That elephant nobody wants to mention

VAT is one of those things everybody goes on about. There are periodic campaigns to lower or abolish VAT for whatever happens to take people's fancy at the time. On a previous occasion I mentioned the fatuousness of the Cut the VAT campaign. I have been told by organizations and individuals involved that it was a good campaign even if it could lead to nothing. I beg to differ. A campaign that is pointless is not a good one. It makes people feel that they have been cheated.

In that posting I mentioned that the Commission, the one organization that can actually do something about VAT has been planning to introduce a little flexibility in the structure. Not, you understand, that any country will now be able to decide on various matters to do with VAT, let alone be allowed to opt out of it and decide to have, let us say, a local sales tax. Far from it. Just a little flexibility.

Lord Willoughby de Broke asked HMG in writing what they proposed to do about the Commission proposals.

Whether they will support at the November Economic and Financial Affairs Council meeting the European Commission's proposal to amend VAT directive 2006/112/EC to allow member states flexibility on VAT rates for labour-intensive services.

Let's face it our government can do nothing about the tax itself or any flexibility. It can support or not support the European Commission's proposals.

It would appear that even that is beyond them. Here is Lord Myners's reply:

The Government are generally supportive of the legislative proposal adopted by the Commission, consistent with its position of supporting the flexibility of member states to apply their own choice of VAT rates to further their domestic priorities and social objectives, provided that this does not materially affect the functioning of the internal market.

Member states are currently discussing the Commission proposal, and whether any amendments should be made before it is considered by Ministers, at official level in Council working groups. The Government will take a view on the final text when it is submitted to Ministers by the presidency.

Reassuring.

They never learn

With a straight face the BBC reports:

The European Commission is stepping up efforts to get its message across to Irish voters and other EU citizens ahead of European elections next June.

The commission, stung by the Irish rejection of the Lisbon Treaty, plans to form a partnership with the Republic of Ireland to raise public awareness.

The "management partnership" involves explaining EU goals and policies in plain language to ordinary citizens.

Are these people listening to themselves? I mean really listening?

The EU makes it clear that they wish to ignore the results that a freely and fairly run referendum (give or take EU money) produced and then it says that they want to "raise public awareness" ahead of the European elections. Surely, what really bothers them is too much public awareness. Then again, that phrase has become code for "they wish to ensure that more people vote the way they are told to or stay at home and not bother us".

Meanwhile the House of Lords European Union Committee has produced one of its excellent reports on "The Commission's Annual Policy Strategy for 2009". I shall blog on it in more detail as soon as I have read it right through. Let me, however, quote Paragraph 1 of the Introduction:

What is the Commission's Annual Policy Strategy?

1. The Annual Policy Strategy is one of the two key strategic planning documents published by the European Commission each year. The Annual Policy Strategy (or APS) published in the spring sets out the Commission's priorities for the following year, and forms the basis for discussion within the EU institutions and beyond. This discussion is intended to influence the Commission's Annual Legislative and Work Programme, published in the autumn, which fleshes out those priorities and sets out detailed plans for the year ahead.

Let us not forget that the Commission is the sole initiator of EU legislation, which then takes a long journey through the various institutions such as the Council and the Parliament with possible negotiations between representatives of member states being done behind the scenes. Once it gets to a national parliament it cannot be thrown out. At no time during that journey are the people consulted though the odd organization that is part of the EU controlled and often financed "civil society" may well have an input according to its own agenda.

I am only guessing, of course, but could that be the real reason for voter apathy?

How's that British foreign policy doing?

One of the oddest aspects of modern British politics is that neither the government nor the opposition have anything remotely resembling a foreign policy or plan to have one, so far as anyone can make it out. Yet, questions and debates on the subject come up with regularity, at least in the House of Lords, where there is still a pretence that we are an independent country with political leaders who have adjoining brain cells.

Yesterday there was a Starred Question about the situation in Zimbabwe and what anybody was going to do about it. To be fair, a number of their lordships have understood that nobody apart from Zimbabwe's neighbours can help the people of that unfortunate country and they, particularly South Africa, still under the presidency of Thabo Mbeki, seem very reluctant to do so.

Lord Blaker's question was low-key. He asked Her Majesty's Government:

What is their assessment of the allocation by Robert Mugabe of portfolios in the proposed Government of Zimbabwe.

HMG replied in the shape of Lord Malloch-Brown, former bag-carrier for the last SecGen of the United Nations, Kofi Annan:

My Lords, along with other EU states, we have condemned Robert Mugabe's unilateral allocation of ministerial portfolios. The allocation of portfolios needs to be agreed by all parties and reflect the will of the Zimbabwean people as expressed in the 29 March elections, which gave Morgan Tsvangirai and the MDC a clear majority.

It is, of course, impossible for Britain to do anything in the international field on her own or simply with other Western states. Everything has to be agreed with the EU and decided on at that level.

Mind you, condemning Robert Mugabe, who knows full well that the EU is not going to do anything to hurt him. It will not even ban him from attending various meetings and summits for fear of losing the attendance of other African leaders, despite the fact that there have been numerous agreements not to let the Zimbabwean dictator step on European soil.

In fact, there is nothing anybody can do unless South Africa decides to deal with the situation. Re-running the election, as suggested by the President of Botswana, is hardly a solution, even if it is done under international supervision, whose presence is impossible to ensure without some show of force. Suppose the international supervision is in place by some miracle; suppose the election is re-run; suppose the MDC wins again. Then what? Neither Lord M-B nor, I suspect, the President of Botswana knows the answer to that.

Meanwhile, it would appear that we are still sending aid to the country with no checks on how it is distributed. In answer to the Duke of Montrose's question on the subject, Lord M-B, the former Annan and Soros henchman (at least, one hopes it is former) answered:

My Lords, it is an astonishing story. Zimbabwe was a country of 12 million people: 3 million have gone into exile; of the remaining 9 million, some 5 million will be dependent on food aid by the end of the year. We have just made an allocation to the World Food Programme of £9 million. Ours and other contributions will make sure that appropriate food is available in this man-made tragedy.

Available it may be but to whom? And who is doing the distribution? Do villages where the MDC has done particularly well get any of the aid?

That is not the full extent of our involvement as Lord Howell's question made it clear:

My Lords, as Mugabe and his gang are obviously determined not to surrender power quietly or wisely, can we be assured that the hard currency money the UK is providing to the Reserve Bank of Zimbabwe and through our UN and EU agencies is going towards the purposes for which it is intended and is not being siphoned off and manipulated for the benefit of the ZANU-PF gangsters?

Well, well, we do not hear much about that hard currency this country provides the Reserve Bank of Zimbabwe. I wonder what happens to it. Somehow, I do not find Lord M-B's assurances entirely credible:

My Lords, the noble Lord draws attention to an appropriate issue. The central bank is making every effort to find any source of foreign currency to keep its patronage operations for the top leadership ticking over. The noble Lord should be assured that we are making absolutely certain that our moneys in no way fall into the hands of Government and go directly to UN and non-governmental partners, mainly for purchases made outside the country.

As the noble lords ought to know money going to the UN and NGOs are not necessarily well spent. There was this little thing called the oil-for-food scam, for instance. But, of course, neither the UN nor the NGOs need to be accountable to anybody for what they do.

Just a couple of reminders

Today is the anniversary of President Kennedy's announcement about the presence of Soviet missiles on Cuba and the beginning of what was probably the worst and most terrifying crisis of the entire Cold War when the two superpowers stood face to face with no intermediaries.

Tomorrow is the anniversary of the start of the Hungarian Revolution of 1956 - another crisis, of power for the Soviet Union and of conscience for the West.

Normal service will now resume.

Interesting suggestions

Well, now we know the answer to the question Jeff Randall posed just a few days ago. George Osborne was invisible because he was trying to beat Peter Mandelson (now the noble Lord Mandelson) at his own game. Of course, if you are going to do that, you ought to be better at it than Georgy-Porgy is turning out to be. (But then how good is he at being Shadow Chancellor?)

The net result of all this is that Osborne's career is in danger. As I write, Cameron has not yet announced that the Shadow Chancellor's position is unassailable, so there may be hope for Georgy-Porgy.

Both on ToryBoyBlog and on Iain Dale's blog commenters have been free with suggestions of replacements. One name that comes up immediately is that of Ken Clarke, the man of the day before yesterday, a throw-back in most people's minds to John Major's government, not the Tories' most glorious hour.

The rest of this posting has been deleted.

Anyone knows what they are playing at?

There has been a certain amount of discussion about the number of Conservatives in Britain (the American bunch is a separate issue) who are supporting Obama in the American presidential election, apparently not bothering to find out much about his record (such as it is) or the statements he has made like the infamous one to Joe the Plumber that showed him to be a socialist who believes not just in big government but a redistributive tax system.

As David Pryce-Jones points out the list now includes such luminaries as Charles Moore and Lord Rees-Mogg. Interestingly enough, both of them are devout Catholics yet seem uninterested in Obama's record on abortion and his repeated votes against giving medical help to babies that survive a botched operation. (No, I am not discussing abortion per se, merely the Catholic view of it.)

Their argument: the election of a black (well, mixed race) President will solve the race issue in the United States and, for all I know, everywhere in the world. It does not seem to occur to these sages that voting for a man because he is black (well, mixed race) is perpetuating the race problem. What if, as David Pryce-Jones asks and as most of us consider almost certain, Obama makes some really disastrous decisions as soon as he gets into the White House? After all, his running mate, Joe Biden, thinks there is a strong possibility of that. How is that going to help race relations in the United States?

I presume none of these race-obsessed Conservatives to whom nothing else matters have noticed that the present and previous Secretaries of State were black. Did that make any difference to race relations anywhere?

Then we have Boris Johnson, Hizonner the Mayor of London, pontificating on that subject, even having the gall to refer to Martin Luther King's famous speech, in which he had hoped that one day people will not be judged by the colour of their skin but by what was inside them. Incidentally, King was a Republican, considering that the Democrat Party was historically the party of slavery and Jim Crow laws.

The thing is, our Boris is not just a commentator, who is entitled to his views, however foolish they are. He is a Conservative politician, the Mayor of London, elected by the people of London to undo the damage inflicted on the great city by his predecessor. What business does he have interfering in the American presidential election? Is he now going to follow in Livingstone's footsteps and establish a foreign policy for London?

On the other hand

Germany is opposing the creation of European "sovereign funds" in order to buy into various key economic enterprises and prevent foreign investment in them. Who leads the charge for this idea? Why, that well-known free-marketeer, President Nicolas Sarkozy.

Germany, which fought longest and hardest against the idea of Europe-wide bank bailouts, immediately criticized Sarkozy's latest idea. But Italy is already mulling legislation to limit investments from foreign state funds, and Spain is actively courting such investments from oil-rich Arab countries.

Sarkozy, who has never made a secret of his penchant for an activist industrial policy, said that joint action by European state investment funds would protect well-known champions of European industry from falling into the possession of foreign investors.

"I don't want European citizens to wake up in several months' time and find that European companies belong to non-European capital, which bought at the share price's lowest point," Sarkozy told the European Parliament in Strasbourg.

"This might be an opportunity to create our own sovereign wealth funds," he said. "And maybe these national sovereign wealth funds could eventually coordinate to form a business response to the crisis."

While this sort of political and economic thinking (if one can call it that) may not sit well with such past French luminaries as Claude Frédéric Bastiat or Marquis de Condorcet, it is well in line with most traditional, right and left, French thinking.

The question from our point of view is not dissimilar from the one posed in the previous posting. If the French government wishes to create sovereign funds to prevent its economy from acquiring international investment, that is up to the French taxpayer to mull over. But a European fund involves other taxpayers, namely us. We are already paying through the nose for Supergordon's plans. Do we really want to do the same for Le Chauve-Souris' ideas?

Oh and how does that Spanish idea of courting investments from oil-rich Arab countries fit into this scheme?

A single European voice will speak truth unto Russian power

Yeah right, if I may be pardoned such a vulgarism. Charles Crawford gets it right:

The key argument in favour of an 'EU Foreign Policy' we hear in the UK is that it acts as a multiplier for British positions.

What tends not to be mentioned is that it acts as a multiplier for other EU Member States' positions too, not least when they disagree with us.

There is also the problem that quite often British positions are not all that clear with Supergordon Brown waiting for the consensus before he can make up his mind.

This is where I part company with the highly esteemed Edward Lucas, author of "The New Cold War". His view is that the EU must work out a common foreign policy, that being the only way it can stop the Kremlin's machinations.

All very well but what if the common foreign policy becomes Germany's policy, which seems to be one of complete appeasement, despite the occasional eruptions by Chancellor Merkel? The only reason this has not happened is the East Europeans, with some support from the Scandinavians and an occasion hum-ha from Britain, challenging the Franco-German line on the subject.

This morning's International Herald Tribune has an article that once again confirms that point of view.

Nowhere was this marriage of interests better expressed recently than in a top-level gathering last month at a castle overlooking the River Elbe. Attendees oozed confidence that, despite the August war in Georgia and the gathering storm in world finance, Russia and Germany would only deepen their centuries-old bonds, perhaps even realizing the dream long held by some of binding Russia closer to the West.

Among the hundreds of guests, all sniffing deals, were German managers in from Moscow mingling with Russian officials, even as East German veterans of Soviet enterprises chatted up younger Russian entrepreneurs.

"The long-term goal is about integrating the Russian economy with Europe," said Peter Danylow, director of the East and Central European Association, an independent business body that promotes contacts between Germans and Eastern countries. "We are a long way from that. But Germany is not prepared to give up. There is too much at stake."

Last year, more than 3 percent of Germany's total exports went to Russia, with trade volume between the countries reaching €57 billion, or $74.6 billion at current exchange rates. German exports to Russia increased by 20 percent in 2007. During the first quarter of this year, they jumped a further 25 percent, according to Klaus Mangold, chairman of the Ost-Ausschuss, the influential group that promotes Germany's economic interests throughout Russia and the former Soviet bloc.

There is no particular reason why Germany should not look to its financial and economic interests, though recent experience indicates that doing business with Russia is a hazardous exercise because of the Kremlin's obsession with power. Furthermore, given President Prime Minister Putin's policies and those of his teddy bear (mishka), President Medvedev, putting quite so many eggs into that basket is likely to turn out to be a bad move.

From our point of view, though, the problem is that Germany, ever more closely tied to Russia and ever more dependent on that country economically, is dictating foreign policy to the rest of the European Union.

Busy, busy, busy

Everybody wants to save the world. First it was Supergordon Brown. Now it's Nicolas (the Batman or le Chauve-Souris) Sarkozy. He has announced to the Toy Parliament that before next month's world summit that will save the world he wants an EU summit. And just to make sure that everything happens he will personally go (together with Commission President Barroso, in his role of Robin) to Beijing "to convince China and India to participate in the world summit". Presumably, the trip to Beijing will not be sufficient. They will have to cross the border and go to New Delhi as well. Ahem, who is paying for all this?

Meanwhile Le Chauve Souris Sarkozy and his very special Robin, alias El Presidente Barroso, have gone to Camp David to have a chat with outgoing President Bush. Of course, Sarkozy is also outgoing as President of the EU because France's time will be up at the end of December but the media does not seem to realize that.

Three world leaders - George W. Bush, Jose Manuel Barroso, and Nicolas Sarkozy - declared in Camp David Saturday they would make every effort to maintain the 'foundations of democratic capitalism', while not allowing the 'malevolent practices of recent years' to reoccur. The most eloquent of the three, the French president, said emphatically that it would be a disaster to undermine the foundations of the free market economy, while 'continuation would mean the same problems causing the same disasters'.

Do these words mean anything? Of course nothing. Politicians are simply trying to cover the confusion they have been thrown into by a financial crisis whose dimensions they did not expect and whose effects they underestimated. By crying 'Things must change!' they are trying to divert the public attention away from their own helplessness.

Tsk, tsk, these Poles are so cynical. Mind you, I wouldn't myself call the President of the European Commission or the temporary President of the European Union, who, just like a previous temporary President, Chancellor Merkel, prefers to spend his time rushing round the world instead of looking to some of the problems his own country is facing, world leaders.

The Christian Science Monitor seems to think that President Sarkozy is emerging as a new leading force in the world.

This week Mr. Sarkozy worked with President Bush to set up a series of meetings to reform the global economy, and he's now off to Asia to broach the idea of bringing India and China together with G-8 nations in a "Bretton Woods II" framework of economic rules. This comes just weeks after he moved with alacrity to broker a cease-fire deal to end the Georgia-Russia war.

Critics still point to Sarkozy's proclivity to turn politics into a show and to unashamedly take credit whenever possible. Yet in the space of a summer he has consolidated his power and blended substance with showmanship, and is now winning praise as a crisis leader in a more multipolar world.

"I think today that everyone, even those who had misgivings, acknowledge that [Sarkozy] not only has great political energy, but also exceptional leadership qualities," commented José Manuel Barroso, the EU chief who accompanied Sarkozy to Camp David this weekend.

Well, if all you need to be a world leader is to rush around setting up lots of meetings regardless of whether they achieve anything or not (the war in Georgia, for everybody's information, ended after a fashion, precisely when the Russians were ready to move and not a moment before, Sarkozy or no Sarkozy) and to have the Commission President endorsing you, then Sarkozy has it made. What will happen in January when he will have to go back to being a French President, no longer un Chauve-Souris?

Oh my, another one

Remember the World Bank-Wolfowitz scandal when the man who tried to clear out the corruption of that organization (the Augean Stables had nothing on that problem) was forced to resign because of misdemeanours of which he was subsequently cleared by all enquiries?

Well, can we expect the same at the IMF where Dominique Strauss-Kahn "is under investigation for what he delicately calls an 'incident which occurred in my private life'. The 'incident' involves former senior IMF economist Piroska Nagy, with whom Mr. Strauss-Kahn had a brief sexual liaison earlier this year until Ms. Nagy's husband found out about it".

As Mr Strauss-Kahn is merely a French politician and not a supporter of the war in Iraq and is unlikely to want to look too closely into some of the curious deals transnational organizations do, the chances of him suffering Paul Wolfowitz's fate are slim.

Mr. Strauss-Kahn has apologized to the IMF staff while insisting that "at no time did I abuse my position" in his dealings with Ms. Nagy, and that might be true. Then again, the managing director seems to have kept his relationship a secret from most of his own board of directors, even after a formal investigation was begun at the behest of one board member in August. The final
judgment will rest with the full board once a report is delivered at the end of this month.

The judgment will tell us something about whether the IMF board -- particularly its nine European members -- will exhibit the same outrage toward Mr. Strauss-Kahn as their World Bank counterparts did last year during the staff coup that ousted former president Paul Wolfowitz. We won't hold our breath, even though Mr. Wolfowitz's purported offenses pale next to what we already know about l'affaire Strauss-Kahn.

Unlike Mr. Strauss-Kahn, Mr. Wolfowitz disclosed his personal relationship with a staff member prior to becoming Bank president and sought to recuse himself from making any decision regarding her next job assignment. A misnamed Ethics Committee nevertheless foisted that decision upon him but later disavowed its own ruling when it became politically convenient to do so. The Bank's European board members then sought to run Mr. Wolfowitz out of the bank
in kangaroo-court proceedings while piously claiming to be safeguarding the institution's reputation.

Mr. Wolfowitz's real sins had everything to do with his tough-on-corruption policies, as well as his previous role in the Bush Administration as deputy secretary of defense. In its report Sunday on Mr. Strauss-Kahn, the New York Times noted that "Mr. Wolfowitz's ouster was fueled . . . also by a visceral dislike many at the agency felt for a major backer of the Iraq war." Now they tell us.

By contrast, Mr. Strauss-Kahn is a paladin of the European establishment, a former finance minister of France and a leader of its Socialist Party. Not surprisingly, he is also popular with the IMF staff. So we also won't hold our breath for a stream of invidious staff leaks about the managing director of the kind that were aimed at Mr. Wolfowitz, much less one-sided "news" from the European court stenographers at the Financial Times. We may hear, however, that the IMF can't afford to be "distracted" by some purely personal issue at this moment of global crisis.

This should be interesting, especially in the light of Supergordy Brown's proposal to give more powers to the IMF over the international financial and banking system. Incidentally, Irwin Stelzer says that anyone who believes the United States will agree to that harebrained scheme (my expression not his) should get in touch with him as he has a bridge to sell.

A few thoughts after yesterday's Bruges Group meeting

And a very good meeting it was, too, with two proponents of the Anglo-American understanding and special relationship, Andrew Roberts and Irwin Stelzer, on parade. Andrew Roberts talked mostly about his latest book, “Masters and Commanders: How Roosevelt, Churchill, Marshall and Alanbrooke Won the War in the West 1941 – 45”, which sounds fascinating and I shall read it just as soon as I have finished Mr Roberts’s last tome “A History of the English-Speaking People since 1900”. And no, I am not envious of his amazing capacity for work, not at all. Grrr.

For the purposes of this blog I shall concentrate on what Irwin Stelzer said about American politics and economic possibilities as well as Andrew Roberts’s comments on that subject rather than the latter’s amusing description of the clash between those four titans.

So, first things first. Dr Stelzer does not think the presidential election is in the bag, however much the Europeans and by that he means the British, as well, may wish it. My own feeling is that the Europeans, including the British know precious little about what is going on in the presidential election as they rely on the European/British media, which is almost completely pro-Obama (as it was almost completely pro-Kerry) and publishes stories that are several days out of date. Thus, there are still articles wittering about Sarah Palin being made fun of by some ridiculous comedienne and how that hurts the McCain/Palin ticket while the story is that Palin is attracting many thousands to her meetings and is doing far more news interviews than any other candidate.

As Dr Stelzer said, if you watch the BBC you will think that Obama is already president. Last time, he added, he did follow the election on the BBC and he did not realize till about spring that Kerry had lost. That was a semi-joke.

The polls, endlessly referred to, are somewhat volatile in this election as Glenn Reynolds of Instapundit keeps saying. They are also a lot closer than the headlines would lead us to believe.

On the other hand, it is more than probable that Congress will go Democrat, so what will happen if Obama wins and there is a clean sweep of the legislative and executive, shortly to be followed by the judiciary, as Supreme Court judges die or retire and new ones are appointed?

Let’s get the most worrying Obama promise out of the way first, though it is an internal American matter and that is the abolition of secret ballot in the unions. If this is passed and, given the Democrats’ reliance on the unions it probably will be, this will be a seriously regressive step in business development.

So what might an Obama presidency mean for Britain and Europe and will all those who wish for it be happy with it? Obviously, all prediction is guessing on the basis of past performance and there is precious little of it in Obama’s case. There are all those buddies of his, starting with Bill Ayers, and his unfortunate admission to Joe the Plumber that he is looking to raising taxes on small to medium-sized businesses in order to redistribute. In connection with that there is the extraordinary notion of “tax credits” to people who do not pay tax as those who earn $50,000 and under do not in America. That “tax credit” will be a hand-out and someone has to pay for it and for the officialdom that will be redistributing the money. So, the economic situation looks a little bleak, though Dr Stelzer pointed out quite correctly that the American economy is a good deal more flexible even now than European or British. Furthermore, the American bail-out (larger than fist defined, naturally enough) will be the equivalent of something like 5 per cent of GDP. The German bail-out will be the equivalent of 16 per cent of GDP and Supergordon Brown’s British bail-out, with which Dr Stelzer does not totally disagree, will be the equivalent of 30 per cent of GDP. Not good.

However, it is the foreign policy that really matters in the case of the President and Obama is likely to be highly protectionist, which will not be good for America but will be even worse for others. The union bosses will do well, though.

His idea of soft diplomacy and working through multilateral, i.e. transnational organizations bodes no good as it recalls the disastrous presidency of Jimmah Carter. In fact, many things about Obama brings that to mind.

The problem, as far as those pro-Obama Brits and Europeans might well find, is that he will most probably will be as isolationist as they would like him to be. That means the Europeans will now be expected to contribute more to the campaign in Afghanistan as Iraq will, most probably, be relatively sorted in the near future. The Obama-bots are not going to like that. Nor will an isolationist America be particularly popular with those countries and people who behave like teenagers – demand all kinds of rights and privileges in the certain knowledge that when things start getting difficult the parents will turn up to deal with problems. What if those parents, i.e. the Americans refuse to turn up?

America is likely to recover from the recession faster than either Britain or Europe and will remain the world’s superpower for the foreseeable future, no matter what some overwrought journalists and analysts might say. I was particularly delighted with Dr Stelzer’s prediction that the GOP’s 2012 candidate is likely to be Governor Sarah Palin. The other side may well field Hillary Clinton. How much fun is that going to be?

In the meantime, instead of gloating over America’s problems or wishing a disastrous left-wing presidency on it, we should start thinking seriously what our future is likely to be.

He does have one friend

Apparently one country has recognized the rather curious independent status of Abkhazia and South Ossetia that consists of them being part of Russia and controlled by Russian troops: Nicaragua, once again controlled by the egregious Daniel Ortega.

Consider the rogue's gallery that refused to go along: Hugo Chávez's Venezuela, the Castros' Cuba, Bolivia, Iran and Syria. The club of seven authoritarian former Soviet republics known as the Collective Security Treaty Organization also demurred. Even Moscow's puppet autocrat in Belarus, Aleksander Lukashenko, deferred to his toothless parliament; in other words, nyet, for now. Russia was rebuffed by China and India at the Shanghai Cooperation Organization.
...

In addition to Mr. Ortega, Russia did manage recognition by Hamas, Hezbollah and the Moldovan regions of Gaugazia and Trans-Dniester. But that is little solace for a Kremlin whose bigger goal in the war was to declare a Monroe-ski Doctrine for its "near abroad" and lead a new anti-American block.

Then again, it has always seemed pretty clear to me that, despite all the bullying swagger President Prime Minister Putin and his teddy bear, President Medvedev, tend to lose heavily when it comes to dealing with other countries.

The ECB extends its reach

The financial crisis keeps developing in its own way, unpredicted by the politicians and the regulators who are hoping to use it to extend their power and are, unfortunately, finding that their actions do not seem to have the results they predict. That, of course, will not stop them from taking action, any action; nor will it stop them from trying to accumulate more power. One does not need to be a soothsayer to predict this.

The ECB is now in a position of beginning to interfere in the finances of countries that are not in the eurozone and, as things go, may not be there for some time. No, I don't mean Britain, though it is not to be excluded that there will be strong murmurs that the answer to whatever question the financial crisis has posed (and nobody who is working in that world knows the question, let alone the answer) is for this country to join EMU and adopt the euro. After all, it has been such a success in the countries that did just that.

The country the ECB is extending its sway over, admittedly, as requested by its central bank, is Hungary. The best summary of what happened was, as ever, in the Wall Street Journal Europe but sadly, one has to subscribe to be able to read the articles on the net. (You can get the editorials, columns and the summary of what is on the net for free, though.)

The ECB said it will lend the National Bank of Hungary up €5 billion ($6.75 billion, £3.89 billion), enabling Hungarian authorities to funnel euros to their cash-strapped commercial banks. the move marks the first time the ECB, which makes monetary policy for the 15 nations that share the euro currency, has stepped in publicly to lend to a country outside the euro-currency zone.

The ECB's extraordinary action highlights growing conern among economists and investors that the euro zone would also suffer, should Hungary's economy founder. Some 80% of the assets in Hungary's banking sector are foreign-owned, according to research firm Capital Economics. Austria - a euro-zone nation - is a major presence across Central Europe.

Hungary has been hit hard by market turmoil in recent days, as its heavy reliance on foreign borrowing made it a prime target for investors pulling out of risky bets. Its currency, the forint, fell to a two-year low against the euro this past Friday, and the government has struggled in recent days to find buyers for its bonds and shorter-term Treasury bills. Earlier this week, government officials put in a request for potential help from the International Monetary Fund, though they maintain an IMF loan is a last resort.

The ECB's emergency loan, in combination with a package of government promises that included trimming the budget deficit to 2.9% of gross domestic product next year, cheered investors. The forint strengthened against the euro in reaction to the announcement.

The Financial Times has the story as well. The loan did not solve the general economic problems as this article reports.

Hungary cut its economic growth forecast for 2009 to 1.2% on Friday from an earlier 3% forecast, against a background of tightening credit at home and a downturn in its main export market, the euro currency area. The worsening outlook and pressure from international financial markets has forced Hungary to draw up a new, tighter budget for 2009, which the government was due to present to parliament on Saturday.

AFP reports a somewhat panicky "national summit" in Hungary where everybody made obvious comments without producing any specific ideas, at least not in public. Perhaps, we shall have to wait for a secret recording to be made public. It has happened before, when we found out that the Prime Minister Ferenc Gyurcsány told a political meeting of close colleagues that he and his supporters had "lied morning, noon and night" to the electorate during the previous election campaign.

Conservatives win ...

... in Canada. While Stephen Harper may not get the majority he wanted, his party has increased its number of seats, which would indicate, despite the National Post sour comments that more Canadians want to press forward with conservative reforms than otherwise.

Could it be that our own Conservative Party, not to mention John McCain and other Republican Representatives and Senators are playing it wrong? Surely not.

Interesting information

There is always some interest attached to Westerners, particularly if they have been involved in somewhat questionable political activity, who then decide to live in countries that are not, shall we say, entirely of Western persuasion.

For instance, two of the high-ranking American officials, investigated for their Communist links and espionage activity, which they vehemently denied and which have been definitively proved since, gave up their US citizenship to live somewhere else.

Take the case of Lauchlin B. Currie, who was Roosevelt’s special representative to China and is one of the people credited with making sure that help meant for the Nationalists never reached them, thus ensuring Mao’s victory.

He did other things. When the FBI started investigating one of the most successful Soviet spies, Gregory Silvermaster, Currie warned the MVD (the KGB was called that at the time). Silvermaster managed to get away and continued his work.

This is the real killer, so to speak. Mr Currie took part in preparations for the Bretton Woods Conference that set up both the IMF and the World Bank. Mostly the conference was organized by Harry Dexter White, a known Soviet agent himself.

Then in 1954, Lauchlin B. Currie resigned from his position, went to Colombia and gave up his American citizenship.

Or let us take the case of Frank Coe, a close colleague of the self-same Harry Dexter White at US Treasury and the IMF. Also a Soviet agent, an allegation indignantly denied, he resigned in 1950 and went to live in China in 1958. There he remained until his death.

So, apart from the fact that these unresolved issues from the thirties, forties and fifties are still poisoning politics in Britain and America why did I suddenly recall these individuals?

I opened my e-mail from the Wall Street Journal and found an interview conducted by Claudia Rossett, whose work I admire enormously with the man who proudly claims to be the “godfather” of the Kyoto Treaty, Maurice Strong. He, too, it seems has moved to China, the country that is least amenable to the sort of transnational control that Mr Strong has advocated all his life and has, one way or another, managed to inject into American politics. Oh and it is the country that is possibly the most polluted in the world.

It is well worth reading the article in its entirety. Mr Strong is, as it behoves a man who has had a long and successful career with the UN though it ended in unresolved problems to do with the Oil-for-Food scam and a very large cheque paid into his account, is very proud of the fact that, despite not being accountable to anybody he has managed to manipulate matters to such an extent that his favoured policies have been accepted by American politicians and imposed on the American people without their say-so.

In his most recent stint at the U.N., from 1997-2005, Mr. Strong served as an Under-Secretary-General and special adviser to former Secretary-General Kofi Annan. He was point man on matters ranging from U.N. reform to environmentalism to North Korea. By some accounts, including his own, he has been a benevolent toiler in the multilateral trenches, a friend of Mikhail Gorbachev and Al Gore, networking to save the planet.

By other accounts, he's a self-dealing and self-declared socialist who has parlayed his talents into a push for collectivist global government. These days he is living in China, where he says his ties go back "40 years."

Ms Rossett gives interesting details of Mr Stong’s political and financial dealings prior to his move to China. On this side of the Pond we are well used to this destruction of democracy but Americans who read this interview might find it all a little surprising and unnerving.

The end of what exactly?

As the financial crisis unfolds and as governments everywhere use this opportunity to nationalize banks (if they can afford to pump in the money) there is a great deal of hand-wringing about the end of capitalism as well as gleeful predictions of the collapse of America's pre-eminence.

On the whole, we do not hold with any of that. Yes, there will be hard times ahead but capitalism is not dead and is not going to die any time soon. Yes, governments will acquire power that they will not know how to use well because they never do know but the financial institutions will, eventually, break free or circumvent the most appalling regulations like the ones that have actually caused the crisis.

But what about America's pre-eminence? Will that disappear? Yes, burble all sorts of people in Europe as well as the New York Times (which will disappear a lot sooner if the present trend of catastrophic fall in readership and share prices will continue). If we are to accept this we have to ask ourselves who is to take her place as the strongest economy, bearing in mind that, no matter what the financial situation is the American economy is doing quite well and actually growing.

Well who? China? Russia? India? Japan? Any European country? The moment you ask that question you can see the basic problem: everybody is in the same mess and many countries are struggling a great deal more because of other problems peculiar to them.

Bret Stephens put it even more strongly in this morning's Wall Street Journal:

Almost in unison, Germany's finance minister, Russia's prime minister and Iran's president predict the end of U.S. "hegemony," financial and/or otherwise. The New York Times weighs in with meditations on "A Power That May Not Stay So Super." Der Spiegel gives us "The End of Hubris." Guardian columnist John Gray sees "A Shattering Moment in America's Fall From Power."

Much of this is said, or written, with ill-disguised glee. But when the tide laps at Gulliver's waistline, it usually means the Lilliputians are already 10 feet under. Before yesterday's surge, the Dow had dropped 25% in three months. But that only means it had outperformed nearly every single major foreign stock exchange, including Germany's XETRADAX (down 28%) China's Shanghai exchange (down 30%), Japan's NIKK225 (down 37%), Brazil's BOVESPA (down 41%) and Russia RTSI (down 61%). These contrasts are a useful demonstration that America's financial woes are nobody else's gain.

On the other hand, global economic distress doesn't invariably work at cross-purposes with American interests. Hugo Chávez's nosedive toward bankruptcy begins when oil dips below $80 a barrel, the price where it hovers now. An identical logic, if perhaps at a different price, applies to the petrodictatorships in Moscow and Tehran, which already are heavily saddled with inflationary and investor-confidence concerns. Russia will also likely burn through its $550 billion in foreign-currency reserves faster than anticipated -- a pleasing if roundabout comeuppance for last summer's Georgian adventure.

Nor does the U.S. seem all that badly off, comparatively speaking, when it comes to its ability to finance a bailout. Last month's $700 billion bailout package seems staggeringly large, but it amounts to a little more than 5% of U.S. gross domestic product. Compare that to Germany's $400 billion to $536 billion rescue package (between 12% and 16% of its GDP), or Britain's $835
billion plan (30%).

Of course it may require considerably more than $700 billion to clean out our Augean Stables. But here it helps that the ratio of government debt to GDP in the U.S. runs to about 62%. For the eurozone, it's 75%; for Japan, 180%.

It also helps that the U.S. continues to have the world's largest inflows of foreign direct investment; that it ranks third in the world (after Singapore and New Zealand) for ease of doing business, according to the World Bank; and that its demographic trends aren't headed toward a tall and steep cliff -- as they are in the EU, Russia, Japan and China.

Above all, the U.S. remains biased toward financial transparency. I am agnostic as to whether mark-to-market accounting is a good idea; last month's temporary ban on short-selling financials seemed a bad one.

But a system that demands timely and accurate financial disclosure and doesn't interfere with price discovery will invariably prove more resilient over time than a system that does not make such demands. If Fannie Mae and Freddie Mac were financial time bombs of one kind, then surely China's state-owned enterprises are time bombs of another. Can anyone determine with even approximate confidence the extent of their liabilities?

Well, it makes sense to me but I would be interested to hear opinions from readers, particularly those more knowledgeable than I am on matters economic.

Can they really predict the future?

As we watch politicians and regulators making one futile and potentially dangerous and highly expensive gesture after another to “save the situation”, “restore confidence” or simply rescue their own careers over the financial crisis, it is worth turning our attention to other situations they have messed up with their certainty that they have knowledge that is denied to ordinary mortals.

Today’s post brought the latest pamphlet from the Institute of Economic Affairs: “Climate Change Policy: Challenging the Activists”, and very interesting it looks, too.

From the Foreword, written by Bruno Prior, Director of Summerleaze Ltd, renewable energy entrepreneurs:

Certainly, the public pronouncements of politicians and the detailed central planning and regulations that they propose seem predicated upon the belief that politicians, their advisers and their regulators have limitless knowledge about the science and economics of climate change, energy use and the environment.

Or perhaps the political class does not have such knowledge, but nevertheless the precautionary principle demands that something must be done. That is the asymmetric precautionary principle, which demands precaution against the risk that today’s freedoms may harm future generations more than they benefit present generations, but opposes precautions against the risk that today’s constraints may harm present generations more than they benefit future generations.

From a politician’s or a regulator’s point of view that is a wonderful situation since we do not really know what will harm or benefit future generations, though we can make some assumptions on the basis of historical knowledge. Therefore, as far as that politician or regulator is concerned, as well as, sadly, too many people in the outside world, any horrifying prediction can be made with no fear of contradiction.

Well, some fear of contradiction and that fear is growing. More and more people are defying what was not so long ago known as a complete consensus (a frightening idea as, for instance, Louis Pasteur could have told us). One of the earliest to do so was Björn Lomborg and there was another well-argued piece in the Times a week or so ago. The comments at the bottom are quite interesting, too, and far more varied than one might have expected though there is still quite a lot of sheep-like bleating as well as the odd piece of silliness, which the author clearly considers to be very witty. You get them everywhere.

Meanwhile, it is worth noting that, as Mr Prior says, government targets rather than market solutions destroy flexibility in development and response to unforeseen contingencies:

State rationing needs firm numbers. The uncertainty may be vast and the permutations of all the unknown variables impossibly complex, but we can provide the necessary figures by applying statistical techniques to sets of tenuous assumptions. The probability of future developments conforming with these assumptions may be negligible, but (having rejected a genuine market approach) there is no option to do without assumptions, and any other set of assumptions will be equally improbable. In a few steps, we convert uncertainty into certainty and dictate that our critics must do the same.

Thanks to this certainty, there is no need or space for entrepreneurs in the traditional sense – that is, those who discover new information in the economic process. Governments have worked out the reasonable costs and expected volumes of each technology (or good), and how much each sector of industry and society will contribute (or require), so there is no need for innovation nor opportunity for the unconventional. The job of business is to deliver as cheaply as possible
what governments have specified. Without rewards for innovation – for betting against the crowd and winning – the economy coalesces around large businesses with low financial costs, high volumes and low margins delivering what governments have ensure will be the most financially viable (though not necessarily the most economic) solutions.

Socialist planning by any other name is likely to bring about the same sorry results.

We shall see

Dr Liam Fox has assured a number of people in my hearing that he was a unionist, Atlanticist, pro-American eurosceptic but had not the slightest intention of calling for a withdrawal from the European Union.

He does not like the Lisbon Treaty but seems unaware that certain matters to do with the common foreign and security policy have been developing ever since the Conservatives foisted the Maastricht Treaty on us. No, there was no referendum then, either, though muggins here was one of those who worked hard to secure one.

However, he is absolutely certain of one thing: the Conservatives, when and if in government will pull out of the European Defence Agency. They have already told their colleagues that they will follow the right path for Britain in this as with the EPP. Yes, he did say that. I expect it will be just the same but miracles might be possible. We shall see.

While we are on the subject of what we shall see or not, Dr Fox also assured us all, that he and his party were absolutely certain that NATO must decide for itself who shall be its members and not allow Russia to intervene in the process.

That is all very well, but as I recall the Conservative Party made no statements at the time of the Sofia Summit when Germany and France with support from Spain, Italy and the Benelux countries opposed all plans to start the process of taking Georgia and Ukraine into NATO because Russia did not want it.

As it happens, the final statement was very different from what our French and German “partners” wanted and promised that the two countries’ Membership Action Plan (MAP) applications would be sorted out by the Foreign Ministers of NATO at their forthcoming meeting in December.

As we know, President Prime Minister Putin and his teddy bear President Medvedev assessed the situation accurately and went ahead with their plans to invade Georgia, where the Russian troops have remained despite many promises to withdraw.

Chancellor Merkel has just visited Russia and, while doing a certain amount of grandstanding about how unhappy she was with the Kremlin’s behaviour, in actual fact, assured her hosts that NATO foreign ministers will do nothing about either Georgia or Ukraine at the December meeting. So much for that.

As it happens, Dr Fox did not explain whether the Conservative Party would be making any statements on the subject when those foreign ministers meet; nor did he mention the possibility of a debate about NATO’s relationship with Russia in the Commons. Still, he made some very firm statements about it all. We shall see what they might lead to.

Who will ...

... sponsor on-line debates of such seriousness in this country? Can't be expensive. Not on-line. Come to think of it, will anyone sponsor a website on which such debates can be conducted? Because, you see, the present tumult and shouting will die (I am still voting present on what to do about the economic mess beyond saying tentatively, get rid of all politicians) but the need to understand politics at its widest will remain. The Right in Britain should be thinking about this but is not.

Yes, I know, it has been cross-posted from EUReferendum but the subject needs to be discussed on as many forums as possible.

Dear, oh dear

Errm, have you seen the news official CCHQ blog, called, in a burst of originality, The Blue Blog? This is the Conservative Party deciding to come into the twenty-first century and admitting that there is a blogosphere out there.

They haven't quite got it. Not just because the blog is truly bad - badly laid out, ridiculous in content (Who on earth is Shazia Awan and why is she allowed to write that sort of celeb-magazine style rubbish?) and infrequent in appearance. They have also not understood the point of the blogosphere. Its purpose is not to produce official party propaganda though, obviously, some will or to gush about the leader or to preen oneself about how savvy and yoof-oriented one is. The blogosphere, as it exists in the United States and as it will, I sincerely hope, one day exist here, is there to provide a different and balancing point of view from the political establishment.

But then, what can one expect from a party that is apparently supporting the Chancellor's plan to part-nationalize the big banks?

Hmm, about that foreign policy

Apologies if some of the postings on this blog veer towards American politics at the moment. In the last few weeks of the presidential and other electoral campaigns, developments over the Pond have become very important.

The Vice-Presidential debate has aroused a great deal of interest and excitement with the MSM or Big Media or drive-by media playing an ever more desperate and unpleasant role. As this is of vital importance in modern politics, I shall do a separate posting about that.

Now I just want to call attention to an interesting fact. It has been assumed by many of our political commentators and our own media, which tends to be ignorant at best about America and partial to the left most of the time (I don't mean just the BBC, either) that Sarah Palin is a ditzhead who says the cutest things about foreign policy.

This ignores Governor Palin's solid achievement in the Alaskan and Canadian pipeline negotiations and deliberately obfuscates on the subject of Senator Biden's knowledge as displayed by his statements. Experience he has none, having been a Senator for most of his life. But, as Rudy Giuliani said, when Biden says the cutest, people, especially in the media, just shrug their shoulders. That's just Joe, they say with a tolerant smile.

The Wall Street Journal, I am glad to say, does not have such double standards, probably because they want McCain-Palin to win. Here the editorial article analyzes the gaffes and/or lies that Senator Biden produced during that debate and which passed "unnoticed" by AP, CNN and others of that ilk.

The worst was his assertion that at some point America and France (huh?) managed to throw Hezbollah out of Lebanon. That would be news to the Lebanese, to Hezbollah and to the Israelis. There are other equally "cute" statements.

As the WSJ says:

We think the word "lie" is overused in politics today, having become a favorite of the blogosphere and at the New York Times. So we won't say Mr. Biden was deliberately making events up when he made these and other false statements. Perhaps he merely misspoke. In any case, Mrs. Palin may not know as much about the world as Mr. Biden does, but at least most of what she knows is true.

On the other hand, is there any evidence that Senator Biden knows anything about the world at all? And is there any evidence that our own ditzy journalists have even asked themselves that question?

Will this make the Polish government more popular?

The trial of General Jaruzelski has started in Poland. He and his co-accused are pleading not guilty. In the long run, as I have written before on EUReferendum, his defence will be that he saved Poland from the far more brutal oppression by strengthened Soviet forces. It is still unclear how the Poles will react to the trial so many years after the events and after the collapse of the Soviet system.

The state the Right is in

The list of top 100 people on the right is up on Iain Dale’s blog. You can see the names here and here and read the explanation of how the choice was made. My very limited and unrepresentative sample of people on the right whose opinion of the list I asked came up with a 30 – 40 per cent recognition rate. Who are most of these people was the question. I would be interested to know other people’s reactions.

The reason for the non-recognition is quite simple. This is not a list of important people on the right so much as people who are well known in the Conservative Party. (Even by that standard some of the decisions are odd. Chris Patten as a new entrant at number 45? Chris Patten?) What we have here is largely a list of politicians, ex-politicians and wannabe politicians.

There are two bloggers, Tim Montgomerie and Guido Fawkes; only one writer, Charles Moore; no historians and a few think-tank people, most of whom are down from last year’s position. Journalists are not allowed into the list, even if they are authors of important books. Thus we have to do without such names as Christopher Booker, Simon Heffer, Peter Oborne and Daniel Johnson. Where is Andrew Roberts, for example, or Jeremy Black? Where are the economists like Tim Congdon? Where are the political philosophers? Perhaps there are none.

A similar list in the United States would consist largely of writers, political analysts, essayists, historians and bloggers with politicians as an also ran.

Two conclusions can be drawn, both rather disturbing. One is that the Conservative Party has no interest in anything except day to day politicking and has no desire to understand anything that might be called the larger picture or to take on board any ideas.

The other is that the Right in this country has allowed it to happen and is, therefore, withering on the vine. Whatever the election result will be in November in the United States, the Right in that country will continue to flourish and to run with ideas. In Britain it will also make little difference what the electoral results will be. The Right will remain nothing very much, allowing the Conservative Party to usurp that position.

Politicians are not the proper people to carry a political ideology. They rarely know or understand what is going on and, quite possibly, have no time or ability to do so. If we are to have something called the Right once again flourishing in this country, we need to look beyond MPs, MEPs, former ministers, shadow ministers, councillors or candidates. None of them are going to be creators or disseminators of ideas. Most of the time they do not even understand or want to understand what politics is about.

Their combined inability to grasp the role of the EU in this country’s legal, political and constitutional structure is beyond lamentable, as we have chronicled on this blog. Their combined reluctance to decide what it is they really believe in shows up their ignorance beyond low-level politicking.

And that is the Right in Britain, officially. The question is what is to be done about it.

Sooner or later they will have to talk about it

The Conservatives are very hopeful about winning the next election when they will be in government but not in power. They do not want to talk about that. George Osborne has made his vitally important speech in which he said nothing of any importance, despite the apparent joy with which commenters on ToryBoy forum have greeted it.

There will be no tax cuts because the economy is in a bad state. The last time we were told there would be no tax cuts it was because the economy was supposedly in good shape and the "profits" would be shared out.

Unreformed, wasteful and seriously harmful instiutions like the education system, the NHS and the Department for International Development will carry on squandering vast sums of money and causing untold harm with it. Great. Really makes it worth one's while to vote Conservative.

There is the rather curious proposal to freeze local taxes for two years if the local councils agree but that is likely to go nowhere.

Then there are the proposals to give the Bank of England more powers to step in with regulations for banks earlier. Unfortunately, this reminds one of the partial nationalization of Bradford & Bingley as well as those endless calls to lower VAT on this, that and the other. None of it can be done without the Commission's say-so. We may get that say-so or we may not. But one would have greater faith in Georgie-Porgie as future Chancellor of the Exchequer if he made it clear that he recognized this fact and had some ideas of how to deal with it.

Of course, the Conservative Party is not actually going to discuss the elephant in the room at this Conference. There are fringe meetings on the EU but not one main debate. This means that there will be no discussion (again) about the extent of the EU's competence in such matters as financial rules and immigration. And that means, in turn, that Tories can go on bleating like blessed little baa-lambs that Europe is not an important subject with the electorate.

Before the conference we had Anthony Browne, former Director of Policy Exchange, now Head of Policy to the new Hizonner the Mayor, writing in the Independent (as quoted by Conservative Home) that he would like to see an amnesty for illegal immigrants who are already in London.

Setting aside such questions as to the usefulness of rewarding legal wrong-doing and the obvious problem that London cannot have an amnesty by itself, there is the problem, unrecognized by Mr Browne or various other commentators that Britain has no right to make decisions on these subjects.

Mr Browne tries to circumvent the argument that an amnesty now would bring in ever more illegal immigrants by promising that there would be toughter border controls. Oh yes? Border controls and matters to do with immigration have been passed over to the European Union.

Recently the ECJ ruled in the so-called Metlock case that individual countries could not prevent non-EU nationals from staying on in an EU member state if they married, however hurriedly, one of those nationals. After which no other member state could keep those hurriedly married newly acquired citizens from entering its own territory. What are the Conservatives going to do about that?

Subsequently, as my colleague on EUReferendum wrote, our own Law Lords decided, going beyond theECJ decision but using it as a basis, that no legal or judicial authority had the right to question whether the marriage was actually a valid one or was merely contracted to keep a certain illegal immigrant in an EU member state, possibly with the intention of moving on to another one.

Questioning such matters as marriages contracted deliberately for visa or right-to-stay purposes, presumably even if that involved a forced marriage imposed on some unfortunate girl in this country, would be against the hopeful illegal immigrant's human rights.

How does Mr Browne or, for that matter, the Conservative Party, propose to get round this problem?

European Voice reports that during the recent meeting the EU's interior ministers (to which Britain sent the junior Minister for Immigration, Liam Byrne) there was a rebellion, led by the Danes.

Denmark's interior minister, Birthe Rønn Hornbech, said during a meeting the EU's justice and home affairs council on 25 September, that she wanted the EU to find a way to undo the effects of the Metock ruling. The Danish governing coalition includes the fiercely anti-immigrant Dansk Folkeparti (Danish People's Party), which has expressed its strong opposition to the ruling.

According to sources, Ireland, Austria, Germany and the UK all also expressed strong reservations about the judgment, arguing that it could encourage marriages of convenience.

The Commission has promised to evaluate the judgement that went further than Directive 2004/38/EC on which it was supposed to rely. This is not an unusual event for the ECJ or for our own Law Lords. Judges are notorious for their constant efforts to supplant politically accountable bodies. Then again, how accountable are the institutions that bring us those wonderful directives.

The Council of Interior Ministers is promising to return to the subject after the evaluation as this is clearly an issue that might cause them all pain at home. But the decisions will be taken at EU level.

Sooner or later even the Conservatives will have to acknowledge this fact.

For anyone in and around Birmingham

The Bruges Group fringe meeting will take place today at 2.30 in the Birmingham and Midland Institute. As it happens there will be fewer speakers as two of them have withdrawn. Daniel Hannan MEP and Roger Helmer MEP will not now be appearing on the same platform as Nigel Farage MEP and Simon Heffer. I couldn't possibly comment.

Media pluralism?

Time for a mea culpa. I have done nothing about the proposed control of blogs and bloggers by the EU and the European Parliament's rather pathetic statement on the subject. I shall read it and write a proper analysis.

In the meantime, here are a few links. My colleague on EUReferendum wrote about it on Tuesday, though he concentrated a little on the fate of the ex-blog England Expects. We have covered the subject before here.

The EUObserver gives a curiously up-beat report - all is well with the European Parliament and the blogosphere as nobody was ever going to try to control it and, in any case, the suggestion has been defeated.

The best report, so far, is by Charles Crawford. He actually fisks the Toy Parliament's statements and finds many horrifying aspects to it. Way to go. I completely agree with his ridicule of the concept of media pluralism. What on earth does that mean? Clearly it is not the same as freedom of the media as that would imply that the Toy Parliament and the other EU institutions had nothing to do with it. Media pluralism, on the other hand, suggests a structure that is actually defined by the powers that be. Rather like a charter of rights that is graciously awarded to people by the state.

More on the substance of the story as I have time to fisk the relevant documents myself.

The silence is not entirely unproductive

I apologize for the long silence. Many things have caught up with me. One of them was a conference on "Free Speech, Jihad and the Future of Western Civilization" on Monday. Over on EUReferendum2 there is a long posting full of preliminary musings. Enjoy.

Ukraine in trouble, Russia worse off

The Ukrainian government collapsed a few days ago and the acrimonious exchanges between the Prime Minister Yuliya Tymoshenko and the President Viktor Yushchenko have exceeded the usual nastiness of those frank and open political discussions.

Yushchenko has accused Tymoshenko of betraying Ukraine’s national interests by leading her party to form a new coalition:

According to Yushchenko, the decisions that the parliamentary factions of
the Yulia Tymoshenko Bloc, the Party of Regions, and the Communist Party are jointly adopting are aimed at destabilizing the situation in the country with the aim of changing the political system.

"One subject is at work - how to bring the country to instability, create a balance of interests through destabilization, hold early presidential, parliamentary, and local elections... In other words, to establish a political regime in which neither you nor I would want to live," Yuschenko said.

In return Tymoshenko accused the President of madness and telling lies about her own and his political behaviour. This could go on for a long time and probably will.

In the meantime the notion of Ukraine participating in any progress towards membership of NATO will have to be abandoned and the most immediate beneficiary of yet another Ukrainian crisis will be the Kremlin who are happy to stir up trouble in that country.

Moscow Times reports that leaders of Georgia and Ukraine will be heading to the UN this week to ask for support for their membership of NATO. Curiously enough, they do not seem to be all that interested in membership of the EU.

President Saakashvili may have thanked the United States and European countries (not the European Union) for their support but he knows full well that the biggest and, apparently, the weakest of the EU’s member states will not even consider standing up to Russia and are reluctant to consider changing their energy policy in order not to have to rely on Russian oil, gas and coal.

Not that this has helped Russia at all. Their financial crisis started before the collapse of Lehman Brothers and has, so far, been considerably more severe than anything the West has had to put up with.

Still, President Medvedev knows how to deal with internal and external problems. His solution consists of screaming abuse at everyone else and announcing that Russia will delineate its southern Arctic boundary in order to strengthen to country’s position in the world. After all, a country that cannot properly develop its existing resources in Siberia must have more outlets that it cannot develop and from which it has to exclude necessary Western technology, knowledge and capital. Such a good idea.

The United States has announced that Russia’s decision will have no validity in international law.

The State Department statement said the United States has no information about any proposed Russian Arctic legislation. Medvedev's public statements indicated, however, that the effort is to define the Arctic's boundary within the Russian land mass.

"Arctic nations use different criteria for defining the portions of their territory considered to be part of their Arctic regions," the statement said. "The definitions are generally for the purpose of internal administration and have no standing in international law."

It said the Russians are gathering scientific evidence to support their earlier contention that the country's continental shelf reaches the North Pole. A technical commission under the Law of the Sea Convention will recommend based on scientific criteria the disposition of the submission, the statement said.

Well, it works with some people. While Russia has not managed to garner support even in the Central Asian countries, the EU is rushing to the rescue after extremely friendly talks between French Prime Minister François Fillon and former Russian President, now Russian Prime Minister Vladimir Putin. The EU will resume talks on the projected partnership if Russia withdraws its troops from Georgia completely, something she is quite reluctant to do. Of course, the two so-called break-away republics, Abkhazia and South Ossetia, will remain part of Russia.

Whom should we fear more?

In a recent address to the Bruges Group John O'Sullivan, the Executive Editor of Radio Free Europe/Radio Liberty and author of "The President, the Pope and the Prime Minister" gave an interesting analysis of the dangers freedom and democracy face in the twenty-first century.

Mentioning Robert Kagan's "The Retunr of History and the End of Dreams", an interesting but somewhat inadequate slim tome about which I have written before, O'Sullivan expanded the theme. Kagan's book is about the return of old-fashioned power politics and the negation of the supposed utopia - the new international and transnational political geometry. As I have mentioned before, there seems no evidence that power politics ever went away, but it is possible to argue that it was in abeyance for a few (very few) years.

The first enemy we face is radical Islamism. John O'Sullivan's view and it is hard to argue with it, is that they are not as dangerous as all that. They can cause a great deal of damage but radical Islamists are failing in their main purpose - the establishment of a world-wide caliphate - and are not succeeding in their secondary purposes either. They have not been able to get rid of a single pro-Western government in the Muslim world since 9/11; they are losing in Iraq and not doing terribly well in other countries. Even in Afghanistan the main problems have to do with tribal structures and economic dysfunctionality, the latter of which the West could, should it have the political will, deal with.

The second enemy is, indeed, the strengthening autocracies who are detemined not to emulate the democracies but to go their own way. That would not matter, except for the fact tha their way involves a great deal of enmity towards the democracies and attempts to undermine them.

There are two reasons why I am optimistic about that battle. One is that the rising autocracies, particularly China and Russia are not as strong as many people seem to think. China's internal problems became manifest in the run-up to and during the Olympics and matters have not got much better even though the information is patchy.

Russia may act like a bully but her dependence on Western buyers and investors has been shown up recently and threatening, manipulating and invading other countries is not necessarily the best way of making your own stronger.

The second reason why Russia is less frightening than it used to be and why radical Islamists are an enemy we can deal with is because they cannot produce effective propaganda.

In this connection I should like to quote a passage from a fascinating book by the Hungarian historian Mária Schmidt, "Battle of Wits", about the East European show-trials and the American spy cases, in particular the Hiss case. Trying to analyze why Westerners became Soviet agents, Dr Schmidt writes:

First of all we have to establish that for those who embraced Communism, the Soviet Union stood for the "Fatherland", i.e. the country of their allegiance whose interests they represented. It is worthwhile to keep this fact in mind when we read harshly judgmental sentences about Cold War propaganda.

On the development of this strange attitude le me quote George Orwell, who started out as a left-winger, and whose inner conflicts were partly caused by the fact that he considered the interests of his own country to be above those of the Soviet Union. [Actually, Orwell went on being a left-winger but an anti-Communist one and he had no real inner conflicts about his feelings for his country but let that pass.]

Orwell writes again and again about the peculiar disjunction that characterized the English fellow travellers and Communists. In his essay, Inside the Whale, he explains that as they divest themselves of their former loyalties and superstitions, the Communists fill the gap by making up
their "losses".

And the result of this compensation is "Father, king, leader, hero, saviour - all in one word, Stalin. God - Stalin. The devil - Hitler. Heaven - Moscow. Hell - Berlin. All the gaps were filled up. So, after all, the 'Communism' of the English intellectual is something explicable enough. It is the patriotism of the deracinated."

That same sentiment is voiced by the French Communists' well-known adage: "France is the country where we live; the Soviet Union is our fatherland for which we work."

The reason I am less worried about both radical Islamism and the newly strengthened autocracies is that they cannot produce the propaganda.

Let me qualify that. Radical Islamism does produce propaganda and it is frequently very reminiscent of the Soviet one. However, by definition, it can appeal to a small, though possibly deadly minority. The Soviet vision was for everyone and it severely underplayed the violence involved in achieving it.

When countries are accused of surrendering to Islamic extremists, when officials come up with daft statements about not having piggy banks, when rules are broken in order to accomodate the supposed needs of believing Muslims, it is not ideology or a glorious vision that is at work; it is sheer cowardice or, not infrequently, dislike of one's own culture. These people are deracinated as well but nobody has managed to make up their "losses". [One may also add that most of the time the demands do not come from the Muslim community, very few of whom have succumbed to the extremist virus, whatever other problems there might be with assimilation.]

The authoritarian states may have an ideology for their own people - former President, now Prime Minister Putin has certainly tried to build up one of sovereign democracy a sort of an amalgam of the old Russian autocracy, orthodoxy and nationalism and the more virulent anti-Westernism of the Soviet period. However, almost by definition these are not ideologies that can appeal to many people outside the country concerned.

Some people find the idea of muscular defence of the national interest attractive. But not only it is doubtful that the Chinese, say, or the Russian governments have the real interests of their countries at heart, it is also difficult to applaud the aggressive display of national interest of one's opponents.

It is the third of our enemies, the massed ranks of the transnational organization, led by the UN but with the EU as its most powerful force as its aspiration is actually to statehood, that is dangerous. They can produce an ideology and a vision, tarnished though it may be (though, at least, not insanely murderous), which can make up those "losses".

Belief in European integration as the great panacea may not appeal to as many people as it used to but belief in the rightness of national politics being superseded by a morally superior one of transnational one remains attractive to very many people, who will fight for a completely false vision as the Communists and fellow travellers did for all those decades.

More on those silent NGOs

This blog has commented before on the odd behaviour of feminist organizations and charities for the disabled in connection with the highly personal attacks on Sarah Palin and her family. Now we have another example of odd behaviour.

The latest Obama ad aimed to discredint Senator McCain centres on the fact that he "does not know how to use e-mal". There are, of course, many responses to that. Why should the senator use e-mail when he has staff?

Then again, ever since the 2000 election it has been clear that of all the Republican campaigners it is McCain or his staff who have harnessed the power of the internet more effectively than anyone else. So, who cares whether he can actually post his own e-mails?

There is the unfortunate aspect of the ad that this mocks old people who, supposedly, are not computer literate, a mockery that will turn many people away from Obama. Not only there are very many older people in the United States, many of whom are computer literate but many, perhaps, feel no need for it, but they turn out to vote in larger numbers than do the "yoof".

So where are the charities that represent the elderly? I suppose there might not be any in the US because the Age Concern with its assumption that anyone over 50 is a complete crock and needs permanent help would be unthinkable there. Then again big charities tend to exist whatever the situation is. I mean when was the last time people in their fifties were seriously considered to be old and incapacitated?

The Obama attack turns out to be worse than expected. It seems that the reason McCain finds it hard to use the keyboard is the injuries he received when he was tortured in North Vietnamese captivity. Naturally, those injuries, like war injuries, have become worse as he has grown older and he now finds it hard to type (great achievement that is), comb his hair or tie his shoes.

Instapundit gives a round-up of comments. There are some missing. Why are the charities that "speak" for the disabled not protesting? Come to think of it, why is the EU not tut-tutting?

Political consensus is often wrong

The experts, i.e. the media and political analysts as well as self-appointed know-alls (don't snigger at the back) have maintained the following: Russia is untouchable in her growing economic and political strength; the Russian government is motivated by national interests (this is said sorrowfully by proponents of the new political geometry and gleefully by advocates of national interest); and the United States is the most hated country in the world.

Recent news about Russia's economic situation disproves all of those. As a result of recent economic shenanigans, such as the BP-TNK dispute, now temporarily and unsatisfactorily settled, public attacks on a major steelmaker and, above all, the invasion of Georgia, economic indicators in Russia have been plunging.

Yesterday's Wall Street Journal Europe published an article [subscription only, unfortunately], entitled "Investors punish Russia".

Over the past few weeks, Russian share prices have fallen more than 40% from their May highs, battered by fears about Kremlin pressure on comapnies as well as the surge in tensions between Moscow and the West after the war in Georgia.

Russian officials initially brushed off the declines as transitory, driven mainly by weak global markets. But as stock prices and the ruble's exchange rate against the dollar have continued to slide, official concern appears to be growing.

President Medvedev has wavered between blaming the United States because of their mortgage crisis (connection unexplained) and proclaiming the end of the problems and the inevitable climb back by the Russian stock market.

Various analysts remain unconvinced, despite the hasty settlement of the BP-TNK issue, influenced clearly by the economic woes that are hitting Russia.

Many investors and analysts share Mr Medvedev's view that Russian shares are cheap, but they are more cautious about a rebound. "It's probably true, but it might not be until 2011," said Ron Smith, strategist at Alfa Bank in Moscow.

Russia's dollar-denominated RTS index fell 4.4% Wednesday [September 10] to 1334.33 as foreign funds continued to unload Russian shares in what Mr Smith described as "capitulation on the country". [I wonder whether Mr Smith thinks capitulation to the country would be better.]

Mr Medvedev blamed Russia's troubles on the U.S. "Let Americans solve the problems with their mortgage system," he said. "To put it simply, they let almost everyone else down."

But investors and analysts say that while the Russian market's swoon is partly due to the global credit crunch and weak foreign markets, Moscow's behaviour has been a big contributor.

On top of which the inevitable fall in the price of oil, metals and other commodities has shown up Russia's reliance on those exports and the short-sightedness of the leadership that has spent the last few years imposing state control on the companies and using its power as energy supplier to interfere in other countries' affairs instead of diversifying the economy through encouragement of investment.

Associated Press agrees that Russian markets and banks are under pressure. Other news stories say the same.

This posting is not a gloat about Russia doing badly economically though a smug "told you so" is allowed, I believe. As it happens, I do not believe that an economically weak and politically contentious Russia is of any help to her people or the rest of the world. But it should have been clear that former President, now Prime Minister Putin's policies would not strengthen Russia any more than stomping around in the school yard strengthens a bully's personality.

What of those three consensus points? Well, the first one is obvious. It is simply not true that the West can do nothing about Russia outside military intervention, which is clearly a nonsensical idea. A commodity exporter needs its market more than a more diversified economy does. Russia is desperately worried that the West, particularly European countries and even more particularly Germany might start diversifying its energy sources. After all, it cannot drink the gas and oil or eat the coal.

Western investment is equally desperately needed and, unfortunately, being nice to the Kremlin does not help matters, as BP has found. On the other hand, the sight of those investments disappearing has concentrated the collective mind somewhat even if President Medvedev continues to play the strong guy.

Secondly, the notion that the Kremlin and, specifically Prime Minister Putin and his teddy bear, President Medvedev have the country's national interest at heart is nonsense. However popular the Georgian invasion may have been (and it is hard to tell as Russian attention tends to be on other matters in August) the sole winner is the Kremlin and its siloviki who see the benefits for their own power in whipping up fears about non-existent foreign threats.

Thirdly, there is the question of everybody hating the United States and, therefore, vaguely supporting Russia as one who stands up to Uncle Sam. In the first place, public outcry against the invasion of Georgia was louder than the had Russians expected even if some official response was muted. In the second place, nobody hates America enough to stop doing business there, invest there or try to go and work there. We and the Russians can see now what happens when a country really falls out of international favour even if only temporarily.

Lest we forget

Energy, foreign policy and that presidential election

Among the various smears and attacks on the Republican Vice-Presidential candidate, Governor Sarah Palin (discussed at length in this highly entertaining posting) the one that could hurt her and Senator McCain is her apparent lack of experience in foreign policy.

Actually, the Vice President needs to have no preliminary experience in foreign policy as that remains the President's domain with the help or hindrance of the Secretary of State. Furthermore, lack of experience is not something the Democrats should be throwing around too much, given whom they have at the top of their ticket. Obama has realized this and so has, reluctantly, his campaign. His supporters in the MSM and the left-wing blogosphere, on the other hand, live in a bubble of their own and consider everyone outside it to be too stupid for words.

In any case, this is not precisely true. The lady has worked on energy and foreign policy matters, the two being closely intertwined, as the Conservatives are going to find out when they become the government.

Jim Bennett, author of "The Anglosphere Challenge" has an article in today's Daily Telegraph that outlines the story of Sarah Palin, Alaskan oil and the Canadian pipeline. It paints a very different picture of the "hockey mom". Inexperienced she ain't; a walk-over she ain't. But then the Democrats have realized this.