Meet the Fuggers or, its the Money Power stupid.
Brexit, The Euro and clueless Elites.
The Eastern Roman empire under Justinian saw the seeds of its final fall to The Ottomans when Abd El Melik started paying tribute in Gold coinage under his own Political Branding you might say.
With all the talk of Brexit being the removal of a final obstacle to the deeper federation of a European State transcending tiresome nationalism, perhaps a little review of History, particularly Monetary history, might not be such a bad thing.
In the review of European competences carried out as a consultation by the foreign office regarding Brexit and or reform requirements of the Eu, two of the papers need to be considered in the context of the Money power argument.
The first paper considered is the Subsidiarity and proportionality aspects of the Lisbon treaty and the competences of the EU institutions vis National and regional democratic institutions. This is a trade-off between Centralised Efficiency and Local democracy.
The second trade-off is the mutually exclusive realities of either Democracy or Private Credit creation, both again are not possible you can have one or the other.
EU enlargement and The monetary union had already become a bridge too far for many British Voters by the time of the Maastricht treaty. The Lisbon was a bridge too far. to mix a metaphor, The straw that broke the camels back. The Irish The Danes, The Swedes, The Dutch pretty much most populations consulted have not given the EU zealots the right answer the first time around and the EU elite simply refused to see the point and have now simply adopted the expediency of not asking.
Two pieces of folk wisdom spring to mind.
´´Quit while you’re ahead´´anon.
´´If you love something, set it free; if it comes backs it’s yours, if it doesn’t, it never was ´´.
Richard Bach.
Having achieved the ultimate power through the ECB it seems that the EU Technocrats simply did not understand that they had already become the house, if they got out more instead of indulging in mutual backslapping, they would know that the house always wins in Casino Capitalism. What this paper will seek to do is show how the EU, in failing to quit while it was ahead, has proceeded with the inevitable process of being hoisted on its own petard of hubris and Elitist Know all knows bestedness.
What follows is the proof that The ECB rules Europe with all the power of financialised capitalist Alchemy, the ECB and The Commission further choose to sacrifice national Governments to Market discipline and certain ruin at the hands of Private Bankers with the power to create money secured against the commonwealth and commons of its own Citizens. With National Governments forced to borrow in open markets without any legal recourse to the ECB as a lender of last resort. Latterly the Five presidents report seeks to justify More Europe in ´´Completing Europe’s Economic and Monetary Union´´
in the Five presidents report Mr Junker , ´´President´Ís that President No1 or President No 5, A or E , Mr Junker Then,, Or, Our Cher Jean Claude.
tells us that;
Responsible national fiscal policies are therefore
essential. They must perform a double function:
guaranteeing that public debt is sustainable and
ensuring that fiscal automatic stabilisers can operate to
cushion country-specific economic shocks. If this is not
the case, downturns are likely to last longer in individual
countries, which in turn affects the whole euro area.
But this is not enough. It is important to ensure also
that the sum of national budget balances leads to an
appropriate fiscal stance(5) at the level of the euro area
as a whole. This is key to avoiding pro-cyclical fiscal
policies at all times.
(5). The concept of fiscal stance reflects changes to the fiscal balance in order to influence aggregate economic demand and output. Under the Stability and Growth Pact,
the fiscal stance is measured on the basis of the structural fiscal balance, i.e. the fiscal balance corrected for the effects of the economic cycle and net of one-off and
other temporary measures. Generally speaking, a fiscal deficit (surplus) would suggest an expansionary (contractionary) fiscal stance
4.2. A fiscal stabilisation
function for the euro area
There are many ways for a currency union to progress
towards a Fiscal Union. Yet, while the degree to which
currency unions have common budgetary instruments
differs, all mature Monetary Unions have put in place
a common macroeconomic stabilisation function to
better deal with shocks that cannot be managed at the
national level alone.
This would be a natural development for the euro area
in the longer term (Stage 2) and under the conditions
explained above, i.e. as the culmination of a process of
convergence and further pooling of decision-making
on national budgets. The objective of automatic
stabilisation at the euro area level would not be to
actively fine-tune the economic cycle at euro area
level. Instead, it should improve the cushioning of large
macroeconomic shocks and thereby make EMU overall
more resilient. The exact design of such euro area
stabilisers requires more in-depth work. This should be
one of the tasks of the proposed expert group.
An open Letter to President Trump regarding the federal reserve could with a few minor word changes apply equally well to the abject failure of the European presidents to understand Modern Money.
http://www.monetary.org/wp-content/uploads/2017/02/President-Trump.pdf
“In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money. The reality of how money is created today differs from the description found in some economics textbooks: • Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.” (Emphasis BoE), Money Creation in the Modern Economy, 2014
The Bank of England seems to have let the UK government know the ECB has perhaps not been so forthcoming with the ´´FIVE´´presidents.
At this point for you dear reader and the `Five Presidentees´, I would like to effect the Introduction of a Brilliant Finance Scholar, If only the Technocrats would seek out real experts rather than Cronies in considering such important matters.
Introducing Professor Richard Werner.
Joseph Schumpeter was good on money and Werner’s thesis quotes extensively from him, ( see below). Werners´ empirical evidence that private banks are making loans without reserves proves that the ECB MONETARY model is the same extractive ´´Bankster´model that has brought penury and poverty to all countries in the EU as it has across the Globalised economy. All countries even the richest ones. Schumpeter is also prescient with respect to the reality of democracy in his competing elites model. The modern model has now reached a kind of stagnation where the Elites seem now to dispense with the necessity to compete. Schumpeter’s other peculiar Genius was in identifying what democracy really means in the Modern form of Elitist Technocratic Government as represented By The EU and its Institutions. I refer of course to Schumpeter’s Competing Elites model of democracy.
To remain with Money, for now, not just the Euro and Stirling but all money falling under the auspices of the IMF, World Bank and International Bank of Settlements.
Here is Steve Keen, the very sharp professor of heterodox monetary theory tackling this question and Joseph Stiglitz in this Entertaining and educational article.
Note To Joe Stiglitz: Banks Originate, Not Intermediate, And That’s Why Aggregate Demand Is Stuffed
This is my Comment posted against the same article, providing the proof for Professor Keen´s assertions from Professor Richard Werner, Who I promised to introduce you to.
” Money created by banks when they make loans so says Ben Bernake on Live TV clip at 14.58 min
Richard Werner @ProfessorWerner First empirical test in 5000 years of banking on whether each individual bank can create money out of nothing is out
http://ac.els-cdn.com/S1057521914001070/1-s2.0-S1057521914001070-main.pdf?_tid=781b835e-8880-11e4-8cf9-00000aacb35f&acdnat=1419104788_bcaee65302916a2bab37a5cf7f63c992 …
https://positivemoney.org/2014/03/bank-england-money-money-creation-modern-economy/
If you skipped the links and took me at my word here’s a bit more of Schumpeter to tee up our shot.
“Something like a certificate of future output or the award of purchasing power on the basis of promises of the entrepreneur actually exists. That is the service that the banker performs for the entrepreneur and to obtain which the entrepreneur approaches the banker. … (The banker) would not be an intermediary, but manufacturer of credit, i.e. he would create himself the purchasing power that he lends to the entrepreneur …. One could say, without committing a major sin, that the banker creates money.” 14
Schumpeter (1912, p. 197, emphasis in original)
“[C]redit is essentially the creation of purchasing power for the purpose of transferring it to the entrepreneur, but not simply the transfer of existing purchasing power. … By credit, entrepreneurs are given access to the social stream of goods before they have acquired the normal claim to it. And this function constitutes the keystone of the modern credit structure.”
Schumpeter (1954, p. 107)
And finally Professor Werner in his own words.
´´Among the many different monetary system designs tried over the past 5000 years, very few have met the requirement for a fair, effective, accountable, stable, sustainable and democratic creation and allocation of money. The view of the author, based on more than twenty-three years of research on this topic, is that it is the safest bet to ensure that the awesome power to create money is returned directly to those to whom it belongs: ordinary people, not technocrats. This can be ensured by the introduction of a network of small, not-for-profit local banks across the nation. Most countries do not currently possess such a system. However, it is at the heart of the successful German economic performance in the past 200 years. It is the very Raiffeisen, Volksbank or Sparkasse banks – the smaller the better – that were helpful in the implementation of this empirical study that should serve as the role model for future policies concerning our monetary system. In addition, one can complement such local public bank money with money issued by local authorities that is accepted to pay local taxes, namely a local public money that has not come about by creating debt, but that is created for services rendered to local authorities or the community. Both forms of local money creation together would create a decentralised and more accountable monetary system that should perform better (based on the empirical evidence from Germany) than the unholy alliance of central banks and big banks, which have done much to create unsustainable asset bubbles and banking crises (Werner, 2013a and Werner, 2013b).
Professor Werner is the Author of the wonderful book Princes of the Yen which is also the title of a Film of the same title. It shows how the forces of neo-liberalism and dollar hegemony were used through the Federal reserve to Liberalise and ruin the Japanese economy pulling down what it had created.
Of course the WTO, IMF and International Bank of settlements all figure in our story and the Private Federal reserve is a key player in the 2008 financial Crisis, Ben Bernake being in the front seat of this speech given by Jean Claude Trichet. In 2012
President Junker waffles on unperturbed by Empirical evidence and continues to network ever more intricacies and technocratic oversights into the dream of Fully connected full spectrum Global Governance.
Again from the Famous Five do Monetary Union fiction that is ´´The Five Presidents Report´´
Consolidating the external
representation of the euro
As EMU evolves towards Economic, Financial and Fiscal
Union, its external representation should be increasingly
unified. This process may take place gradually, but it
should be put in motion starting in Stage 1.
The EU is the world’s largest trading block and the
world’s largest trader of manufactured goods and
services. It has achieved this by acting with one voice
on the global stage, rather than with 28 separate trade
strategies. The large economic and financial size and
the existence of a single monetary and exchange rate
policy for most of its members make the EU policy
decisions and economic developments increasingly
relevant for the world economy.
However, in the international financial institutions, the
EU and the euro area are still not represented as one.
This fragmented voice means the EU is punching below
its political and economic weight as each euro area
Member State speaks individually. This is particularly
true in the case of the IMF despite the efforts made to
coordinate European positions.
p.17 5 presidents report IBID
“You are not expected to understand this”
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samizdat
ˈsamɪzdat,ˌsamɪzˈdat/
noun
1. the clandestine copying and distribution of literature banned by the state, especially formerly in the communist countries of eastern Europe.
“a samizdat newsletter”
Surveying the damage done.
Summary of main points
from this corporate watch report into the ECB, Troika and the Pigs´ Crises.
https://corporatewatch.org/news/2015/jan/23/false-dilemmas-critical-guide-euro-zone-crisis
The EU is made up of a web of institutions; the main ones are the Commission, the Parliament and the Council of Ministers. It is grounded legally in a series of Treaties.
Setting up the euro zone was a lengthy process, that was from the beginning a corporate-led vision. The common currency imposed a single monetary policy (e.g. decisions about interest rates) decided centrally, but fiscal policies (e.g. decisions about taxes) decided nationally.
Monetary policy for all countries is decided by the European Central Bank (ECB), which is prohibited from lending directly to governments. Instead, governments borrow by issuing bonds bought and traded in financial markets.
Restrictions were put in place regarding targets for the size of debts (at 60% of GDP) and deficits (at 3% of GDP). These targets were enshrined in the Maastricht Treaty and further entrenched through the Stability and Growth Pact. No euro zone country ever fully complied with these targets, however, only some were berated about breaking them.
The crisis led to the creation of the Troika – comprised of the Commission, the ECB and the International Monetary Fund (IMF) – three institutions that are unaccountable, opaque and fundamentally undemocratic. They dictate the bailouts and the conditions that must be implemented in order for the recipients to receive the money.
Corporate Watch.
“The Troika acts like a governor and visits it’s colonies in the south of Europe and tells them what to do.” Derk Jan Eppink, a conservative Belgian MEP
Jeremy Bentham published a long Correspondence with Adam Smith on the title The Defence of Usury, Bentham also in that Pamphlet set out the logical basis upon which Colonialisation would make sense to a colonising power.The value of a colony to the mother country, according to the
common mode of computation, is equal to the sum total of imports
from that colony and exports to it put together.
From this statement, if the foregoing observation be just,
the following deductions will come to be made.
http://socserv2.socsci.mcmaster.ca/econ/ugcm/3ll3/bentham/usury
8. The damage that must be done to the national stock of
intelligence by the false views of the national interest, which
must be kept up in order to prevent the nation from opening their
eyes and insisting upon the enfranchisement of the colony.
9. The sacrifice that must be made of the real interest of
the colony to this imaginary interest of the mother-country. It
is for the purpose of governing it badly, and for no other, that
you wish to get or keep a colony. Govern it well, it is of no use
to you.
To govern its inhabitants as well as they would govern
themselves, you must choose to govern them those only whom they
would themselves choose, you must sacrifice none of their
interests to your own, you must bestow as much time and attention
to their interests as they would themselves, in a word, you must
take those very measures and no others, which they themselves
would take. But would this be governing? And what would it be
worth to you, if it were?
After all, it would be impossible for you to govern them so
well as they would themselves, on account of the distance.
10. The bad government resulting to the mother-country from
the complication, the indistinct views of things, and the
consumption of time occasioned by this load of distant
dependencies.
https://letthemconfectsweeterlies.blogspot.se/2014/09/on-scottish-independence-usury-and-true.html
To be fair to the Famous Five it is not only they who seemed confused, in respect of the great power vested in the ECB. The Scottish Government led by Nicola Sturgeon seem equally confused.
More from the Corporate watch excellent report.
Chapter 9: Austerity does not repay debts but it destroys people
Austerity has deepened the crisis and has created an institutional landscape that favours big business and states. Austerity turned the crisis into an opportunity by exploiting lower wages, worse working conditions, and by inviting investors to buy anything and everything at discount prices. This chapter lays out why it is imposed, some examples of what it achieves and what others have to say about it.
Chapter 10: The European Central Bank’s actions and responses
The ECB was prohibited from covering the state’s borrowing costs when the crisis hit. Instead, it responded by flooding the banks with cheap loans. The banks then often used these cheap loans to lend at much higher rates to governments. This encouraged banks to buy the bonds from their own governments, raising the probability of both of them collapsing. Eventually, the ECB bought up troubled countries’ bonds in the secondary bond market, itself a profitable business. By doing this the ECB alleviated the big private banks from the risky business of holding debts.
Chapter 11: Changes in EU structures: using the crisis as a good excuse
A new series of legislative changes alter the legal and governing frameworks of the EU. Each of these changes further entrenches austerity as well as introducing harsher repercussions if new rules aren’t followed. This means that the severe austerity implemented in the crisis countries is now generalised and applied across the EU. The Fiscal Compact and other such measures are explained.
Chapter 12: New bodies: authorities chasing their own tails
The authorities have created several new bodies to deal with the crisis. Each one has failed spectacularly at diagnosing the problems, or predicting the next fallouts.
Keeping in mind the variety of perspectives about the causes of the crisis, it is interesting to cross check them with the reforms actually implemented. Under the excuse of the crisis, authorities are introducing measures which despite deepening the crisis, strengthen future opportunities for profit making. The ‘shock doctrine’ – a method which involves exploiting the violent destruction of the existing economic and social norms, in order to bring in a new laissez-faire capitalism – is being applied to the full.2
Conclusion
By blending the state theories of Miliband and Poulantzas, we are able to see the neoliberal state in a multidimensional form. It is not solely the result of the decisions of those in power, but also a complex system that constructs its own acquiescence. The neoliberal state is a qualitatively distinct form of the capitalist state. Its authoritarianism is present not only in its unquestioned defense of the interests of capital, but also in the way that it actively seeks to shape society to be more favorable to its goals. Peripheral countries have borne the burden of this violence as their position within the world system is secondary and practically dispensable. Core countries require a much more skilled intervention through the introduction of reforms and the transformation of institutions to solidify obedience in the form of the market society. Austerity, understood as a social-historical force, is the tool of the neoliberal state to subvert democracy and promote authoritarianism.
By way of some further political theory.
http://newpol.org/content/neoliberalism-austerity-and-authoritarianism
And Political Economy.
https://en.wikipedia.org/wiki/Growth_in_a_Time_of_Debt
Economics professor L. Randall Wray criticized Reinhart and Rogoff for combining data “across centuries, exchange rate regimes, public and private debt, and debt denominated in foreign currency as well as domestic currency,” in addition to “statistical errors,” and for lacking a “theory of sovereign currency”.[5]
Other critiques point out that any correspondence between debt levels and insufficient economic growth could just as easily be reversed: it is the weak economic growth that leads to the high debt levels.[16][17][18] Others have argued that the relationship between debt and growth varies significantly between countries, meaning that an average “rule”, such as that suggested by Reinhart and Rogoff, has little meaning or policy relevance.[17][19]
Nobel Prize-winning Princeton economist Paul Krugman stated in 2013:[20]
What the Reinhart-Rogoff affair shows is the extent to which austerity has been sold on false pretenses. For three years, the turn to austerity has been presented not as a choice but as a necessity. Economic research, austerity advocates insisted, showed that terrible things happen once debt exceeds 90 percent of G.D.P. But “economic research” showed no such thing; a couple of economists made that assertion, while many others disagreed. Policy makers abandoned the unemployed and turned to austerity because they wanted to, not because they had to.
Corporate Watch point the fingure at Rogoff and Reinhart, George Osbourne one of the scalps claimed by the great Brexit debacle also quoted them famously in defence of his wrong headed Austerity Catechism. As we will see though,
There is nothing New under the sun when it comes to debt and Usury.
´´One Lesson of the Charlemagne era is that money systems should never be dependent on the presence of exceptional individuals or the existence of available gold or silver deposits.´´
Sarlenga . Lost Science of Money.
Meet The Fuggers.
Hans Fugger a weaver founded the house of Fugger in 1367 with 3000 florins . By 1488 his descendants had got control of the Tyrol silver mines by lending 150,000 florins to the Arch Duke and by that process he gained control of the Aubsburg mint, hence for 100 years control of both the Silver source and the mint gave great power to the Fugger dynasty by 1525 they charged as much as 30% on small loans and as little as 2% on large loans.
https://en.wikipedia.org/wiki/Fugger
The Hanseatic League against the Credit bankers. Is one struggle between a group of entrepreneurs and a bunch of Banksters in their case the Banksters were in Bruges. Elsewhere across the channel,
Belloc characterised the reformation as
´´a rising of the rich against the poor´´,
´and indeed Calvin had written the unfortunate statement:
´´The people must always be kept in poverty in order that they remain obedient´´.
Kampshulte I 1869 p.430 as quoted by Grisar
Weber wrote of ´´Tooth Fairy Capitalism ´´ The protestant ethic and the spirit of capitalism.
The Levellers found inspiration in the Torah, Puritanism Oliver Cromwell Usury and all of that.
And then what passed as Fake news at the time.
1634 Flagellum Pontificum John Bastwick
1652 Apologetical Narration John Lilburne
1657 Killing no murder Colonel Titus and sexby
1673 England’s Appeal from the private cabal at Whitehall Lisola.
.
https://babel.hathitrust.org/cgi/pt?id=uiuc.5260972_001;view=1up;seq=10;size=200
The degree of confirmation bias on both sides of the debate by zealots is un-nerving. Verhofstad and the Spinelli Group Zealots and the Libertarian Anarcho free market capitalism out types at the other extreme. What strikes me most about much of the expert analysis is a failure in understanding Monetary history and the huge problem of the EURO currency and ECB/Troika power relations contrasted with money as an expression of social relations. These aspects of the Enlargement and federalisation of the EU are coming around again in Greece and heating up horribly presently in Italy. Democracy and privatised monetary power are mutually exclusive, the EURO and ECB has failed to find the required compromise, which is ironic when the Father of the EURO really does have most of the answers.
Meet Bernard Leitaer.
Denmark and Sweden and the UK have the most interesting relationship with the EU, Sweden is very active in seeking parliamentary reasoned opinions and engages as a model of how good the system could be. Sadly the echo chamber aspects of EU zealotry have hampered reform. UK efforts to reform the EU have been unwelcome in the group think atmosphere and more shocks can be expected in France The Netherlands and even Germany. Finland also may well be looking for out of the EURO it has been a disaster for Finns.
https://letthemconfectsweeterlies.blogspot.se/2017/02/article-50-globalisation-and-real-seat.html
It is perhaps interesting here to note that it is a Swede that invented to Tempered Guitar Fretboard system, And a German JS Bach that gave us the Mean Tempered system.
https://letthemconfectsweeterlies.blogspot.se/2012/07/true-temperament-curly-frets.html
The metaphor is really just a variation on Square pegs and Round holes. Curly frets really are a pre requisite for reaching harmony with the mean temperament of the EU Piano.The question is what is concert pitch and which key will we play in? A promising metaphor this, look out for some more jokes and puns on this.
But here the federalist Band plays on as the titanic sinks.
http://www.politics.co.uk/blogs/2017/02/15/everything-you-need-to-know-about-article-50-in-five-minutes
Meanwhile in Italy, who learned a thing or two with Machiavelli, the Borgias and Medicis.
http://uk.reuters.com/article/uk-italy-s-p-probe-idUKKBN1541H6
By Vincenzo Damiani | TRANI, ITALY
An Italian prosecutor has asked for five current and former managers at credit ratings agency Standard & Poor’s to be jailed for alleged market manipulation in relation to a sovereign downgrade of the country, a court heard on Friday.
Rating agencies have come under fire in Italy for their role during the sovereign debt crisis, when a series of cuts to the country’s ratings compounded economic and political problems that sent borrowing costs soaring.
Italian prosecutor Michele Ruggiero asked for jail sentences of between two and three years and fines of up to 500,000 euros for the officials, as well as a fine of 4.6 million euros for the rating agency itself.
A new hearing is scheduled for Jan. 25 and the judge is expected to then set a date for the verdict.
S&P said none of the accusations were backed up by proof.
In emailed comments, the agency said the various hearings had repeatedly shown S&P’s analyses had been in line with reports from the Bank of Italy and leading international institutions.
“The accusations against Standard & Poor’s are based on a bad interpretation of normal analytical debate, crucial for our ratings process,” it said.
Only four of the five people Ruggiero wants jailed are still with S&P.
The investigation against Standard & Poor’s, as well as rivals Fitch and Moody’s, was launched by prosecutors in Trani, southern Italy, in January 2012 following complaints by consumer associations.
http://www.theglobeandmail.com/report-on-business/international-business/european-business/charlotte-hogg-appointed-as-new-deputy-governor-of-bank-of-england/article33962727/
Canary´s from Coal Mines past. Continue to hum along to the Ode to Joy, or perhaps Colonel Bogey?
http://library.fora.tv/2009/11/06/Uncommon_Knowledge_Vaclav_Klaus
adv
But as Toby Nagle points out, it is not clear exactly what status this money has: do eurozone governments really have the right to create money, or are they simply leveraging the allowance made to them by the ECB? The behaviour of the ECB suggests that it regards eurozone governments as subordinate. They may only create the amount of money that the ECB allows them to. And that is limited by treaty.
The Maastricht treaty required European member states to limit their cyclical deficits to 3 per cent of GDP; the fiscal compact of 2012, drawn up in the aftermath of the crisis, additionally requires governments to balance their budgets over the business cycle. To ensure progress towards compliance with these rules, the ECB has several times threatened to withdraw liquidity support from commercial banks if governments did not implement the necessary fiscal consolidation measures. Banks denied liquidity support cannot facilitate government spending. The real spending constraint that eurozone member states face (and the UK does not) is the risk to the banking system arising from the conflicting objectives of central bank and fiscal authorities.
And this constraint is binding. Forced to balance their budgets and unable to reflate their economies or protect them from local shocks, eurozone governments have become more like US municipal authorities than sovereign states. But there is no equivalent of the US federal fiscal authority. As the ECB’s Mario Draghi observed recently, the monetary union is “incomplete”. In fact, the absence of a supranational fiscal authority in the eurozone is not a bug, it’s a feature. The union was designed with one monetary authority for many fiscal authorities. Such a design inevitably results in the single monetary authority also becoming the fiscal authority. Subordination of eurozone governments to the ECB is built into the design of the union.
So even if eurozone governments ended bond issuance tomorrow and funded their borrowing requirements entirely from bank lending, as Richard Werner of Southampton University has suggested, there would still be significant restriction of money growth due to ECB-enforced spending cuts and tax rises.
What should be done about Greece and what’s likely to happen
“The other half of the chief economists, like me, recognised that a single currency would be introduced, no matter how nonsensical the economics, since it was a political project. (The economics being bad, the politics was even worse: the end of democracy in Europe). They agreed with me that it was going to be a disaster. I asked the chief economist of what was then the fourth largest German bank: “If you think so, why don’t you speak up about this? You are forecasting gloom and doom, but I don’t see any reports by you or your bank about it.” His answer was shocking: He said that there had been clear instructions from the boards of all the large German banks to their staff that no report on the abolition of the D-Mark and the introduction of a European single currency that was in any way negative was allowed to be published. The economists in the private sector had been muzzled by their bosses. The same I heard from journalists. So the German media only quoted the rigged reports from the banking economists.
What should be done about Greece – and what is likely to happen
As I warned in my 2003 book Princes of the Yen, in the event the European Central Bank was to exacerbate matters greatly by creating massive credit bubbles, banking crises and recessions in its first decade of operation. The ECB then ensured a prolonged crisis by not ending these banking busts, such as in Ireland, quickly and without costs to the tax payer (as central banks are uniquely able to do). Instead, the ECB forced governments to incur massive national debts to rescue their now defunct banking systems. This way, Ireland moved from fiscal poster boy to virtual default, needing an IMF ‘rescue’.
And Still The Famous Five el Presidente’s strum on with the same old tune.
´´The euro is a successful and stable currency. It is shared by 19 EU Member States and more than 330 million citizens. It has provided its members with price stability and shielded them against external instability. Despite the recent crisis, it remains the second most important currency in the world, with a share of almost a quarter of global foreign exchange reserves, and with almost sixty countries and territories around the world either directly or indirectly pegging their currency to it. Europe is emerging from the worst financial and economic crisis in seven decades. The challenges of recent years forced national governments and EU institutions to take quick and extraordinary steps. They needed to stabilise their economies and to protect all that has been achieved through the gradual and at times painstaking process of European integration. As a result, the integrity of the euro area as a whole has been preserved and the internal market remains strong´´.
This section is developing the point that the struggle for continental European Hegemony is nothing new and that it has not always been obtained by means of war. War tends to happen only when the monetary hegemony is opposed. Arguably Saddam Hussien Accepting EUROS for oil Challenged US Dollar hegemony and caused the second Iraq War. This is a well-documented analysis that the causes of that war and also the Libyan Conflict /colour revolution against Colonel Gaddafi in Libya.
Ellen Brown, Libya Oil or Gold in Google will get you into the flow of discovering the subtexts of the greatest story never told.
From Butterboxes to Wooden Shoes: The Shift in English Popular Sentiment from Anti-Dutch to Anti-French in the 1670s
So What have the Europeans ever done for us?
´´The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” I nodded and murmured something about enlightenment principles and empiricism. He cut me off. “That’s not the way the world really works anymore.” He continued “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors … and you, all of you, will be left to just study what we do.”
Suskind, Ron (2004-10-17). Faith, Certainty and the Presidency of George W. Bush. The New York Times Magazine.
https://en.wikipedia.org/wiki/Reality-based_community
https://en.wikipedia.org/wiki/Karl_Rove
Contrast this with Marcel Champs
“I am still a victim of chess. It has all the beauty of art – and much more. It cannot be commercialized. Chess is much purer than art in its social position. (On giving up art to play chess)”
― Marcel Duchamp
And
Duchamp’s dictum, “It is the viewer [regardeur] who makes the pictures [tableaux],” would probably have been applauded by Baudelaire, who insisted on the active role of the beholder.´´
Baudelaire’s Media Aesthetics: The Gaze of the Flâneur and 19th-Century Media
By Marit Grøtta
or
“Beholder, wake up. Seer (and Apprentice Seer), stick out your thumb. Beholder, you may view the Seer’s card.”
From Bonus Pack 2, on Team Village
Normally, the Beholder and the Seer are on the same team and, like the Masons, can afford to have one party lie knowing other will be there to back them up. But this dynamic turns on its head if the Beholder sees that the Seer has been turned into a Werewolf.
http://onenightultimate.com/?p=275
And
Today, chess programs have become so good that even grandmasters sometimes struggle to understand the logic behind some of their moves.
Kenneth Rogoff
karelvan wolferen says
´´But it still leaves us with the puzzle of why Asians as well as Europeans, whose EU trade commissioners have been mouthing the same job creating nonsense around the TPIP that has come with the TPP, appear unable to tackle intellectually the dominant power aspects of these treaties. Perhaps because they exist in a world of their own that is politically sterilized by current economic suppositions. More generally, the concept of power (not influence with which it is often confused) receives a stepmotherly treatment in popular as well as serious writing, and the social science denizens of academia are entirely at sea with it. Mainstream economics is ahistorcal on purpose and hence has no room for power, which has helped continue the fateful division of political and economic affairs into separate realms for discussion that has long served the interests of power elites´´
http://www.karelvanwolferen.com/49-the-predators-behind-the-tpp-14-oct-2015/
Wolferen has more to say , this for instance.
´´Since the political dimension to economic arrangements in the United States remains hidden in most discourse because political and economic reality are routinely treated as separate realms of life, few notice that what is justified in the United States by casting it in terms of the market at work, is frequently the result of heavy political involvement and interference. Politically well-connected American corporations, paying for the election expenses of Congress members who determine their fate, need not fear ‘market forces’. If the banks responsible for the credit crisis of 2008 and the subsequent world-recession that is still with us, had not been lifted out of ‘the market’ by the state, they would no longer exist. Powerful corporations have been allowed to swallow the state; they have as the power sensitive economist James Galbraith calls it, created a ‘predator state’, which they of course exploit for their own expansion. There is no frame of reference with which we can more convincingly define the TPP.´´
Some before and after Discourse on Brexit. Pillow Talk Tett and Lord King.
Gillian Tett and Lord King.Tett after New your law school
Tett before question time.
Will Rogers quote for 30´s trickle down
Brandon Weber
@brandon.weber.upw
I’m a labor union historian, educator, change catalyst, and a dreamer. I strongly believe in the ability of working people to kick ass via social media.
Brandon Weber´s meme posting on Facebook is a practical demonstration of the observation of Benjamin Franklin’s regarding ignorance of monetary policy in respect of general discourses on politics.
85000 views and 379 comments only One regarding the money power.
Number of mentions of money 1, One a SINGLE ONE.
In 1729 Benjamin Franklin wrote a pamphlet ´´A modest Enquiry into the nature and the necessity of a paper Currency.”
a modest enquiry,
”There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricate, more difficult to acquire in any Degree of Perfection than This, and therefore none more generally neglected. Hence it is, that we every Day find Men in Conversation contending warmly on some Point in Politicks, which, altho’ it may nearly concern them both, neither of them understand any more than they do each other.
Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.
To proceed, then,
There is a certain proportionate Quantity of Money requisite to carry on the Trade of a Country freely and currently; More than which would be of no Advantage in Trade, and Less, if much less, exceedingly detrimental to it.
This leads us to the following general Considerations.”
http://founders.archives.gov/documents/Franklin/01-01-02-0041
https://letthemconfectsweeterlies.blogspot.se/2016/11/the-giant-sucking-sound-sharp-intake-of.html
Nafta and EU enlargement are interesting siblings and of course, the promises made for CETA TTP and TTIP are all too redolent of the Apple not falling far from the tree.
First the comment that explained the probable meaning of Will Rogers in the Trickle down meme.
Mick Serridge Century of Enslavement: The Assassination of John F. Kennedy and the Federal Reserve Bank Conspiracy. The truth is that the Federal Reserve is not federal at all, but owned since 1913 by twelve super-wealthy International Banking families, such as the Rothschild’s and the Rockefellers. They are the ones that control this country behind the scenes. They make public enemies of anyone who questions their methods or throw light upon their obvious crimes. To understand this theory we must understand that the real power is not with the politicians, but with the International Bankers. The money powers preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. What JFK did was to create interest-free government money, backed up by the silver reserve, contrary to the Federal Reserve money, which is not backed up by anything as we will see. He wanted to pay off the US debt this way. So by signing Executive Order 110, he was about to put the Federal Reserve Bank and the International Bankers out of business. The Federal Reserve Notes would eventually not be in demand anymore, and by doing so, Mr. Kennedy probably also signed his own death warrant. Executive Order 110 gave the U.S. the ability to create its own money backed up by silver. He obviously knew the secret about the Federal Reserve, and decided to follow the Constitution. Of course, this was a very dangerous thing to do, because if he was allowed to continue, it could put the International bankers out of business in the long run. So this was even more serious than to reorganize the CIA. This is a well hidden secret, but can even be verified in “Encyclopedia Britannica”, and by the statements in this article, as we shall see. This setup is against the US Constitution, where the government is supposed to create our money (the 16th Amendment), which should be backed up by gold and silver.
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Roger Lewis Great Comment. https://www.youtube.com/watch?v=iFDe5kUUyT0
The Biggest Scam In The History Of Mankind -…
YOUTUBE.COM
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. https://letthemconfectsweeterlies.blogspot.se/2017/02/article-50-globalisation-and-real-seat.html
The Drive of this paper is based upon the more substantial book-length analysis by Dr Richard North, linked to by this web site.
http://www.eureferendum.com/blogview.aspx?blogno=86251
The 406 page Flexcit report THE LEAVE ALLIANCE Flexcit A plan for leaving the European Union may be found at the link.
http://www.eureferendum.com/documents/flexcit.pdf
Flexcit Money?
Mansfield Money?
in 2014 the Institute for economic Affairs held a competition, The Brexit prize which awarded 100,000 pounds to the winning Brexit strategy.
The winner was Ian Mansfield a foreign office Staffer based at the time in the Philippines, here’s a link to the winning Paper.
UK commonwealth office Money?
This is an extensive report from consultation carried out to inform the UK prime minister in the seeking of a reform and change to the relationship of the UK with the EU. This report highlights a number of questions about the EU and its effectiveness and its failings. Clearly, there are successes in the EU as well and the EU and UK positions are both flawed by their failing to tackle the political economy questions and theory of democracy and governance questions related to Monetary policy and who creates the Credit or money of the Nation, or the Stae or the Alliance.
https://www.gov.uk/government/consultations/eu-enlargement-review-of-the-balance-of-competences
Subsidiarity, Proportionality and Democracy.
A. Subsidiarity Introduction 1.1 Subsidiarity is not a type of competence, but rather a principle that must be followed by the EU when considering whether or not to exercise competence. The subsidiarity principle sets out that the EU should only act if the objectives of the proposed action cannot be sufficiently met by the Member States, and can be better achieved by the EU. It therefore regulates the exercise of powers at EU level. This principle underpins the balance of competences as, when the EU has competence, there is an important question about whether the EU should exercise that competence or it should be exercised at Member State or sub-national level. Subsidiarity is also considered important for democracy, as it involves a preference for decision making closer to citizens.
The UK has a strong tradition of parliamentary sovereignty, that is to say, Parliament is the supreme legal authority. Its constitutional arrangements differ significantly from those found in many other EU Member States, which typically have single written constitutions. There have been considerable https://en.wikiquote.org/wiki/Karl_Rovechanges to the constitution in the UK in recent years, including through the devolution of substantial powers to Scotland, Wales and Northern Ireland. Subsidiarity in the EU, the choice between the EU, national or subnational levels, is therefore a subset of an even broader issue, as the same choice exists internationally; the choice of action at global, regional or national level and within nation states, the choice of action at national or a range of subnational levels.
18 Review of the Balance of Competences between the United Kingdom and the European Union: Subsidiarity and Proportionality 1.4 The subsidiarity principle in its current form only applies in areas of non-exclusive EU competence. If the EU has exclusive competence, the argument goes, then the EU is the only actor empowered to act, and it should therefore only consider whether or not to act.
Whilst it is a ‘legal’ principle, in the sense that the EU institutions are legally bound to apply it, putting it into practice requires significant political judgement and compromise. The Treaties’ definition of subsidiarity is high-level and general. Different decision makers will be influenced by diverse political views, national cultures and constitutional orders when judging which actor – an EU institution, the Member States, or subnational authorities – is best placed to achieve an objective.1
Stalin´s Idea of Subsidiarity and Proportionality according to krushev.
When Stalin Died Krushev denounced him, Brexit is an analogue for the denunciation of the EU (Stalin) yet the EU is still alive or though diminished. I quote the passage in Krushevs´ Speech as it deals with Stalins´ treatment of the Yugoslav crisis.
One can draw one´s own conclusions, but I draw parallels to Putin, To Syria to the Ukraine and of course the Slovenian debt crisis of a few years back. ´´Once as Tragedy and then as Farce´´ Indeed. The parallels to the Errancy of the UK, by some measures and rhetoric, are startling.
https://www.marxists.org/archive/khrushchev/1956/02/24.htm
Speech Delivered: February 24-25 1956;
At the Twentieth Congress of the CPSU February 24-25 1956, Khrushchev delivered a report in which he denounced Stalin’s crimes and the ‘cult of personality’ surrounding Stalin. This speech would ultimately trigger a world-wide split:
The July Plenum of the Central Committee studied in detail the reasons for the development of conflict with Yugoslavia. It was a shameful role which Stalin played here. The “Yugoslav affair” contained no problems which could not have been solved through Party discussions among comrades. There was no significant basis for the development of this “affair.” It was completely possible to have prevented the rupture of relations with that country. This does not mean, however, that Yugoslav leaders made no mistakes or had no shortcomings. But these mistakes and shortcomings were magnified in a monstrous manner by Stalin, resulting in the breakoff of relations with a friendly country.
I recall the first days when the conflict between the Soviet Union and Yugoslavia began to be blown up artificially. Once, when I came from Kiev to Moscow, I was invited to visit Stalin, who, pointing to the copy of a letter recently sent to [Yugoslavian President Marshal Joseph] Tito, asked me, “Have you read this?”
Not waiting for my reply, he answered, “I will shake my little finger – and there will be no more Tito. He will fall.”
We have paid dearly for this “shaking of the little finger.” This statement reflected Stalin’s mania for greatness, but he acted just that way: “I will shake my little finger – and there will be no Kosior”; “I will shake my little finger once more and Postyshev and Chubar will be no more”; “I will shake my little finger again – and Voznesensky, Kuznetsov and many others will disappear.”
But this did not happen to Tito. No matter how much or how little Stalin shook, not only his little finger but everything else that he could shake, Tito did not fall. Why? The reason was that, in this instance of disagreement with [our] Yugoslav comrades, Tito had behind him a state and a people who had had a serious education in fighting for liberty and independence, a people who gave support to its leaders.
You see what Stalin’s mania for greatness led to. He completely lost consciousness of reality. He demonstrated his suspicion and haughtiness not only in relation to individuals in the USSR, but in relation to whole parties and nations.
We have carefully examined the case of Yugoslavia. We have found a proper solution which is approved by the peoples of the Soviet Union and of Yugoslavia as well as by the working masses of all the people’s democracies and by all progressive humanity. The liquidation of [our] abnormal relationship with Yugoslavia was done in the interest of the whole camp of socialism, in the interest of strengthening peace in the whole world.
The importance of the Central Committee’s Politbiuro was reduced and its work was disorganized by the creation within the Politbiuro of various commissions – the so-called “quintets,” “sextets,” “septets” and “nonets” Here is, for instance, a Politbiuro resolution from October 3, 1946:
“Stalin’s proposal:
“1.The Politbiuro Commission for Foreign Affairs (’Sextet’) is to concern itself in the future, in addition to foreign affairs, also with matters of internal construction and domestic policy.
“2.The Sextet is to add to its roster the Chairman of the State Commission of Economic Planning of the USSR, comrade Voznesensky, and is to be known as a Septet.
“Signed: Secretary of the Central Committee, J. Stalin.”
What [sophistry]!
(Laughter in the hall.)
It is clear that the creation within the Politbiuro of this type of commissions – “quintets,” “sextets,” “septets” and “nonets” – was against the principle of collective leadership. The result of this was that some members of the Politbiuro were in this way kept away from participation in reaching the most important state matters.
One of the oldest members of our Party, Klimenty Yefremovich Voroshilov, found himself in an almost impossible situation. For several years he was actually deprived of the right of participation in Politbiuro sessions. Stalin forbade him to attend Politbiuro sessions and to receive documents. When the Politbiuro was in session and comrade Voroshilov heard about it, he telephoned each time and asked whether he would be allowed to attend. Sometimes Stalin permitted it, but always showed his dissatisfaction.
Because of his extreme suspicion, Stalin toyed also with the absurd and ridiculous suspicion that Voroshilov was an English agent.
(Laughter in the hall.)
It’s true – an English agent. A special tap was installed in his home to listen to what was said there.
(Indignation in the hall.)
By unilateral decision, Stalin had also separated one other man from the work of the Politbiuro – Andrey Andreyevich Andreyev. This was one of the most unbridled acts of willfulness.
Looking at the experiences of different countries under the European Union Enlargement since Maastricht and the Political tourniquets applied ever tighter since Lisbon and one sees all of the Failings of Stalinist Five-year plans and a sort of Lysenkoism regarding their efficacy
A doubling down on the insistence upon an elite narrative of Ideal reality which simply could never become the Picture of any objective observer.
There is no shortage of empirical reports that show the realities of the failure of European monetary policy as dictated by the ECB and the Troika and yet the Theories are clung to furiously in all of their Pareto, Turing complete, algorithmically opaque beauty, The evidence must surely be wrong? Think again mon Cher Jean-Claude.
Abstract Based on survey data covering 8,387 firms in 20 countries we compare credit demand and credit supply for firms in Eastern Europe to those for firms in selected Western European countries. We find that firms in Eastern Europe have a higher need for credit than firms in Western Europe, and that a higher share of firms is discouraged from applying for a loan. The higher rate of discouraged firms in Eastern Europe is driven more by the presence of foreign banks than by the macroeconomic environment or the lack of creditor protection. We find no evidence that foreign bank presence leads to stricter loan approval decisions. Finally, credit constraints do have a real cost in that firms which are denied credit or discouraged from applying are less likely to invest in R&D and introduce new products.
WORKING PAPER SERIES NO 1421 / FEBRUARY 2012 WHO NEEDS CREDIT AND WHO GETS CREDIT IN EASTERN EUROPE? by Martin Brown, Steven Ongena, Alexander Popov and Pinar Yesin
http://www.marketoracle.co.uk/Article54197.html
The Balkanization of Europe is well on its way in, appropriately, the Balkan area and surrounding nations. A conference on closing borders in Austria yesterday was attended by Albania, Bosnia, Bulgaria, Kosovo, Croatia, Macedonia, Montenegro, Serbia and Slovenia. But not Greece or Germany. These are not all EU members, but most would like to be. Greece doesn’t like it one bit, it has threatened to block all EU decision until this is resolved, and recalled its ambassador to Vienna today..
Six countries has (re-)introduced border checks: Belgium, France, Austria, Denmark, Norway and Sweden. Many more have have erected razor wire fences. Hungary has the loudest voice; it announced a referendum on refugee quota yesterday. Quota that by the way are not worth the paper they’re written and translated into 20-odd languages on. Out of 160,000 agreed on, only some 500 refugees have been relocated.
The EU’s response so far has been a sort of para-military police force, Frontex, and now even NATO. As if refugees are a military threat. It’s amusing to see that many nations accuse Greece of not closing its borders properly, but never explain how that should be done when that border happens to be at sea. Just like they’ve never sent the people or equipment they vowed to make available. The EU in the end is proving to be toothless.
A German newspaper reports that a government document in Berlin talks about 3.6 million refugees in the country by 2020. That can only make one wonder what Europe will look like in 2020. But more importantly, we should wonder what Greece will look like in, say, a month from now. Since Frontex and NATO can’t stop the refugee flow any more than Greece itself can, and borders to countries to the north are closed, tens if not hundreds of thousands of people may get stranded in the country.
Europe has played a major role in turning Ukraine into a failed state, and did the same in Libya, Iraq and Syria. Unless someone shows some leadership soon and the chaos is stopped from spreading further, Greece could well be next on the list.
What I personally find deep black hilarious is that many if not all of the countries involved have signed a whole slew of both European and international laws, but even something as elementary as the Geneva convention gets thrown out the window seemingly at will. Just as black is the question: do refugees also have the right to asylum when they’re fleeing your own bombs?
https://www.theautomaticearth.com/2016/02/the-balkanization-of-europe/
Back to the Democratic deficit. And Subsidiarity and proportionality.
in the Maastricht Treaty which entered into force in 1993. Provisions in the Treaty were broad, stating that ‘in areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community’.5
5 Article 3b in the Treaty establishing the European Community (TEC) as set out in the Maastricht Treaty. Text as adopted in 1992, available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:JOC_1992_224_R_0001_01&from=EN
1.15 In particular, the Lisbon Treaty introduced changes to subsidiarity in terms of: • Scope – adding an explicit reference to regional and local dimensions: the Treaties now require consideration of the effectiveness of European, national and local/ regional action towards achieving the desired objective; and • Enforcement: creating new mechanisms to police compliance with the principle by national parliaments, arguably the actor with the greatest connection to citizens in the EU context. 1.16 One commentator described three purposes of these changes as being: 1) To shift the focus from ex-post judicial enforcement of subsidiarity, more towards ex-ante political enforcement of subsidiarity; 2) […] To introduce an external scrutiny of EU competence by engaging the institutions which had the greatest interest in the enforcement or abuse of subsidiarity, i.e. the national parliaments; and 3) […]To borrow some of the democratic legitimacy of the national parliaments so as to bolster the EU’s own political mandate.14
14 Professor M. Dougan and Dr T. Horsley, University of Liverpool, submission of evidence.
NOTE RL. Note that exclusive competence on Monetary policy is excluded from the Subsidiarity principle.
´´Give me control over the money creation and I care not who makes its laws´´Mayer Rothschild-.
Under the principle of subsidiarity, where the EU does not have exclusive competence it can only act if it is better placed than the Member States to do so because of the scale or effects of the proposed action.
1.20 The ‘ordinary legislative procedure’ (formerly known as ‘co-decision’) is now the main way that EU legal acts such as regulations and directives are adopted. In most cases, only the European Commission can propose a new legal act. For the proposal to become law, it must be jointly adopted by the Council (which is composed of Ministers from each Member State) and the European Parliament. Under this procedure, the Council acts on the basis of qualified majority voting (QMV), where a specified majority of votes is required, with the share of votes of each Member State reflecting its population size. In a small number of areas, EU legal acts are adopted under ‘special legislative procedures’ with different voting rules or actors. For example, in some cases, the Council acts by unanimity, without co-decision by the European Parliament.
Parliamentary Scrutiny: Document-Based, Mandating and Mixed Systems One Mechanism for National Parliaments to Feed in Subsidiarity Concerns
Document-Based Systems In document-based systems, parliaments focus on scrutinising legislative proposals and other documents produced by the EU institutions. They do not generally aim to mandate government ministers. Countries with document-based systems include the UK, as well as France, Germany, Ireland, Italy, Cyprus, Portugal, Belgium, Luxembourg, Bulgaria, and the Czech Republic. The relevant committee will normally report to the full chamber its views on an EU document’s political and legal importance, which may include views on subsidiarity and proportionality. Some systems have a scrutiny reserve which provides that ministers should not agree to proposals at Council until scrutiny has been completed. Both chambers of the UK Parliament adopted a document-based scrutiny system in the 1970s when the UK joined the EU. The UK Government deposits most types of EU documents in Parliament shortly after publication, along with an Explanatory Memorandum summarising the document and the Government’s position. The European Scrutiny Committee in the House of Commons and the EU Select Committee, and its six sectoral sub-committees, in the House of Lords scrutinise these documents. The scrutiny reserve resolutions of both Houses provide that government ministers should not agree to proposals in the Council until scrutiny has been completed. Whilst the UK Government can override the scrutiny reserve by agreeing to documents in the Council, both Committees are able to hold the Government to account for overrides including by calling ministers to appear before them.
Mandating Systems
The Danish Folketinget was the first national parliament in Europe to establish a mandating system. The Danish Government must inform the European Affairs Committee about the Council agenda, seek a mandate on proposed negotiating positions, and obtain a negotiating mandate before important decisions. Some 75 mandates issue each year. The Government is expected to stick to the mandate and may have to ask for a new mandate if a proposal changes fundamentally during negotiations. The Danish tradition of minority coalitions means that it is in the Government’s interest to ensure parliamentary support for EU policies. Its subsidiarity checks are based on close cooperation between the European Affairs Committee and the sectoral committees.*
1.39 Since the entry into force of the Lisbon Treaty, two ‘yellow cards’ have been issued but as yet no ‘orange cards’.
http://www.bbc.com/news/uk-politics-eu-referendum-35471248
In May 2012, the commission withdrew a draft law, Monti II, that would have introduced a new EU mechanism for settling labour disputes, after 12 parliaments objected.
According to Ian Cooper, a political analyst at Cambridge University, the Danish parliament led that yellow-card initiative. National MPs had co-ordinated their arguments face-to-face, helped by their representatives in Brussels, he said in a blog.
In October 2013, the UK was among 11 parliaments that objected to a commission proposal to create an EU public prosecutor’s office. On that occasion, the commission decided to maintain the proposal, despite the yellow card.
An orange-card procedure also exists, but has not been used yet. If a majority of national parliaments jointly oppose a draft law, the commission has to review it.
The failure to use the orange card shows that national MPs are focused on national interests, and “struggle to find a common stance on European issues”, Agata Gostynska of the Centre for European Reform told the BBC.
1.41 The Lisbon Treaty also introduced new provisions which allow national parliaments to request their government to take a case to the ECJ on their behalf where they determine that legislation adopted breaches the subsidiarity principle. The UK Government and the European Committees in both Houses of Parliament have signed a Memorandum of Understanding to set out the procedures by which the UK Parliament may make use of these new powers.32 1.42 These new provisions have not yet been used in the UK, or indeed in any other Member State. But the UK Parliament has indicated its willingness to consider making use of the power to bring a legal challenge to proposals on subsidiarity grounds. In July 2014, the Chair of the House of Lords EU Committee wrote to the President of the European Commission regarding a proposal for a directive on occupational pension schemes (8633/14) which the Committee considered failed to respect subsidiarity, as the vast majority of such schemes were in four countries only and the Commission had not provided any qualitative or quantitative substantiation of the need for EU action and that they could not be addressed sufficiently by Member States.33 The letter concluded that if the proposal were adopted as currently drafted, the Committee would be minded to recommend consideration of a legal challenge to it. A revised draft was published in October 2014, and it remains under consideration.
European Public Prosecutor’s Office (EPPO) National parliaments delivered a second ‘yellow card’ on 28 October 2013 on a draft legislative proposal to establish a European Public Prosecutor’s Office (EPPO); with a total of 19 votes from Parliaments in 11 Member States, including the UK. The proposed EPPO would be able to prosecute fraud against the EU budget directly in national courts. The Commission published its response on 27 November 2013, announcing that the proposal would remain unchanged. The House of Lords EU Committee and the House of Commons European Scrutiny Committee wrote to the Commission to express their concern at the swiftness with which the decision had been made to retain the proposal and the lack of consideration given to other options. They were concerned by the lack of engagement in the review process and the failure in addressing national parliaments’ concerns as well as the narrow view of subsidiarity set out by the Commission. The Commission maintained its position without making any concessions. The House of Commons European Scrutiny Committee registered its continued disappointment at the Commission’s handling of the ‘yellow card’ and concluded that the Commission has undermined faith in the ‘yellow card’ procedure. It should be noted that the UK has not opted into this proposal (which is within the scope of the Justice and Home Affairs opt-in) and so is not bound by it. * European Commission, Decision to Withdraw the Proposal for a Council Regulation on the Exercise of the Right to Take Collective Action Within the Context of the Freedom of Establishment and the Freedom to Provide Services, 2012.
1.45 The Swedish National Legislature (Riksdag) has issued a noticeably high number of reasoned opinions, and the specific way in which its scrutiny system works has been put forward as an explanation for this. The Riksdag operates a mixed scrutiny system, and examines all EU legislative proposals (as well as other EU documents) for their compliance with the principle of subsidiarity. Each proposal is sent to one of the fifteen parliamentary committees. These committees are different from the UK Parliamentary Select Committees, being more like permanent bill committees that scrutinise all domestic bills as well as EU proposals in their subject area. As such, EU proposals are dealt with and discussed via a mainstreamed process which divides the workload across committees according to their substantive area of expertise.
http://www.parliament.uk/business/committees/committees-a-z/commons-select/european-scrutiny-committee/scrutiny-reserve-overrides/
Quiqqly, Price and Value Money????
Money and Goods Are Different
Thus, clearly, money and goods are not the same thing but are, on the contrary, exactly opposite things. Most confusion in economic thinking arises from failure to recognize this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth; money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion. The value of goods, expressed in money, is called “prices,” while the value of money, expressed in goods, is called “value.”
http://www.wanttoknow.info/articles/quigley_carroll.tragedy_hope_banking_money_history
B. Proportionality
1.54 Article 5(4), paragraph 1 TEU and TFEU states: Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.
59 Some important ECJ judgements found proportionality to be a ‘general principle’ of EU law. In Fedesa, the ECJ set out an overview: The Court has consistently held that the principle of proportionality is one of the general principles of Community [EU] law. By virtue of that principle, the lawfulness of the prohibition of an economic activity is subject to the condition that the prohibitory measures are appropriate and necessary in order to achieve the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued.45
Comparison of Proportionality and Subsidiarity 1.78 Much of what has been said above with respect to subsidiarity applies equally to proportionality, although there are notable differences. Both principles are recognised by the ECJ as general principles of EU law. They therefore have a powerful status in the EU legal system, just below the status of Treaty articles, but also to be used when interpreting the Treaties. EU legislation can be struck down by the ECJ for breach of general principles of EU law. 1.79 The EU institutions must consider respect for proportionality and subsidiarity throughout the process of drafting and negotiating of legislation. Practical guidance, derived in part from the Edinburgh European Council guidelines on subsidiarity and proportionality (1992) has been carried through to the European Commission’s impact assessment process, and the Lisbon Treaty’s Protocol 2 on Subsidiarity and Proportionality. 1.80 The scope of the two principles is different. Proportionality is applicable more broadly than subsidiarity, in that it applies not only to all EU institutions but also to Member States when acting or legislating in areas governed by EU law. And proportionality applies across the board of EU law whilst subsidiarity (so far as Article 5 TEU is concerned, at least) does not apply in any area of exclusive EU competence. 1.81 There are some major differences in the role of different institutions, both in theory and in practice. Proportionality has largely been developed through the case-law of the ECJ, whereas there is very little case-law on subsidiarity. Chapter Two examines views on why courts have not played a major role to date on subsidiarity. 1.82 The development of subsidiarity as a concept has gone hand in hand with growing support for an increased role for national parliaments in the EU legislative processes, and the creation of specific mechanisms, such as yellow cards, as a means of helping increase the democratic legitimacy of the EU. However the current mechanism for national parliaments (described at 1.37) is explicitly focused on subsidiarity rather than proportionality. Whether it should also cover proportionality is considered in chapters two and three. 1.83 Whilst proportionality appears to be a less controversial concept, insofar as less evidence was received on it, the cases above illustrate its powerful role in many cases before the ECJ – as well as national courts.
C. Flexibility Clause (Article 352 TFEU) Introduction 1.84 Article 352 TFEU provides a power that can be used where no specific provisions of the Treaty confer express or implied powers to act, if such a power appears nonetheless necessary to attain one of the Treaty objectives. It provides: If action by the Union should prove necessary, within the framework of the policies defined in the Treaties, to attain one of the objectives set out in the Treaties, and the Treaties have not provided the necessary powers, the Council, acting unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament, shall adopt the appropriate measures. Where the measures in question are adopted by the Council in accordance with a special legislative procedure, it shall also act unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament.63
Treaty on the Functioning of the European Union –
C. Flexibility Clause (Article 352 TFEU) Introduction 1.84 Article 352 TFEU provides a power that can be used where no specific provisions of the Treaty confer express or implied powers to act, if such a power appears nonetheless necessary to attain one of the Treaty objectives. It provides: If action by the Union should prove necessary, within the framework of the policies defined in the Treaties, to attain one of the objectives set out in the Treaties, and the Treaties have not provided the necessary powers, the Council, acting unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament, shall adopt the appropriate measures. Where the measures in question are adopted by the Council in accordance with a special legislative procedure, it shall also act unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament.63
1.94 Some Member States have enacted additional controls on the use of Article 352 involving national parliaments. The UK has brought in additional controls on the use of Article 352 at the national level, under Section 8 of the European Union Act 2011 (‘EU Act 2011’), which requires prior parliamentary approval (in the form of an Act of Parliament) before a UK minister can support an EU proposal based in whole or in part on Article 352, with certain exemptions. Similarly, under German law, the German Government may only support the use of Article 352 after prior approval from the parliament, following an important decision by its Constitutional Court on the compatibility of the Lisbon Treaty with the German Constitution.67 1.95 Recent case-law confirms that there is no obligation on the EU actors to use powers which may be available to them under Article 352 TFEU.68
Article 352 and the German Constitution • The German Constitutional Court, the Bundesverfassungsgericht, was asked to consider whether Article 352 was compatible with the German Constitution. It found there was a problem: ‘because the newly worded provision makes it possible substantially to amend treaty foundations of the European Union without the constitutive participation of legislative bodies…’. • The German Constitution does not allow the executive (the government) to transfer the power to create new powers or competences (the Kompetenz-kompetenz) to other bodies without the involvement of the legislature (parliament). The Lisbon Treaty requires the Commission only to draw the national parliaments’ attention to Article 352 proposals but does not require national parliament approval. The Bundesverfassungsgericht therefore required any Article 352 proposals to be approved by the Bundestag and Bundesrat (the two chambers of the German Parliament) before the German representative in the EU could approve the proposal. • Much like Section 8 of the UK European Union Act 2011, that requirement poses a clear limitation on the potential for the use of the flexibility clause.
Reasons for a Growing Focus on Subsidiarity 2.8 Some evidence set out factors which could explain the growing focus on subsidiarity in the EU context. These include: • Enlargement from 6 to 28 members. It was suggested that this has made subsidiarity more important as the Commission and its officials are no longer so familiar with the situations in each Member State.10 It has also increased the diversity within and among a greater number of Member States, rendering very detailed, centralised legislation less appropriate in a number of areas.11 • Expansion of the EU’s competences. Successive Treaties have conferred new powers on the EU to act in many areas, greatly increasing the possibilities for choices to be made between EU and national or regional powers and policies. • Popular discontent with EU action. This has been one of the main drivers to develop subsidiarity protection. For example, the Senior European Experts Group notes that the European Council promoted the concept of subsidiarity following the initial Danish rejection of the Maastricht Treaty in 1992 ‘in order to counter the sense, widespread after the rush of legislation necessary for the establishment of the Single Market on 1 January 1993, that the EU had begun to intrude into too many policy areas and in too much detail’.12 • The financial crisis: Whilst some consider it resulted from too much subsidiarity (Member States inadequately controlling their financial sectors), others consider that the EU’s response has gone too far the other way by bringing in very detailed supra-national control which has limited the scope for Member States or indeed national parliaments to make choices.13 • Changing of voting rules: The shift to more frequent use of QMV rather than unanimity means individual Member States no longer have the ability to veto the adoption of laws in those areas.14 • Dissatisfaction on the part of national parliaments: in particular a perception that the EU institutions do not take into account their views.15 • Accountability: The preamble to Protocol No 2 sets out the aspiration, ‘[…] to ensure that decisions are taken as closely as possible to the citizens of the Union’.16 There remain concerns about the ‘democratic deficit’ in the EU, meaning the gap, or perceived gap, between Member State citizens and the EU institutions.
2.14 Evidence was received from the Scottish Government, the Convention of Scottish Local Authorities (COSLA), National Assembly of Wales and academics about the mechanisms for ensuring subsidiarity within the UK’s devolution settlement. The Welsh Assembly praised the excellent working relations among the different UK legislatures on subsidiarity issues. UK reasoned opinions have reflected regional/devolved concerns, for example on the European Public Prosecutor proposal reflecting the devolution of justice within the UK.27 The devolved administrations have offices in Brussels, and participate in the UK delegation to the CoR.28 2.15 Local authorities in England are represented by the Local Government Association (LGA) which also provided evidence. They estimate that half of all legislation which applies to the sector derives from EU law, whether through directly effective Regulations or through domestic implementation of Directives. For example, respondents to the Environment and Climate Change Report highlighted a number of such issues where they thought that UK competence was more appropriate than EU competence, for example, on land use planning. 2.16 Whilst Article 5(3) TEU acknowledges for the first time the place of regional and local level in EU governance, EU law itself creates no self-standing rights for regional bodies to be involved in the assessment process. Subsidiarity at this level is important – as the Electoral Reform Society observed: ‘much of EU policy is actually implemented at the sub-state level, by regional and local governments. For instance, many EU structural funds are designed to be implemented at regional level’.29 One participant in the Brussels seminar considered that national authorities tended to focus on [subsidiarity] issues
2.15
Improving the Democratic Legitimacy of the EU 2.23 Charles Grant of the Centre for European Reform notes that theory on political institutions considers different aspects of legitimacy:35 • Input legitimacy: are the institutions accountable through elections? • Output legitimacy: are the resulting laws effective and respected? Do the institutions deliver good outcomes for people? 2.24 Grant assesses the input legitimacy of the EU as somewhat mixed: ‘Given the complexity of decision-making, with power shared among many institutions, lines of accountability in the EU have never been easy to follow’.36 He considers that the recent euro area crisis has weakened input legitimacy in the EU, and as he and others point out, euro area legitimacy cannot be addressed by greater European Parliament involvement since the EU budget, over which the European Parliament has oversight, is marginal in this regard. Grant therefore argues for greater involvement of national parliaments as a way to increase the EU’s input legitimacy (whilst calling for better policies as the best way to increase output legitimacy). 2.25 Garcia argues that more time for consultations would increase input legitimacy by allowing greater consultation with civil society and other stakeholders.37 The need for longer consultation was a consistent theme in other Balance of Competences reports. And at the Emerging Themes workshop, a particular concern was raised about rushed policy making in response to crises, which caused problems further down the line.38 A Dutch parliamentary report also identifies a disconnect between citizens and EU policy-making: ‘Few citizens know that ministers attend every Council and that a key responsibility of Members of Parliament (MPs) is to scrutinise the actions of these ministers, and that MPs also operate independently in Brussels. This is a problem of input legitimacy’.39
Subsidiarity in Economic and Monetary Policy: Tensions between Efficiency and National Ownership • Participants at a panel event hosted by Bruegel considered the trade-offs between the Commission’s ability to provide rigorous and robust advice and to police properly the governance system and the question of national ownership. They argued that proper co-ordination and better analysis from the Commission would require giving up a level of national ownership that Member States were not willing to do. This presented a problem and a trade-off between an effective system and subsidiarity concerns. • They commented that different Member States or groups of Member States may be willing or need to tolerate different levels of intrusiveness from the Commission depending on the level of integration between them. They discussed the challenges that can flow from a lack of delivery on the part of Member States, which can lead to the Commission tightening the rules but in turn leads to further lack of ownership because discretion is removed. • There was a suggestion that the authority of the system (the Commission) needs to find a better balance between rule implementation and the use of a certain amount of discretion. For example, it was argued that the Commission needs to apply the Stability and Growth Pact rules with an element of discretion as this is in the common interest of all Member States. This was seen as a difficult thing to get right. However, if it is not, it was argued that co-ordination will not work. Source: HMG, Review of the Balance of Competences between the UK and the EU: Economic and Monetary Policy (published in parallel).
2.46 The subsidiarity principle applies to legislation in areas of shared or supporting competences but not when the area in question is one of exclusive EU competence. Some contest the rationale behind the exclusion of areas of exclusive EU competence from the scope of subsidiarity mechanisms in the Treaties. Barber, for example, considers that, where the EU has exclusive competence, it should be encouraged to defer as much as possible to Member States in those areas, and thus uphold the principle of subsidiarity. Barber notes that in areas of exclusive EU competence, the EU may authorise Member States to act.66 Others were not convinced that this exclusion was significant in practice. For instance, the Senior European Experts Group pointed out, ‘there are only five areas of exclusive competence (one of which does not currently affect the UK as we are not part of the eurozone) but 18 areas of shared or supporting competence, [and therefore] the application of subsidiarity is a significant issue in large parts of EU activity, including the Single Market, justice and home affairs, the environment and social policy’.67
http://journals.sagepub.com/doi/pdf/10.1177/0959680108097494
Wages and Immigration and Economic Migration within EU, Refugees and Asylum Economic Migrants outside of EU?
Wages is not the only question there are terms and conditions and the spectre of Zero Hours contracts in the UK. In the US they call it the right to work which loosely means the right to be exploited by predatory race to the bottom capitalist.
Historical Development of Economic and Monetary Policy
1.9 Economic objectives have been at the heart of the EU’s historical development since the creation of the European Coal and Steel Community in 1951 (the forerunner of the EEC). The Treaty of Rome contained the first references to co-ordination of economic and monetary policy. Member States were to regard their macroeconomic policies as a ‘matter of common concern’, while the Treaty placed a number of constraints on the way Member States should run their balance of payments. 1.10 It is arguable that these provisions were primarily motivated by the desire to ensure that balance of payments crises did not threaten the Community’s trade policy. However, they did provide a basis for the deeper economic and monetary co-operation that eventually followed.
1.11 During the decade after the Treaty of Rome, although the European Commission had put forward the idea of a single currency, few concrete moves were made towards deeper economic and monetary co-ordination. That began to change, however, following a series of events which gradually undermined the prevailing international monetary framework, namely the Bretton Woods system, with the US dollar and gold at its centre. In Europe, the resulting market turbulence forced a devaluation of the French franc (after a period of inflation) in August 1969 and shortly afterwards, a revaluation of the German deutschmark, following major capital flight from the US dollar into the deutschmark. Chapter 1: Historical Development 17
1.12 It was against this background of the rolling disintegration of the Bretton Woods system that the then EU Member States called, at the Hague Summit of 1969, for the ‘creation of an Economic and Monetary Union (EMU)’ and the ‘harmonisation of economic policies’
.2 Some immediate actions followed, such as the creation of automatic and unconditional short-term credits amongst Member State central banks in order to bolster exchange rate parities. But more fundamentally, the Hague Summit led to the establishment of the Werner Committee, under the then Luxembourg Prime Minister Pierre Werner, in order to map out the Community’s path to its declared intention of EMU. The Werner Committee reported in 1970, recommending:
• Full currency convertibility with exchange rate parities irrevocably fixed;
• Centralised monetary policy with a single external monetary policy;
• Major aspects of fiscal policy to be co-ordinated at Community level;
• Completion of EMU by 1980, with early steps focused on reducing the margin of exchange rate fluctuation, alongside greater harmonisation of national economic policies; and
• Mechanisms for monetary support over the short-term and for financial aid over the medium-term.
3 1.13 It was clear from the outset that monetary integration was to be taken in step with wider economic integration, including through the provision of the necessary monetary as well as financial mechanisms. The logic was that greater economic harmonisation should bolster the durability of the monetary arrangements. In addition, on the monetary side, exchange rate fluctuations would be reduced gradually, and within an overall zone of fluctuation against the US dollar. Initially, this objective was pursued via an arrangement that came to be known as ‘the snake in the tunnel’, created in March 1972.
1.14 However, the ‘snake’ ran into multiple problems during the 1970s, as Member States failed to adequately co-ordinate policies in the face of major external stresses, such as the US ending the Bretton Woods system in 1971 by breaking the dollar’s convertibility to gold, and the 1973 oil crisis. By 1977 only five of the Community’s nine Member States had managed to stay inside the system, and it became clear that the goal of the Werner Report (a full EMU by 1980) was badly off track.
1.15 Instead attention then focused on developing a less ambitious approach, namely exchange rate management through the European Monetary System (EMS), an idea put forward in 1977 by Roy Jenkins, the then President of the European Commission.4 The EMS, created in March 1979 in a more limited form than that put forward by the Commission, involved a deliberate degree of flexibility, both in terms of the relatively wide bands that were permitted, and through the fact that collectively agreed devaluation and revaluations were permissible within the system. Such valuation changes happened on a number of important occasions, including the major French devaluation of 1983. Initially, a 2 In 1969, the then EEC consisted of the six founding Member States: France, Italy, Germany, Belgium, The Netherlands, and Luxembourg.
3. The Werner Committee, Report to the Council and the Commission on the Realisation by Stages of Economic and Monetary Union in the Community (1970).
4. This involved the creation of the European Currency Unit (ECU), a weighted basket of Member States’ currencies. The ECU was used as the yardstick for assessing whether countries’ currencies were fluctuating within agreed bands around a central rate. It was also used as the denominator, and means of settlement, for central bank interventions in support of the agreed exchange rate parities. Over time, it also began to be used, unofficially, as a basis for private transactions.
18 Review of the Balance of Competences between the United Kingdom and the European Union: Economic and Monetary Policy number of countries opted out of the Exchange Rate Mechanism (ERM) part of the EMS, including the UK. But by 1991, following the UK’s entry in 1990, the only Member States to remain outside were Greece and Portugal.
1.16 Meanwhile, the European Council meeting in Hanover in June 1988 set up the Committee for the Study of Economic and Monetary Union, chaired by the then President of the Commission, Jaques Delors, and including all European Community Central Bank Governors. The resulting Delors Report on EMU, submitted in April 1989, set out, like the Werner Report nineteen years earlier, a plan of action to make a full EMU a reality. On the basis of the report, the December 1989 Strasbourg European Council called for an intergovernmental conference which eventually led to the Maastricht Treaty, signed in February 1992. This was the Treaty that laid out the architecture for the euro, and the process for its creation. Amongst other important measures it:
• Established that governments should avoid excessive deficits. A protocol to the Treaty specified the values of deficits and debts that countries should not exceed;
• Established a prohibition on the Union assuming the liabilities of Member States, or of Member States assuming the liabilities of other Member States;
• Abolished remaining capital controls; and
• Created a three-stage process that Member States and the Union would have to go through to create (or join) the euro: – Membership of the ERM; – A period of centralising and building the monetary institutions, including creating the ECB, alongside testing the Member States against entry criteria; and – The introduction of the single currency itself.5
1.17 However, very soon after the Maastricht Treaty was signed, the ERM entered a crisis phase. In June 1992 Denmark voted against the Maastricht Treaty in a referendum and German opinion polls suggested a majority of its population were not in favour of joining. Meanwhile, inconsistencies in the policies many Member States were running at this time, to try to keep their currencies in line with the deutschmark while also tackling high unemployment, encouraged speculative attacks against a number of currencies in the ERM. Sterling and the Italian lira exited the ERM in September 1992. Spain and Portugal devalued in November, and the Irish punt followed in January 1993. Both Spain and Ireland re-imposed temporary exchange controls during this time. Then, in August 1993, the whole system was decisively loosened, with all but the deutschmark and the Dutch guilder widening their bands to +/– 15 per cent against the European Currency Unit (compared to the original +/– 2.25 per cent for most countries).
1.18 For the UK, the painful exit from the ERM in September 1992 came on top of an already ambivalent attitude to further economic and monetary integration that had resulted in the negotiation of an opt-out from euro area membership at Maastricht earlier that year. For the other participating countries however, the experience did not stop them, from 1994 onwards, pushing on with the ‘second stage’ of EMU (primarily focused on institutionbuilding, and on meeting the macroeconomic convergence criteria) as envisaged in the Maastricht Treaty. Eleven countries adopted the euro formally at the start of 1999. Greece 5 At Maastricht, the UK secured an opt-out from joining the euro, which is set out in Protocol 15 of the TFEU. See Box 3A for further details of the UK’s unique relationship on economic and monetary policy. Chapter 1: Historical Development 19 joined two years later, one year before euro notes and coins entered circulation. Since then, Slovenia, Cyprus, Malta, Slovakia, Estonia and, most recently, Latvia have also joined, with Lithuania expected to join on 1 January 2015.
1.19 Along with the rules on excessive deficits set out in the Maastricht Treaty, the euro was underpinned by detailed rules on fiscal policy. These were enshrined in EU regulations known as the ‘Stability and Growth Pact’ (SGP), alongside a degree of closer economic co-ordination, with surveillance of Member States’ policies by the Council on the basis of Commission assessments. Additionally, a broader strategy for EU level growth and reform was agreed in the Lisbon Strategy in 2010, which set out a range of reform targets monitored largely through peer review and the open method of co-ordination.6
The Euro Area Crisis
1.20 The seeds of the euro area’s sovereign debt problems were sown in the years leading up to the crisis, reflecting weaknesses in the initial design and institutional structures of EMU, which were obscured by the relative strength of growth through most of that period. From 1999 onwards, when the ECB began to set a single interest rate for the euro area as a whole, much of the euro area periphery enjoyed low (in some cases negative) real interest rates that fuelled excess demand. Market adjustments to the euro area’s single interest rate did not function fully, with markets mispricing the risks attached to sovereign and private sector debt in a number of economies. This led to rapid consumption and credit growth, a build-up in debt, investment in non-productive assets including housing bubbles, and a steady erosion of export competitiveness against euro area partners.
1.21 The euro area sovereign debt crisis was, in many respects, the trigger that exposed and magnified these underlying problems:
• Even before the start of the crisis, trend growth had started falling under strain from adverse demographics, reflected in revisions to the Commission’s trend growth projections. As growth weakened in light of the euro area’s deleveraging challenge, it became increasingly clear that pre-crisis improvements in the real economy had been driven more by cyclical rather than structural factors than had previously been assumed. Furthermore, the structural fiscal balances of many economies (both within and outside the euro area) were materially weaker. Fiscal consolidation to address past mistakes and ensure that public finances were returned to a sustainable path became essential;
• This consolidation would also prove extremely challenging against a backdrop of deteriorating growth. Countries for which real interest rates had previously been low or negative experienced a rapid reversal, with real rates rising as growth and inflation fell, and the ECB, by definition, unable to respond optimally to economic conditions in every part of the euro area. Debt dynamics worsened markedly;
• In parallel, and as with many countries, banks came under immediate pressure as risks arising from bad debts, weak loan management and housing bubbles, began to materialise. The cost of the financial sector interventions that became necessary, allied with further market concern over the underlying health of many other banks,
6 The open method of co-ordination is an instrument of the Lisbon Strategy. It provides a framework for co-operation between Member States whereby national policies can be directed towards certain common objectives. The Lisbon Strategy was agreed by the European Council in March 2000 as an economic development plan for the EU from 2000-2010 and was the forerunner of the Europe 2020 strategy. It aimed to deal with issues such as low levels of productivity and economic growth across the EU through close co-operation between the EU and Member States, but the main targets (such as 70 per cent employment rate, and three per cent of Gross Domestic Product (GDP) spent on research and development) were not reached.
20 Review of the Balance of Competences between the United Kingdom and the European Union: Economic and Monetary Policy represented a second, growing challenge to the public finances in a number of economies. This was true even in countries such as Ireland and Spain where general government debt had previously fallen progressively to very low levels;
• An adverse feedback loop developed between a number of sovereigns and their banking sectors, under which concerns over banking sector fragility and fear that problems had not been fully and transparently identified and addressed fed concerns over each government’s ability to deal with pressures it might face. This, in turn, increased market concerns over the strength of the support that might be available to banks;
• These concerns were triggered in earnest in late 2009 when Greece made successive revisions to its 2009 deficit estimates from three per cent of Gross Domestic Product (GDP) to 12.7 per cent of GDP (Greece was subsequently assessed by Eurostat as having engaged in the ‘deliberate misreporting of [public finance] figures’).
7 For the first time, the Economic and Financial Affairs Council (ECOFIN) reprimanded a Member State (Greece) for policies that threatened the functioning of monetary union.
1.22 Collectively, these factors would represent a challenge to almost any economy. But four factors specific to monetary union lay behind the steady ratcheting of market concerns that led to the most acute phase of the crisis. The first factor was that, until the creation of temporary assistance mechanisms in 2010, and the permanent European Stability Mechanism (ESM) (which entered into force on 8 October 2012), the euro area had lacked any agreed means of providing medium-term financial assistance, by way of loans, to each other. Because of their size, International Monetary Fund (IMF) resources alone were insufficient to insulate euro area economies from market tensions. Furthermore, and as the crisis evolved, the size of the firewall available was arguably never large enough to convince markets that the euro area had the resources at its disposal to deal with the countries that might next come under market scrutiny.
8. Absent such a framework for the resolution of sovereign debt pressures, and with no precedent to draw upon, markets were unsure how and whether the euro area would address emerging pressures.
1.23 The second factor was uncertainty over whether a vulnerable economy would abide by the commitments embodied in the Treaty which referred to the ‘irrevocable’ fixing of exchange rates in EMU, or might try to negotiate an exit from the euro area. Even the suspicion of the latter would lead to markets seeking a higher reward for the redenomination risk they would bear on loans to any country unable, or unwilling, to make an unambiguous commitment to its future inside EMU.
1.24 The third factor was the absence of an effective and agreed system for addressing crossborder banking risk and resolving banking sector vulnerabilities. A sovereign’s capacity to provide recapitalisation finance is limited by the constraints of EMU membership and the bank/sovereign feedback loop. The provision of liquidity support is effectively pooled, and is the responsibility of the Eurosystem (the ECB and national central banks), implying risk would be transferred, in extreme circumstances, to the euro area as a whole. Until the creation of banking union, the euro area lacked the institutional means decisively to break the link between weak banks and weak sovereigns.
7 European Commission, Report on Greek Government Deficit and Debt Statistics (2010).
8 Although, see below on the European Central Bank (ECB), there is a legitimate question over whether it could ever have been large enough.
Chapter 1: Historical Development 21
HM Treasury compilation from various sources.
1.25 But probably the single most important factor was that the crisis revealed a significant gap in the euro area’s macroeconomic policy architecture. There was an absence of a lender of last resort to sovereign governments, which allowed a lack of confidence alone to turn liquidity problems into solvency ones (as explained by De Grauwe).10 In this context no individual euro area country had the firepower to prevent a self-fulfilling prophecy in which it could be forced by markets, through charging ever higher yields on its debt, towards needing external support. There was, in other words, no circuit breaker to prevent market concern pushing yields up, creating additional financing pressures, in turn further threatening the public finances and feeding further concerns. The ECB’s announcement of its Outright Monetary Transactions (OMT) programme in autumn 2012 provided the euro area, for the first time, with such a circuit breaker. This was vital if the euro area was to be able credibly to convince markets that it could address problems in any of the largest Member States, including Italy, were they to emerge. 9 The Outright Monetary Transactions programme under which the ECB makes purchases in secondary, sovereign bond markets, under certain conditions, of bonds issued by euro area Member States. 10 P. De Grauwe,’ Governance of a Fragile Eurozone’, CEPS Working Document, 346, May 2011.
The ECB’s announcement of its Outright Monetary Transactions (OMT) programme in autumn 2012 provided the euro area, for the first time, with such a circuit breaker. This was vital if the euro area was to be able credibly to convince markets that it could address problems in any of the largest Member States, including Italy, were they to emerge. 9 The Outright Monetary Transactions programme under which the ECB makes purchases in secondary, sovereign bond markets, under certain conditions, of bonds issued by euro area Member States.
Box 1A: The EU and the International Community The IMF has a number of important but overlapping roles. Primary amongst them are: expert surveillance of the global economy, both bilaterally via Article IV reports, and multilaterally via flagship publications such as the World Economic Outlook, Fiscal Monitor, Global Financial Stability Reports and spillovers reports; and official lending to its members who cannot meet their external balance of payments. Lending is accompanied by detailed surveillance and policy advice in order to restore economic stability. The UK contributes to the IMF’s resources via its quota subscription and temporary resources, such as bilateral loans. The IMF draws on the contributions of its membership as a whole in order to finance its lending programmes. Surveillance or analysis by the IMF often informs the work of the Group of Seven (G7) and the Group of Twenty (G20) on economic issues. There are also long-standing links between the IMF and EU mechanisms to address external imbalances amongst Member States, which have adapted and become stronger during the recent euro area sovereign debt crisis. The G20 regularly calls upon the IMF as an expert, trusted and independent advisor on economic issues. Under the Australian G20 presidency, members have agreed to ‘develop ambitious but realistic policies with the aim to lift our collective GDP by more than two per cent above the trajectory implied by current policies over the coming five years.’ Each G20 member has produced a growth strategy, outlining how it will contribute to this target. The IMF was asked, alongside the Organisation for Economic Co-operation and Development (OECD), to help quantify the potential impact, both individually and collectively, of these strategies on growth over the next five years. They will continue to act as an advisory body into 2015, looking at the progress made in implementing the measures put forward by the G20. Like the IMF, the EU is also able to provide financial assistance to Member States and third countries (non-Member States with whom the EU has close geographic, economic and political ties). These loans are subject to the recipient implementing a structural adjustment programme which aims to address the underlying problems. These assistance mechanisms have generally only been activated alongside financial and technical support from the IMF. During these programmes of assistance, both the IMF and the European Commission conduct regular reviews of the recipient to determine whether the implementation of reforms is satisfactory. In recent years, Commission proposals to provide EU financial assistance have only allowed for the disbursement of EU loans where the recipient has satisfactorily completed its most recent IMF review. Finally, in order to co-ordinate the response to the euro area sovereign debt crisis, the IMF worked in close co-operation with the European Commission and the ECB. This informal relationship between the three institutions became known as the ‘Troika’. The IMF notes that ‘co-operation through the Troika is aimed at ensuring maximum coherence and efficiency in staff-level program discussions with governments on the policies that are needed to put their economies back on the path of sustainable economic growth’. However, the decision making processes of these institutions are independent of each other
IMF FUNDING?? COLLATERAL SKIN IN GAME SERIES:
https://letthemconfectsweeterlies.blogspot.se/2015/05/on-tides-of-global-capital-david.html
https://letthemconfectsweeterlies.blogspot.se/2015/07/bricks-without-straw-economic-recovery.html
https://letthemconfectsweeterlies.blogspot.se/2015/07/bricks-without-straw-pharoh-merkel.html
https://letthemconfectsweeterlies.blogspot.se/2015/07/so-how-much-skin-do-troika-have-in-game.html
https://letthemconfectsweeterlies.blogspot.se/2015/07/on-skin-in-game-interestinf-question.html
https://letthemconfectsweeterlies.blogspot.se/2015/07/bankers-and-skin-in-game-taleb.html
https://letthemconfectsweeterlies.blogspot.se/2016/01/tragedy-and-hope-from-whence-we-came.html
https://letthemconfectsweeterlies.blogspot.se/2016/02/usury-hells-fuel-and-mans-oppressor.html
A central lack of fibre. Either moral or physical around which myths of debt are spun.
As spiders spin webs and weavers warp clothe. Spartan Ephors of prudence pass judgement on all
and stand above and astride the law. Dispensing injustice and taking clothes off the backs of The freezing
and food out of the mouths of the hungry. Passing judgement on those who perform real work,
asking always for more and demanding to pay less.
So draw the bow of truth with intentness in the eye,
Seek out the irreducible posits, the epistemological gods of homer.
If there be one free miracle let the ephors explain the rest.
What is this power of usury? Where did this power come from ?
Who is it exercised for and to whom do you ephors of usury answer to ?
And now let me ask. How do we take this power away?
Only then we shall see good faith and brotherhood restored to the commons.
©RogerG Lewis 2016
Box 1B: Fiscal Co-ordination: the Six-Pack and Two-Pack In response to the euro area sovereign debt crisis, the EU has enacted a number of measures to strengthen budgetary and economic co-ordination for the EU as a whole and for the euro area in particular. In December 2011, a new set of enhanced economic governance rules, commonly known as the six-pack, entered into force. This contained six pieces of legislation, the main components of which were as follows: • Strengthening the preventive arm of the SGP, requiring countries to make significant progress towards their Medium Term Budgetary Objectives (MTOs) and introducing expenditure benchmarks; • Strengthening corrective action under the SGP, meaning an excessive deficit procedure can be launched on the back of debt developments and setting a benchmark for the reduction of debt above the EU’s target of 60 per cent GDP; • Introducing sanctions to the preventive arm of the SGP for the euro area Member States, and new sanctions at an earlier stage of the corrective arm; • Setting out minimum standards for national budgetary frameworks and, for all but the UK, introducing the need for numerical fiscal rules to be respected in national frameworks; • Introducing a new Macroeconomic Imbalances Procedure, which extends surveillance to the macroeconomy with the aim of identifying early risks and preventing the emergence of harmful imbalances; and • Introducing sanctions for euro area countries for failure to adhere to corrective action plans under the MIP. The six-pack was reinforced for the euro area through the adoption of the two-pack, a set of further economic governance measures which entered into force in May 2013. The main components are as follows: • The introduction of additional surveillance for the euro area Member States, which must submit draft budgetary plans to the Commission by 15 October each year, set up independent bodies in charge of monitoring national fiscal rules, and base budgetary forecasts on independent macroeconomic forecasts. For those in the Excessive Deficit Procedure (EDP) there will be even tighter monitoring by the Commission; and • A process for the approval and disbursement of financial assistance for euro area countries and for the monitoring of those in financial difficulty.
Stability and Growth Pact.
2.9 As detailed in Chapter Three, although the UK participates in co-ordination mechanisms such as the SGP it is not bound by the coercive elements and has carve outs from many areas (see Box 3A). This reflects the UK’s position as a Member State with an opt-out from the commitment to join the euro. The same degree of co-ordination is not needed. So, while the UK participates in the EDP and is the subject of recommendations, these remain precisely that. No evidence suggested that the UK should be the subject of deeper economic co-ordination with the EU. Given its opt-out, some respondents questioned whether the UK needs to participate in these mechanisms at all.3 2.10 This chapter considers the reasons for policy co-ordination at international level and explains why policy co-ordination in the EU is particularly important.
2.24 The OECD argues that the payoff from collective action to tackle unsustainable public finances and rebalance global growth through pro-growth structural reform is potentially large.12 It argues that unless tackled, high government indebtedness can dampen medium-term growth prospects, through higher long-term interest rates and risks to future stability. The OECD paper further argues that through a combination of fiscal consolidation and structural reforms, a sustained reduction in global imbalances could be achieved.13 In this scenario output is higher, due to lower long-term interest rates and the removal of distortions that constrain consumption and investment in surplus countries and savings in deficit countries.
Check this ( cricular reasoning????)))
Rogoff et al, see Corporate Watch paper.
At the April 2009 G20 summit held in London, world leaders pledged to support growth in emerging markets and developing countries by raising the IMF’s lending resources to $750 billion. They also supported a general allocation of the IMF’s Special Drawing Rights, which are an international reserve asset, equivalent to $250 billion in order to boost global liquidity. In 2010, the IMF then committed to double its quota-based resources to just over $715 billion at current exchange rates, while its temporary resources grew to include New Arrangements to Borrow (NAB) worth about $575 billion and bilateral loans totalling $461 billion. The IMF also plays a crucial role in surveillance of the global economy and international monetary system, including joint Early Warning Exercises with the Financial Stability Board to spot emerging imbalances and systemic risks. In 2011, the IMF agreed an action plan to sharpen its surveillance of interconnectedness, risk assessments, financial stability, and balance of payments stability. Furthermore, its Integrated Surveillance Decision in 2012 clarified the importance of focusing on global economic and financial stability in the context of multilateral surveillance, and made Article IV consultations a vehicle not only for bilateral but also multilateral surveillance, thereby allowing the IMF to discuss the full range of spillovers from a member’s policies that might affect global stability. 2.27 Some of the earlier work on macroeconomic policy co-ordination suggested international discussion forums such as the G7 or the OECD as the best place to discuss policy co-ordination. In fact, when the global financial crisis hit, the G20 replaced the G7 as the primary steering group for the world economy.18 Pisani-Ferry argues that the G20 is a less suitable forum for the discussion of regulatory matters, as opposed to macroeconomic issues and their implications for the institutions of global governance.19 The regulatory issues, mainly the responsibility of a small number of countries with sophisticated financial systems, may overshadow the macroeconomic dimension of the global agenda. Check this ????? SKIN IN GAME???
Box 3A: The UK Opt-Out During negotiations over what became the 1992 Maastricht Treaty, the UK secured an optout from the commitment to join the euro. This opt-out, now set out in Protocol 15 to the EU Treaties, is clear that ‘the United Kingdom shall not be obliged or committed to adopt the euro without a separate decision to do so by its government and parliament’. Protocol 15 paragraph 1 states that ‘unless the United Kingdom notifies the Council that it intends to adopt the euro, it shall be under no obligation to do so’. Meanwhile, paragraph 3 is clear that ‘the United Kingdom shall retain its powers in the field of monetary policy according to national law’. As a result of this, the majority of monetary provisions and a number of economic and fiscal provisions in the Treaties and in secondary legislation do not apply to the UK. A detailed list of provisions is set out in Appendix B. In practice, this means: • First, that the UK retains competence for its own monetary policy, which is decided by the Bank of England and not the ECB; • Second, that the UK Government has a different legal obligation to all other Member States with regard to the EU’s requirements on government deficits. For example, whereas all other Member States ‘shall avoid excessive deficits’, as set out in Article 126 of the TFEU, the UK shall ‘endeavour to avoid an excessive government deficit’. In particular, and importantly, this means that the UK cannot be subject to sanctions under the SGP as the coercive provisions do not apply to the UK; • Third, that the UK’s voting rights are suspended in the areas that do not apply to it because of the opt-out. So the UK does not get to vote on areas of euro area policy, such as decisions on the Excessive Deficit Procedure and the appointment of the President and other members of the Executive Board of the ECB; • Fourth, that as a result of the opt-out, there are a number of areas of secondary legislation which do not apply to the UK. For example, the ‘two-pack’ regulations, which were adopted under Article 136 TFEU and involve tighter surveillance over euro area fiscal policy, do not apply to the UK at all. Nor do the new sanctions provisions of the ‘six-pack’ which were also agreed under Article 136 TFEU. In addition, Articles 5 to 7 of Directive 2011/85/EU on requirements for budgetary frameworks of the Member States, which place an obligation on Member States to have in place domestic numerical rules for meeting their EU fiscal targets, do not apply to the UK. Indeed, Recital 17 of the Directive explains that that the SGP reference values in Protocol 12 to the Treaties ‘are not directly binding on the UK’. ‘The obligation to have in place numerical fiscal rules that effectively promote compliance with the specific reference values for the excessive deficit, and the related obligation for the multiannual objectives in medium-term budgetary frameworks to be consistent with such rules, should therefore not apply to the United Kingdom’;
The Treaty on the Functioning of the European Union (TFEU).1
The Treaty of Lisbon amended both the Maastricht Treaty (also known as the TEU) and the Treaty of Rome (henceforth known as the TFEU).
Fifth, that despite the above, the UK does participate in the EU mechanisms for surveillance and co-ordination of fiscal and economic policies. For example, the UK participates in the Stability and Growth Pact and the European Semester. However, this is often on different terms to euro area Member States and even some non-euro area Member States, in particular due to the fact that the coercive elements of these procedures do not apply to the UK; and • Finally, the UK is not a signatory to the TSCG (the ‘Fiscal Compact’), the ESM Treaty, or the Single Resolution Fund Treaty. These are all intergovernmental Treaties that apply to the euro area or signatory Member States only. This different relationship to a number of important EU Treaty rules and pieces of legislation often means the UK takes a different approach towards this area of policy than many other Member States. Further details on legal provisions referred to in this box can be found in Appendix B.
Monetary Policy Special Position of the United Kingdom 3.5 Article 3 of TFEU states that the Union shall have exclusive competence for monetary policy for the Member States whose currency is the euro. However, when provisions on economic and monetary union were introduced in the Maastricht Treaty, the UK gave notice that it did not intend to participate in full economic and monetary union or the introduction of the euro. Furthermore, the current UK Government, in its Coalition Programme for Government, stated that Britain will not join or prepare to join the euro in this Parliament.4
3.6 The UK therefore retains its powers in the field of monetary policy according to national law. As a result, a number of Treaty provisions (notably large parts of Title VIII of the TFEU as well as provisions of the ECB Statute) do not apply to the UK.5 Protocol 15 to the TFEU specifically sets out where provisions do not apply to the UK, as shown in Appendix C.6
3.9 Article 119(2) TFEU states that the activities of Member States ‘shall include the single currency, the euro’. Therefore all Member States are expected to join the euro, unless they have negotiated a specific opt-out. The UK and Denmark are the only two Member States to have obtained a formal opt-out from joining the euro.
There is an increasing tide in favour of reconsidering fiscal austerity programmes, in recognition of the persistent effects of underemployment of labour and capital on potential output. At the same time, however, it should be recognised that weak growth in countries facing precarious fiscal positions is not sufficient evidence against fiscal austerity. Where sovereign risk is high, fiscal tightening remains an important avenue to bring down deficits at a limited cost to economic activity, as risk premiums recede over time. In addition, fiscal austerity may well have important unobserved benefits, by preventing greater macroeconomic instability which tends to arise in the presence of high sovereign risk.38
39 European Commission, Europe 2020: A Strategy for Smart, Sustainable and Inclusive Growth (2010).
Rogoff etc see skin in game, austerity and monetarism, Bollocks!!!!
from Erwan Mahé
Regular Thaler’s Corner readers are well aware of the importance I assign to money circulation, as per the famous MV of MV=PQ equation, which has enabled to avoid a good number of pitfalls in recent years.
But it is crucial to view this equation in the context of today’s real world, and not as some of our Stone Age monetarists would have us believe, with a more or less stable V, and a confusion between money supply and monetary base!
As such, my approach is at the polar opposite of that adopted in the ECB statutes. I admit to taking cruel pleasure in citing the relevant excerpts (emphasis mine, link here)
The ECB’s monetary policy strategy
At its meeting on 13 October 1998 the Governing Council of the ECB agreed on the main elements of the stability-oriented monetary policy strategy of the ESCB. These elements concern: the quantitative definition of the primary objective of the single monetary policy, price stability; a prominent role for money with a reference value for the growth of a monetary aggregate; and a broadly based assessment of the outlook for future price developments.
The prominent role of money has been signalled by the announcement of a reference value for the broad monetary aggregate M3.
The reference value for monetary growth
In December 1998 the Governing Council of the ECB announced the first reference value for monetary growth, namely an annual growth rate of 4½% for the broad monetary aggregate M3. This reference value was confirmed in December 1999. It was also announced then that the reference value would henceforth be reviewed on an annual basis.
The derivation of the reference value was based on the standard relationship between money, prices, real activity and the velocity of circulation.
This premise, which recalls the gold standard days, assumes a static relationship between money supply, prices and money velocity as per MV=PQ, but with a V set in concrete, which explains how the ECB ended up impaling itself on the Great Financial Crisis. It sparked the crisis in Europe by hiking key rates in July 2008, due to its total inability to understand that the collapse of the securitisation market would also collapse V !
3.97 Taking into account the reforms that have been made, one attendee at the Bruegel event characterised the new economic governance structure as breaking down into four unconcentric circles: • An EU circle ( the European Semester); • A euro area circle (for example, the two-pack regulations and sanctions provisions of the SGP/MIP); • An intergovernmental circle (the ESM, the TSCG and the Single Resolution Fund Treaty); and • A circle for opt-outs/exclusions (including the UK and Denmark’s opt-outs of the euro).56 3.98 One of the biggest sources of instability in the euro area arises from shortcomings in the economic governance of the single currency and associated economic policies. The economic and financial crisis exposed shortcomings in the design of the euro and the EMU. The euro area has shortcomings due to the lack of economic convergence between its members. The rules determining membership were too weak. Stephen Pickford and Paola Subacchi argued that the governance structure supporting the EMU did not provide it with an effective mechanism to achieve proper convergence, or to compensate for the lack of convergence. As a result, prior to the euro area sovereign debt crisis the SGP, the fiscal surveillance mechanism in place to safeguard the stability of the EMU, did not provide sufficient incentives for the correction of fiscal imbalances in the euro area. 3.99 Furthermore, there was insufficient responsibility on surplus countries within the euro area to reduce imbalances. Stephen Pickford and Paola Subacchi noted that: Looking back at the period from 1999-2007, it is clear that wider economic policies were insufficiently co-ordinated to prevent the buildup of serious economic imbalances within the currency area.57 3.100 Stephen Pickford and Paola Subacchi argued that greater integration of euro area policy requires fundamental reforms to its governance entailing: • A move towards a single fiscal authority; • An effective mechanism to resolve failing financial institutions; • Better incentives for the implementation of economic policy reforms; • More effective co-ordination of the single monetary policy with wider economic policies; and • An effective lender of the last resort for euro area Member States.58 56 Record of 4 June 2014 stakeholder event, Bruegel. 57 Stephen Pickford and Paola Subacchi, submission of evidence. 58 Idem.
The Role of the European Central Bank 4.39 The ECB is the central bank for the euro and administers the monetary policy of the euro area. It is one of the seven institutions of the EU listed in the TEU. The central banks of the 28 EU Member States own the capital stock of the ECB, and as such they are the owners and shareholders of the ECB. 4.40 The ECB and the national central banks of those countries that have adopted the euro together constitute the Eurosystem. The main objective of the Eurosystem is to maintain price stability, safeguarding the value of the euro. The Governing Council in October 1998 defined price stability as inflation (according to the Harmonised Index of Consumer Prices) of below, but close to, two per cent over the medium-term. Beyond this, the basic tasks of the ECB are to define and implement the monetary policy for the euro area, to conduct foreign exchange operations, to take care of the foreign reserves and the promotion of the smooth operation of payment systems. 4.41 The Governing Council is the main decision-making body of the ECB. It consists of the six members of the Executive Board as well as the presidents of the eighteen national central banks of the euro area. From January 2015, when Lithuania joins the euro area, the national central bank governors will switch to holding rotational voting rights. The Executive Board will continue to hold permanent voting rights. 4.42 The Governing Council usually meets twice a month. At its first meeting each month, it assesses economic and monetary developments and takes its monthly monetary policy decision. At its second meeting, it mainly discusses issues related to other tasks and responsibilities of the Eurosystem. 4.43 The legal basis for the single monetary policy is the Treaty establishing the European Community and the Statute of the European System of Central Banks (ESCB) and of the ECB. The TFEU generally refers to the ESCB rather than to the Eurosystem, since it was drawn up on the premise that all EU Member States would eventually adopt the euro. The ESCB comprises the ECB and the national central banks of all EU Member States. 4.44 The ECB has played an active role in managing the euro area sovereign debt crisis. Interest rates fell sharply in 2008, and have since fallen further, so that nominal interest rates in the euro area are now only marginally above zero (see Chart 4A). The ECB has also taken measures that go beyond conventional monetary policy. This section discusses some, but by no means all, of these measures. 4.45 As financial market turbulence unfolded and interbank lending slowed down, the ECB stepped in to provide liquidity to support the orderly functioning of money markets in August 2007. This was followed by joint action with the Federal Reserve in December 2007 to offer US dollar funding to Eurosystem counterparties. 4.46 In 2008, a number of further measures were undertaken to improve the overall liquidity position of the euro area banking system. The most important of these was a switch to a policy of ‘full allotment’ and fixed rates, whereby euro area banks were able to get unlimited liquidity from the ECB at the main refinancing rate provided they offered adequate collateral.
4.47 In 2009, the ECB continued to make changes to its refinancing operations. In addition, it launched its first covered bonds purchase programme in June 2009, with the aim of encouraging banks to maintain and expand their lending. 4.48 The (now terminated) Securities Markets Programme (SMP) was introduced in May 2010 to ensure depth and liquidity in dysfunctional market segments. Under the programme, the ECB could start purchasing certain debt securities markets, notably government bonds, in the secondary market. The purchases were originally sterilised so that liquidity conditions in the interbank money market remained unaffected, but in June 2014 the sterilisation was suspended.40 4.49 In 2011, the ECB continued its active financial market engagement. It changed its main refinancing operations; reaching agreements on liquidity swap arrangements, both with the Bank of England and the Federal Reserve, and announcing a second covered bond purchase programme. Arguably, the most important of these were the two Longer-Term Refinancing Operations (LTROs) offered at a fixed rate and with a maturity of 36 months. This followed severe market tensions that threatened the functioning of the money market. Over €1 trillion were allotted to banks over the two operations in December 2011 and February 2012. 4.50 In July 2012, ECB president Draghi delivered a speech saying that Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.41 4.51 Six weeks later, the ECB announced the possibility of Outright Monetary Transactions (OMTs). OMTs are interventions in secondary sovereign bond markets, providing a backstop to avoid potentially severe challenges for price stability in the euro area. As of yet, OMTs have never been used. 40 When a central bank intervenes in financial markets via the purchase of assets, it increases the money supply. A central bank can decide to ‘sterilise’ this intervention by acting in a way to keep the money supply (and its own balance sheet) of constant size. This can be done by offering commercial banks interest to deposit money in its facilities (as is the case with the ECB and the SMP programme) or by selling other assets. 41 Mario Draghi, Speech at the Global Investment Conference in London (26 July 2012). Available at: http://www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html, accessed on 25 November 2014.
Jeroen Dijsselbloem, Keynote Speech by Eurogroup President at the Atlantic Council, New Growth Deal for the Eurozone: Connecting Reform Agenda, Budgetary Consolidation and Supportive Investments, (10 October 2014). Available at: http://www.eurozone.europa.eu/newsroom/news/2014/10/keynote-speechjdijsselbloem-at-atlantic-council/, accessed on 5 November 2014.
Federalists to petition Parliament on fiscal union
January 23, 2012 3:13 PM
At meetings in Barcelona on Friday and Saturday (20-21 January), the European federalists took a stance on the emerging intergovernmental treaty on fiscal discipline.
The UEF took note of the circumstances which led up to the drafting of a new treaty outside the framework of the European Union, but welcomed the fact that the British bluff had been called and their veto by-passed.
Several problematical issues in the 4th draft of the treaty were noted, including the problem of discordance with the official EU structure and treaty-based criteria.
In the view of UEF, the new treaty does not address the critical problem of sovereign debt and is therefore only one further step towards what must be done to salvage the euro and to begin economic recovery.
Andrew Duff MEP, President of the UEF, said:
“For all its complications, the new treaty does contain some features which federalists can welcome warmly. These are that it goes further than the Six Pack in terms of budgetary discipline; it commits to the greater use of enhanced cooperation among the eurozone; it will enter into force before all signatory states have ratified it; and it is to be incorporated into the EU treaty within five years.
“What Europe now needs, however, is a draft treaty on fiscal union run by a federal economic government. For this reason the UEF has decided to petition the European Parliament to use its new constitutional powers to initiate this next decisive step.”
END
https://en.wikipedia.org/wiki/V%C3%A1clav_Klaus
European Parliament[edit]
On 5 December 2008, members of the Conference of Presidents of the European Parliament visited the Czech Republic prior to the start of the Czech presidency of the European Union. They were invited by Václav Klaus to meet him at Prague Castle. Daniel Cohn-Bendit, chairman of Green Group, brought a European flag and presented it to Klaus.[16] Cohn-Bendit also said that he “did not care about Klaus’ opinions on the Lisbon Treaty, that Klaus would simply have to sign it”. This was negatively commented in the Czech Republic as an undue interference in Czech affairs. Co-president of the Independence/Democracy parliamentary group, Nigel Farage, compared Cohn-Bendit’s actions to a “German official from seventy years ago or a Soviet official from twenty years ago.[17]
Further, then Irish MEP Brian Crowley told Klaus that the Irish people wanted ratification of the Treaty of Lisbon and were “insulted” by Klaus’ association with Declan Ganley and Libertas. Klaus responded that “the biggest insult to the Irish people is not to accept the results of the Irish referendum”.[18] Crowley replied, “You will not tell me what the Irish think. As an Irishman, I know it best.”[18] In the UK the confrontative atmosphere of this meeting was criticized by some of the media: “This bizarre confrontation … confirms the inability of the Euro-elite to accept that anyone holds views different from their own.”[16]
On 19 February 2009, Klaus made a speech to the European Parliament where he criticized the European Union’s lack of democracy, continuing integration and economic policies:
The present decision-making system of the European Union is different from a classic parliamentary democracy, tested and proven by history. In a normal parliamentary system, part of the MPs support the government and part support the opposition. In the European Parliament, this arrangement has been missing. Here, only one single alternative is being promoted, and those who dare think about a different option are labelled as enemies of European integration… There is also a great distance (not only in a geographical sense) between citizens and Union representatives, which is much greater than is the case inside the member countries. This distance is often described as the democratic deficit, the loss of democratic accountability, the decision-making of the unelected – but selected – ones, as bureaucratisation of decision-making etc. The proposals to change the current state of affairs – included in the rejected European Constitution or in the not much different Lisbon Treaty – would make this defect even worse. Since there is no European demos – and no European nation – this defect cannot be solved by strengthening the role of the European Parliament, either.[19][20]
After this point was made, a number of MEPs walked out of the chamber.[21][22] Klaus continued to state:
I fear that the attempts to speed up and deepen integration and to move decisions about the lives of the citizens of the member countries up to the European level can have effects that will endanger all the positive things achieved in Europe in the last half a century… Let us not allow a situation where the citizens of member countries would live their lives with a resigned feeling that the EU project is not their own; that it is developing differently than they would wish, that they are only forced to accept it. We would very easily and very soon slip back to the times that we hoped belonged to history… We must say openly that the present economic system of the EU is a system of a suppressed market, a system of a permanently strengthening centrally controlled economy. Although history has more than clearly proven that this is a dead end, we find ourselves walking the same path once again.[19][20]
https://en.wikipedia.org/wiki/Zinoviev_letter
http://www.cambridgeclarion.org/press_cuttings/gladio_graun_5dec1990.html
The Gladio File: did fear of communism throw West into the arms of terrorists?
Richard Norton-Taylor, Guardian, 5 December 1990, page 12
As scandal unfolds, Whitehall’s response is silence, writes Richard Norton-Taylor
A CHANCE discovery by an assiduous Italian magistrate investigating a neo-fascist terrorist attack has unearthed a secret paramilitary network run by units of the armed forces and intelligence services throughout western Europe.
Over the past few weeks, government after government, with the notable exception of the British, has been forced to admit that the organisation – whose original purpose was to set up resistance groups against occupying Warsaw Pact forces – still exists. It has come be to known as Operation Gladio, after its Italian branch.
Two threads have emerged. Ministers, let alone parliaments, knew nothing about the secret units; second, while nominally established as “stay-behind” sabotage groups to combat communist forces, in some countries they soon had internal political targets in their sights.
Representatives from these units have been meeting regularly in Brussels in the Allied Coordination Committee. This consists of civilian and military personnel, according to Italian and Belgian sources. Guy Coeme, the Belgian defence minister, has said it last met in Brussels in late October.
The network was not confined to Nato countries. An inquiry in Switzerland recently revealed the existence of a secret organisation, P26. It had 400 agents with access to guns and explosives with a German radio system, Harpoon, set up in 1985 to contact parallel groups in neighbouring countries.
One early task was to take over plans for a Swiss government-in-exile in south-west Ireland in the event of invasion. Another was to prepare for action against “subversion”.
P26 was backed by P27, a private foreign intelligence agency funded partly by the government, and by a special unit of Swiss army intelligence which had built up files on nearly 8,000 “suspect persons” including “leftists”, “bill stickers”, “Jehovah’s witnesses”, people with “abnormal tendencies” and anti-nuclear demonstrators.
On November 14, the Swiss government hurriedly dissolved P26 – the head of which, it emerged, had been paid £100,000 a year.
Although the Ministry of Defence has repeatedly refused to comment on Britain’s involvement, Sir Anthony Farrar-Hockley, a former commander of Nato forces in northern Europe, has confirmed that a secret network of arms – to be handed out to a civilian guerrilla force in the event of an invasion – was set up in Britain after the war.
The Guardian has learned of a secret attempt to revive elements of a parallel post-war plan relating to overseas operations. In the early days of Mrs Thatcher’s Conservative leadership, a group of former intelligence officers, inspired by the wartime Special Operations Executive, attempted to set up a secret unit as a kind of armed MI6 cell.
Those behind the scheme included Airey Neave, Mrs Thatcher’s close adviser who was killed in a terrorist attack in 1979, and George Kennedy Young, a former deputy chief of the Secret Intelligence Service, MI6.
Mrs Thatcher is said to have been initially enthusiastic but dropped the idea after the scandal surrounding the attack by the French secret service on the Greenpeace ship, Rainbow Warrior, in New Zealand in 1985.
British co-operation with the Gladio network since the 1950s appears to have concentrated on offering training expertise for continental cells. Werner Carobbio, a member of the Swiss parliamentary inquiry, referred the Guardian to Swiss press reports that P26 personnel had received training in Britain.
General Gerardo Serravalle, a retired officer, told the Italian parliamentary inquiry that a Gladio unit trained in Britain in the early 1970s. General Fausto Fortunato, head of the Italian Gladio cell until 1964, referred to a “crucial” meeting of the network held in Britain, followed by others in France, Belgium and Luxembourg in the early 1960s.
Revelations about the Gladio network have provoked embarrassed reactions. Wilfried Martens, Belgium’s prime minister almost continuously since 1979, has said he was never told about its network, now under investigation after allegations that it was linked to a series of terrorist attacks in the 1980s.
The Dutch prime minister, Ruud Lubbers, told parliament last month that a secret organisation had been set up inside the defence ministry in the 1950s originally to provide intelligence to a government in exile. Members of the cell are believed to have taken part recently in a training exercise in Sicily.
The French defence minister, Jean-Pierre Chevènement, has announced that the French section, code-named Gallio, had been dissolved by presidential decree.
The German section, set up with the help of second world war army veterans and the extreme rightwing Federation of German Youth, allegedly drew up plans to assassinate leading members of the opposition Social Democrat party in the event of a Warsaw Pact invasion. The German government has promised to consider winding it up.
In Greece, where it was given the code-name, Sheepskin, a cell was set up by the CIA in the 1950s but was dismantled in 1988, according to the government. Officers in the underground unit were involved in the Colonels’ coup in 1967.
In Turkey, Bulent Ecevit, prime minister at the time of the invasion of northern Cyprus in 1974, has said he was informed at the time of a “special warfare” department within the headquarters of the general staff. He said he was told it had been financed until then by the US but needed funds from Ankara.
A former Italian Gladio officer has said Gladio agents were trained by US instructors at a military base in Spanish Canary Islands from 1966 to the mid-1970s. He said France proposed Spain for membership of the network in 1973 but Britain, Germany and the Netherlands blocked the move on the grounds that Spain was not a democracy.
Remoaners, the Gladio Stay behind crew
´We are the resistance´.
Jacob Funk Kirkegaard (PIIE)
February 23, 2016 10:30 AM
The last-minute deal between Prime Minister David Cameron of Britain and the leaders of the European Union on February 19 was aimed at persuading Cameron, his government, and the Conservative Party leadership to support staying in the European Union in the referendum scheduled for June 23. Will it do the trick?
Almost certainly, yes. The burden on those favoring a British exit (Brexit) is to make the case that life on the outside will be better than staying in under this new deal—a difficult challenge. Most Scottish, Welsh, and perhaps even Northern Irish voters are likely to support EU membership, leaving it up to the numerically dominant English voters to drag the entire United Kingdom out of the European Union. Were that to happen, Scottish (and perhaps other) nationalists would seize the opportunity to demand a new referendum on whether to remain part of the United Kingdom or break free and seek membership in the European Union as a new independent country. Voting for UK secession could thus produce a series of votes to break up the United Kingdom itself, creating a Little England in its wake.
The Lobbying Problem. Is Lobbying consultation?
Interest group influence on EU policy-making: A quantitative analysis across issues Heike Klüver, University of Mannheim Abstract: This paper presents a large-scale empirical analysis of interest group influence on EU policy-making across a wide range of issues. The explanation of policy outcomes as well as the democratic legitimacy of the EU crucially depends on how much influence interest groups have and how influence is distributed among them. However, only few studies have addressed the question of influence and most are limited to case studies focusing only on one single issue. Recent literature however suggests that interest group influence varies considerably across issues. It is assumed that influence is not a mere function of interest group characteristics, but strongly shaped by the issue context. The lack of large-N studies controling for issue variables is mainly due to methodological difficulties in measuring influence. Hence, this paper employs a new approach: Drawing on a quantitative text analysis performed with Wordfish, policy preferences of interest groups will be compared with the policy proposal in order to identify the winners and the losers of the decision-making process. While controling for interest group characteristics, the effect of issue-related variables on interest group influence will be tested across 15 policy issues.
A prominent hypothesis in interest group research is that cause groups are less influential than sectional groups. It is hypothesized that cause groups are less influential since they cannot provide resources to decision-makers (Dür/de Bièvre 2007a: 81). 4 Another stream of research is concerned with the effect of organizational form on interest group influence. Pieter Bouwen (2002, 2004) presented a well-elaborated theoretical framework explaining influence of business associations in the European Union. Resources are defined as money, information as well as electoral support. With little to exchange, cause groups are not able to shift the policy position of decision-makers towards their ideal point. The inability to provide resources lies in the nature of the interest they represent: Since cause groups defend some diffuse ideal or principle, everyone can join these groups and thus the membership is very heterogenous. Due to the fact that the interest is of secondary nature to members and members face only diffuse costs and benefits associated with this interest, they will not provide the same financial resources and electoral support as members of sectional groups whose primary material interests are affected. Since cause groups defend a diffuse ideal or principle and since they lack financial resources they can only provide decision-makers with much less detailed information than sectional groups. Thus, even though cause groups have overcome the problem of getting organized, they constantly suffer from collective action problems, leading to an undersupply of resources (Dür/de Bièvre 2007a: 82). Sectional groups by contrast represent welldefined homogenous constituencies with specific interests. Since these interests are of primary material concern to their members they are willing to supply the interest group with the necessary financial and electoral support. Thus, the following hypothesis can be formulated: Hypothesis 1: Sectional groups are more influential than cause groups.
http://aei.pitt.edu/33094/1/kluever._heike.pdf
https://en.wikipedia.org/wiki/Elite_theory
Martin Gilens and Benjamin I.
´´In their statistical analysis of 1,779 policy issues Martin Gilens and Benjamin I. Page found “that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”
Pareto etc.Pareto Theory Of Maximum Economics
Pareto turned his interest to economic matters and he became an advocate of free trade, finding himself in difficulty with the Italian government. His writings reflected the ideas of Léon Walras that economics is essentially a mathematical science. Pareto was a leader of the “Lausanne School” and represents the second generation of the Neoclassical Revolution. His “tastes-and-obstacles” approach to general equilibrium theory were resurrected during the great “Paretian Revival” of the 1930s and have influenced theoretical economics since.[18]
In his Manual of Political Economy (1906) the focus is on equilibrium in terms of solutions to individual problems of “objectives and constraints”. He used the indifference curve of Edgeworth (1881) extensively, for the theory of the consumer and, another great novelty, in his theory of the producer. He gave the first presentation of the trade-off box now known as the “Edgeworth-Bowley” box.[19]
Pareto was the first to realize that cardinal utility could be dispensed with and economic equilibrium thought of in terms of ordinal utility[20] – that is, it was not necessary to know how much a person valued this or that, only that he preferred X of this to Y of that. Utility was a preference-ordering. With this, Pareto not only inaugurated modern microeconomics, but he also demolished the alliance of economics and utilitarian philosophy (which calls for the greatest good for the greatest number; Pareto said “good” cannot be measured). He replaced it with the notion of Pareto-optimality, the idea that a system is enjoying maximum economic satisfaction when no one can be made better off without making someone else worse off. Pareto optimality is widely used in welfare economics and game theory. A standard theorem is that a perfectly competitive market creates distributions of wealth that are Pareto optimal.[21]
Concepts[edit]
Some economic concepts in current use are based on his work:
The Pareto index is a measure of the inequality of income distribution.
He argued that in all countries and times, the distribution of income and wealth is highly skewed, with a few holding most of the wealth. He argued that all observed societies follow a regular logarithmic pattern:
1.
where N is the number of people with wealth higher than x, and A and m are constants. Over the years, Pareto’s Law has proved remarkably close to observed data.
The Pareto chart is a special type of histogram, used to view causes of a problem in order of severity from largest to smallest. It is a statistical tool that graphically demonstrates the Pareto principle or the 80–20 rule.
Pareto’s law concerns the distribution of income.
The Pareto distribution is a probability distribution used, among other things, as a mathematical realization of Pareto’s law.
Ophelimity is a measure of purely economic satisfaction.
https://letthemconfectsweeterlies.blogspot.se/2016/01/the-iron-law-of-oligarchy.html
Hypothesis 4: The higher the complexity of a policy proposal, the higher the chance of an interest group to be influential.
Hypothesis 5: The higher the number of interest groups that belong to the same lobbying perspective, the higher the chance of an interest group to be influential.
´´The preliminary results show no evidence for a significant effect of interest group type on interest group influence. Neither nature of the interest nor organizational form had a consistent effect on interest group influence. Hence, based on this preliminary analysis, two existing hypotheses in interest group research need to be rejected. By contrast, issue characteristics explained a high share of variation in interest group influence: Being located on the same side of the initial Commission position as the status quo had a significant and strong positive effect on interest group influence. The size of the lobbying perspective understood as the number of interest groups located on the same side of the initial Commission position also had a significant and positive effect on interest group influence. Whereas the significance and direction of these two effects remain robust over a plurality of different models, the effects of salience and complexity of the policy proposal are inconclusive. Salience and complexity only have a very small effect which is not significant across all models. The direction of the salience effect even varies across the models. Hence, whereas the size of the lobbying perspective and being located on the same policy side as the status quo have a strong and robust effect, salience and complexity of the policy proposal need to be further investigated. However, it can already be concluded from this preliminary analysis that issue characteristics have a high explanatory power whereas interest group type cannot account for variation in interest group influence´´.
10
Similarly, an important recent strand of participatory theory, so-called agonistic theory, holds that the essence of democracy is a widespread ethos of contestation of differences.
11
From the perspective of elite democracy, such critiques ring hollow because they impose onto modern institutions an external ideal of democracy that is fundamentally incompatible with the scale and pluralism of nation-states in the 21st century. Most crucially, today the vast majority of citizens are by necessity primarily occupied with work and lack the leisure to participate in public life. Even if participatory ideals are persuasive in some abstract sense, elite democracy argues convincingly that any viable concept of democratic legitimacy in the present should focus on making elite institutions more transparent and accountable to the citizenry rather than contesting their elite character as such
A first key theme in theories of elite democracy is a view of
institutional systems as self-regulating
. That is, in the view of elite democracy, rather than an active citizenry, institutional systems are primarily responsible for providing for their own legitimacy and accountability. Seeking a more stable source of authority than the citizenry, Madison, for example, develops a system of central institutions which contains within itself its own mechanisms for distributing power: ÒÉthe defect must be supplied, by so contriving the interior structure of the government as that its several constituent parts may, by their mutual relations, be the means of keeping each other in their proper placeÉThe different governments will control each other, at the same time that each will be controlled byitselfÓ (318-21). Madison is clear that the people must surrender their power,
Finally, following from its view of institutions as self-regulating, an important corollary theme in elite democratic theory is its minimal view of citizenship. If accountability is to be located in the institutional system itself, active participation by citizens in collective decisions is unnecessary
Elite democracy is deeply intertwined with, but not identical to, the political theory of liberalism, which holds that public institutions can be justified only in terms of individual freedom.
18
Liberalism is properly understood as a theory of the balance between individual freedom and the state, as distinct from the balance of power between the many and the few. Liberalism and elite democracy are analytically distinct, for representative government can in principle be either liberal or authoritarian, just as liberal
17
On the Madisonian tradition’s rejection of the classical teachings, see Wilson C. McWilliams,
Redeeming Democracy in America
, ed. Patrick J. Deneen and Susan Jane McWilliams (Lawrence: University Press of Kansas, 2011), esp. 9ff.
18
Louis Hartz,
The Liberal Tradition in America
(New York: Harcourt Brace, 1955); John Rawls,
A Theory of Justice
(Cambridge, MA: Harvard University Press, 1971).
12 regimes can be in principle be governed by the few or the many. However, representative government has evolved historically intertwined with liberalism and cannot be understood in isolation from its ideological context and the powerful ways in which liberalism reinforces elite rule. Liberalism (including Madisonian republicanism) tends to be suspicious of popular rule, for fear that tyrannical majorities will exert state power.
19
Moreover, political theorists have recently recognized the ideological role of liberalism in legitimizing corporate power, masking inequalities in the private sphere, and encouraging a view of citizens as passive and individualistic consumers.
20
Rather than critique of the liberal tradition as such, my immediate focus for the purposes of this paper is whether representative government can be recognized as oligarchical from AristotleÕs distinctive perspective.
In Book IV, an important shift occurs in AristotleÕs thought toward a distinct focus on democracy and oligarchy in particular. Aristotle suggests that political science should also address questions of how to preserve existing regimes, even if they are flawed: É
[O]ne should study not only the best regime but also the regime that is [the best] possible, and similarly also the regime that is easier and more attainable for allÉsince to reform a regime is no less a task than to institute one from the beginningÉ Hence in addition to what has been said the political expert should be able to assist existing regimes as well (1288b35-1289a7)
Whether the regime is an oligarchy or democracy is thus a basic question that must be confronted at the outset of analysis of existing regimes, without taking for granted the assumptions of conventional political discourse
Early in the
Politics
, Aristotle refers to the conventional opinion of Spartan Senate as oligarchic and the mixture with the kingship and (overseers) (a select group drawn from the people by lot to supervise the education of the young) as aristocratic (1265b28-40).Again, Aristotle argues that SolonÕs reforms were not as radically democratic as commonly supposed because they preserved the elite practice of election to offices(1273b39-43). Election on the basis of wealth (ploutinden) is oligarchic, while election on the basis of virtue (aristinden) is aristocratic (1293b11). Moreover, as aristocracy inevitably inclines toward oligarchy, so even the most noble forms of (hairesis) would be expected to degenerate.
Moreover, all empirical evidence suggests that political participation within the representative system in practice privileges the wealthy and highly educated.
28
William Pitt made this statement: “Let the American people go into their debt-funding schemes and banking systems, and from that hour their boasted independence will be a mere phantom.
The saying is apocryphal and was originated by the populist author T. Cushing Daniel, a Washington-based lobbyist and lawyer, in his testimony before the U.S. Congress in 1911 in hearings on House Resolution 314 (whether financiers were restricting trade by domination of the money supply). This is what Daniel said:
William Pitt made this statement: “Let the American people go into their debt-funding schemes and banking systems, and from that hour their boasted independence will be a mere phantom.” He realized the maxim that Rothschilds laid down as fundamental: “Let us control the money of a country and we care not who makes its laws.”
It is true that the Rothschilds had “maxims” and these were published by London weeklies in the 1890s. All of these maxims were homey things like “Be sure you are right, then go forward.” Cushing simply invented the imaginary “control the money” maxim for the purposes of his books and testimony.
The original Rothschilds were very religious, modest people. Its hard to imagine Nathan R. or his brothers as having said such an arrogant thing and it conflicts with what is known about his personality. Long after Nathan R. was dead, during the period 1890-1910, which was a period of anti-trust and anti-wealth agitation in the United States many writers made up all kinds of stories to portray the Rothschilds and other “barons” according to their stereotypes of rich, arrogant puppet masters. These stereotypes often did not resemble the actual people.
Concerning the phraseology and idea that Daniel expressed, this was not original to him, but, as you might imagine, was adapted from the works of others. In this case the phrase appears to have come from a short paper on the History of New York State published in 1892 by Welland Hendricks, a school principal. This is what Hendricks wrote:
Our Dutch forefathers who seemed to care little whether the flag of England or of Holland floated over the weak fort of New Amsterdam so long as their trade was uninterrupted have bequeathed their spirit to our keen-sighted non-voting business men of to-day, and all along the motto of our leading citizens has seemed to be — let us make the money of the nation and we care not who makes its laws.
Daniel completely perverted the original sense of the sentence to his own purpose. Hendricks was borrowing the phrase as well. In 1890, a meddlying clergyman named Wilbur Crafts, who tried to get all kinds of moralistic laws passed in New York, wrote a tract promoting the banning of work on Sunday containing the paragraph:
Massachusetts took upon herself the appointment of Boston’s Police Commissioners, and so of her police. The lawless had been saying for years, “Let us appoint the city’s police and we care not who makes its laws.”
The actual origin of the printed phrase dates back to the 17th century Scottish Parliamentarian, Andrew Fletcher:
I said I knew a very wise man so much of Sir Christopher’s sentiment, that he believed if a man were permitted to make all the ballads he need not care who should make the laws of a nation, and we find that most of the ancient legislators thought that they could not well reform the manners of any city without the help of a lyric, and sometimes of a dramatic poet.
— An ACCOUNT of A CONVERSATION concerning A RIGHT REGULATION of GOVERNMENTS For the common Good of Mankind: In A LETTER to the Marquiss of Montrose , the Earls of Rothes, Roxburg and Haddington, From London the first of December, 1703′.
Now, of whom is Fletcher speaking? Who is the “very wise man”? It is, of course, Sir Phillip Sydney (1554-1586), the English poet who came to completely dominate the court of Queen Elizabeth even though he was only in his 20s. Sydney is the one who originated the phrase “Let me make the ballads of a nation, and I care not who makes its laws.”
https://babel.hathitrust.org/cgi/pt?id=uc1.$b37377;view=1up;seq=13
https://www.amazon.com/Real-Money-versus-False-Credits/dp/1410104729
From Greenwald’s article:
A failed, collapsed party cannot form an effective resistance. Trump did not become president and the Republicans do not dominate virtually all levels of government because there is some sort of massive surge in enthusiasm for right-wing extremism. Quite the contrary: This all happened because the Democrats are perceived — with good reason — to be out of touch, artificial, talking points-spouting automatons who serve Wall Street, Silicon Valley, and the agenda of endless war, led by millionaires and funded by oligarchs to do the least amount possible for ordinary, powerless citizens while still keeping their votes.
European troika
From Wikipedia, the free encyclopedia
For other uses, see Troika.
2013 protests agains troika in Slovenia
The European troika is the designation of the triumvirate representing the European Union in its foreign relations, in particular concerning its common foreign and security policy (CFSP).
Currently, while talking about the troika (especially in the media) one refers to a decision group formed by the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF).
Common Foreign and Security Policy[edit]
This term was used in the European Union when referring to a group composed of the Foreign Affairs Minister of the Member State holding the Presidency of the Council of Ministers, the Secretary-General of the Council of the European Union, who also held the post of High Representative of the Common Foreign and Security Policy (CFSP), and the European Commissioner for External Relations. The “Troïka” represented the European Union in external relations that fall within the scope of the common foreign and security policy (CFSP).
With the 2009 ratification of the Lisbon Treaty, the post of Secretary-General of the Council was separated from the post of High Representative of the CFSP, which then assumed the responsibilities of the European Commissioner for External Relations. Since only two of the original posts making up the troika still exist, it is unclear what the future of the troika arrangement in the EU is.
Financial crisis bailout creditors[edit]
The term troika has been widely used in Greece and Cyprus (Greek: τρόικα),[1][2] Ireland,[3] Portugal[4] and Spain[5] to refer to the presence of the European Commission, European Central Bank, and International Monetary Fund in these countries since 2010 and the financial measures that these institutions have taken. Slovenia barely avoided the intervention by the troika in 2013, thanks to the loan of EUR 1.5 billion acquired at the PIMCO.[6]
´´The realities Rove predicted have infantilized parliamentary debates, current affairs discussion and lecture events, and anything of a supposedly serious nature on TV. These now conform to comic book simplicities of evil, heroes and baddies. They have produced a multitude of editorials with facts upside-down. They force even those who advise against provoking Moscow to include a remark or two about Putin being a murderer or tyrant, lest they could be mistaken for traitors to Enlightenment values or even as Russian puppets, as I have been. Layers of unreality have incapacitated learned and serious people to think clearly about the world and how it came to be that way.´´
http://www.globalresearch.ca/karl-roves-prophecy-we…/5572533 #KarlRove#RealitiesofEmpire #FakeNews #Duchamp #StaringatGoats
The battle over CETA will continue: Next, national parliaments and citizens must decide
15/02/2017
While the European Parliament will vote on CETA today, the deal must still be voted on by the national parliaments of EU member states where it continues to face strong opposition.
A referendum is expected in the Netherlands and the German constitutional court may decide that Germany will abandon the agreement. In addition, over 2,000 European cities, regions and organisations have declared themselves to be ‘CETA- and TTIP-free zones’.
GUE/NGL Shadow Rapporteur on CETA, Anne-Marie Mineur, explains: “While part of the agreement will provisionally apply almost immediately, the national parliaments fortunately still get to ratify the greater part of the agreement.
“Given the huge pressure that is mounting in so many countries, there is a very reasonable chance that at least one parliament will block ratification.
“In my own country, the Netherlands, preparations are being made for a referendum, but also in countries like Germany and Austria, the public protest is enormous.
“The Belgian government has also announced that it will ask the European Court of Justice for an opinion on whether the Investment Court System is compatible with the European legal system.”
http://www.europarl.europa.eu/news/en/news-room/20170209IPR61728/ceta-meps-back-eu-canada-trade-agreement
The deal was approved by 408 votes to 254, with 33 abstentions.
What’s next?
CETA will start to be provisionally applied from 1 March (they’re not hanging about!). Provisional application means the parts of CETA which impact on European law will be introduced, while those parts which affect national law of the members states will have to wait for each and every state to ratify.
States will have different processes to ratify. In the UK, unsurprisingly perhaps, will have one of the less democratic ways of ratification. Like secondary legislation, CETA will be ‘laid before parliament’ and if no objection raised, will go through automatically. It is doubtful the Labour party will want to risk another split by calling for a vote on CETA – a vote they are bound to lose.
Attention, therefore will turn elsewhere. Belgium looks interesting. Remember the furore caused by Wallonia refusing to let Belgium sign CETA at the Council stage back in November? Well, those concerns and objections have yet to be fully addressed, allowing for another set-to near the seat of European democracy.In The Netherlands, activists are pushing for a referendum to be held on the issue. They need to collect 300,000 signatures to request one (it’s only advisory, but the pressure will be on). Other countries might not want to force a decision before elections which are coming up – with elements that might be against CETA in good ways or bad in the running for election.This fight is far from over. In the UK it appears like well be turning our attention to TISA and the Brexit-era trade agenda. Let us know if you have other issues to feed it. But one thing’s for sure, we want to be able to shout about what we are for in the trade debate, not simply what were against, so were working up alternatives to corporate friendly trade policies and deals. Watch this space.
Guy Verhofstadt’s federalist vision of his beloved EU will undermine its very future
Guy VERHOFSTADT, President of the Alliance of Liberals and Democrats for Europe, drafted the strategic report on the evolution and adaptations of the current institutional structure of the EU. He stated:
“Brexit, Trump, Putin: these are more than enough reasons to reform the European Union. To do it now, and to do it profoundly. That is what our three reports propose:
• a more efficient union: by slimming down the commission, ending Europe à la carte, which is in fact has created bureaucratic chaos and a single seat of the European Parliament,
• a more democratic union: by reforming European elections, expanding the Spitzencandidate process and turning the Council into a Council of States
• a stronger union: enhancing the protection of civil liberties in the union, and an enhanced capability against external threats, by building a defence union, but also a government for the Eurozone, with a fiscal capacity, an EU finance minister, own resources, and a convergence code with conditionality “.
http://www.europarl.europa.eu/RegData/etudes/STUD/2017/571404/IPOL_STU(2017)571404_EN.pdf
Mr Verhofstadt’s vision for the future of the EU is flawed and not representative of the citizens of Europe. It is a shame that the only hint of understanding of what is needed is the call for this Parliament to have a single seat. The 110 million euros saved every year by not travelling from Brussels to Strasbourg each month would be a step in the right direction and the kind of reform people want to see. The Strasbourg circus has become a symbol of everything that is wrong with the EU; it is matters such as this that the report should have addressed.
Britain did not vote to leave the EU because there was not enough Europe. We voted to leave because the EU does too much. It has already taken too much power from the member states. It must not take any more.
http://brexitcentral.com/guy-verhofstadts-federalist-vision-beloved-eu-will-undermine-future/
There was very little serious public debate about political integration, about sharing
sovereignty or democratic accountability of supranational institutions. The debate mostly
revolved around the economic benefits of the membership versus the freedom of movement
and immigration troubles. Post-electoral analysis showed that the government’s
recommendation or “remainers” positions was rejected despite the leave campaign having
failed to present a clear alternative. Messages such as “Take back control” and “Britain first”
had strong impact in important sectors of the electorate. The electorate, or at least a
substantial part of it, “were more focused on immigration, the UK financial contribution to
the EU budget, and the democratic deficit in EU governance”. At the end of the day the two
decisive issues for those voting for “Leave” seemed to be national sovereignty and
immigration13
.
In conclusion, post-electoral analysis shows a mixture of causes for the outcome of the
referendum, many enshrined in the particular relation of UK with the European integration
process, others common to many other Member States. Since the Danish electorate rejected
the Maastricht Treaty in 1992, referendums on European integration have often had elitedefying
consequences. The Brexit is the most significant expression of this so far in Europe’s
history (except perhaps the rejection of the Constitutional Treaty). The United Kingdom has
always been a reluctant European partner, with a national media that is particularly
aggressive towards the notion of European integration, but it would seem that this
referendum cannot be dismissed “as just a sign of English insularity”. Concerns about
immigration and the loss of distinct national identity are relevant also to many other Member
States.
18
Ambitious reform of treaties
The second resolution, by Guy Verhofstadt (ALDE, BE), looks at ways to move further than the current toolbox allows and suggests various reforms of the Lisbon Treaty, in the areas of economic governance, foreign policy, fundamental rights and transparency. In it, MEPs:
suggest creating an EU finance minister and giving the EU Commission the power to formulate and give effect to a common EU economic policy, backed up by a euro-area budget,
reiterate that the European Parliament should have a single seat,
propose reducing the size of the College of EU Commissioners substantially, including by cutting the number of Vice-Presidents to two, and
state their belief in allowing EU citizens in each member state to vote directly on the European political parties’ lead candidates for Commission President.
“These reports give the blueprint of what a more perfect Union should look like. They do not propose European integration for the sake of it. Once these reports are adopted, the question is: what is the way forward? I know we can have a strong, powerful, respected European union and at the same time have flourishing local and national democracies. In fact, I believe the one is not possible without the other”, said Mr Verhofstadt.
The resolution was approved by 283 votes to 269 with 83 abstentions.
http://www.allaboutphilosophy.org/blind-men-and-the-elephant.htm
The Elephant Of EuroStan..
Blind Men and the Elephant
Blind Men and the Elephant – A Picture of Relativism and Tolerance
The Blind Men and the Elephant is a famous Indian fable that tells the story of six blind sojourners that come across different parts of an elephant in their life journeys. In turn, each blind man creates his own version of reality from that limited experience and perspective. In philosophy departments throughout the world, the Blind Men and the Elephant has become the poster child for moral relativism and religious tolerance.
Blind Men and the Elephant – A Poem by John Godfrey Saxe
Here is John Godfrey Saxe’s (1816-1887) version of Blind Men and the Elephant:
It was six men of Indostan,
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind),
That each by observation
Might satisfy his mind.
The First approach’d the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to bawl:
“God bless me! but the Elephant
Is very like a wall!”
The Second, feeling of the tusk,
Cried, -“Ho! what have we here
So very round and smooth and sharp?
To me ’tis mighty clear,
This wonder of an Elephant
Is very like a spear!”
The Third approach’d the animal,
And happening to take
The squirming trunk within his hands,
Thus boldly up and spake:
“I see,” -quoth he- “the Elephant
Is very like a snake!”
The Fourth reached out an eager hand,
And felt about the knee:
“What most this wondrous beast is like
Is mighty plain,” -quoth he,-
“‘Tis clear enough the Elephant
Is very like a tree!”
The Fifth, who chanced to touch the ear,
Said- “E’en the blindest man
Can tell what this resembles most;
Deny the fact who can,
This marvel of an Elephant
Is very like a fan!”
The Sixth no sooner had begun
About the beast to grope,
Then, seizing on the swinging tail
That fell within his scope,
“I see,” -quoth he,- “the Elephant
Is very like a rope!”
And so these men of Indostan
Disputed loud and long,
Each in his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!
MORAL,
So, oft in theologic wars
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean;
And prate about an Elephant
Not one of them has seen!
Blind Men and the Elephant – Philosophical Parable
The Blind Men and the Elephant is an ancient parable used today as a warning for people that promote absolute truth or exclusive religious claims. The simple reason is that our sensory perceptions and life experiences can lead to limited access and overreaching misinterpretations. How can a person with a limited touch of truth turn that into the one and only version of all reality?
Blind Men and the Elephant – Theological Truth
When it comes to the moral of the Blind Men and the Elephant, it seems that today’s philosophers end their agenda too quickly. Doesn’t the picture of the blind men and the elephant also point to something bigger — The elephant? Indeed, each blind man has a limited perspective on the objective truth, but that doesn’t mean objective truth isn’t there. In fact, truth isn’t relative at all… It’s there to discover in all its totality. In theology, just because we have limited access to Truth, that doesn’t mean any and all versions of Truth are equally valid. Actually, if we know the Whole Elephant is out there, shouldn’t this drive us to open our eyes wider and seek every opportunity to experience more of Him?
71 thoughts on “Meet The Fuggers, Brexit, The Euro and Clueless Elites.”