Behold, Politics

By Grant Williams

January 27, 2014





"Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies."





"A week is a long time in politics."





"The oppressed are allowed once every few years to decide which particular representatives of the oppressing class are to represent and repress them."





"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience."


Gibraltar is a British Overseas Territory.


Gibraltar.psd


It has an area of 2.6 square miles and juts from the southern tip of the Iberian Peninsula, overlooking the entrance to the Mediterranean Sea. Roughly 30,000 people live in the territory, whose sole distinguishing feature is the very large rock which runs along the eastern edge of the territory and culminates in a dramatic promontory in the northeastern corner.

That's it there, on the right ... see?

Gibraltar was captured by an Anglo-Dutch force in 1704 during the War of the Spanish Succession, in which European countries fought each other over who had the right to succeed King Charles II as ruler of Spain.

Charles (or Carlos) had died without heirs, bringing to its final extinction the mighty House of Habsburg, which had dominated European royalty for three centuries. In his will, Charles had designated his 16-year-old grandnephew Philip, Duke of Anjou, as his successor.

Philip was the grandson of the reigning French king, Louis XIV, the famous "Sun King"; and the prospect of an early 18th-century Franco-Spanish alliance at the heart of Europe was unnerving to others, who saw it as potentially destabilizing the delicate balance of power; and so, as Europeans tended to do in the days before they got around to creating the EU, they opted to fight a war.

This war turned out to be quite the bar brawl, spilling out of Spain and into Germany, the Netherlands, and, somehow, America, as the French and the English fought each other in Florida, New England, Newfoundland (huh?), and Carolina.

(Thankfully, the prospect of an Hollande/Rajoy alliance at the heart of today's Europe would provoke nothing more than uncontrollable laughter, so Europe is far safer now; but then it was a different world.)

Anyhoo, as part of the Treaty of Utrecht, which ended the Spanish War of Succession in 1713, Spain got a French king after all (Philip V), but he was required to relinquish all future claims by his family on the French throne; various French princelings were forced to give up all present and future claims to the Spanish throne; Savoy was given Sicily; Charles VI of Austria received the Spanish Netherlands, Naples, Sardinia, and most of Milan; Portugal was handed a chunk of the Amazon rainforest ... and Great Britain got Gibraltar.


Personally, if I'd been negotiating the deal, I'd have stuck it out for Naples, Sardinia, and Milan, but ... whatever. Gibraltar was better than nothing. Probably.

Funnily enough, as the years have passed, the Spanish have from time to time reasserted their claims to the rocky promontory that juts out from mainland Spain, 80-odd miles southwest of another town annexed (albeit UNofficially) by the BritishMarbella. And who can blame them?

Gibraltar is to Spain as Cape Cod is to Massachusetts or Baja is to Californiaonly with more monkeys.

Referenda proposing a return to Spanish sovereignty were held in Gibraltar in 1967 and 2002, and one would have to say that the results could certainly be classified as "conclusive."

The 1967 referendum on whether to pass under Spanish Sovereignty or remain part of Great Britain left little room for doubt:


Choice 
 Votes        
 %
British Sovereignty
  12,138
 99.64
Spanish Sovereignty
  44
 0.36
Invalid/Blank Votes 
  55
 -
Total
  12,237
 100
Registered Voters/Turnout
  12,672
 95.67


Thirty-five years later, the 2002 referendum, which asked "Do you approve of the principle that Britain and Spain should share sovereignty over Gibraltar?" was equally one-sided:


Choice
 Votes
       %
No
 17,900
    98.48
Yes
 187
      1.03
Valid Votes
 18,087
    99.51
Invalid/Blank Votes
    89
      0.49
Total
    18,176     
100
Voter Turnout
87.9
Electorate
20,678


Whatever your view on the Gibraltar issue (assuming you can be bothered to have one), it's pretty hard to argue with 98.48% of the voters in a (supposed) democracy; but with things in Spain being quite tight and Catalonia looking to become a new Gibraltar all of its own, the Rajoy government clearly felt that a little distraction was in order; and so "tensions" in the Strait have escalated in recent months, with Spanish-imposed delays at border crossings that would make Chris Christie's staff salivate (no need for subterfuge HERE). And, of course, in response quite by coincidence, there have been the requisite "naval exercises" conducted by the British Royal Navy off the coast of "The Rock."

In early January, however, after the mood had darkened considerably over waiting times to cross the border between the Territory and the Mainland having stretched to four hours (Fort Lee residents, the people of Gibraltar feel your pain), another amazing coincidence occurred when certain diplomatic documents relating to discussions on Gibraltar were declassified by the British Foreign Office. Within these documents detailing exchanges between King Juan Carlos of Spain and the then-British Ambassador to Madrid, Sir Richard Parsons (no relation to Nicholas), was a revelation:

(UK Daily Telegraph): King Juan Carlos of Spain told Britain that Spain "did not really want" Gibraltar back as it would lead to claims from Morocco for Spanish territories in North Africa, newly declassified documents from the 1980s released by the Foreign Office reveal.

The King of Spain admitted privately in a meeting with the then British ambassador to Madrid, Sir Richard Parsons, that it was "not in Spain's interest to recover Gibraltar in the near future."

If it did so, "King Hassan would immediately reactivate the Moroccan claim to Ceuta and Melilla," the monarch, who celebrated his 76th birthday on Sunday, reportedly said during the meeting in Madrid in July 1983.
Fascinating stuff, but that's not the passage that contains the revelation.

This is:

In a confidential dispatch from Madrid to Geoffrey Howe, the then Foreign Secretary, Ambassador Parsons wrote: "The King emphasised, as he had done with me before, that that requirement was to take some step over Gibraltar which would keep public opinion quiet for the time being.

"It should be clearly understood in private by both governments that in fact Spain did not really seek an early solution to the sovereignty problem.

"If [Spain] recovered Gibraltar, King Hassan of Morocco would immediately activate his claim to Ceuta and Melilla.

"The two foreign ministers should reach a private understanding between each other, differentiating between their actual aim and the methods used to propitiate public opinion on both sides."

Did you spot it? No?

Well here it is again in slow motion:

"T h e t w o f o r e i g n m i n i s t e r s s h o u l d r e a c h a p r i v a t e
u n d e r s t a n d i n g b e t w e e n e a c h o t h e r, d i f f e r e n t i a t i n g
b e t w e e n t h e i r a c t u a l a i m a n d t h e m e t h o d s u s e d t o
p r o p i t i a t e p u b l i c o p i n i o n o n b o t h s i d e s."

... and here's the super-slo-mo close-up frame (if you have 3D glasses, put them on now):

"... P R O P I T I A T E P U B L I C O P I N I O N ..."

Let's go to the dictionary:

pro·pi·ti·ate transitive verb \prō-pi-shē-āt\ :

to make (someone) pleased or less angry by giving or saying something desired

Behold, politics.

Sometimes, in cables amongst themselves, politicians tend to forget that "real people" will eventually get to read their words (either that or they realize but just don't give a damn), and they drop the facade and talk in real terms.

Sir Richard Parsons' words, translated, are telling:

The two foreign ministers should work out what needs to be said to keep the public happy whilst they simultaneously pursue a completely different agendaone which they feel best benefits the political ambitions of each side.

Now, I'm not telling many of you something you didn't already knowalthough there may be a few amongst you who still believe that all elected officials are there for the good of the people — but to see how things look when the mask slips and the monster behind is revealed is important in what I suspect could be a seriously turbulent year politically.

Mark the dates May 22nd to 25th in your diaries, folks.

That is the time frame during which elections to the EU Parliament must be conducted this year, and the potential for the politicians and bureaucrats who creep backwards and forwards to Brussels (on expenses) to receive a major wake-up call increases by the day.

Historically, turnout at EU parliamentary elections has been abysmal fairly poor and has declined consistently to the point where, in 2009, the percentage of eligible voters who turned out to select representatives to the body that would go on making ever more decisions about how they would be allowed to live their lives was just 43%.

The result?

Well, the people of Europe got the parliament they deserved.


2323.png 
             Source: EU Parliament


Nowhere was that voter apathy greater than in the United Kingdom, where the hatred of what is seen by the British as European "meddling" has always led to a smaller turnout than that which determines the winner of Strictly Come Dancing:




  2337.png 
           Source: EU Parliament


The source of Britain's apathy has been a sense that, 24 miles away across the English Channel, there is a world of bureaucratic fools whose sole aim in life is to spend taxpayers' money on new ways to interfere with the lives of those taxpayers, by ruling on matters which those taxpayers find, at best, irrelevant.

We have trod this turf together before, but the EU is a writer's best friend when it comes to ridiculous rulings. These fools certainly know how important it is to call a spade a manually operated, metal-and-wood-composite, earth-moving implement. Take this ruling on the correct nomenclature for wine fruit-derived alcoholic beverages from produce sourced outside the EU:

(The Parliament.com): The EU has been accused of not allowing a wine to be called wine because it is made from grapes sourced outside the EU.

According to EU law, an English wine produced in Kent by Chapel Down & Wines of Argentina cannot be classified as a wine.

This is despite it being made of Malbec grapes air-freighted to the UK from Argentina.

As a result, the wine owner has been told he must call it a "fruit-derived alcoholic beverage from produce sourced outside the EU".

Or this one on the correct presentation of olive oil:

(UK Daily Telegraph): In the middle of an economic crisis and a collapse in political confidence in the European project, an EU committee has found time to ban the serving of olive oil in dipping bowls and from re-filled jugs in restaurants. From now on you will have to douse your bread in pre-packaged, factory bottles with a dispensing nozzle and labelling that meets the EU's standards.

The official explanation for the move is that it is to improve both hygiene and the "image of olive oil" within the EU....

It also says something about the size and ambition of the European Union that it now takes an interest in how people put oil on their bread.

As I said, easy pickings for the writer but fun all the same. In fact, here are a couple more, (courtesy of the UK Daily Telegraph, who regularly mine this particular vein of news); and we'll begin with that most dangerous of items, bottled water:

(UK Daily Telegraph): Brussels bureaucrats were ridiculed yesterday after banning drink manufacturers from claiming that water can prevent dehydration.

EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

Having saved the citizens of the EU from the dangers of believing that bottled water might rehydrate them, the Commission turned its attention to another potential peril, mislabeled Cornish pasties:

(UK Daily Telegraph): The infamous bureaucrats of Brussels have made another baffling judgment on the nature of food, ruling that a swede can be called a turnip when it's in a Cornish pasty.

[European Commission] Officials have decreed that only minced or diced beef, sliced potato, onion and swede are allowed to fill the pastry.

However the Cornish are unusual in referring to swede as turnip, even though they differ markedly. The former is white with a sharp taste while the latter is orange with a more earthy flavour.

Because of this linguistic quirk, the regulations have been amended to allow either term to be used on the label although only one of the two is allowed in the pasty.

This will mean that genuine Cornish pasties will be allowed to go on sale advertised as containing turnip, but will break the rules if they actually do contain the rogue root vegetable.

Blower.psd

But the Continent could never truly be safe until no child under 8 could ever be subjected to the potential dangers of blowing up a balloon or playing magnetic fishing games, and deadly party blowers certainly had to be removed from the mouths of anyone under 14:

(UK Daily Telegraph): Children are to be banned from taking part in traditional Christmas games, from blowing up balloons to blowing on party whistles, because of new EU safety rules that have just entered into force.

The EU toy safety directive, agreed and implemented by Government, states that balloons must not be blown up by unsupervised children under the age of 8, in case they accidentally swallow them and choke.

Despite having been popular favourites for generations of children, party games including whistles and magnetic fishing games are to be banned because their small parts or chemicals used in making them are decreed to be too risky.

Apparently harmless toys that children have enjoyed for decades are now regarded by EU regulators as posing an unacceptable safety risk.

Whistle blowers, which scroll out into a long coloured paper tongue when sounded — a party favourite at family Christmas meals — are now classed as unsafe for all children under 14.

I could go on. But I won't.

For some reason, however, in mainland Europe these ridiculous rules don't seem to provoke the ire that they do in Great Britain; and the idea of "Europe" has always played rather well with your average Belgian, German, Luxembourger or, for that matter, even your common or garden Dutchman, Italian, or Frenchman

Even your standard Greek, Cypriot, or Spaniard hasn't seemed too bothered by the diktats laid down by their Brussels-based overlords.

That, Dear Reader, may be about to change in a BIG way.

As I write this week's Things That Make You Go Hmmm... the EU Parliament looks like this:


2372.png 
Source: EU Commission


By the time May 26th dawns on Europe, this picture could well be completely redrawn, as a group of previously irrelevant political parties look to capitalize on the growing disaffection with the EU project and its common currency, and are prepared to seize as much power as the citizens of Europe will grant them.

The problem is, these parties are nearly all extremist in nature; but whether right- or left-wing, they unite beneath an anti-Europe banner, and that may be enough to sweep them to relevance and give them a strong hand at the negotiating table.

But before we get to the upstarts, a quick look at how things currently stand. Let's begin with the Presidencies of the EUall four of them.


Van%20Rompuy%2013p.psd

The President of the European Council is Herman Van Rompuy of Belgium (famously described by Nigel Farage as having "the charisma of a damp rag and the appearance of a low-grade bank clerk." Van Rompuy's role is described thus:

(Wikipedia): The duty of the European Council president is primarily that of preparing and chairing the meetings of the European Council. This longer term President of the European Council has been described directly by some as a new "President of the European Union". According to the Financial Times, "the president would have few formal powers, but would give the EU strategic leadership and represent the bloc on the world stage on issues such as climate change, bilateral relations and development."

Next up is the familiar face of José Manuel Barroso of Portugal, the President of the European Commission:


Barroso%2013p.psd


(Wikipedia): The President of the European Commission is head of the 27-member college of Commissioners. The Commission's responsibilities include drafting legislative proposals and managing the day to day running of the EU

It is also responsible for a degree of the EU's external representation, for example attending G8 meetings. The Commission President is proposed by the European Council, who take account of the previous European Elections, before being elected by the European Parliament for a five-year mandate. It has been described by some as the "President of the European Union" but a more common analogy is "Prime Minister of the European Union" given the style of position over a cabinet government.


Antonis%20Samras%2013p.psd


Thirdly, there is the Presidency of the Council of the EU, a position currently held (as of January 2014) by Antonis Samaras of Greece:

(Wikipedia): The Presidency of the Council of the European Union (Council of Ministers) is rotated between member states of every 6 months. The Council is composed of the relevant national ministers depending on the topic being discussed with minister from the state holding the presidency chairing. The country holding the Presidency is able to affect the overall policy direction for the six months. Since 2007, the Presidency has been co-ordinated every 18 months by three countries (a "triplet"), though one still takes a lead position every 6 months.

Martin%20Schultz%2013p.psd


Finally (yeah, I know...), there is the Presidency of the European Parliament, held currently by Martin Schultz, a man who, according to a completely fabricated poll, is recognized only 63.4% of the time in his own bathroom mirror:

(Wikipedia): The President of the European Parliament presides over the plenary of the Parliament, which is one-half of the legislative branch of the Union. The President also chairs the Bureau and Conference of Presidents as well as representing the Parliament. The President's role is similar to that of a speaker in a national parliament, but also represents the Parliament externally and vis a vis the other institutions, which is a more political role.

OK, now that you know who the main players are, forget them. These guys are not important.

The important names to know are Alex Tsipras, Marine Le Pen, Nigel Farage, and Beppe Grillo.

Tsipras is the leader of the hard-left Syriza party in Greece; Le Pen heads France's right-wing Front National; Grillo commands the Italian leftist Five Star movement; and the charismatic Farage rules over the slightly more moderate but definitely right-wing UK Independence Party (UKIP).

Over the last several years, as Europe has teetered on the brink of implosion, the old guard of Barroso, Van Rompuy et al. have applied numerous band-aids to their beloved European project with scant regard for the welfare of the citizens of Europe and an almost pathological refusal to countenance even the simple fact that the EU, in its current form at least, is not fit for purpose.
Tsipras, Le Pen & Co. aim to change all that.

(Greekreporter.com): A series of scandals, unresolved talks with the country's international lenders, and the escape of a terrorist seem to be taking their toll on Prime Minister Antonis Samaras' coalition government and his New Democracy Conservatives, who have fallen 7.7 percent points behind their rival, the Coalition of the Radical Left (SYRIZA) in the critical Attica region including Athens.

SYRIZA, which opposes the austerity measures being imposed by the government, had been battling for the lead in surveys for a year with New Democracy, both sides barely one percent apart, but now has a lead of 24.6-16.9 percent in the poll taken by GPO for Newcast.

That comes in the wake of a series of arrests involving a scandal at the failed state-owned Hellenic Postbank, the defense ministry, a publisher charged with failing to pay his taxes and as Samaras is trying to assert the country is poised to make a comeback. Voters aren't buying it.

But, as if to underline the shift towards extremity in the Greek political landscape, behind the radical left and the incumbents lurks another danger to the status quo:

Despite the arrest and prosecution of its leaders on charges of running a criminal gang, the ultra-far right extremists of Golden Dawn remain a steadfast third with 11.1 percent, even though its leader, Nikos Michaloliakos, and four other of his party's Members of Parliament are in jail awaiting trial.

Uh-oh! That's the far-left in the lead and the ultra-far-right in a healthy third place.

What's Greek for "powderkeg"? Oh, thank you: πυριτιδαποθήκη

The once-dominant PASOK ... is now dead last among the seven parties in the Parliament. The Communist party (KKE) is fourth with 4.9 percent, followed by the Independent Greeks at 4 percent, the Democratic Left (DIMAR) — a former partner in the coalition — at 3.1 percent and also in danger of disappearing as a party next, just ahead of PASOK.

SYRIZA leader Alexis Tsipras, who opposes the austerity measures and said his party wouldn't repay the $325 billion in loans granted by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB), has predicted the Leftists will come to power.

"What could possibly unite the radical left and the ultra-far-right?" Well, it's funny you should ask.

In a study late last year into the reasons why voters defect from one party in favour of another, some interesting dynamics were exposed:

(Before It's News): There are however some astonishing new signs on the "where votes were gained and lost" dimension. For example, 16% of SYRIZA defectors went to Golden Dawnsuggesting that some Greeks care nothing for political ideology, they will just back anyone who stands up to the Troika and Brussels.

Uh-huh. Remember those words: "anyone who stands up to the Troika and Brussels."

But that's just little old Greece. Who worries about them, right?

Meanwhile in France, Marine Le Pen is making some waves of her own:

(The Week): MARINE LE PEN, leader of the French far-Right party Front National, has proposed joining forces with UKIP to bring down the EU's "Berlin wall of Brussels".

Nigel Farage, battling accusations of UKIP being a racist party, has moved to distance himself from Le Pen's Front National, but Le Pen is nothing if not persistent:

Le Pen, who has joined forces with Dutch anti-Islamic leader Geert Wilders, believes UKIP is avoiding an alliance due to "electoral considerations" and might reconsider in the future.

"They say they're not in agreement with us. My foot," she told the Daily Telegraph. "OK, we don't have the same economic policies [but] they share our point of view on the European Union and immigration: everyone must control his borders, European technocrats must disappear, the European Soviet Union must collapse, everyone must have their own currency, their economic policy and decide in their own home."

Le Pen's surge in the polls is driven, unsurprisingly, by the same motivations as those propelling Greece's right and left wings forward:

Front National could emerge as the leading party in France's European elections with the backing of 24 per cent of voters, according to one poll by research firm Ifop.

It is just one of several anti-immigration and anti-EU parties gaining ground in Europe, where many have lost faith in the ability of the European Union to help kick-start their faltering economies, says the Telegraph.
"How to improve the European Union?" asks Le Pen. "By making it collapse. We brought the Berlin Wall down. I want to bring the Brussels wall down. I expect one thing only from the European system and that's for it to explode."

Fairly clear.

Italy?

(Europe Online): The eurozone should split, with weaker economies adopting a different currency from Germany, Italy's protest party leader Beppe Grillo said Thursday, riding on anti-euro sentiment ahead of European elections.

"It is our small, modest proposal: With France, Greece, Ireland, Spain and Portugal, we should go there and ask for a two-speed euro, if we do not want to leave altogether," Grillo said.

He vowed to hold a referendum on the issue even though it would require a change in Italy's constitution, which bans popular votes on international agreements.

(Note the fact that an ailing France has now been co-opted by the weaker Southern economies. Core no more, it seems.)

Everywhere you look around the world, there is political upheaval. In Europe it is anti-austerity and anti-euro, the fuse lit by weak economies and mass unemployment; but elsewhere similar themes are evident as governments struggle to retain control of increasingly restless populations.

In the Ukraine we see mass protests as pro-European and pro-Russian factions fight each other in increasingly bloody street battles, while in Turkey and Egypt civil unrest has led to brutal government crackdowns.

In Thailand, disaffection with a proposal by PM Yingluck Shinawatra to pardon disgraced former-PM Thaksin Shinawatra (What? Oh, the name? Yes... Well in actual fact, she's his sister, but obviously that had no bearing on her decision to pardon her brother the disgraced ex-PM) has led to two months of increasingly violent protests in the streets of Bangkok, despite Shinawatra's offering to dissolve Parliament and hold fresh elections (that's the PM Shinawatra, not her brother the ex-PM, who is currently in exile in Dubai after being found guilty in absentia of corruption, treason, tax evasion, and gagging the press).

(I'm waiting on confirmation from my sources in Bangkok, but my understanding is that the Thai people knew the Shinawatras were siblings when they voted in Yingluck a scant two years ago.)

Meanwhile, in perennial basket cases Venezuela and Argentina, chronic inflation and the collapse of their respective currencies (again) has led to draconian capital controls, which will doubtless send thousands more into the streets:


2458.png 
Source: Bloomberg


The weakness in the peso, the Bolivar, and many other emerging-market currencies is a direct result of the Fed's attempt to taper their own QE program. The dollar has strengthened against the South African rand, the Indonesian rupiah, the Brazilian real and, an old favourite, the Turkish lira, to name but a few.

The Turkish central bank was forced to intervene in the FX markets this past week and gave us, as the good folks at Zerohedge so succinctly put it, an insight into what a central bank losing control looks like.

The lengths of the different phases in Turkey may differ from those in Argentina, but the outcome will not:

(Zerohedge): With chatter that over $3 billion has been thrown into the FX market to buy Turkish Lira, it appears the central bank is losing control quickly, and Turkish stocks are tumbling. The Turkish Lira collapsed almost 400 pips this morning to around 2.30 to the USDan all-time record low as the combination of corruption, social unrest, and Fed taper are seeing hot money outflows faster than the Turkish central bank can keep control. This is the biggest tumble in the Lira in almost 5 months as the Istanbul 100 (stocks) drops 2.9% — its biggest drop in a month; and Turkish bond yields are backing up to 2-year highs.

*TURKEY FX SALES TODAY REACHED $3B: HSBC CITES 'MARKET PLAYERS'

*TURKISH LIRA WEAKENS PAST 3.15 AGAINST EURO IN ISTANBUL

*TURKISH LIRA WEAKENS TO NEW RECORD 2.3029 PER DOLLAR

*BORSA ISTANBUL 100 INDEX FALLS 2.9% TO 65,429.29 AT THE CLOSE

*TURKEY 2YR BOND YIELDS RISE TO 10.50%, HIGHEST SINCE JAN. 2012


2471.png 
Source: Bloomberg


But let's leave for another day the simply inevitable unintended consequences of Federal Reserve actions (though you'd assume it was otherwise if you received your information only from official mouthpieces), because it's politics and politicians we are discussing this week; and as we all know, central banks are politically independent organizations.

Repeat after me:

"Central Banks are politically independent organizations."

Good.

Now, we've touched on Greece (which is always something of a tinderbox); we've touched on France (where the extremely right-wing Ms. Le Pen has laid out her manifesto in no uncertain terms); and we have also mentioned Italy (where the amusing Signor Grillo is being courted by none other than Silvio Berlusconi, a man who never saw a principled political stance he wasn't willing to take on either wing for the sake of a few votes, to form a power alliance (which will be staunchly anti-Euro of course) — but what about the United Kingdom? Yes, the country that global analytic firm Maplecroft recently classified as a 'low-risk' political environment.

Well, the UK is undergoing a "recovery" which has been much hailed by PM David Cameron in recent days, and that has to be good for any incumbent party in these recovery-starved times.
In fact, the recovery is so vibrant in Britain that the unemployment rate has fallen extremely fast to a mere 7.1%, a fact announced with great glee this past week by the prime minister.


2492.png 
Source: Bloomberg


In a virtual simulcast (so as to ensure that nobody made the cardinal error of thinking for one second that BoE governor Mark Carney's 7% threshold for the beginning of the normalization of interest rates would actually be enforced), Carney announced that the UK economy was "in a new place":

(UK Guardian): Mark Carney insisted on Friday that Britain's economy remains well short of achieving "escape velocity" from recession as the Bank of England governor said policy would remain on an emergency setting for some time to come.

In a speech to UK business leaders in Davos, Carney said the Bank's nine-strong monetary policy committee would look at its forward guidance strategy following the sharper than expected fall in unemployment in recent months.

But he hinted that he currently favoured updating rather than ditching his flagship policy initiative and pledged that the degree of stimulus would "remain exceptional for some time".

The Bank has been surprised by the recent performance of the economy, having predicted last August that it could be early 2016 before the jobless rate hit 7%.

"A few quarters of above-trend growth driven by household spending represent a good start, but they aren't sufficient", Carney said as he discussed the prospects for permanent exit from the deepest recession of the post-war era.

"It will take sustained growth, more balanced demand and a recovery in the supply side for advanced economies to break free into a more normal universe."

A central bank governor INSISTING that the economy ISN'T very strong; that's something you didn't used to see happen. Ever. don't see every day. But this is the new world of central bank-inspired subsistence, where trillions of dollars are spent to propitiate public opinion while a generation of politicians continues to encroach on everyday lives and make decisions based on their political dreams rather than on what's in the best interests of their citizens.

How "low-risk" is the UK and how strong is Cameron's "Recovery for All"?

(UK Daily Telegraph): Concerns about future violent protests over the Government's austerity measures have prompted chief constables to ask Theresa May, the Home Secretary, for authorisation to deploy water cannon in mainland Britain for the first time...

Documents disclosed by the Association of Chief Police Officers show plans have been drawn up for the cannon to be used against protesters and rioters in the future.

Police warn they expect water cannon will be required because "the ongoing and potential future austerity measures are likely to lead to continued protest".

Politicians. You can tell when they're lying because their lips move.

Occasionally, one of their own breaks ranks from the political circle, though. When they do, it doesn't end well. Quickly, yes, but not well. A case in point, former Greek PM Papandreou's outrageous suggestion in 2011 that the Greek people should vote on austerity:

November 1, 2011: (BBC News): Greece will hold a referendum on a new European Union aid package intended to resolve the country's debt crisis, Prime Minister George Papandreou says.

Last week eurozone leaders agreed on a 100bn-euro loan (£86bn; $140bn) to Athens and a 50% debt write-off, in an effort to tackle the euro crisis.

But there have been large-scale protests in Greece against austerity measures demanded by the EU.

Opinion polls in Greece show that most people do not support the austerity deal.

Mr Papandreou told a meeting of his governing Socialist party that Greek people would have the final say on the package, which is designed to reduce Greek debt by about €100bn.

"The command of the Greek people will bind us", he was quoted as saying by AFP news agency.

He set no date for the referendum, but indicated that it would be held after details of the deal have been finalised with the EU and the country's creditors.

November 3, 2011: (NY Times): In a tumultuous day of political gamesmanship, Prime Minister George A. Papandreou called off a referendum on Greece's new debt deal with the euro zone on Thursday after winning a measure of support from his opposition and managing to repair, at least for a day, a major rupture in relations with Europe.

The decision to abandon his idea of holding a popular vote on the European debt deal did not end the political turmoil here; Mr. Papandreou still faces a rebellion in his own Socialist Party and the fury of some opposition figures.

November 6, 2011: (UK Daily Telegraph): George Papandreou, Greece's embattled prime minister, will resign as soon as a deal for an interim coalition government is agreed, perhaps as early as Sunday night, a senior member from his party said....

[Antonis] Samaras rejected any compromise while Mr Papandreou remains prime minister.

"I am determined to help. Provided that Papandreou resigns, everything will take its course..."

November 7, 2011: (Der Spiegel): After days of political wrangling, Greek Prime Minister Giorgios Papandreou has agreed to step down to allow the formation of an interim coalition government including the opposition conservative New Democracy party.

As Britain's Harold Wilson famously said:

"A week is a long time in politics."

In the case of Papandreou, within a week of suggesting a referendum be held to determine what the people of Greece wanted, he was out.

Tricky things, these EU referenda.

Great Britain is another country that has pledged to hold one (though not until 2017), and this past week the duplicity of political machinations was exposed to the sunlight once more as pro-EU members of the House of Lords tried to kill the bill. It wasn't a pretty sight:

(UK Daily Telegraph): David Cameron's plan to give the public a vote on membership of the European Union could be defeated within weeks after Labour peers tabled dozens of outlandish amendments that could halt its progress in Parliament.

More than 50 amendments were tabled for the committee stage of the EU Referendum Bill, including holding a petition of a million voters, posing the questions in Cornish and giving prisoners the vote, the Telegraph has learnt.

As a private member's Bill, it has a limited time to pass through Parliament. It can only be debated on Fridays and must be approved by both houses by February 28.

Only debated on Fridays? What?

It gets worse when we get to some of the items deemed essential to discuss by the Labour peersprimarily Lord Foulkes of Cumnock, a former minister in the staunchly pro-Europe Blair government — who was single-handedly responsible for forty of the fifty-six amendments tabled.

What did Lord Foulkes deem crucial? Well, read his list of suggested amendments, and the full extent to which those of a political bent check their self-respect at the door becomes evident:

Page 1, line 2, after "A" insert "consultative."

Makes the vote non-binding

Page 1, line 4, leave out "must" and insert "may."

This would make holding the referendum optional rather than compulsory.

Page 1, line 4, leave out "must" and insert "will."

Appears to be an attempt to make the bill non-binding

Page 1, line 5, leave out subsection (3) and insert:

"( ) The Prime Minister shall propose a motion to the House of Commons, and the Leader of the House of Lords shall propose a motion to the House of Lords, appointing a day on which the referendum is to be held."

This would remove the power to set the date from the Secretary of State and would require a motion in each House instead. Creates more chances for Commons to kill the bill.

Page 1, line 5, leave out "Secretary of State" and insert "Prime Minister."

This would require the Prime Minister to make the order appointing the date of the referendum.

Page 1, line 5, leave out "Secretary of State" and insert "Secretary of State for Justice."

This would require the Secretary of State of Justice to make the order appointing the date of the referendum.

Page 1, line 5, leave out "Secretary of State" and insert "Secretary of State for Foreign and Commonwealth Affairs."

This would require the Foreign Secretary to make the order appointing the date of the referendum.

Page 1, line 5, leave out "Secretary of State" and insert "Deputy Prime Minister."

This would require the Deputy Prime Minister to make the order appointing the date of the referendum.

Page 1, line 5, after "State" insert "after consultation with the First Ministers of the devolved administrations."

This gives the First Ministers in Scotland and Wales a veto over the vote.

The full article is HERE. Read it when calm.


Quimby.psd


And on that note, having seen just how fragile the political situation is in Europe and beyond, we'll leave the world to its own devices, as I've already taken up far more of your precious time than I had intended.

But in closing I'll say this: 2014 is shaping up to be the year when the political landscape gets altered right across the globe, and in periods of great societal change such as the one I suspect we are about to see, bad things tend to happen.

Which way this goes is anybody's guess, but I strongly suspect that the European elections will cause another bout of panic in Europe this summer and lead to there being some troubling faces at the top table.

Outside of the EU, look for continued political upheaval in the Middle East (of course) and South America, as well as parts of Asia. Also, South Africa's post-Mandela landscape has yet to be determined.

The one thing that CAN be counted on through all this is the fact that politicians will remain politicians, no matter what part of the political spectrum they spring from.

You have been warned.