Category Archives: Europe

Does the UK Party Political System need a ‘Night of the Long Knives’?

 

Brexit has amplified blatant dissension amongst politicians of all persuasions. This not only creates difficulties getting anything done but also makes politics irrelevant as there is no longer the discipline within any party to fulfil manifesto pledges under collective responsibility. As politics in its disciplined form functions on mediocrity what we now have is treacherous chaos.

Having recently watched the ‘Darkest Hour’ account of the challenges faced by Winston Churchill during those dark days of May 1940 dealing with the plotting shenanigans of the fearful pacifists headed by Neville Chamberlain and Lord Halifax (whose view was essentially that he knew better than the people what was good for them). They completely undermined any attempt to deal with the fundamental reality that Adolf Hitler was hell-bent on conquering the whole of Europe, including the UK. Any hope of a peace deal as proposed by Halifax was pure fantasy based only on irrational fear. These people were the remoaners of today. Churchill’s ‘Night of the Long Knives’ came after speaking personally to the ordinary people on a tube train to Westminster and which prompted the courage to deliver his famous oratory to the Houses of Parliament on 4th June 1940. He mobilised the people of the UK to save the UK army stranded on the beaches of Dunkirk and to fight for the British way of life in the face of the overwhelming odds within mainland Europe, and in the face of certain members of UK politics. Sound familiar?

Our party-political system is based on people agreeing a basic ideology and creed regarding how to run a country. Like-minded people then form a party, select constituency representatives to stand as Members of Parliament under an agreed manifesto who, having achieved the majority of MP’s, select a leader who then forms an executive in the form of a cabinet. This cabinet is obliged to execute the manifesto upon which the people voted them into power with the full support of back-bench MP’s.

Think of the UK as a major corporate (UK plc) with a CEO (Prime Minister), Board of Directors (Cabinet), Line Managers (back-bench MP’s) and departmental workers (local constituents). Successful corporates will have competent and capable management resources who co-operate to secure their place in the market. Such corporates have a circular information flow in which strategy is fed from the Board down the ranks, and the ranks feed back the merits of such strategy in terms of execution and benefits. A competent Board will consist of Directors representing different factions of the company each expressing their own views without fear within the confines of the Boardroom. However, once a majority vote has been taken as to strategic direction then each Director, irrespective of their own personal view, is obliged to either diligently implement the agreed strategy, or find another job. Likewise with the Line Managers and departmental workers. Anyone expressing dissent or failing to comply will be quickly dispensed. A successful corporate needs allegiance and loyalty of all involved or it will surely fail.

So why do our politicians think that UK plc does not need the same corporate discipline to be successful? Why is it possible within UK plc to have a small band of Conservative back-bench MP’s who, in spite of their rhetoric to the contrary, are hell-bent on sabotaging Brexit – and think it entirely acceptable to attempt to hold the Prime Minister to ransom if she does not comply with their wishes. These people clearly think they know better than more than 17 million constituents and thus believe they have the right of treachery both to their political party and to the people of the UK.

In the case of Brexit David Cameron asked the people where they stand on UK membership of the EU. They responded in numbers never before witnessed – the majority wanted out. The people have spoken. The Executive has their instruction to leave the EU; the obligation of the back-bench MP’s to support the executive in the process regardless of their personal preference or how their own constituents voted – this was a national referendum; not regional.

So why are these rebels not dismissed? There must be a mechanism to dispense with these people. They are on the wrong side of the argument and are naphtha to the politicians in Brussels fighting to hold their power over the UK including extracting continuing contributions to its failing economy. Complex negotiations for Brexit are difficult enough without having the enemy within your own camp. As a trained negotiator the fundamental mindset is that life is simple, only people make it difficult. Unfortunately, the Churchillian orator powers of Socrates are a scarce resource at present so I fear we need an alternative ‘Night of the Long Knives’ to rid us of this treacherous few so that the people get what they expect. I would certainly like the opportunity in open debate to expose their lack of understanding of the EU venture to the UK people. When do these people wake up to the fact that the UK economy is robust despite the politically motivated propaganda of the likes of OECD and IMF. Of course the EU will trade with the UK on fair and reasonable terms – the trade deficit alone in favour of the EU is Euro one billion each week! Of course the most important centre of Global banking will remain in London (the USA have made several unsuccessful attempts to move this influence to the USA). And history has shown that the UK prospers better when it controls its own destiny.

Just a brief note on the antics of the House of Lords remoaners. Anyone familiar with the Corn Law of 1932 will understand the vested interests of hereditary peers in their fear of losing substantial subsidies under the Common Agricultural Policy that should have been scrapped years ago.

If we go back to 1940 Clement Attlee, the leader of the opposition Labour Party understood the realities within Europe and proposed a grand coalition, but absolutely not under Prime Minister Neville Chamberlain. Today we have a Labour Party in disarray regarding Brexit. Last week demonstrated that the rebels in the Conservative Party could easily be countered by the Brexiteers in the Labour Party. Thus, one remedy to rebels against Brexit would be a grand coalition of MP’s committed to the majority will of the people specifically for Brexit to achieve the best possible terms for Brexit putting Brussels on notice that the UK is united across the major parties in responding to the mandate of the British people. This would change the whole dynamic of negotiations with the EU and result in the effective beheading of the remoaners as would be the case under that greatest of Generals, Sun Tsu. Furthermore it would neutralise irrelevant but mischievous minority parties such as the Liberals and the SNP.

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Has Democracy As A System of Government Run Its Course?

 

In a speech in the House of Commons on 11 November 1947, Winston Churchill said: No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time. Since then democracy has shown itself as a far from perfect system in that the inherent assumptions are that every voter has the capability to understand the issues, and the people elected to deal with the issues have the appropriate experience and wisdom to conduct the majority view of the people. Recent elections throughout the World demonstrate that neither assumption is reasonable. The result is a range of governments derived from populist to unwitting authoritarian.

My attention was drawn to the breakdown in democracy in Europe during the ratification of the Maastricht Treaty, and later the Lisbon and Nice treaties, where various EU member Governments were unable to achieve ratification of these treaties on a free vote but were instructed by the Brussels apparatchik to continue to poll until they achieved the required result, i.e. undemocratic attrition.

In the UK we have two clear examples. The BREXIT referendum attracted the largest turnout of any election in recent times by percentage of votes, and numbers who voted, thus should be deemed to be compliant with the fundamental principle of democracy. Using the fundamental principles of democracy the outcome should be accepted by all, and the Parliament of the day thus mandated by the people to conclude the exit process. Yet the remainers, or remoaners as I prefer to call them, are so vehemently opposed to the democratic result that they continue to attempt to thwart the BREXIT process without any consideration of the damage that they inflict on achieving a good divorce settlement for both the UK and the EU. To these people I say that you have no regard for democracy, the history and future of the UK, and the turnout for this important vote, but are instead far too consumed with blinkered argument with little concern regarding the damaging consequences for the people who voted, and subsequently respected the outcome of the referendum. I can assure these people that if this referendum were to rerun the vote would be more overwhelming.

Who are these people who cannot accept a democratic majority, and why do they think that they can abandon the principles of democracy in favour of a minority? I noted during the Andrew Marr show last Sunday that Labour MP, Chuka Umunna, was stating that BREXIT is so important that it should ride above party politics or personal ambition of Government members but every sentence he uttered was both party political and promotion of his own ambitions. During this week he has furthered both by stating that Parliament should have a legally binding vote on the BREXIT deal before it can be ratified – yet another attempt to thwart the process, and thus the will of the people. What a hypocrite. For balance I can also identify a Conservative MP, Anna Soubry who caused eyes to roll on the Conservative benches in the House of Commons this past Monday when she continued to vent her vehement attack on BREXIT and her party leaders. If she does not understand the principles of democracy why is she in Government?

Then we have the devastating miscalculation of the recent General Election. Short-sighted and blinkered arrogance in the extreme.  My thoughts on reading the Conservative Party (latterly described as Presidential) Election Manifesto are already published. Why did no one with political clout in the Conservative Party face down Teresa May and alert her to the inevitable consequences of such a poorly considered manifesto? I can suggest that study of the ‘Art of War’ by Sun Tzu is required study by her in future campaigns.

Of course, Jeremy Corbyn understood such consequences and saw an opportunity to seize power. He used the rise of a populist vote, especially with younger voters more consumed in their smart phones than in the real world. He promised them anything for their vote even though it was clear from the outset that none of these promises were remotely deliverable, as per populist socialist governments in South America and Africa. His was a particularly exaggerated socialist agenda that had none of the subtle argument proposed by the likes of Tony Blair. This was blatant abuse of process with the certain outcome of bankrupting UK plc. But why did these voters not see the inevitable outcome?

Today Jeremy Corbyn sees himself as the socialist saviour and although verbally supporting the BREXIT outcome he is using it as a party-political football in an attempt to unseat the Conservatives to seize power for himself. For the remoaners who think that BREXIT will be bad for the UK economy I ask them to consider the devastating consequences of a Corbyn led Government. The centre left government under Tony Blair left the Treasury coffers empty (as with all previous Labour Governments since WWII) – but this will be nothing compared with bankruptcy as Corbyn pursues a left socialist agenda. Perhaps his followers should consider the irony in my past blog ‘General Election 2015 – A Sorry Tale’.

The BREXIT campaign was bruising but, from my dialogue with people, they understood why they wanted to vote as they did irrespective of the blindingly aggressive rhetoric from both sides. My view is that the politicians were so outrageous that their words became an incoherent noise. The doom-and-gloom merchants such as David Cameron and George Osborne hid behind rigged outpourings from the likes of OECD and IMF clearly geared to frighten voters, but subsequently found to be completely false and unfounded. The UK economy has prospered post-BREXIT, and the EU is beginning to understand that THE UK is not about to bail out Europe for the third time in the past one hundred years. Teresa May has offered what the International Court of Arbitration would likely deem as legally obligated under the Lisbon Treaty. Any more requires valuable reciprocity from the EU. The second largest contributor to the EU is obviously a real loss to them, but they had the opportunity to address the needs of the UK people, but chose in their blind arrogance, to ignore such needs. Now they want to put valuable trade for both parties at risk to continue to prop up a failed system which is blatantly undemocratic. My instinct tells me that there will be substantial turmoil within the EU countries if trade is not maintained with the UK. The interview with the Foreign Minister of Spain, Alphonso Dastis, by Andrew Marr last Sunday was very revealing as he clearly stated that the close relationship between the UK and Spain pre-dates the EU. He argued that seventeen million UK visitors to Spain each year plus some 750k of UK citizens choosing to retire in Spain is not something they intend to put at risk.

So, what does all this say about our current form of democracy. We have politicians who choose the ignore the majority will of the people. We now have far too many career politicians who clearly lack the experience and wisdom needed to execute their office. We have an unelected powerhouse in Brussels who have no regard for the will of the people when it does not concur with their agenda. We have multiparty systems in many countries that govern by painful compromise (rather than strong leadership). We have too many politicians who have little regard for the ability of people to think for themselves and thus govern by fear tactics. And we have an electorate who feel disconnected from the process and thus disinterested. Instead of democratically thinking about an issue in the interest of all, they concern themselves with what matters only to themselves. Is democracy about to implode, and what phoenix will rise from the ashes?

 

 

BREXIT – 120 days on

univestBREXIT – 120 days on

It has been some 120 days post-Brexit, so where do we find ourselves when measured against the doom and gloom of the Remain campaign. We have a new PM, Teresa May who appears clear on what Brexit means, discovery that global organisations such as the IMF knowingly misled the British people, even the principal architect of the Eurozone claiming that it is now a ‘House of Cards’, and churlish self-interests trying to scupper Brexit with no regard for the democracy that they claim to cherish.

It is really sad for me to see that, amongst a significant number of people spanning all classes, there are elements of the British character that do no justice to our heritage of the UK great explorers and inventors that shaped this World of ours. I watched in disdain the current and excellent TV costume drama ‘Victoria’ recounting the trials and tribulations of Queen Victoria who reigned during the Industrial Revolution as scaremongers, vested interests, self-righteous, and ‘not-invented-here’ jealousy tried to stop the introduction of the steam locomotive. Thankfully, Prince Albert saved the day. Even today I hear eco-warriors stating that the Industrial Revolution was the beginning of the end of mankind, but where would these people, or even the World be without trains. India thrives on the railways, whereas Brazil, without much needed rail infrastructure, has serious transport and thus economic problems – look at the speed of rail infrastructure development in China.

Then I am reminded of the Neville Chamberlain pacifist era before the second world war when Winston Churchill, with his worldly experience, could see the ambitions of Hitler but, in spite of his fine rhetoric, could not persuade enough people that we needed to prepare ourselves for the inevitable. Indeed, according to Boris Johnson in his captivating book ‘The Churchill Factor: How One Man Made History’, had the war been delayed by some two weeks Churchill would already have been hounded out of office!

We are told that we must learn from the past, but do we? During the referendum debate we had the David Cameron, George Osborne and Nick Clegg elite, all from privileged schooling, all career politicians with ideologies not supported by any worldly experience, and easily persuaded by more scurrilous and self-serving influences, preaching doom and gloom if we did not stay part of the EU project. They rallied any vested interest they could find including the IMF, the OECD, and President Obama – an embarrassing chapter for all of them. But history will not record any of them as good, let alone great politicians. David Cameron was clear in his Bloomberg address that if the UK did not get significant Treaty changes for the UK then he would vote out, yet like Chamberlain he returned from Berlin with a worthless piece of paper. He will be remembered as someone who readily changed his mind on substantial matters – not good leadership. But he has realised the errors of his ways and will fade quietly away. Osborne still finds occasion to try to placate his ego, and Clegg is now trying to rally support for a blatant counter-offensive to Brexit on the basis that people do not know what Brexit means. Let me assure him that the core ‘middle-England blue-blooded Brits’ that always save the day in times of need know precisely what it means – a clean exit from the EU in all respects, returning to a Sovereign State, just like most other countries in the World. As has been shown since Brexit, the UK is a major player in this World, and when we sneeze the World coughs. The EU needs the UK far more than the UK needs the EU.

So what has happened since Brexit. I would suggest that the most significant outcome is the clear demonstration of how the elite politics of today is so out of touch with reality, as is being played out in the USA today. What did go on behind closed doors that caused Cameron to accept that the UK should be sacrificed for ‘the greater good of Europe’? How many more times does the UK have to make significant sacrifices for Europe before Europe (mainly Germany) learns from it?

Let me take some words from a Telegraph article summarising a post-Brexit report from the IMF’s Independent Evaluation Office (IEO). This report goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way EU insiders used the Fund to rescue their own rich currency union and banking system. It states:

‘The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.

This is the lacerating verdict of the IMF’s top watchdog on the Fund’s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods institutions.

It describes a “culture of complacency”, prone to “superficial and mechanistic” analysis, and traces a shocking break-down in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation.’

The IEO Report states that since 2011 some 80% of all IMF lending was secretly used to support the Euro – not within the mandate of the IMF, and why Asia and Latin America are so incensed. Add to this the recent publication by Prof Otmar Issing, the first chief economist of the ECB and principal architect of the Euro, in which he states that the rules laid down for the Euro have been so debased by politicians that the currency, and thus the Eurozone, is but a ‘House of Cards’ waiting to collapse. Thus the desperate need to keep the fastest growing economy in the Western World, the UK, inside the EU, not least because of the unique capital raising power of the City of London – thus the lies to the British public by both the IMF and the OECD during the referendum campaign.

By far the biggest everyday loss to the EU is the City of London. With the City inside the EU it could claim to be the most significant financial power on the international stage. Without it the Eurozone does not even have the capacity to clear its own currency. The EU desperately needs the capital raising powers of the City. All of this posturing regarding passporting can be put into perspective by ING announcing last week that it is moving some 40 of its prominent traders from two locations within the EU to London. The worst case scenario is we will return to the days before passporting whereby, under the rules that international banks can only engage in business in countries in which they have a physical presence, banks will re-establish little more than a rep office through which transactions will be directed to London. As for moving banking to Frankfurt and/or Paris it should be noted that during my more than 35 years in the City this has been muted on a number of occasions. Paris is a non-starter for a number of technical reasons, and Frankfurt for even more including that no self-respecting high flier banker would consider living there.

As for corporate business I think that the recent announcement by Apple, the largest company in the World, that it is moving and consolidation its European headquarters in London, with all of the tax implications included, states the blindingly obvious – London is the gateway to Europe.

In a recent French Presidential Campaign speech by Nicolas Sarkozy he clearly stated that his first day in office (if elected) would be spent in Berlin (note: not Brussels) putting a new EU Treaty together that would address the concerns of the UK to encourage them to stay within the EU. He knows that there will be revolution in France if the farmers got even a whisper that tariff barriers were to be imposed on the UK.

In Germany we also have elections on the horizon. I am certain that the elite of Germany will resign themselves to the inevitable Brexit and thus quietly encourage election results that will ensure that no harm comes to the valuable existing trading relations with the UK.

The principle voices of Angela Merkel in Brussels, Donald Tusk, Martin Schulz, and Jean-Claude Junker, are synonymous with the problems faced by the EU. On the one hand they are stating that the EU will survive Brexit. On the other that are issuing instructions to member states to clamp down on rising nationalism.

The good news is that GBP has depreciated from its over-valued level by some 17% causing the UK Stock Market to regain some of its lost value over recent years, and provide the stimulus for the return for a much increased manufacturing base – jobs, prosperity, less dependency on imports. It should be remembered that Germany pushed through the Eurozone project to devalue the over-inflated Deutshemark by some 30% – great for Germany, but a disaster for most other members.

This devaluation will mean price increases to the UK consumer of imported goods and thus stimulate much needed, but controlled inflation reducing the need for QE and restoring interest rates to more normal economic levels. Some of this increase could be artificial as EU Governments put pressure on their major suppliers to increase prices to the UK as per the much publicised Unilever to Tesco increases which resulted in an embarrassing climb-down by Unilever. The real price increases will put upward pressure on wage demands – good for the workers who generate the wealth but contained to 2% pa or less wage growth over recent years, but not so good for fat executives who have enriched themselves with wage growth of around 10% pa during the same period. Also we can be competitive manufacturers and return to the days of ‘Buy British’. We can even return to eating our own delicious apples, currently outlawed by the EU to force import from the likes of France. The UK Government could easily buffer the increased price of fuel and energy (increases not EU related) by reducing, or indeed eliminating all of the absurd anti-competitive eco taxes on UK energy prices.

Trading with the World, including Europe will certainly not get worse, but is likely to improve. The intransigence of the EU Commission regarding trade with the EU is legion – ask the Americans. Our global relationships will prosper far more after the dust of Brexit has settled.

The issues we face today are the posturing, petulance, grandstanding, etc by both a dying EU and those die-hard remainers in the UK who have jettisoned democracy in favour of their own self-interests. This causes turbulence in the markets, no doubt exacerbated by the more influential remainers. The professional financial markets love such turbulence as they use it to generate good profits. The losers are the general public in whose lives the media relish creating uncertainty, and which impacts their cost of living resulting in understandable protest. How many media outlets have directly associated recent fuel price increases with Brexit? Oil prices are recovering from two years of global turmoil, and should settle around US$60 per barrel. The UK has a much needed currency devaluation regardless of Brexit. De facto prices will increase from their extraordinary lows over recent months regardless of Brexit. I can remember when oil prices were US$16 per barrel, and more recently US$120 per barrel – but neither to do with the EU or Brexit.

Brexit has not yielded doom and gloom, not even a technical recession. The UK is now projected as the fastest growing Western economy. Just as with the resistance to the steam locomotive in Victorian times it is time to ignore the doomsayers and grasp the opportunities that now present themselves so that, as with the proliferation of railways, the UK will again rise be a major and great player in this World in its own name.

 

2-weeks post-BREXIT. Where are we?

univest2-weeks post-BREXIT. Where are we?

The EU Referendum has raised a number of issues that show why this referendum was needed. During recent years politics has become too elite and detached from the people it is there to serve. A good shakeout is necessary, as is happening in the USA. BREXIT has triggered this process in Europe, and especially the EU. So where are we post-BREXIT?

Scare Story: The UK will suffer unprecedented political turmoil

This is true, but more in the EU than the UK. The reaction at the quickly convened emergency meeting of the European Parliament on the Monday following BREXIT resembled more a Third World bun fight than a rational First World debate. The exchange of insults and rebuke was extraordinary.

The UK political turmoil has shown that David Cameron lacks the qualities of a true leader. Having consented to a referendum on the basis of a reformed EU, which he did not achieve, a strategically capable leader would have returned from Brussels to announce his frustration with Brussels, and then overseen the referendum debate without expressing his own view, or that of the Government, ready to implement the decision of the people (democracy) thus providing the political leadership and continuity post-BREXIT that is currently so lacking. We have a political vacuum until we have a new leader – not good for confidence around the world.

This political vacuum has fuelled an anti-democratic minority to challenge the outcome of the EU Referendum result. It is interesting to note that these whingers obviously have the view that a democracy can only be democratic when the vote result concurs with their view. And these whingers include people like Richard Branson who, reportedly, saw some 30% wiped off his Virgin empire. The people have spoken and, with a larger turnout than your average General Election, the clear majority voted for BREXIT. In a democracy every citizen has the obligation to make themselves aware of the issue requiring a vote of the people, and to cast their vote accordingly. In this digital age there is no excuse for lack of information. The result is clear, so to the whingers – move on; we will flourish.

The positive result of this turmoil as we approach political summer recess is that the UK Civil Service has time to consider the optimal exit terms for negotiation with the EU, and a period of reflection by the EU machine. As I refine this blog I found an article in yesterday’s London Evening Standard written by Frank-Walter Steinmeier, the German Foreign Minister, in which he acknowledges that the EU elite have been indifferent to the voices of the people, causing great unrest. His solution – even faster political and economic integration. Will they ever listen?

Scare Story: The UK markets will collapse with pensions and quality of life in decline, and London will lose its status as the Global Financial Centre

Since the casino players, looking purely to make money from the volatility surrounding the referendum vote, have gone to sleep (when will the G7 address this global destabilising problem) the UK stock markets have stabilised, and indeed risen some 15% – a vote of confidence by investors, and good for pension funds. Adjustments will occur as the UK realigns itself; albeit the attack on commercial property funds is bizarre. Furthermore all talk of the capital markets moving within the EU has evaporated – the underlying covert motive by both the USA and Germany having been neutralised.

Our EU partners have not been so fortunate in that the BREXIT vote has caused much instability within the EU forcing markets down by as much as 15%. Although they have recovered some of these losses there is little evidence of full recovery any time soon. Italy is on the brink of a banking crisis, and there is much discontent within the EU. We have the USA regulators stating that both Deutsche Bank and Banco de Santander fail their stress tests and thus must increase capital if they wish to continue to trade US dollars. And of course VW are looking at considerably more substantial fines around the world. There is also reported a vote of no confidence for the EU to settle Euro transactions.

The doomsayers claim that the 10% fall in sterling against the US dollar is a major disaster for the UK. On the contrary sterling has been over-valued for some time damaging the ability of the UK to sell its goods overseas. As I write this blog sterling has recovered to 1.29. It would be better for the UK economy if this rate fell below 1.26 for a few months before the US Presidential elections will likely deflate the US dollar, pushing the value of sterling up again. I would remind the whingers that when Germany pushed for the introduction of the Euro the result for Germany was an effective significant devaluation of the Deutschemark which was much needed by the German economy to trade themselves out of the grossly underestimated cost of reunification – but at a real cost to all other Eurozone members.

Scare Story: The UK will require years to negotiate new trade deals with the Single Market and the World

There are a number of countries, including the USA and Germany, who want to be first to sign trade deals with the UK. There is much confusion being hoisted by the whingers about the single market. The UK does not need to be part of the single market for the same reasons that are frustrating the trade deal between the EU and the USA (who already trade more with the EU than does the UK). What we need is tariff-free trade deals with each of the member states who wish to engage with us. If Germany can do this then why not all other member states? The EU is fragmenting, and will need significant reform if it is to survive – including trade relationships. Regardless of the political rhetoric Germany will not risk the loss of its significant exports to the UK, and France will follow.

Scare Story: UK citizens will lose the right to freely travel, work and live in the EU countries

Today UK citizens need a passport to travel into the EU member States, and to return from them. Travelling freely within the EU countries is defined by the Schengen Agreement between member States and thus does not change anything for UK citizens. Moving to an EU member State may change, but looking at the number of EU citizens living in the UK reciprocity is the likely outcome.

Scare Story: The UK is too small and insignificant to go it alone

The UK coughed on the 23rd June, and the whole world sneezed, and is still sneezing. The UK has always punched well above its weight, and always will. London is the most important global financial centre in the world, and thanks to BREXIT, will retain this status. The EU loses one of its two permanent seats at the UN Security Council, and loses the global diplomatic reach enjoyed by the UK. As the fifth largest economy in the world the UK will find its feet over the coming months, and then flourish. The EU may not be so lucky.

 

A few days ago I listened to an interesting discussion regarding the total breakdown of the former USSR. The original discussions with Gorbachev revolved around the satellite states adjoining the eastern borders of Western Europe. However, as the Berlin Wall fell practically all members of the USSR declared their own freedom from Moscow. The view was that Moscow thought it could impose a homogeneous citizen unity across the USSR without any regard for the diverse nature and cultures of each nation state. Thus laws and regulations formulated in Moscow intended to create a homogeneous USSR caused resentment and unrest in these States – the response being typical Roman-type repression by Moscow, and ultimately downfall. Even the Romans knew better when they built their empire. What could the EU learn from this? Brussels relentlessly moves towards a United States of Europe without the consent of the people. Whether they use brute force, or financial pain they attempt to impose their will over each member State. The majority of people in the UK have said ‘NO’, and I fully expect others to follow.

A few weeks before the referendum vote I listened to an interesting debate by university students regarding the EU Referendum. They did not have guest speakers, rather relying on four students on each side of the debate to put their respective cases. The debate was surprisingly articulate. The audience was an estimated 100 students who, after the debate, overwhelmingly voted for BREXIT. This tallies with the young vote of some 25% of 18 – 24 year-olds. The triangle of knowledge for 16 – 24 year-olds (post-university) consists of students who have both the intellect and knowledge to analyse issues, students who have the knowledge but not enough intellect to fully appreciate the issues, and the remainder who prefer to go to the pub and watch football. The proportion of students who have both the intellect and knowledge average around 23%. Thus most of the 25% who voted for BREXIT are likely to have understood why. The other two sectors are likely to take the safe option to stay with what they know, or not vote. Therefore, I do not accept that the older (wiser) voters in any way let the young down. This is why the social engineering of the Blair/Brown Government sending 50% of the young to university was ridiculous, a waste of money, and did nothing for those who leave lesser universities with a degree and considerable debt but with no prospect of the suitable job that was implied was available for them.

I have also heard from the young that they wanted to remain in the EU to take advantage of the Erasmus program to study in Europe not realising that this program has little to do with the EU, but formulated as an exchange program between the universities, and includes universities in the USA. There is no possibility that this will end as a result of BREXIT, not least because of the significant number of European students who want to take advantage of the far superior red brick and CAT universities in the UK.

Just as a footnote, I chose to assess the views of the more canny Scottish voters regarding the post-BREXIT opportunist actions of Nicola Sturgeon, First Minister in Scotland, as I did before the Scottish Independence Referendum. The result then was a resounding vote to stay in the UK. A vote today between the UK and the EU would yield the same result. So Nicola, don’t waste your time as the people do not want your pathway, and I cannot imagine the EU entertaining yet another country joining on a net beneficiary basis in any event. The EU Referendum was on behalf of the whole of the UK, and the people spoke. Let it be. There is a bright tomorrow for the UK, so let us focus on the future together.

A View on post-BREXIT not yet discussed

univestA View on post-BREXIT not yet discussed

In general I tend to agree that the economic data banded around from both sides of the EU Referendum argument to be irrelevant, not least because such data will be skewed by undeclared terms of reference, and vested interests. However, there are referendum issues not being addressed, and a likely outcome scenario not even discussed.

We invariably hear both Cameron and Corbyn declare that we should remain in a REFORMED EU, but has any political commentator asked what they mean by REFORMED, and how they intend to achieve such reform? Not to my knowledge. This is a very important point as I would suggest that the deal that Cameron produced at the start of the referendum is little better in the medium to long-term than the agreement waved at the people by Chamberlain just before WWII.

As a seasoned player in real-world geo-politics and geo-economics for over 35 years I would like to suggest a likely outcome of a BREXIT vote. Certainly there will be much hostile media posturing by EU mandarins, not least to try to prevent a rush to the exit by other member States. However, behind closed doors the mood will be far more sober as Germany almost certainly cannot sustain the EU without the UK. It is reasonably certain that free trade will continue as the German Government could not sustain the wrath of its corporate giants who export much to the UK, and we are well versed in the way that French farmers will bring the French Government into line. What I expect to happen is a call between Berlin (not Brussels) and London to determine what reforms would change the view of the British people. Thus the period following BREXIT would more likely be Treaty reform to put to the UK to keep the UK in. The UK Referendum result is not legally binding on the UK Government so a vote in the House of Commons to accept a revised (reformed) EU Treaty with a General Election in sight would likely keep us in the EU. The BREXIT would merely accelerate the reforms that are generally accepted as needed throughout most member States, with the full support of most member States. Thus a BREXIT vote could see us as a good citizen of Europe.

Another important factor in this debate is the supremacy of English Law, especially in trade and finance. The reason that the City of London is the financial centre of the world is the global confidence in English Law over all others relating to trade, capital markets, and insurance. If this is diluted by EU supremacy then the resulting instability will be felt globally, as well as UK GDP. During my career Frankfurt has attempted on two occasions to steal part of this valuable asset, and France continues to dream of doing the same. Retaining the supremacy of English Law in this EU arena is vital to UK prosperity.

As for the global impact of BREXIT there is no doubt that there will be a short period of volatility but I would suggest that such volatility will pale against the global impact of the recent adjustment in China and its continued economic slowdown, and a Trump victory in November. Unfortunately, we live in times of a new breed of unscrupulous large blocks of wealth that avariciously feed on volatility purely for greed, and they have the wealth to exaggerate such volatility to maximise their profit. When will the G7 address this global instability?

BREXIT – In this week of tribute to the Bard

Shakespeare lives here

In tribute to the greatest Bard

Compose some lines, it will be hard,

But once again, we are faced

With treachery, to be embraced

EU reform was his spoken mandate

Failed; now he moves to collaborate

Heed well the falseness of his word

The fear to force you into herd.

 

Those who claim to fight our case

Have failed, but want that we remain in place

What do they have us to believe?

That they knowest best; are we naïve?

EU citizens with their feet do vote

The UK is the place they bloat

We would like to welcome those

Who satisfy our needs and goals.

 

Rule Britannia, let not you fall,

Remember all you do enjoy

May this fair land we love so well

In dignity and freedom dwell

Be remembered those who gave their future

To make this nation free to prosper

Let not your spirit be subdued

By fear of raging platitude.

 

Let’s not to foreigner’s bow

Their voices hollow, not in favour thou

They would not heed to what they say

So why would we bend to their way?

We are made of sterner stuff

With resolve and fortitude, we rebuff

We are strong; not slave to obey

So bid them well, be on your way.

 

Compare ye not with a lesser realm

Who have not our powers to overwhelm

Our omnipotence they do not share

Nor standing and heritage to declare

When we do call, our voice will be heard

They dare not our call to be spurred

They will not treat us with disdain

Lest Europe will despair again.

 

Our past doth show our stealth and pride

Thus let not our omnipotence be denied

And think of England’s pleasant land

Is not for those of foreign land

Who wish to smite our honours past

And crush our national interest

Shout it loud, Britons awake

Lest those abroad your life will take.

 

So harken all you Brits, be true

To what it is you need to do

To save this land, its history share

With those you are yet to bear

Let not your offspring be denied

The hopes and dreams for which men died

Or be defined by those abroad

Whose plan for us is truly flawed.

 

Remember to the words we sang

When faced with that beleaguered land

Vera Lynn, our spirits raised

Again we showed; our courage blazed

‘There’ll always be an England

And England shall be free

If England means as much to you

As England means to me.’

 

And in the words of the great Bard himself:

This royal throne of kings, this sceptred isle,
this earth of majesty, this seat of Mars,
this other Eden, demi-paradise,
This fortress built by Nature for herself
Against infection and the hand of war,
This happy breed of men, this little world,
This precious stone set in the silver sea,
Which serves it in the office of a wall
Or as a moat defensive to a house,
Against the envy of less happier lands,
This blessed plot, this earth, this realm, this England.

Shakespeare’s Richard II

Is Putin really orchestrating the disintegration of Europe?

univestIs Putin really orchestrating the disintegration of Europe?

I have just finished reading a report on Bloomberg News titled ‘From Rape Claim to Brexit, Putin Machine Tears at Europe’s Seams’ by Arne Delfs and Henry Meyer citing incidents such as the ‘Lisa Affair’ in Germany as evidence that Putin is orchestrating the disintegration of Europe. This claim is worth a little exploration.

There is no doubt that the paranoia that is Putin sees a strong Europe as a direct threat to Russia, especially along its borders – Ukraine being a prime example. As Russia is not in a position to rapidly grow in spite of its energy reserves then his strategy must be to weaken his perceived enemy – classic Sun Tzu. We have also witnessed his desire to be seen as a major influence in the World with his intervention in Syria. So can he manipulate the disintegration of Europe?

The evidence presented in the Bloomberg report would suggest that he can, and indeed, is exploiting the weakness in the EU system. But is he a primary mover, or just having a little mischievous fun exploiting the clear fault lines in the EU model as retaliation for the embargo imposed on Russia for past mischief?

For anyone to exploit a large system such as the EU in this way there must be inherent weaknesses that can be exploited. We saw during the Ukraine crisis that the response by the West had to be tempered because of the overwhelming reliance on energy supplies from Russia by Germany (some 84% against the UK 4%). Why would a so-called major economy allow itself to engage in an energy policy which left them so vulnerable? Why should the West allow such an economy to influence its response?

What I have observed over many years is that every time a closed system tries to impose itself on other systems the oppressor fails, e.g. Germany on Europe, Russia on USSR. Even the Romans, during their expansionism, knew that that had to befriend the conquered and only impose changes regarding the needs of Rome in exchange for protection. They knew that they could not possibly hold the line of their empire if they tried to completely impose their will over the oppressed. Indeed, they used a philosophy that made it an honour to elevate the compliant to the status of a Roman citizen – probably the first peoples honours system.

Putin appears to be exploiting the clear divisions in the EU regarding the attempted imposition of the German way, albeit under the Brussels umbrella, on the other EU members. Of course, as with all such closed States, they believe that they have a successful model which they would like to share (impose) on others to allow them to indulge in the prosperity of their system. I have argued in previous blogs that there are inherently fatal flaws in the incestuous German closed system akin to Japan in the 1980’s and thus will ultimately fail. The nearest closed system to that of Germany within the EU is France albeit that the closed system in France consists of nationalised industries and banks – the topical example being EdF – and France is technically bankrupt.

But Germany has shown itself to be flawed, notably in its handling of the refugee crisis. Their double-edged sword of appearing to act with compassion as a cover for their desperate need for some one million skilled people to replace the erosion of its own workforce since 2012 through emigration to the likes of the UK, Switzerland, the USA, and Australia, has backfired. The Lisa Affair appears to be a ploy to further add to the woes of Angela Merkel as she loses popularity as the usually compliant German population now regularly take to the streets in defiance.

So, assuming Putin is playing games, should we be concerned? Politicians play games most of the time. Look at the upcoming intervention of the USA in the BREXIT debate. Is the USA really concerned about the UK, or their own influence in the EU for which they use the UK as their gateway? Would the USA ever consider surrendering any form of sovereignty to another nation to engage with it? I fully understand both the short-term geo-political and geo-economic consequences of a BREXIT – and it is not good. But everyone appears to be asking the UK to sacrifice itself for the sake of global stability. Why don’t these interlopers focus their concerns towards the mandarins in Brussels, and who could still save the day if vital EU reform is agreed? How many more times in history do the British people have to sacrifice themselves to save the World? If Putin wants to play games with Germany to accelerate realisation then so be it. If he is successful, the unintended consequences (on his part) might be the tonic that Europe so desperately needs.

BREXIT – Could The Right Thing To Do mean Uncertainty?

univestBREXIT – Could The Right Thing To Do mean Uncertainty?

I had hoped to move on from Brexit for a couple of weeks but my ears are ringing with the flagrantly misleading messages from the ‘Remain’ faction of the Government, especially self-serving junior ministers protecting their personal future career by towing the party line.

Over the recent past we have continually heard the pathos statement on every political issue ‘The Right Thing To Do’, and it is still in use today. In the Brexit campaign the repeated messages from the ‘Remain’ politicians are ‘Could’ and ‘Uncertainty’. Philosophers over the centuries have argued that in mankind there is no such thing as ‘Right’ or ‘Wrong’; only ‘Acceptable’ and ‘Unacceptable’. And the interpretation of both are subject to regular change. Even such hard statements such as ‘It is wrong to kill your fellow man’ has numerous exceptions – what are armies for? In certain branches of mathematics 2 + 2 = 4 would be the wrong answer.

The word ‘Could’ has to be the weakest example of the words available such as ‘Likely’, ‘Will’ or even ‘Inevitable’. And in life the only certainties are that night will follow day, and of course, taxes.

So why are these words so prolific in the Brexit debate? As none of them has any defined substance, and thus can be used without any political accountability, one can only assume they are expressions intended to induce fear, and even terrorism amongst the population, without recourse. Is this referendum considered so irrelevant by the ‘Remain’ faction of the Government that they can trivialise the issues in this way? Sounds like their message to the population is ‘We know better than you what is good for you and your offspring, but you will not understand the arguments, so just do as we say’. I can only hope that the population get this message loud and clear, the hackles flair, and the backbone that won the Battle of Britain prevails. After all Cameron’s so-called deal could be compared with the Chamberlain letter of pacification from Hitler – before Winston Churchill came to the rescue.

As we are discussing political rhetoric, perhaps a revisit to the wisdom of Aristotle may help.

LOGOS: We are faced with the option to leave the political body known as the EU. We must weigh the arguments for and against, and make our decision by means of a referendum of the people to be held on 23rd June. We, your Government, acknowledge and accept that the EU is in need of significant reform as we do not agree with its current course. We have debated with the autocrats in Brussels seeking commitment to these necessary reforms to protect the British people and their way of life – but we have failed in all respects to date, even though the autocrats in Brussels are aware that this could result in the UK leaving the EU.

ETHOS: We, the Government, are fully aware of our failings to date, but we still believe that we should continue to argue our case from within the EU in the hope that we may, some day, convince the autocrats that we do not wish to become part of an undemocratic United States of Europe. In the mean time we have achieved some exemptions from further integration, albeit open to challenge.

PATHOS: We, your Government, reluctantly accept that our resolve during the Bloomberg discussion leading to this referendum has failed to materialise, in spite of best efforts on our part. We further accept that our stance is a real gamble that we can effect major reform before the EU slowly, but surely, erode our exemptions. But we, your Government, truly believe (well at least half of us) that the right thing to do, in the interests of the UK people, is to remain, as an exit could mean an uncertain future.

Which way would you vote?

 

BREXIT will not isolate the UK in Europe

univestBREXIT will not isolate the UK in Europe

I have received a number of comments suggesting that BREXIT will isolate the UK in Europe. As I have absolutely no interest in isolating the UK from Europe I would like to address these comments.

If you look back to the various blogs about the EU I generated in 2013 it should be clear that I consider that the UK should be at the very heart of Europe. If we look back at the two configurations suggested by Winston Churchill we essentially see one option where the UK would act as broker between the then OEEC (Organisation for European Economic Co-operation) and, primarily, the USA – a role we still perform in part today. The other option was to create a United States of Europe where the UK was the dominant player at the very heart of Europe. Never, in his wildest dreams, would he consider a role as a marginalised player in the autocratic EU of today.

So where is the confusion? Fundamentally BREXIT is about leaving the political system that is the EU – not Europe. Furthermore, BREXIT would lead the way for others member states, who cannot wield the power of the UK, but of similar mind, to follow. Other EU members who do not favour or qualify to join the German-Franco dominated Eurozone, could also combine with the UK to seek a new arrangement. This is where the UK, after the experience of BREXIT, would be ideally placed to take the lead role. A new grouping, under UK leadership, would be based on free trade with the Eurozone core (not the nonsense contributory scaremonger version), and on mutual interests elsewhere in the world – not least the Commonwealth countries. The new form of cooperation would be between independent sovereign European Nations and absolutely free of compulsion towards economic convergence or political integration.

Thereafter survival of the remaining EU ultimately depends on the fiscal union of those who use it. Fiscal union, defacto, demands political union. So the EU can only survive for as long as the remaining rich countries are prepared to transfer a proportion of their wealth to the poorer ones, and those poorer ones are prepared to endure the stark conditions of austerity the rich countries impose on them for receiving it. But the imposition of political union on the 19 nations that use it, (let alone the other 9 who do not, and may join the UK) no longer looks like a realistic option. As with the failure of the Schengen agreement on open borders, common sense suggests that we must have a fully integrated United States of Europe model for the Eurozone to survive. The reality is that there is little appetite to integrate 28 nations with disparate economies, different backgrounds, culture and languages under an undemocratic autocracy. Therefore, we need to find another way.

What I have always insisted is that the UK must have an alternate plan for Europe post-BREXIT that provides for the unity of the countries of Europe, but without the political integration. It would even be possible to keep the Eurozone for those member States that feel it beneficial (remembering that fiscal union means political union), albeit with a democratic oversight.

I am still firmly of the opinion that BREXIT will be the beginning of the end of the EU in its current form. The EU blind determination to continue its drive for ever closer union is in fact driving it rapidly towards the rocks of disintegration. If the EU were to recognise the impending disaster in time to materially change course before the June referendum, then it might be in the UK’s interests to stay in and participate in the process of reconstruction. But this is the only positive argument that can be made for staying in. As we saw with the Cameron negotiations the EU hierarchy seem so obstinately oblivious of the impending danger, that the case for us to leave is compelling. Remaining in without major reform would consign Britain to being a second-tier state in a United States of Europe controlled by the German-Franco-led Eurozone – which is totally unacceptable.

I was lucky enough over the past weekend to gain access to a paper ‘The Referendum – a step towards a Democratic, Prosperous and Safe Europe’ jointly written by Walter Reid, formerly Professor of Accounting and Financial Control at the London Business School, and Chairman MDA Training Ltd, and D.R. Myddelton, Emeritus Professor of Finance and Accounting at Cranfield School of Management. Rather than me summarise a lengthy paper I will provide an extract that speaks volumes of a proper English approach to the referendum:

Quote:

The paper proposes the establishment of a European Multi Currency Union [EMCU] to operate alongside the Eurozone.  Unless the Eurozone and the Brussels Commission come to realise that some such change is essential to hold the EU together – which seems unlikely – it will be necessary for it to be set up by a new Treaty outside the EU by member-states wishing to be free of the current Mission.  A parallel structure between the EU and the EMCU will enable Europe to present a common position in areas such as defence and internal security and any other areas where it is in the mutual interests of both parties to work together.

Britain has an important role to play in helping to set up this new democratic Europe.  It could provide a way for both Britain and our fellow-member-states who also want to escape the oppressive actions of the Eurozone to protect their national interests and build together a democratic and prosperous Europe.

To help achieve this crucial aim, David Cameron should adopt an approach that would mitigate further acrimonious and divisive argument between the Remain and the Leave groups – which could split his party and indeed the country. This would involve agreeing that his recent negotiations achieved much less than the ‘fundamental and far reaching change’ he sought in his Bloomburg speech and that the concessions gained are being challenged.  Further, they are causing serious divisions across Europe as other countries seek similar exemptions.

End Quote

The last paragraph indicates a needed change in position by David Cameron which would also stop all of the adverse speculation in the markets, which in itself is unnecessarily damaging the UK. I would hope that this paper becomes readily available in the public domain.