Ponters Pensées 19.6.16

Southern Europe's Ailing Banks: Here's Don Quijote's opening para in an article on the latest thing done to kick the problem down the road: Senior bankers in Spain and Italy can breathe a collective sigh of relief after Europe’s finance and economic ministers decided on Friday to postpone, for at least 18 months, a decision on setting a limit on the government bonds some banks can hold as eligible “risk-free” capital. It was one of four things keeping Spanish senior bankers awake at night. Now, they can sleep a little sounder. See here for the whole article. Once again, he says, short-term political expedience trumps the need for long-term economic prudence. DQ's conclusion: One thing that is abundantly clear is that, Brexit or no Brexit, the Eurozone is destined to languish in economic limbo for at least another year and a half, assuming it lasts that long. No way to run a supranational state, some would say. But politics has always outranked economics in Brussels and there's no electorate to account to for it.

Spanish Taxes: It's Declaración de la Renta time again. As usual, the efficient Tax Office (La Hacienda) has sent me details of my income for last year. For the 3rd year running, it's attached a paragraph to the effect they've got data from my national tax office but 'haven't had time to include this income' in their report. This is just a fishing expedition, aimed at all (or most) foreign residents. It comes to something when the state lies to its citizens. So blatantly, I mean. Needless to say, it goes on all the time in less obvious ways.

Spanglish: The latest word – liftado. 'Un lifting' usually means a facelift but now we have the verb liftar, or at least its past participle liftado. This is something to do with a type of tennis serve, as in: Acción y efecto de liftar: movimiento giratorio superior. En física, el efecto característico que se da a la pelota mediante el cual la parte superior del cuerpo que gira se desplaza hacia delante, y la parte inferior se dirige hacia atrás respecto al centro. There's also un power lifting, which is something to do with weight-lifting, I believe.

RT TV: Another of their irritating Americans is Lee Camp, who's a stand-up comic with a strident – occasionally histrionic – delivery which is backed by obvious canned laughter. He makes some good points about US politics but is hard to endure. I don't get the impression his act ever includes comments on Russia, even though his field of comedy is said to be as wide as 'society'. Maybe there's a Russian comic who does the same thing about his/her society and I've just never seen them. (Cue laughter). The station is currently running a series of interviews with athletes affected by the recently imposed Olympics ban, all of them saying how unfair and politically motivated it is. No one - least of all RT TV - mentions the accusation of state-sponsored institutionalised doping and corrupt doping agencies. They don't exist, apparently. It's all a US-driven Western myth, designed to ensure Anglo countries bag all the medals. Which could be true, of course.

Finally . . . For those who, like me, aspire to ageing gracefully, there's a site for you. It's called Advanced Style and it has its own Facebook page. Enjoy.

Personal Note: I'm off on my 3rd camino de Santiago of the year tomorrow and am hoping it will be as enjoyable as the coastal walk I did a week or so ago. As usual, I'll try to post commentary and fotos as we go.

 A FINAL WORD ON THE UPCOMING BREXIT VOTE - Dominic Lawson

The highlighting is mine

The EU credit card has cost us our sovereignty. So now let’s cut it up

If Britain votes this Thursday to remain a member of the European Union, it will be the result of a misunderstanding. Not a new one, but the misunderstanding that has been deliberately fostered since this country signed the treaty of accession in 1972.

As during the 1975 referendum campaign, the advocates of membership talk as if it were like signing up for an American Express card: membership has its privileges, and it is only a financial deal.

So in this referendum, the tactician-in-chief of the “remain” campaign, George Osborne, has behaved like any sharp financial salesman: if we don’t keep our EU gold card, he warns, it will “add between £70 and £105 a month to the cost of a mortgage for the average first-time buyer”. This figure is presumably based on the notion that in financial turmoil post-Brexit, interest rates would increase.

As a matter of fact, the sterling interbank rate has fallen since the chancellor made that statement, even as it seemed increasingly likely that Britain would vote to leave. But this is beside the point, which is that the EU is a profoundly ideological political entity, not a credit card company. 

It was just about possible to overlook this in the 1970s, when it was called the European Economic Community. But since the Maastricht treaty — let alone the treaties of Nice and Lisbon — even the slowest learner can see that this has the accoutrements of a fully fledged supranational administration, with its own flag, an army in waiting, a central bank, a civil service, a president, a parliament and a supreme court (the Court of Justice), to whose rulings our own parliament agreed — in 1972 — to be unquestioningly and legally subject.

The justice secretary, Michael Gove, was only indicating the practical consequences of this when he declared: “As a minister, I’ve seen hundreds of new EU rules cross my desk, none of which were requested by the UK parliament, none of which I or any other British politician could alter in any way and none of which made us freer, richer or fairer. Every single day, every single minister is told, ‘Yes, minister, I understand, but I’m afraid that’s against EU rules.’ I know it. My colleagues in government know it. And the British people ought to know it too: your government is not, ultimately, in control of hundreds of areas that matter.”

It is in this context that the argument over immigration must be seen: it is just a controversial example of a wider problem. The Maastricht treaty brought with it the fact of EU citizenship, which meant that all citizens of the union had an unchallengeable right to live and work in any of its now 28 member states.

It was a glorious vision of personal freedom, especially for those in poorer countries. But if you believe that for a piece of land to be defined as a country it must have borders and a government with some control over who may and may not live within them, Britain is no more than a province of the EU, lacking one of the most vital aspects of independence. This has been noticed.

You can argue that unlimited migration within the member states — which are themselves annually giving citizenship to roughly 900,000 migrants from outside the EU — is economically beneficial to the receiving nations. But if voters believe this is inimical to them, it is destructive of our entire political system when the government is compelled to tell the electorate: sorry, we can’t do anything about that.

It is not as if other EU countries have evaded democratic crisis. When last year the people of Greece were voting in a referendum on whether to continue with the immensely stringent economic policies demanded by the EU authorities, the president of the European Commission, Jean-Claude Juncker, warned them: “There can be no democratic choice against the European treaties.” He was right.

Unlike Greece, Britain is not in the eurozone. This is fortunate, but it makes our membership of the EU less, not more, suitable. Its (unelected) policy-making arm — the European Commission — is now entirely devoted to salvaging the eurozone. This can be achieved only by greater harmonisation in all areas of policy, which will cover Britain too. As the EU’s Five Presidents’ Report declared — and is there any British voter who even knows the names of the EU’s five presidents?— this will involve “deeper integration” of “national labour markets”, “insolvency law”, “company law” and “property rights”.

Bizarrely, David Cameron has already pledged not to interfere with this process — the bonbon to win French assent to what the PM asked for during his almost forgotten “renegotiation” with the rest of the EU in February.

On the whole, multinational bosses like the idea of a completely homogenised Europe, which is why they are putting their weight behind the “remain” campaign’s Project Fear — even those who think it’s nonsense. Thus the head of the American industrial behemoth General Electric, Jeff Immelt, dutifully put his name to a letter in the Financial Times last month warning that Brexit would “hit UK growth and impede foreign investment ”. Yet last October the same Jeff Immelt told The Daily Telegraph of Britain’s membership of the EU: “As a global investor it really doesn’t matter. We have a big presence here and we’re a big exporter from here. So it’s important the UK has good relationships around the world, but I don’t really think that its place in the European Union makes that much difference.”

Similarly, and almost as unnoticed, Richard Sharp — the only external member of the Bank of England’s financial policy committee with significant personal investments in the UK economy — told the House of Commons Treasury committee that if the June 23 vote were for Brexit: “I am not worried about a major financing difficulty . . . the UK is a thoroughly investable economy and would remain a thoroughly investable economy whichever way the vote goes.”

As to the warning from the governor of the Bank, Mark Carney, that Brexit would test the “kindness of strangers” to continue funding the country’s record deficit, Sharp told the MPs: “I might disagree with the governor . . . I don’t think it’s the kindness of strangers. I think strangers make a risk-reward assessment, and they would continue to view the UK as an extremely good risk.”

Note that these two businessmen are not producing spuriously precise forecasts of what will happen to the economy in the months after Brexit: they are making general long-term assessments, just like the head of Eurointelligence, Wolfgang Münchau, who told the readers of the FT: “There may be reasons why the UK may wish to remain a member of the EU. But whatever they are, they are not economic.”

It is, to repeat, a political issue — and even a moral one. Thus a number of leading churchmen, including the archbishops of Canterbury and York, have argued that Britain’s leaving the EU would put at risk the peace in Europe that has been almost coterminous with the organisation’s existence. Leave aside the fact that Britain joined not in 1948 but 1972; are the central institutions of the modern EU — the Schengen borderless area and the euro — making the continent more stable? Or the opposite?

If you think the latter is the case, then voting “leave” would be the kindest thing to do for all the peoples of Europe. We should let them know there is another way.