Category Archives: EU

Trying to understand the Tories

Into the Abyss
Into the Abyss.
Westminster politics often makes me feel foreign — the fact that it doesn’t make any more sense now than it did when I arrived in Scotland 14 years ago just shows how completely divorced Scotland and England already are politically.

The Tories’ referendum on leaving the EU is a prime example. In Scotland you simply don’t encounter that deep antipathy towards the EU that clearly must be a common theme amongst natural conservatives in England, and as a result what’s happening just now simply doesn’t feel relevant to me. Unfortunately, Scotland voted No to independence, and as a result, this referendum is happening here too, and the outcome does matter to people in Scotland (not least to EU citizens like me).

I therefore have to get my head round this. The first question I’ve been asking myself is why Cameron decided to boldly split his own party like no man has split it before, and in particular, how he ended leading the Stay campaign.

Before the summer holiday, I had convinced myself that he was looking for an excuse to head the Leave campaign:

My guess is he’s already expecting his negotiations will fail (if for no other reason because he’s asking for things that any EU expert will tell him the other countries won’t give him), and he’ll then go out and say something along these lines: “I really wanted to remain in a reformed EU, but the other countries have turned their backs on us, so I will with a heavy heart have to recommend that this great nation leaves the EU.”

Why is Cameron doing this? My guess is it’s to save the Conservative party. If he came out in favour of leaving the EU already, some pro-business Tories would break out, and if he campaigned in favour of EU membership, a very large number of MPs would rebel. By pretending to negotiate in good faith, he keeps the pro-EU Tories happy, and by setting the negotiations up to fail, he ensures the Eurosceptics will eventually be happy.

I was mulling this over when my beloved wife pointed out that I might have been right but that this analysis was overtaken by events. In normal circumstances, a lot of EU countries would have been quietly relieved to see the UK leave, so they wouldn’t have been willing to agree to many of his demands (and in fact Angela Merkel gave them a rather lukewarm reception when he first aired them).

However, these are not normal circumstances. The whole world is getting rather destabilised, and the EU is facing a lot of obstacles on many fronts simultaneously. The EU leaders therefore were afraid the whole edifice would come tumbling down if they gave Cameron the cold shoulder, so they were forced to agree to his proposals without major changes. As a result, he couldn’t really claim to have been let down.

However, this leaves Cameron in a horrible position. As John Rentoul described it in The Independent:

If Cameron wins this referendum he will be hobbled by his party. Within moments of the result, the anti-EU Tory party will be looking towards the next referendum. At some point the EU treaties will have to be rewritten and it will be hard to resist demands for another referendum. Far from settling the European question, this referendum could ensure that Europe will dominate the Tory party’s choice of Cameron’s successor. […]

If Cameron loses the referendum, forget all his hints about staying on. His time would be over. His party would not countenance Brexit negotiations being handled by a leader who wanted to stay in. One way or the other, this is the end of his premiership: we just don’t know how or exactly when.

I’ve said before that Cameron seems to be a clever tactician but a lousy strategist. I guess this might be yet another example of this, because surely he’s ended up somewhere he never wanted to be.

I wouldn’t mind the Tories half as much if they were just a fringe freak show (a bit like UKIP), but living in a country where these hapless wretched people have a parliamentary majority scares me witless.

The only glimmer of hope is that perhaps this referendum will lead to Scottish independence sooner rather than later.

Thoughts on Greece

Yes To Grexit
Yes To Grexit by Jan Wellmann, on Flickr.
I love the European Union — it has achieved so much for normal European citizens: Peace, the freedom to travel and (in many cases) prosperity. I also love the idea of a common European currency — although it was terribly exciting as a kid to get exotic notes and coins when travelling, it also made it hard to compare prices and salaries across borders. Indeed, back in the year 2000, I was very active on the Yes side when Denmark held a referendum about joining the Euro (it was narrowly defeated).

However, the EU I liked the best was Jacques Delors’s Commission-run project. Since then, the European Council (where the heads of state get together in private) has taken the lead, and idealism and democracy has suffered.

The EU has disappointed me in at least three regards recently:

Firstly, Barroso and several other European politicians took part in Project Fear’s scaremongering in order to persuade us to remain within the United Kingdom. Given that almost everybody on the pro-independence side supported continued membership of the EU, whereas many people on the No side were already discussing how and when to leave the European Union, that struck me as being rather foolish, short-sighted and undemocratic.

Secondly, the Mediterranean refugee crisis has revealed a huge lack of European solidarity. It’s clear the numbers that arrive in Italy are far too high for one country, but spread across the EU they would be very manageable, and yet lots of countries refuse to do their bit.

Thirdly, the way Greece has been treated has been an unmitigated disaster, not just for Greece but for all of Europe.

The EU has to work in the interest of normal Europeans citizens, and that’s simply not happening in Greece. Normal people are suffering, to a large extent because their former governments borrowed a lot of money and gave it to their rich friends (such as international bankers).

I completely understand that other European countries are worried about moral hazard. Of course you don’t want a situation where a country can simply borrow money and then refuse to pay it back without any negative consequences. However, punishing ordinary Greeks for a century is a rather extreme way to avoid moral hazard, I would have thought.

At the moment, what benefit does Greece actually derive from being part of the Euro? As Frances Coppola put it recently
in Forbes:

Any country can use the Euro as its currency, whether or not it is a member of the Euro. And some do: Montenegro, for example, and Kosovo are both Euro users though they are very far from being accepted into the EU, let alone becoming Euro members. So what distinguishes a Euro member from a Euro user?

Normally, the distinction between a sovereign currency issuer and the (foreign) user of a currency is that the sovereign currency issuer has complete control of the money supply, whereas the user must earn, borrow or buy its currency from external sources. But Greece cannot be considered a sovereign currency issuer. Its central bank can only issue the amount of Euros that the ECB allows it to. That amount has just been frozen by the ECB. Greece must now borrow, buy or earn additional Euros from external sources. That is what currency users have to do, not currency issuers. So Greece has no control of its money supply. It is as if it were using a foreign currency as its domestic currency.

Bloomberg reports that Bulgaria, which is not a Euro member but backs its currency with Euro reserves, has just been allowed to borrow from the ECB at the same rate as Euro members, thus enabling it to firewall its banks from Greek contagion. This is a privilege normally only accorded to Euro members – and it has been WITHDRAWN from Greece. If this is true, then Bulgaria (non-Euro member) can obtain Euros from the ECB while Greece (Euro member) cannot. It is hard to see what benefit Greece’s Euro membership confers, apart from redistribution of seigniorage receipts.

I’m not saying that the best solution would necessarily involve giving a lot of money to the Greek state. Perhaps it’d be better if the Greek banks were to be taken over by the EU, for instance. Or perhaps Greek pensions could be paid by the EU instead. It might be worth looking at what the US would do if a state went bust, or what Germany before 1999 would have done if one of its Länder had done so.

However, some kind of debt foregiveness must surely play a part when a country cannot realistically pay back its debts ever. And Germany of all countries shouldn’t be vetoing it. As the French economist, Thomas Piketty, said to Die Zeit:

When I now hear the Germans say that they deal with debt in a very moral way and firmly believe that debts must be repaid, then I think: What a big joke! Germany is the prime example of a country that has never paid its debts. It can teach other countries no lessons. [Wenn ich die Deutschen heute sagen höre, dass sie einen sehr moralischen Umgang mit Schulden pflegen und fest daran glauben, dass Schulden zurückgezahlt werden müssen, dann denke ich: Das ist doch ein großer Witz! Deutschland ist das Land, das nie seine Schulden bezahlt hat. Es kann darin anderen Ländern keine Lektionen erteilen.]

I can’t help thinking that a lot of the differences between the approach taken to Greece comes down to national bankruptcy laws. In Denmark (and Germany, I believe), if you go bankrupt, you will never be entirely free of your debt. I know of people who did something silly in their twenties, got landed with a huge debt, and a result they’ll never be able to buy a house ever — bankruptcy laws are mainly concerned with ensuring that you’re allowed to keep enough money every month to survive. In English-speaking countries, on the other hand, a bankruptcy actually cancels most of your debt, and you’ll be able to start from scratch with a blank slate.

Apart from cancelling debts, the threats have to stop. In a federal state (and that’s more or less what the Eurozone is today), you cannot expect similar political parties to be in power in all parliaments all the time. (In fact the past twenty years have probably been rather exceptional in that regard, because of the way the Social Democratic and Conservative parties became so similar after the collapse of Communism.) The various treaties and constitutions have to be designed in such a way that things don’t collapse in a heap simply because some neo-Marxists get into power in Greece. That said, even inside the UK most politicians seem to be struggling with finding the right response to the rise of the SNP, so it’s not simply a European problem.

The way the majority of EU countries are acting at the moment, I wouldn’t be surprised if Greece eventually decided it’d be better to leave the EU completely, and that would be really dangerous for the rest of us, given the instability of the geopolitical situation at the moment. Europe really needs to get its act together!

Cameron wants the UK to leave the EU

PM attends European Council
PM attends European Council by Number 10, on Flickr.
David Cameron has said in the past that he intends to campaign to remain in the EU provided that he achieves a satisfactory deal before the referendum. I’ve just realised he must be bluffing.

The reason for this is Number 10’s announcement that EU citizens won’t be able to vote in the referendum. They didn’t have to announce this yet, so they’re clearly trying to shut down debate on this topic quickly — which again means they must be desperate to achieve this. It would have been much easier simply to let everybody discuss the pros and cons of different franchises, but then the outcome might not have been what they wanted.

And let’s face it: There can be only one reason to be desperate to prevent EU citizens from voting in the referendum, and that’s to achieve a vote in favour of Brexit, given that they’re the only group of people living here who would be almost guaranteed to vote in favour of continued EU membership. It’s worth noting in this connexion that the Tories have also ruled out giving 16- and 17-year-olds the vote — another group that are likely to be more positive towards the EU than the average UK voter — while being perfectly happy to let Commonwealth citizens vote, although they’re likely to more lukewarm towards EU membership.

If David Cameron really thought he would be likely to campaign in favour of remaining in the EU, it would be nonsensical to move fast to ensure the EU’s biggest fans are disenfranchised.

My guess is he’s already expecting his negotiations will fail (if for no other reason because he’s asking for things that any EU expert will tell him the other countries won’t give him), and he’ll then go out and say something along these lines: “I really wanted to remain in a reformed EU, but the other countries have turned their backs on us, so I will with a heavy heart have to recommend that this great nation leaves the EU.”

Why is Cameron doing this? My guess is it’s to save the Conservative party. If he came out in favour of leaving the EU already, some pro-business Tories would break out, and if he campaigned in favour of EU membership, a very large number of MPs would rebel. By pretending to negotiate in good faith, he keeps the pro-EU Tories happy, and by setting the negotiations up to fail, he ensures the Eurosceptics will eventually be happy.

Indyref postmortem III: Why were EU citizens ignored?

I think it’s quite likely the next independence referendum will happen sooner rather than later, so it’s important to have a look at what we could have done better, not in order to point fingers at anybody, but simply to make sure that we win next time. This is the third of several indyref postmortems.

European Union flags
European Union flags by, on Flickr.
One thing I didn’t really understand during the indyref campaign was why EU citizens were largely ignored by the Yes campaign.

I do realise some leaflets were produced in Polish and possibly other EU languages, but most EU citizens living in Scotland speak English fluently, so what was missing wasn’t really materials in other languages, but answering the specific concerns shared by EU citizens in Scotland, such as the following:

  • Would they be forced to leave Scotland if the EU terminated Scotland’s membership after a Yes vote, as the Unionists were often warning the EU would?
  • Would the non-discrimination of EU citizens continue without change after independence? In particular, would they be continue to be able to work, to access the NHS, to vote in Scottish Parliament elections, and so on?
  • Would it be easy to become a Scottish citizen after independence?

The last question was answered unequivocally — it would be rather hard, much harder than for British citizens living in Scotland. However, the first two items weren’t addressed very clearly.

It would have been very easy for the Scottish Government to issue some clear plans to reassure all EU citizens. However, this didn’t really happen — there were some promising clauses hidden in the draft constitution and other places, but it was all too hidden to be of much use in the campaign.

It’s really rather sad, because most EU citizens were fundamentally sympathetic to getting away from the Eurosceptic consensus that often seems to reign supreme in England — indeed, for many EU citizens here, the in/out referendum could lead to losing their jobs and being deported back to a country they haven’t lived in for many years.

I don’t know why the Scottish Government didn’t do more. I can think of a few possible explanations, but I don’t know whether they’re correct or not.

Firstly, I think there was an unwillingness to discuss the possibility of Scotland being thrown out of the EU — if the Scottish Government had said: “We guarantee your rights to live and work here even if Scotland is temporarily excluded from the EU”, they may have feared the Unionists would have used this as evidence they were right to raise doubts about Scotland’s continued EU membership.

Secondly, they may have wanted to keep their powder dry for the membership negotiations with the EU. If they had already guaranteed the rights of all EU citizens in Scotland, their negotiation position might have been seen to be weakened. However, as an EU citizen it’s not very attractive to vote to become a bargaining chip.

Thirdly, there might have been some disagreements within the Scottish Government about the right way forward, and this kept things vague.

Finally, I’m not sure many Scots really understood how scary the prospect of being chucked out of Scotland as an unfortunate side effect of the EU playing hardball was for EU citizens here. However, we’re so used to threatening and xenophobic language from many English politicans (especially from UKIP) that it’s easy to become somewhat paranoid.

Of course a large number of EU citizens (including myself) voted Yes enthusiastically in spite of all this, but a more proactive approach from the Scottish Government could have led to an almost unanimous backing for independence from these voters. In the end, No won the referendum by such a large margin that it didn’t really matter what the EU citizens voted, but nobody could have known this in advance.

(Much of this blog post might also apply to Commonwealth citizens in Scotland — I’m not sure. On the other hand, people from outwith the EU and the Commonwealth couldn’t vote in the independence referendum unless they had obtained British citizenship, so there wouldn’t have been a specific reason to appeal specifically to them in the campaign.)

Peace, European values and the well-being of the peoples of Europe

Glasgow Foodbank
Glasgow Foodbank by Zep 19, on Flickr.
Article 3 of the consolidated EU treaties states: The Union’s aim is to promote peace, its values and the well-being of its peoples.

How can the EU’s aim be compatible with forcing the Greek people into poverty through austerity? Surely it doesn’t promote the well-being of the people of Greece at all. Given that poverty, unemployment and general hopelessness can easily lead to civil unrest and down the line even war, it doesn’t appear to be promoting peace in the longer term either. And I naïvely thought European values were about democracy, liberty and solidarity, not about enforcing neoliberal economic torture against the democratic will of a people.

I’m a huge fan of the EU project, especially the way it was conceived and implemented in the 1980s and 1990s. Promoting peace and prosperity while fostering links between people from many countries is a wonderful idea. Without the EU’s rules about free movement, I might never have moved to Scotland (I got a job here without having to apply for a work permit), which would have deprived my daughters of being born, given that I met my beloved wife here. And if European countries had been at war rather than working together in the 1960s, my father would probably not have moved from Württemberg to Denmark, where he met my mother.

However, the way the EU is currently developing is hugely worrying. It’s increasingly becoming a technocratic project where most decisions are made according to the rulebook of the Party of Necessity (“there is no alternative”).

I’m sure most of the modern EU politicians honestly believe they’re doing the right thing, but they don’t appreciate that there is more than one way to do things, that globalised neoliberalism isn’t the only game in town. As Paul Mason put it recently:

For a technocratic, youthful generation of politicians, brought up in what playwright David Hare calls the “absence of war”, the events in Greece just do not fit the world view in which all these historic issues and grievances, and obscure Greek anniversaries were supposed to be subjects for the documentary channels, not politics.

The modern technocratic politicians are of course everywhere, not just in the EU. In many countries, they’re busy trying to abolish universal benefits, free public amenities, subsidised public transport and so on. For instance, in Denmark there are currently huge discussions about how it’s becoming impossible to live in “Udkantsdanmark” (“peripheral Denmark”) because schools have been shut, bus routes cancelled, hospitals centralised, and so on. Everything was done in the name of efficiency and quality, but the technocratic politicians completely forgot to ask themselves what Denmark will be like when almost everybody lives in either Copenhagen or in the nascent Randers-Århus-Skanderborg-Horsens-Vejle conurbation.

Of course there are exceptions in some places. The SNP has been brilliant at defending universal benefits, lowering ferry prices and doing many other useful things, but in many countries only fringe parties go against the technocratic consensus. Another example is the fight against benefit fraud and tax avoidance. Modern neoliberal technocrats seem to be outraged at the former and quite relaxed about the latter, although the state loses much more money through tax avoidance. Again, the SNP has signalled a very different approach in Scotland.

To return to Greece and the EU, I obviously don’t have a problem with voters electing technocratic governments if that’s what they want. However, currently it seems like the EU is increasingly becoming a tool for the technocratic governments to force any aberrant countries to toe the line. They’re clearly not thinking first and foremost about the consequences of their actions on peace, European values and the well-being of the peoples of Europe, but more about not rocking the boat and upsetting their friends in the multinational banks.

That said, there’s clearly also a cultural clash with regard to bankruptcies. In Denmark and Germany, declaring bankruptcy is more about getting protection from creditors and less about getting a fresh start; if you’ve grown up in a culture where any debt you take on stays with you forever, it must be hard to understand why a country should get half its debts cancelled just because it cannot realistically ever pay them back. However, Germany would do well to appreciate that the forgiveness it was shown after World War II made it the stable and peaceful country it is today, whereas the punitive measures imposed on it after World War I were an important cause of Nazism; if they truly want a peaceful and harmonious Europe, they should perhaps pass on the baton of forgiveness.

I really hope the current technocratic/neoliberal majority in the EU will be replaced by parties such as the SNP and Syriza who’re willing to rethink politics and create a Europe that works for the benefit of its citizens.

The decline of the Party of Necessity

Referendum Eve in Glasgow
Referendum Eve in Glasgow by Phyllis Buchanan, on Flickr.
Before the fall of the Iron Curtain, left-wing parties in Europe typically had left-wing policies, such as being in favour of universal benefits, free education (incl. university tuition), generous unemployment benefits and free healthcare.

However, the collapse of communism seems to have made many formerly left-wing politicians believe that neoliberalism was the only game in town, and they gradually started enacting almost exactly the same policies as their right-wing opponents, just presented in a slightly left-wing fashion.

Most of the politicians from both formerly left-wing and right-wing political parties have studied politics, economics and/or law at university and have learnt to treat neoliberal textbooks as gospel.

To a large extent, one cannot tell these former opponents apart. I’ve suggested in the past that the Tories, Labour and the LibDems should merge into one Better Together party in Scotland, but in an international context, I’d suggest the merger should be called the Party of Necessity, because its politicians always claim their unpopular policies are “necessary” according to their textbooks.

So when the banks started collapsing in 2008, the reaction of the Party of Necessity governments was the same in all countries, namely to bail out the banks and introduce a version of austerity protecting the ultra-rich and sending the bill to the poorest citizens.

However, the beautiful thing about democracy is that if all the existing parties get something completely and utterly wrong, new parties will emerge from nowhere and replace them, or existing small parties will suddenly become huge. This is what we saw in Greece yesterday, and very similar things are happening all over Europe and beyond. (The Scottish Yes campaign, which nearly achieved Scottish independence last year, was of course also part of this international trend.)

Here are a few examples of the decline of the Party of Necessity:

Greece (PASOK + New Democracy): 2007: 79.9%, 2009: 77.4%, 2012: 32.1%, 2012 (again): 42%, 2015: 32.5%.

Spain (PP + PSOE): 2008: 83.8%, 2012: 73.4%, latest opinion polls: ~45%.

Italy (Democratic Party + People of Freedom): 2006: 99.5%, 2008: 84.3%, 2013: 58.6%, latest opinion polls: ~50%.

Scotland (Tory + Lab + LibDem), Westminster elections: 2005: 77.9%, 2010: 77.6%, latest opinion polls: ~45%.

UK (Tory + Lab + LibDem): 2005: 89.6%, 2010: 88.1%, latest opinion polls: ~68%.

Denmark (SocDem + SocLib + Cons + Lib): 2007: 67.2%, 2011: 65.9%, latest opinion polls: ~55%.

Germany (CDU/CSU + SPD + FDP): 2005: 79.2%, 2009: 71.4%, 2013: 72.0%, latest opinion polls: ~67%.

It’s clear that different countries aren’t at the same stage — as a rule of thumb it seems to be linked to how well they have coped with the recession. However, it seems likely that many European countries soon won’t be governed by the Party of Necessity. It’s already the case in Scotland and Greece, but the figures above makes me think it’s simply a question of time before a majority of European governments are anti-Necessity.

I’ve said it before, but we truly do live in interesting times.

Addendum (27/01/14): Aditya Chakrabortty has written a very interesting article about how Labour risks ending up like PASOK. His name for what I have called the Party of Necessity above is TINA (“there is no alternative”), which is a very accurate description, too.

Dragging Scotland out of the EU

Independence can transform Scotland
Independence can transform Scotland by Scottish Government, on Flickr.
Nicola Sturgeon has proposed to give Scotland, Wales and Northern Ireland a veto over the UK’s exit from the EU. According to the BBC, she said:

If you look at states like Australia and Canada there are some circumstances where changes to their constitution requires not just a majority across the country but in each of the provinces as well.

The UK is not a unitary state it is a family of nations, it is made up of the four home nations.

We were told during the referendum that each of these nations had equal status, that our voices mattered.

If that is the case I think it is right that something that would have such significant consequences for jobs, for the economy, for our standing in the world, it should require the consent of not just the UK as a whole but that family of nations.

It’s quite an attractive proposition. The Unionists clearly talked up federalism during the referendum campaign, and this is an obvious consequence.

If the Unionist parties don’t agree, it’s just another sign that they didn’t themselves believe the very arguments they used to win the referendum. If the UK as a whole votes to leave the EU but Scotland votes to stay, it will therefore be prudent to hold a second independence referendum to allow the people of Scotland to chose which of the two unions they want to remain in, the British one or the European one.

While we’re on this topic, the BBC’s Laura Kuenssberg tweeted something rather party-political today:

A political union is best described as a club. It’s always the case that members have the right to leave if they so desire — it can never require the consent of all members. This was why the Scottish independence referendum took place only in Scotland and not in the entire UK, and this is why the Brexit will be decided in the UK and not by a referendum in the entire EU.

However, clubs and political unions can decide on their own rules for what they do collectively. They can decide that new members can’t vote, they can decide who gets to join, and they can require unanimity for accepting new members or for joining other associations.

In most political unions the membership rules are described in the constitution or at least a political treaty, but because of the UK’s unwritten constitution many of those rules are based on precedent and political statements. It therefore makes good sense for Nicola Sturgeon to point out that the Unionists’ frequent talk about the family of nations has constitutional implications.

If Laura Kuenssberg wants to compare this proposal to the independence referendum, it would have been the equivalent of Shetland asking for a veto. However, nobody has ever described Scotland as a family of nations comprising Shetland and mainland Scotland, which is why nobody seriously considered doing this.