One of the more amusing things about European politics in the contemporary era is that, as so little action with any point to it is taken about anything, political leaders are forced into ridiculous situations that defy explanation….and the media are then left with the unenviable task of trying to make it all look interesting, sensible, or even a matter of great import. Thus, because David Cameron cannot decide on anything to do with the EU (being flapped at by one wing if he says no, and fluttered around by the other if he says yes) he finally got to the stage last year of saying oh alright then we will have a referendum if I’m still in power after the next election….but not before 2017.
In strategic circles (and nothing goes round in strategic circles with quite the dizzying headlessness of Camerlot) that sort of thing is known as ‘buying time’, but Dave has attempted to buy the double-banded family-value pack of time here: so much so, in fact, that one can’t help wondering if what he really did was place a 2-1 on bet with Paddy Power that the EU will have gone to Davy Jones’ Locker by then anyway. Either way, the result for the time being is that the good ship Eunatisitania is being pounded with torpedoes while careering about at 30 knots in search of icebergs to play with. Our Prime Minister, however, has his own personal escape ladder going up to a Westland helicopter, but has decided to wait four years in order to see, you know, sort of how things pan out.
Now this week has come the news that several of the helicopter crew are climbing down the ladder to point out to Cammers that they know the end of this movie, and the ship sinks: so FFS put your hand-made Grenson shoe on the ladder you berk, and climb up here where it’s safe. The Prime Minister, we are told, is “under pressure” to hold a referendum earlier. But last night, he told his MPs he cannot do this under the terms of the Coalition deal with the LibDems. “Right men, pay attention: sorry, sorry…yes I know an asteroid’s heading towards us, but rules are rules.”
In the context of what is so obviously a sinking ship across the Channel, it doesn’t as yet appear to have dawned on the PM that we’re on board the bloody thing. And if you think I’m exaggerating, allow me to drill into some of the latest news.
Il Corriere della Sera said on Monday that Italy needs to find at least €6bn in the next 20 days in order to control its excessive deficit procedure. Fabrizio Saccomanni is expected to present a plan to the EU in the next few days, but it’s hard to see what Plan B’s going to be if Wolfie and Geli say no.
Greece is also going need extra funding beyond the Troika’s projections in the next 10 months, despite a better-than-projected fiscal performance in the first quarter of 2013, largely due its banks being as near as damnit empty. To avoid a unique one-off bail-in Template being triggered, the country will have to go back to the markets. There are some encouraging signs here says Ekathemerini, by which I presume they mean that the markets only backed off, rather than stampeding away like a herd of spooked steer.
The European Central Bank meanwhile continues to avoid any mentions of or news about capital flight from the eurozone, which given the Cyprus theft scam and negative real interest rates must be horrendous. You can’t start a recovery without seed money, and you can’t kick-start consumption without taxpayers having something left in their pockets. With both of these things missing, Mario Draghi’s ECB can keep moving the chequers around, but when there are only black pieces remaining on the board, the game’s over. Mark J Grant puts this very well as follows:
‘The fact that the interest rates for European sovereign debt have done remarkably well all rest on one thing and one thing only: the creation of money and a massive amount of it. There is no inflation because the underlying economies are in horrendous shape, unemployment in a number of countries at Depression levels and yet the band still plays on.’
As I pointed out above, the band not only plays on, the crew are entertaining the passengers with their game of Hunt the Iceberg. There’s no shortage from which to choose: among the senior crew, the evidence of insoluble crisis is now so obvious, that the game-changing friendship between Captain France and Chief Engineer Germany has declined somewhat…they are now tearing at each other’s throats in a frenzy of blame over who is responsible for the collapse of the eurozone. Ten days ago, a document from the French government was leaked to the press openly saying Merkel’s “selfish intransigence’ was at the heart of the problem. France is – according to a recent European Commission report – heading for a negative growth of 0.1% this year, with unemployment set to zoom up to 10.9%. All I can say is that, if you look at the continuing rate of infrastructural spending in France, you’d never know there’d ever been an austerity programme there. Anyway, it’s being whispered that sixty billion euros are to be cut from government expenditure, public sector salaries have been frozen, and job cuts are, at last, beginning. Imagine how that’s going to play with les syndicats.
Over towards the East lies Slovenia, where the troubled government sold some 5 and 10 year bonds last April 30th. Things were going quite well until Moody’s informed the government of an impending downgrade, and the pols immediately pulled the bond auction. Moody’s did this for one simple reason: the assumption that under the Dijsselbloem Template of Doom regime, Slovenia’s creditors will be among the first to be raped. It’s only Moody’s opinion of course, but then I can’t say I demur in this regard.
Talking of rape, last night Bruno Waterfield at the Telegraph reported that Dieseldooom is warning that ECB checks on the quality of banking assets could lead to banks being shut down. ‘Shut down’ is a Dieselspeak for ‘bailed in’. The prospect of eurozone banks facing closure will alarm British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.
And if all that’s not enough to start a panic down in C-Class, the rat Lagarde – aka the IMF arm of the Troika – can be seen scurrying towards the sharp end in search of a diving point nearer to the water. Crissie came out yesterday to strongly oppose plans by the Greek Development Ministry for the creation of a Hellenic Investment Fund and special economic zones around the country. In its report on the Greek economy published on Monday, and in contrast to the wishes of Berlin, which supports both growth initiatives, the IMF says that efforts for the planning of technical growth will have to be rebuffed: “International evidence is mixed at best on the usefulness of development banks, tax-free zones, and subsidies (or tax expenditures) targeted at specific sectors,” said the former hotshot lawyer, who once aggregated four quarters of a French economic report instead of averaging them.
In the light of these portents of inundation, a revolt below deck has seen the locks on the cages smashed, and a flood of steerage passengers running towards the blunt end. A staggering 1.1 million people from the European south moved to Germany in 2012, Germany’s statistics authority said yesterday. Most of them came from Spain, Greece, Italy and Portugal, highlighting an accelerating trend that started in 2010. What this will mean is a falling cost of labour within Germany, with a consequent further boost to its economy…..and thus an even more lopsided eurozone than we have already. In the longer term, however, I predict it will lead to increased social tensions there.
So as you can see, it’s all going rather well. But Mr Cameron cannot win this one. The MSM titles are a tad short on precisely where this pressure for an early referendum is coming from – perhaps because it’s coming from at least two well-known media owners. But within the Party, there are those inside Camerlot who want to have the referendum quickly in order to spike Farage’s guns (“We’re leaving anyway, so why vote Ukip?”); and others inside plus plenty of those heavily-armed foot-soldiers scaling the walls in search of quick and massive no-vote (“See, we told you Cameron….you ignored them and now this is all your fault”). At the weekend, a Conservative source remarked to me that “the Right wants the referendum to turn into a giant vote of no-confidence in Cameron”. I think he’s almost certainly right, and I think it probably would.
But Dave says we’re not having one, so there. As I have been saying since the start of his Premiership, there really are just too many press titles, lefties and Tory rebels for Cameron to survive for any great length of time as Tory leader. Having cocked up the election strategy in 2010 (over which he and Osborne almost fell out at one point) the PM was forced to do a deal with a Party whose rank and file loathe the Tories, and vice-versa. Not only did that alienate Paul Dacre at the Mail, Murdoch at Newscorp, and the Sarklay Brothers down south, it also doomed Britain to staying in the EU. Indeed, the case against David Cameron’s leadership is so easy to make, it can only be a matter of time before the Right feels it has enough ducks in a row to make it. The faster they get a referendum, the sooner that will be.
The case continues, and I end this piece as I began it: here we are in Britain, debating the pros and cons of a referendum to help us decide whether we want to drown on board SS Eunatisitania, or get in the helicopter and head for Asia. I do apologise, but I find it both hysterically funny and completely mad.