These protesters offer no credible alternative programme. They merely seek the reinstatement of [...]]]> Across southern Europe, and especially in Greece and Spain, we’re hearing an inchoate cry of pain and rage from citizens whose lives have been shattered by austerity programmes. We’re seeing EU flags (and occasionally German flags) burned in the public squares.

These protesters offer no credible alternative programme. They merely seek the reinstatement of the good old days, the status quo ante, before bank failures and property bubbles and spending cuts and massive unemployment. They remember when most people had jobs, and the rest had generous benefits. When welfare provision was good. When state services were available. And when, in Greece at least, one could retire at 57 with a good pension, and when most citizens found ways to avoid paying their taxes.

They perhaps haven’t grasped that in a globalised world we cannot forever go on borrowing to sustain salaries and benefits much higher than in the rest of the world. So in a sense they are deluded and mistaken. Yet in another sense they have a point. They have grasped at some deeper level the idea that it all comes down to Brussels (and Berlin) — that the EU is the problem, not the solution.

O’Connell Street, Dublin, 1842

The Greeks in particular are deeply conflicted on this point. They see it as a badge of pride and honour to be in the €uro, and in the EU, yet they reject the conditions of membership. I heard a Vox Pop interview today in which a Greek woman said “We’re in a community — we must support each other”, which being translated means “The Germans should bail us out. Again”.

Boris Johnson recently said, in his inimitable style: “I have a clear policy on cake. I’m pro having it. And I’m pro eating it”. Boris can get away with such a magnificent self-contradictory sound-bite, but it doesn’t work in Greece. Either they choose the €uro, and with it, grinding deflation and austerity and hunger and poverty, for decades or perhaps forever. Or else the get out, default, devalue, and in the medium-term start to recover, as their ouzo and their olive oil and their Aegean cruises are priced back into international markets.

Of course the anti-austerity mood in Europe is not just set by protesters on the streets. We’ve seen it at the ballot box as well, with the polls in France and Greece showing a strong anti-austerity bent, and even the EU institutions are now talking about “balancing austerity with pro-growth programmes”. Perhaps only Angela Merkel remains a true believer in fiscal probity alone.

This mood will be noticed in Ireland, and will surely encourage the NO vote in the up-coming referendum. The opinion polls at the moment are conflicted, and there are suggestions that most of the polls are associated with the Yes side.

As Irish voters face a barrage of YES propaganda from EU politicians, as they’re subjected to bribes and blandishments and brow-beating from Brussels, they will surely observe that the gut-feelings of the NO side are widely shared across Europe. Not just in the traditionally sceptical countries, but in the EU’s heartland. Yet again, the Irish are the only EU citizens who have an explicit vote on Merkel’s Fiscal Compact. They now know that if they defy the good and the great and the Brussels apparatchiks, they are in good company, and they speak for European citizens everywhere.

By Roger Helmer MEP

With the European House crashing about his ears, his cry in the plenary on Wednesday was “More federalism! More political integration! €uro-bonds! [...]]]> Guy Verhofstadt is a former Prime Minister of Belgium, and now leader of the Liberals in the European parliament. He is also the most splendidly unreconstructed €uro-zealot you could hope to meet.

With the European House crashing about his ears, his cry in the plenary on Wednesday was “More federalism! More political integration! €uro-bonds! Debt mutualisation! More Europe!”. And yet elsewhere in his speech he reminded us that we faced not a world crisis or a world recession, but a European crisis. He seemed oblivious to the obvious flaw in his logic.

I wrote to him afterwards in the following terms:

Dear Guy,

Along with other colleagues, I enjoyed your Europe Day speech in the plenary this afternoon, and rather surprisingly, I found that I agreed with part of it. You said, as near as I can recall: “We must remember that this is not a global recession, or a global financial crisis. It is a European recession, and a European crisis”. I agree. I raised my Blue Card, seeking to put a question to you, but this was disallowed by the President. So I put it to you now.

Has it occurred to you to ask why this recession is unique to Europe (or at least largely so – though the USA also has some problems)? Ask any economist, and the answer is clear. The EU is over-taxed, over-regulated, and over-borrowed. The €uro experiment is failing before our eyes — it is clearly not possible for Germany to share a currency and a monetary policy with the Club Med countries. The trade imbalances between North and South cannot be resolved in a single currency zone. Greece will not start to recover until it breaks free, defaults and devalues.

In this context, your call for “More Europe” seems bizarre, if not perverse.

Best regards. ROGER HELMER MEP

In one sense, of course, he is right. As the MacDougall report noted as early as 1977, a successful monetary union in Europe is possible — but it would require some 6 to 8% of EU GDP to be available as fiscal transfers from winners to losers. In those days we used to call it fiscal transfers: now we call it bail-outs. If Germany were prepared to subsidise the Club Med countries on that scale, forever, in a sort of EU-wide Barnett Formula, then the €uro could work. But of course it’s politically impossible: German voters wouldn’t stand for it.

The euro-fanatics are like the obsessive gambler who plays double-or-quits. Every time he loses, he doubles the stakes. Theoretically, he must always end up ahead, except for one small snag. The theory assumes he has an infinite amount of money. The reason punters lose and the house wins is because punters don’t have infinitely deep pockets. Sooner or later, they’re broke, and go home with a hangover. Just like the €urozone.

In the text-book definition of lunacy, people keep repeating the same action — More Europe! — expecting a different result next time. The rest of us can see the catastrophe unfolding, but Verhofstadt and his chums are like those earlier Europeans, the Bourbons. They have learned nothing, and forgotten nothing.

By Roger Helmer MEP

The fourth of the seven principles of a Free Society, as espoused by The Freedom Association, is limited government. My own [...]]]> There is a City saying: “Sell in May and go away.” This year it needs to be amended to read “Sell in May, pray hard and come back in the middle of October.”

The fourth of the seven principles of a Free Society, as espoused by The Freedom Association, is limited government. My own favourite is ‘individual freedom’ and as a capitalist working in the City (my politics are let’s create wealth by individual initiative and let’s debate the distribution of the wealth created) I have tried, through TFA blogs, to bring to public attention the financial regulatory chaos which threatens the UK’s recovery from recession.

Things are going to get much, much worse.

a) Between mid-July and mid-October MPs will sit for just 12 days.

b) At a presentation by Transport for London on the impact of the Olympic Games their spokesperson said that “we have a moral obligation to get the competitors to and from the stadium: they have been training all their lives for these games.” This will be achieved by turning London (from mid-July until mid-September) into a police state. The chaos in London this week when the police closed West London so her Majesty could reach Parliament is just a foretaste of what is to come (and, of course, forget early June as we celebrate the Diamond Jubilee).

c) In early autumn politics will be dominated by the Party Conference season (Lib-dems: Brighton: 22 – 26 September. Labour: 30 September – 4 October Manchester. Conservatives 7 – 10 October: Birmingham).

d) The business impact of the Queen’s speech was dire (CityAM referred to “fiddling while the economy burnt”).

e) The ludicrous success of Wonga.com in launching its business loans up to £10,000 at rates approaching 2% per week is a dreadful indictment of the empty rhetoric of the banks and the Department for Business, Innovation and Skills who are not supporting British business.

f) A report by Civitas has slammed the Financial Services Authority (FSA) calling it a ‘closed shop’ because of its inertia in approving applications from start-up banks.

g) A report from the Centre for Economic and Business Research (CEBR) says that City bonuses have fallen to their lowest level for fourteen years. That may not get much public sympathy but it should be translated into reduced revenues from the City on which our economy so depends.

My son and daughter-in-law have just announced that in 2013 they are emigrating to Ipswich, off the Gold Coast, in Australia: their application has been given provisional approval. I’m staying to fight on. I do wonder which of us has got it right.

By Tony Drury

It was Elizabeth Barrett Browning who said that “No man can be called friendless who has God and the companionship of good books.” That right is now under serious threat for many citizens of the United Kingdom.

The Coalition Government, and specifically Ed Vaizey (right), the libraries [...]]]>

It was Elizabeth Barrett Browning who said that “No man can be called friendless who has God and the companionship of good books.” That right is now under serious threat for many citizens of the United Kingdom.

The Coalition Government, and specifically Ed Vaizey (right), the libraries Minister, wants to cut the Public Lending Right (PLR) scheme from £7.22 million to £6.96 million from now to 2014/15 (it was cut 3% in 2011). The PLR is the only direct investment in modern literature that the Government makes. The body which administers it is to be abolished, although there is now a three-month consultation period. The proposal is that the PLR will be administered by the British Library in Boston Spa.

The PLR is the aggregate royalties that authors receive from the borrowing of their books. It excludes electric and audio books. They are under increasing pressure because of smaller advances, the closure of many independent book shops, the fall in sales as consumers spend less and the complexities of eBooks. Books are being sold at much lower prices and the accounting system used by Amazon is perplexing many writers.

With our ageing population, the book remains one of the great pleasures in life. It is baffling that the Coalition Government cannot recognise a key social need and actually increase the PLR. The sum of money is relatively small. The benefits would be massive.

I must declare a vested interest in this subject. My first work of fiction, Megan’s Game, goes on sale on 16 May 2012. Of course I’m taking advantage to plug my book. I can however state that the five years’ labour has brought it home to me how hard the life of the author really is in these times of austerity.

If I remember the words of Groucho Marx perhaps I’ll retain my sense of proportion:
“I find television to be very educating. Every time somebody turns on the set, I go in the other room and read a book.”

Tony Drury
Follow me on Twitter @tonydrury39

Sir Mervyn King used the first radio talk by a Governor of the Bank of England in peacetime for more than 70 years to [...]]]> There is an oft-quoted Scottish proverb which might have been on the mind of the Governor of the Bank of England during this last week: “Confession Is Good For The Soul.”

Sir Mervyn King used the first radio talk by a Governor of the Bank of England in peacetime for more than 70 years to attempt to apologise for the Bank’s ‘failure’ to anticipate the financial crisis.

The moment of truth was ruined by his allocation of the real blame in everybody else’s direction. Sir Mervyn said, in so many words, that –

a) The Bank should have done more but, apart from writing reports, there was little it
could have done.

b) The new regulations introduced in 1997 took away most of its powers and it was
powerless to intervene. This is open to question. The Bank retained responsibility
for the stability of the banking system. The reality is that all its attention was
placed on the Monetary Policy Committee and the setting of interest rates to
control inflation (which, of course, it has failed to do in recent times).

Bank of England, Threadneedle Street, London, England. English: The Bank of England in Threadneedle Street, London. Deutsch: Sitz der Bank von England in der Londoner Threadneedle Street. (Photo credit: Wikipedia)

The Bank of England remains the only member of the tripartite regulatory system that has not allowed public scrutiny of its role in the crisis: both the Treasury and the Financial Services Authority (“FSA”) have done so.

The UK’s regulatory system is facing great change with the FSA being replaced by the Prudential Regulatory Authority and the Financial Conduct Authority.

However the real attention is on the setting up of a Financial Policy Committee which will monitor the banking sector while the Monetary Policy Committee controls interest rates. The Bank’s accountability to Parliament remains the subject of intense discussion between the Treasury Select Committee (under the chairmanship of Andrew Tyrie MP) and the Governor.

The real impact of these events is that financial regulation is stagnating while costs soar. The appointment of a new Governor of the Bank of England in 2013 (with senior resignations worrying all too common) will also hinder progress. The Coalition Government, led by the Chancellor of the Exchequer, rushed into these changes. After the Queen’s Jubilee celebrations and the Olympic Games, autumn will come and the financial regulatory chaos will remain and probably be even more complex. This week one report suggested that media was overtaking financial services as the London’s main revenue generator.

The Scottish proverb quoted above is, in fact, missing one word. The actual proverb reads:

“Open confession is good for the soul.”

Instead of meaningless introspection by the Governor, dithering by the changing FSA and empty rhetoric by the Treasury Select Committee, the Chancellor should realise the serious affect the regulatory muddle will have on the UK’s growth prospects.

Perhaps ‘Open confession’ by all parties is the real answer.

Tony Drury
Twitter: @tonydrury39

I, for one, am quite surprised. The polls showed François Holland and Nicholas Sarkozy practically neck and neck throughout the whole campaign. But after a poor performance in the [...]]]>

The votes are in, the turnout was huge and by a 3 point margin France will have its first Socialist President in nearly 30 years.

I, for one, am quite surprised. The polls showed François Holland and Nicholas Sarkozy practically neck and neck throughout the whole campaign. But after a poor performance in the only televised debate, coupled with economic fears and rising concerns over planned austerity measures (not to mention a growing national distaste for the man himself) Nicholas Sarkozy announced his concession and called for the nation to rally around their new leader.

Early analysis suggests that many of those casting their votes for the “Parti Socialiste” (the PS) were actually doing so less as an act of support for their policies but as a referendum against the Presidential incumbent. Shortly after the election The Washington Post called Hollande the “accidental president” who seemed sure to lose just a few months ago.

François Hollande à Saint-Cyr-sur-Loire (Photo credit: Wikipedia)

Francois Hollande secured his nomination as the Socialist candidate only after the highly-favored front runner was forced to drop out. Dominique Strass-Kahn led party opinion polls by double digits over Hollande, until he found himself arrested and charged with sexual assault by the NYPD. The headlines were just too much to overcome for DSK. He withdrew from the race almost upon returning to France.

Hollande was then able to clinch the nomination with 56% of the party vote – not a landslide but just enough to win. The whole party then fell right behind him, including his former partner, and ‘07 candidate for President, Segolene Royal. Jacques Chirac would later announce his endorsement but given his post-presidency convictions on fraud and embezzlement during his tenure as Mayor of Paris it is unclear whether or not his support was helpful or even wanted.

The first round of voting was scheduled for April 22^nd. A total of 10 candidates qualified for the ballot, including the far-right “Front Nationale” (FN).

The FN has managed to garner quite an amount of political support over the last decade, especially in the rural and suburban regions of the country. Their 2002 candidate, Jean-Marie Le Pen placed second in the first round of voting. His daughter Marine Le Pen placed third last April with 12% of the vote: a shocking amount when you take into account many of Le Pen’s public statements on immigration and French minorities. Their party is becoming an effective spoiler for each new election season.

After advancing from the first round with Sarkozy, Hollande led many nationwide polls but never by more than the percentage of error. His victory in the second round was a combination of effective campaigning and personality politics.

So what does a Socialist President mean for France? What does it mean for the European Union? What does it say about public reaction towards an administration focused on spending cuts, or about the popularity of Socialism as a political ideology?

Many of the answers will come into sharp focus over the coming months. Hollande has already announced he wants a renegotiation of the European Fiscal Treaty. This will immediately put his government at odds with EU leadership in Brussels, not to mention neighbouring Germany. The future of the Euro will again be placed under the spotlight, as will the impossibility of maintaining a common currency without a common monetary policy. But the French election results point to something much larger than the future stability of the EU.

Francois Hollande’s victory signals a shift in European electoral politics. With few exceptions, the continent’s penchant for conservative, free-market capitalist politicians had been steadily growing since beginning of this century. Christian Democrat and Centre-Right parties like Germany’s CDU, Italy’s PdL, Czech Republic’s ODS and France’s UMP had enjoyed success at the ballot boxes year after year. Even the European Parliament itself is led by the conservative EPP Group. Their governments typically required a ruling coalition but they’ve always remained the ruling party. That trend seems to be slowing.

The new order seems to reward politicians who appeal to the economic frustrations of the populace.

We saw Czech voters punish the ODS for cuts to public programs by stripping them of 28 parliamentary seats in 2010. Belgium has recently cobbled together a 6 part coalition led by the Walloni Socialist, Elio de Rupo. Since being elected PM of Sweden in 2006, subsequent elections have forced Fredrik Reinfeldt to expand his coalition to offset gains by the opposition Social Democrats and Swedish Greens. Finally, Angela Merkel is watching one German state election after the other chip away at her coalition partners. At this rate the CDU (hovering around 34% of parliament seats) won’t have the support it needs to form a government following the next federal elections (slated for October 2013). A German Social Democrat / Greens coalition is widely predicted.

In every one of these examples there is one recurring theme – the electorate is growing frightened of conservative politicians in the age of austerity. The message of “things are difficult and they’re only going to get worse” is a tough sell compared to “we know who made things this way, now let’s make them pay for it”.

The Socialist message is one of unification, like barring the doors and hunkering down before the storm. It’s based on an interdependence of abilities and resources. The fact is that conservative fiscal policies trim off the stragglers. Those who didn’t have the foresight to buy a lifeboat are going to drown. This is a very difficult message to build support around.

The election of François Hollande is less an affirmation for French Socialism than it is a response by a frightened electorate. Justifiably frightened, to be sure, but irrationally acting on instinct just the same. The coming decade will likely bring similar electoral results as Europe struggles to redefine itself.

Joseph Bono

Related articles

• John Simpson: French Revolution could cost David Cameron his head (thesun.co.uk)

The Coalition Government lost sight of this truth almost from [...]]]> Capitalism favours private ownership as a means of production with the objective of generating profits. Politics concerns the taxation and distribution of the wealth that is created. Capitalism works at its most efficient when individuals have the freedom to maximise their use of capital.

The Coalition Government lost sight of this truth almost from the beginning with their torrent of change, regulation, fiscal backtracking, accusatory judgements and budgetary strangulation. Capital freedom has almost disappeared in the UK.

The current revolution in the world of publishing is therefore worth highlighting: it is capitalism at its most effective.

Everybody is aware of the fundamental shift from hardcopy to digital books. Many now have readers onto which they download their favourite books. The market leaders have been Amazon with its Kindle and Apple’s iPad.

Logo for the Barnes & Noble Nook (Photo credit: Wikipedia)

However Microsoft has stunned the sector by announcing that it is to acquire a stake costing $300 million in the digital operations of Barnes & Noble in the US. They are the world’s largest physical seller of books. They have invested huge sums in an e-reader called ‘the Nook’. When Microsoft launch Windows 8 the home screen will feature a Nook application. When the market statement was made the Barnes & Noble share price increased by nearly 60 per cent. The Nook e-reader market share is around 22% compared to Amazon’s Kindles at 52%. This deal will change all that.

Barnes & Noble anticipate that e-books will increase from 5% to 30% of the global book market within three years. Microsoft will own more screens in portable devices than their competitors.

In the United Kingdom the mantra is that growth can come from SMEs. However the small-cap markets are almost dead. AIM manages a few foreign mineral companies and little else. PLUS Markets is fighting for its survival and is up for sale. The Treasury is committed to providing finance for growth through funds. In doing so they are allowing the building of massive overheads (usually a minimum of 25% of a fund will go in costs) without any guarantee of success.

The Microsoft deal, which will pour capital into innovation and expansion to the ultimate benefit of the consumers, is capitalism at its best.

As the UK skirts with double dip it is time the Coalition, the Treasury and the financial regulators realised that the efficient operation of the capital markets is the best way to restore our fortunes.

Tony Drury

Follow Tony on Twitter @TonyDrury39

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• Microsoft and Barnes & Noble take on Amazon’s Kindle with $300m deal (telegraph.co.uk)