was said to be the financial transaction tax (FTT), an oddly unfair idea that a group of countries with relatively small financial sectors could jointly gang up to tax the one country which has an unseasonably large one, and which would certainly have damaged British interests. In that sense he was right to veto. Since the FTT is unfeasible without Britain, it was very likely a deliberate ploy by Sarkozy, as Ben Brogan suggests, to insist on this point which he knew Cameron could not accept, thus removing the “difficult” Cameron from the scene and clearing the way for an EU which might just have a chance of agreeing what it needed to agree.

However, this does not mean a triumph for Cameron – far from it. It is, as former Downing Street chief of staff, Jonathan Powell, told John Rentoul, “the worst foreign policy disaster in my adult lifetime”. But not because of the FTT. It is a disaster because it should never have come to this. Sarkozy took this action precisely because he knew Cameron was hamstrung and would never co-operate. Rather than the EU limping around with a British club foot, Sarkozy ruthlessly opted for amputation. But Sarkozy is no fool: he must have seen the attractions of a deal, but didn’t see it as possible.


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