Tag Archives: Politics

Once upon a time ……. In Europe

univestOnce upon a time ……. In Europe

Once upon a time there was a fairy kingdom that lived inside a place called Brussels and was surrounded on all four sides by a land called Europe containing the Outer Realms. Brussels is aligned with another kingdom called Strasbourg. Both are inhabited by disembodied heads that speak from the walls of bars, and with yet another closed kingdom called Berlin, the abode of Brunnhilde and her Only Party. These Kingdoms are in eternal political syzygy and speak not with the people of the surrounding lands, of whom they know nothing. The following is a chronicle of what could befell them, and why.

After years of peace, the Kingdoms were taken greatly aback by the rise of the BREXIT Monster, their surprise being proof that they know nothing of the Outer Realms. They know nothing for good reasons, of which there are two. The first is that they pass their lives with each other and among each other and talking to each other and writing about each other and reading about each other behind the high walls of their Kingdoms. In organs of their own Insider community they endlessly write stories of the form ‘A soothsayer in Brussels replies to what some other sayer of sooth in Strasbourg said about yet another’s attack on someone else’.

They all dwell in monasteries called the EU Commission and the EU Council, where they are indoctrinated that they are the wisest of men, and inerrant. They have no idea that they are so hated in the strange lands without their walls, which on their maps are drawn as fog with notations such as ‘Here dwelleth dragons’. They do not know that there are people who agreed not with them. Were they not right about all things?

The other reason for their puzzlement is a powerful spell called ’Political Correctness’. This strong magic prevents the outlanders from saying anything that the Three Kingdoms do not want to hear. Anyone who engages incantations are branded slurs, which are truthful thoughts about sacred tribes, or who say inappropriate things about a certain little country whose only importance is being that it produces vast wealth for the Kingdoms, is now thrown into durance vile. Thus, the Three Kingdoms never hear anything they don’t like, and so believe that almost everyone without the walls loves them. They have scarce an idea what furies are roiling and boiling and stirring under the surface of the Outer Realms.

Now, until the BREXIT Monster appeared, the Three Kingdoms were ruled by a pseudo-democracy of one Bicephalous Party with two names. The Only Party consists of blackguards and quislings and pickpockets bought and paid for by the plutocratic oligarchy of large corporations, and the very rich. These tell the two halves of the One Party what to do. Every four years there is played a great tournament in which candidates of the Two Names of the One Party engaged in the most savage combat imaginable.  This is to distract the people outside the walls in the Outer Realms. Afterwards, nothing changes and all goes on as before though the division of the spoils may shift a little.

And in their ignorance and pride, the Three Kingdoms now engender a monster called BREXIT, and it has bitten them.

The Only Party always controls the villains because it controls the choice of pretenders to the throne. A pretender gains the Presidency by paying homage to the Only Party, and the rich who provide that money controls, as vassals, those who accept it. The pretenders are as straw and melons sold in a market.

Furthermore, the scribes and oracles of the Kingdoms say aloud only those things that are meet for the surrounding serfs to hear.  The persistent spell of Political Correctness amounts to a societal mute button and prevents the Holy Orders within the Three Kingdoms from noticing what stirs without.

Until the BREXIT Monster came raging, slouching toward Bethlehem, with which the Kingdoms confuse themselves.

And there is fright, and desperation, and rending of teeth, and gnashing of hair, for many are the rice bowls threatened.

The darkest of horrors is that the serfs might come to choose the manner of their government. For long years, the Bicephalous Party had presided over that most desirable form of democracy in which the people have no power. This laudable state they have maintained by never talking about anything of substance, such as unending wars in remote lands beyond the edges of the maps, or the importation of slaves from curious and unwholesome countries, or the manufacturers of all things by foreign dwarves, or the satiate life of the Insiders within the kingdoms.

A great broil now ensues. The people of the little country see for the first time a chance to manage their destinies and rise up for the BREXIT Monster.  Inside Brussels, the Wise and Good – for do they not so denominate themselves? – are greatly astonished. ‘What manner of wight can this be?’ they ask in wonder. They say that the BREXIT Monster is beguiling fools, the cracked, and those who represented the worst in Europe. And the scribes and oracles are sore afraid, for most of the outlying populace appear to belong to these tribes.

One of the Two Names of the Only Party have sent forth their dreadful creature, Brunnhilde, to fight in single combat with the BREXIT Monster. Her very visage turns men to stone, it is said. She is held to be of one blood with Boadica, Jeanne d’Arc, and Lucretia Borgia.

The Three Kingdoms are at one with her, as she has corrupted them to her ways, being mendacious, and ugly, as well as suffering coughing fits and dizzy spells. Surely, say the scribes and oracles, any monster must fly screaming from her mere presence.

Yet it seems that BREXIT is no common monster. Every time it is beset by the scribes and oracles of Brussels, it grows stronger, and a sulfurous smoke breathes from its mouth. With drawn swords the BREXIT Monster and the crumbling ruin yclept Brunnhilde circle each other.

And beyond the parapets and crenellations of the three Kingdoms the sky grows darker. Inside Brussels and in Strasbourg, the disembodied heads rail and rage, but with every blast, the helots joint the BREXIT Monster in larger numbers, for they hate the Insiders. In Berlin, the half-educated narcissists say ever more stupid things, but these have not their usual effect.

In their pride, the Three Kingdoms had engendered Nemesis, and they watch in terror behind the ramparts as the sky grows darker and strange shapes twist in the looming clouds as the BREXIT Monster strides ever nearer, breathing fire.

 

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BREXIT – What a difference a week makes

univestBREXIT – What a difference a week makes

The past week has yielded so many interesting events that I have shelved my scheduled blog to consider the potential impacts to the whole EU debate.

In no particular order let us start with the UK Budget speech given by George Osbourne last Wednesday. All sounded good with much bravado albeit two of his three fiscal rules were already in shatters. But the economy is growing so such rules are only political rhetoric. However, he used this platform to make a clear statement that the Office for Budget Responsibility (OBR) had provided evidence that UK exit from the EU would damage the UK economy in the short-term. This statement clearly aggrieved the OBR as, by tea time, they had completely refuted his representations as they only provided (conveniently selected?) views provided by third parties.

Then he expounded the view that we were all in this together as he slashed corporate taxes at the same time as slashing benefit payments (some £4 billion) to the most disadvantaged. Whereas there is no doubt that the welfare budget in the UK does need to be reined in, it cannot be achieved merely by setting arbitrary limits and crossing out figures on a spreadsheet with a complete disregard for social justice. Again, by the end of the week, these welfare cuts had diluted from hard cuts, to a discussion, to kicking into the long grass, to being scrapped with the very public resignation of the Work & Pensions Secretary, Iain Duncan Smith who gave an impassioned account of his position on the Sunday morning Andrew Marr show. Let us not forget that this happened to Osbourne in his last budget as well.

Also, during his budget speech, he confirmed that the continued refusal by the EU to relax VAT rules to allow tampons to be zero rated, the so-called tampon tax (some £500 million pa), would result in the taxes collected continuing to be distributed to various women-based charities. The following day David Cameron went to an EU Summit meeting in Brussels regarding the important refugee crisis. Apparently, during a coffee break, all 28 EU leaders agreed to relax the EU VAT rules. Clearly not planned. Has Europe realised that BREXIT is gaining support? How many more rabbits will be drawn from EU hats between now and 23rd June?

It was interesting to tour the Highlands of Scotland a few weeks before the Scottish Independence referendum to test my view that Scotland would be stronger in the Union, and thus the vote would be to stay part of the UK. Having purposely stayed in B&B and small privately owned hotels it was interesting to speak privately with the Scottish people about their thoughts. In those 8 days only one person clearly stated that they wanted independence. Much was offered by the UK Government in fear of the noise by those shouting ‘independence’. Had they copied my trip they would determine that no deals were necessary. Everyone else was keeping their thoughts to themselves because of what they were seeing in places like Glasgow where Alex Salmond’s equivalent of Hitler’s brown shirt nationalistic youth movement were intimidating those who openly wanted to remain with the UK. Come the day the silent majority, proud of their heritage within the UK, prevailed. I would therefore suggest that rabbits from the EU, at this late stage, will not work. Indeed, I think the canny Scots are likely to deal Nicola Sturgeon a blow in the EU referendum. Ouch, Nicola.

Then we have the third fiscal rule imposed upon himself regarding converting the current budget deficit into a surplus by the end of this parliament. The general view on this pronouncement is that he needs a major event, such as an exit from the EU, to provide a credible excuse for missing this target, as most surely will be the case. But not because of misguided ambition as a budget surplus should be the goal for fiscal prudence, but the target has to be reasonably achievable with a balanced approach. Ouch for political ambition.

And Peter Mandelson amused me by suggesting that if Maggie Thatcher was still in charge that she would vote to stay in. Having known her views, I’m sure that she found the surrender of so much UK sovereignty to the EU by Tony Blair in her final years as depressing, and would certainly have returned from negotiations with a credible reform deal before even thinking of such a stand to remain a member. It was also interesting that Mandelson had conveniently forgotten that he proposed we join the Euro. Beware of the so-called Prince of Darkness.

Then I read a City Comment in the London Evening Standard by a journalist with the name of Anthony Hilton. Firstly, he was abusing a quote by a long deceased industrialist, Sir Arnold Hall, “What problem do we have which is so serious that (BREXIT) could possibly provide the answer”? Then he used comparators that demonstrated his armchair approach to journalism. For example, he states that the German economy can operate very well within the EU, so why can’t the UK? If he remotely understood the difference between the German and the UK economies he would understand the answer. Whereas the UK sits with the USA economy as an outsider, or open structure, the German economy is quite the opposite as an insider, or closed structure. Ownership of German companies is protected with incestuous patrimonial linkages between German banks and companies, with preferential proxy votes and cross-shareholdings. Foreign ownership of a German company is so rare that it is major news. An example of the vast difference this closed structure reveals can be illustrated by reference to the steel dumping by China. The incestuous linkages in Germany mean that steel users (car production construction, and other major engineering companies) can be compelled to buy from German steel manufacturers rather than buying cheaper steel being dumped by China. This is protectionism. Our open system cannot compel our companies to use British steel. So when our steel companies suffer the impact of dumping we can do nothing about it because it would require Government intervention – not allowed by the EU. And will Germany fully support an anti-dumping campaign against China – not likely as China is an important market for Germany exports. We should also remember that Germany makes the trade rules within the EU to favour Germany, as with the Euro fiscal policy.

He further cites Wolfgang Schäuble, the German Finance Minister, and one of the nationalistic dinosaurs standing in the way of the much needed radical EU reform, who stated at the recent BCC conference that, after BREXIT, any trade deal with the EU would be conditional on maintaining free movement, and continuation of some form of payment into Brussels. This is typical scaremonger nonsense. Do the USA, or even Canada suffer such impositions in their trade agreements? The German Foreign Minister was far more realistic. He endorsed the view that a free trade deal would be agreed within days of BREXIT irrespective of EU political views not least because the German Government would be bombarded by their major companies and banks because of the high level of exports to the UK, not to mention that imports from Germany to the UK are significantly larger than UK exports to Germany.

I could further dismantle his arguments, but would suggest that he listens to someone like Sir Peter Hargreaves, the co-founder of the very successful Hargreaves Lansdown investment manager, who has a real-world experience and suggest that not only would the UK be better off outside of the EU, but such a stimulus would re-energise the British people to take more pride in the UK, buy British, and put the ‘Great’ back into Britain. For certain the UK has problems in productivity, poor venture investment, and lack of manufacturing. Perhaps a refusal by the EU to provide goods will stimulate the UK to make their own – a boost to employment, and needed reduction in the balance of payments – all positive. We could also relabel our much heralded sparkling wine as Champagne (as do the Americans), retain our traditions of sausages, Cornish pasties, pork pies et al without meddling interference in the British way of life from Brussels.

My final observation for today is the visit by Obama to Cuba. The opportunity to re-engage with Cuba has been staring at Europe for some years, with the doors open to engage. Whilst visiting a few years ago on an exploratory trip ‘America’ still invoked hatred with the Cuban people because of the Bay of Pigs incident. The opportunities for European businesses was considerable, as was the opportunity to substantially re-establish original European businesses in sugar, and other agri-products, as well as new off-shore oil & gas finds. The inward looking nature of the EU has surrendered this opportunity to the USA who will now move in and, no doubt, ignore repatriation of former European assets. The British understand the importance of such opportunities because of their historic trans-global, outward view of the world, in stark contrast to the introspective view of the EU.

Let us hope that the coming weeks are somewhat quieter, and less damaging.

 

 

BREXIT – What Deal?

univestBREXIT – What Deal?

When David Cameron elected to engage in a referendum regarding UK membership of the EU his pronouncement was that he would seek much needed fundamental reform to the EU, or support an ‘out’ vote. These reforms included substantial issues such as curtailing the role of the European Court of Human Rights in UK determinations, to scrap the Human Rights Act, reclaiming sovereignty for both our parliament and our judicial system, and to have sanction over immigration into the UK.

What he achieved is zero reform; only some tweaking at the fringes which, until written into Treaty are no more than what the Courts call mitigating circumstances in determinations, the existing Treaty being the fundamental basis on which they will make determinations. Few, if any of the EU leaders who agreed this tweaking will be in office when the next Treaty is discussed, and the European Parliament can most certainly vote down any, if not all of the concessions. Thus why the ‘deal’ is already in the dim past of the EU referendum debate.

As a trained negotiator I have an unease about the lack of any substance to the ‘deal’ as Germany most certainly needs to keep us within. Did Cameron not have the heart for such a negotiation? Is there a deal behind the scenes regarding the future of Cameron? Was he the wrong man to negotiate? History may tell us the answer, but until then we must accept that the ‘deal’ does not remotely meet with the initial basis of the referendum.

I am not going to debase my discussion by using speculative monetary values, or the use and abuse of statistics. As it is clear to see in the media the business and financial community are divided on opinion based on their specific vested interests – thus irrelevant. As argued in previous blogs this debate is about the future of the people in the UK. All of the economic and political arguments pale against the right outcome for the British way of life. Business and finance will continue regardless of the choice made in June. As one dear lady so elegantly put it in a Jeremy Vine interview last week, ‘so-called experts built the Titanic, but not the Ark’.

I do not believe the people of the UK will engage with the current political and business debate. So let us bring the argument down to a reasonable comparator argument that anyone can understand. Our base will be a recently new golf club where the charter debenture holders (the people who essentially financed the building of the club) sought preferential treatment as part of their contribution. This creates a two-tiered system of membership even though much of their initial investment has been redeemed through subsequent debenture sales. What will happen over time is policy committee members will change, and privileges of the charter members will become fuzzy, and erode, until they have no more privileges than any other member, i.e. harmonising rights to all members. This is what will most certainly happen in the EU. Fuzzy memberships such as Norway, the UK, and Switzerland will be tolerated in the short-term, but over time the boundaries will be eroded until they are eradicated. In Political Risk parlance this is called creeping expropriation. If the UK elects to remain an EU member it will most certainly not retain any special status over time.

The generally accepted current situation of the EU is fragile, and in need of serious reform. So what is the future if the UK votes to remain within – uncertainty. What is the future if the UK votes to leave the EU – uncertainty. So what is the difference – control of the uncertainty. The UK is not a Switzerland or a Norway. The UK is the 5th largest economy in the world – and carries much power and influence in the world in its own right (as endorsed by the German Foreign Minister on Radio 4).

Let us look at uncertainty, again in an easily understandable form. Uncertainty is as much part of life as day and night. The obvious relevant examples are life-changing decisions to get married, have children, or God forbid – divorce. They all require uncertain adaptability, but are all undertaken with the hope to a better future. For a while they can be a struggle, but the outcome is generally worth it. Ask any woman who has gone through labour, but yielded a healthy baby – the pain of labour is soon forgotten. A BREXIT includes a 2 year ‘grandfather clause’ where all of our existing relationships with the EU continue giving time to agree alternatives such as free trade agreements. The UK will see some immediate benefits in that the irksome elements of the Human Rights Act can be ignored, immigration can be brought under control, and our transport infrastructure can quickly progress without the interminable interference of Brussels. Therefore, our uncertainty has a short-term safety net which negates the scaremonger argument that the short-term will be turbulent; but does have some valuable upsides. The UK successfully recovered from 2 World wars without help, so a relatively simple exit from the EU should be a breeze. I would suggest that most people will not feel any immediate difference.

There is one element of the uncertainty that I have yet to see any comment. What is likely to happen to the EU without the UK as a member. There are a number of relevant uncertainties. Other net contributor countries could see the UK exit as a sign that the current EU model is really broke, and thus elect to do the same – especially as the EU will have to increase contributions of other member States to fill the vacuum left by the considerable contribution by the UK. The right-wing elements of France could rise and depose the French Government. France has much to lose by a UK exit. Where were these concerns in the deal negotiations – or wasn’t the threat of the UK leaving a serious consideration?

If Germany can find the means to support the Eurozone then it will more rapidly consolidate its hold over the Euro countries – and the people of the UK will be thankful that they departed. Of course we still have the Greek issue which will most certainly be a thorn in the side of Germany – will this lead to conflict within the Eurozone? We have seen that the poor response by Germany to the economic situation in the Eurozone when they refused quantitative easing some 4 years ago. The too little – too late plan by the ECB yesterday was greeted with derision by the markets.

The UK has a proud history as the banking centre of the world boasting excellence in financial capability (even when Labour are in Government), and the ability of the UK to rise from both the irresponsible spending of the last Labour Government and the financial crisis lays testimony to the intelligent and speedy response to such events. Should this be sacrificed to the incapable Eurozone mandarins who clearly do not have the experience, or the global market understanding?

In summary BREXIT will yield uncertainty whichever way it goes. Therefore, the issue is whether or not the people of the UK want control over such uncertainty, or do they want to surrender decisions to Brussels – unaccountable to the people of the UK, and not so interested in preserving the British way of life.

 

 

German Domination of Europe – When will they learn that there is a better way

German Domination of Europe – When will they learn that there is a better way

The poignant D Day events of last Friday reminded me that this year is also the centenary since the start of the First World War, or the Great War as it is more commonly known. Although I have many good friends in Germany, and hold absolutely no prejudice against the German people of today, it occurred to me that, for 100 years, the elite of Germany have attempted to mould Europe in their own image, initially through two catastrophic world wars, and currently through self-serving political and economic influence within the European Union.

It cannot be disputed that the engine-room behind the introduction of the Euro was Germany, and in spite of the so-called stringent rules of entry into the Euro, Germany allowed such rules to be significantly relaxed to allow countries to participate where compliance with the entry rules would result in such countries otherwise unlikely to qualify for entry for years to come. It is no secret that Germany has significantly prospered under the Euro – at the expense of the other member nations. These nations now seek financial support, and the German Government have a hard time selling these bailouts to the already over-taxed German people, albeit a problem created by Germany in its self-serving quest for the domination of Europe.

Sometimes I reflect that Germany, having left Europe devastated in 1945, forgets that much of their subsequent prosperity was built on their substantial participation in the Marshall Plan (whereas the United Kingdom, as victor, did not qualify for any such support and has been required the swallow the cost of the wars, and rebuild using its own resources). As with the so-called super-model of Japanese prosperity in the 1980’s I do not subscribe to the German economic model of today, and certainly would strongly oppose this model being at the centre of the European Union. The current German economic model has a fundamental incestuous instability at its core, just like the proverbial pack of cards, and just as with Japan before its economy collapsed.

And this week the German elite are flexing their self-serving muscle again by instruction Angela Merkel to support a tame federalist like Jean-Claude Juncker as European Commission president, a move that is counter to the fundamental reforms needed by all donor nations – except Germany.

I have just noticed a news headline  ‘German chancellor Angela Merkel has cautioned David Cameron not to use threats of a UK exit from the EU in his campaign to block a federalist candidate from taking the helm of the European Commission.’

Without these reforms my view is that the UK should not threaten to leave the EU, but make it very clear to Germany through the promised referendum that the people of the UK do not see their future dominated by the German vision of Europe. Maybe then the UK will have to pick up the pieces of an imploded Europe for the third time.

EU/Eurozone – Start Again or Plod On? – Common Judiciary

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EU/Eurozone – Start Again or Plod On?

Common Judiciary

The Judiciary of a nation state is the organ of government that should provide oversight of the legislative and executive (government), and is a comprehensive and integrated structure able to delivery stable legal security according to the laws of the State.

In this blog we will quickly propose an outline legal framework for a common democratic legal system for our United States of Europe that will provide a secure legal structure for all people.

The judicial structure is the system of courts that interprets and applies the law in the name of the nation state. The judiciary should have the power to change laws through the process of judicial review. Courts with judicial review power may annul the laws and rules of the state when it finds them incompatible with a higher norm, such as primary legislation, the provisions of the constitution, or international law. Judges constitute a critical force for interpretation and implementation of a constitution, thus de facto in common law countries creating the body of constitutional law. Thus the judiciary needs to be fully independent of the legislative and executive, and the judges be conferred on merit, not election.

The judiciary usually consists, at its head, a court of final appeal called the ‘Supreme Court’ or ‘Constitutional Court’, together with various levels of lower courts.

Under the doctrine of the separation of powers, the judiciary does not make law, which is the responsibility of the legislative, or enforce law, which is the responsibility of the executive, but rather interprets law and applies it to the facts of each case.

This organ of the state is responsible to provide equal justice for all under law, including human rights and fundamental freedoms.

The judiciary also provides the mechanism for the resolution of civil disputes, and a criminal justice system.

So much for a democratic judicial system definition but the complexity of the various legal structures currently used throughout the EU nation states is mind-boggling. We have Common Law, structures based on Napoleonic Code, Civil Law, Basic law, etc. In the USA there is Federal Law as the legal foundation, and then there is State Law superimposed upon it. The overall legal platform is based on English Common Law which was adopted from the English Legal System. However the USA has subsequently over-complicated this system in their overly litigious society, and we should avoid this. As an example an identical contract drafted under US Law (50 pages), English Law (5 pages), and Swiss Law (3 pages). Any consideration of a legal system needs to learn lessons of the past and to keep it simple and relevant.

For business to effectively operate throughout our United States of Europe there must be a common legal platform. The complexity of the current EU multi-legal systems adds a cost burden to business which ultimately reflects in the price of product or service to the consumer – the people of Europe. But what system to adopt?

My argument for the above structure starts with a global perspective. Our United States of Europe will most certainly want to engage in business with the wider world. If we look at trade in oil & gas, commodities, manufactured trade, international securities, all of these have standard legal packages throughout the world which also provide trusted international arbitration. These legal structures have all been derived and evolved out of English Law, are drafted in the English language, and jurisdiction will be either/and/or English Law and US Law. These systems were devised to create a common and safe platform for international trade, are widely used, and banks prefer these tried and tested structures for their involvement in transactions.

Thus I propose that the legal structure as regards business, commerce, and finance be English Law. As the foundation of the English legal system is Common Law then our Legal System for the United States of Europe would be based on Common law, also known as case law or precedent, and is law developed by judges through decisions of courts and similar tribunals. One third of the world’s population (approximately 2.3 billion people) live in common law jurisdictions or in systems mixed with civil law, and thus this proposed system would be compatible with many major trading partners in the world, including the USA and India.

However I would not propose total adoption of the English Legal system as I would see our new model as a golden opportunity to significantly revise some of the historic anomalies in the process of English Law, not least the removal of the barrister/solicitor structure which adds significant cost to the process of law. Another example would be the abolition of much of our Family Division law and replace it with something more akin to the structure in the German legal system, and the German inquisitorial process (Civil Law) in the lower courts would also be more relevant and cost effective, and thus ensure that remedy in law is available to all. Common law courts tend to use an adversarial system, in which two sides present their cases to a neutral judge. In contrast civil law systems use an inquisitorial system process, where an examining magistrate serves two roles by developing the evidence and arguments for one and the other side during the investigation phase, and which could be heard as litigant in person without fear of being overawed by an opposing lawyer.

I have actually experienced the confusion of examination under an unfamiliar legal system in a language unknown to me as a witness in a case in the Austrian Courts where protocol dictates that the case should be heard in Austrian-German. The proceedings were conducted under civil law and thus the judge was the primary examiner. After about one hour (of a 5 hour examination of my evidence) the Judge, who obviously was fluent in English, was becoming increasingly frustrated with the translator of my testimony which was frequently being corrected by the lawyers to both the claimant and the defendant. Having determined that all of the key people spoke English the judge dismissed the translator, and the hearing was continued in English. This judge was clear in his objective to get to the truth of the matter, and was not about to allow out-dated protocols to compromise his objective.

In Switzerland it is now common to hear cases in English, and which was initiated by cases involving international trade.

A key requirement of any modern democratic system is the rights afforded under habeas corpus. A writ of habeas corpus is a writ (legal action) that requires a person under arrest to be brought before a judge or into court. The principle of habeas corpus ensures that a prisoner can be released from unlawful detention—that is, detention lacking sufficient cause or evidence. The remedy can be sought by the prisoner or by another person coming to the prisoner’s aid. This right originated in the English legal system, and is now available in many nations. It has historically been an important legal instrument safeguarding individual freedom against arbitrary state action. The jurist Albert Venn Dicey wrote that the British Habeas Corpus Acts “declare no principle and define no rights, but they are for practical purposes worth a hundred constitutional articles guaranteeing individual liberty”. There are nation states within the EU, and new members under this model who do not use habeas corpus, and thus my reference to its fundamental role in the United States of Europe.

Habeas corpus essentially means that you are innocent until you are proven guilty. There are some exceptions to this, e.g. consumer banking law where a customer who has a dispute with a financial institution can, in equity, reverse this situation in that the bank will be assumed in the wrong unless the bank can prove itself in the right. An ordinary consumer cannot be expected to contest a bank having vast resources with which to frustrate a consumer claim. It could be argued that this removal of habeas corpus should be applied to all service sector corporates, especially energy and mobile phone providers. In this age of automaton account management mistakes are common putting the consumer under much stress and distress dealing with intransigent corporate customer services who believe that their computers are always right. It would be more equitable if the corporate was required to prove that the data in their computers is legitimate.

Thus my proposal for the judiciary of the United States of Europe would be:

  • An independent constitutional judiciary based on merit, not election
  • A European Supreme Court where the judges comprise the senior judge of each of the nation states. The President of the Supreme Court would be determined by election by the Supreme Court judges on a 2 year re-election
  • A legal system based on  English Common Law with appropriate elements of Civil Law
  • Modernised court processes including removal of barrister/solicitor protocol, and introduction of the inquisitorial system in the lower courts
  • Member states to have their own courts subordinated to the Supreme Court
  • Member states to have own assemblies able to enact State law, by-laws, and ordinances consistent with constitutional law
  • Intrinsic rights to all under habeas corpus, albeit with the specific exclusion of terrorists
  • Service sector corporates to have no right to habeas corpus in consumer disputes

Thank you for your continued interest in this European venture.

This blog is part of a series of blogs called ‘EU/Eurozone – Start Again or Plod On?’ and which examine the framework for a truly United States of Europe, and what would be needed to achieve it. Look at the archive index to find other blogs in this series.

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EU/Eurozone – Start Again or Plod On? – Common Language

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EU/Eurozone – Start Again or Plod On?

A Common Language

The cost of operating in so many languages in the EU is obscenely expensive, and probably enough to lift all children in Europe out of poverty. If we look to our template of the United States of America, and energise my rusty memory of the formation, and formulation of the US Constitution, one of the debates was which language would be adopted – English, French, or German. Even though there were strong, conflicting opinions as there were many immigrants from many European countries all speaking different languages, they all agreed that inclusion of everyone was important in the process and thus they had to select one language which would become the language of the country. Shakespeare won the argument. We see today that Spanish has emerged as a minor second language of the USA as a result of widespread immigration from South America, and there are still small pockets of German and Dutch (primarily Amish communities), French (New Orleans), albeit none are a replacement for the use of English.

During a discussion last year with a former Federal Councillor and Minister of Justice of Switzerland, and Swiss business people, there was a clear pride that Switzerland was able to function in 4 languages, i.e. German, French, Italian, and Romantsch. I posed a question regarding what language they would use for the military command centre in the event that Switzerland was attacked by a foreign invader. After a long silence of pondering, the answer came back as ‘English’. I could only congratulate this inspired response.

This question reminded the former Swiss Federal Councillor of a funny story where this language principle was taken to extremes. In Switzerland they have 2 cantons (federal states) where the boundary passes through the city of Basel, and even along the middle of the street. The language of one canton is German, and the other is French. Each canton, without consultation with each other, introduced different regulations regarding the behaviour of dogs on the street. However they did not succeed in teaching the dogs how to read these different regulations so the dogs could not know how to change their behaviour when they crossed over the street into the other canton.

This is a great illustration on 3 different levels. The first is the natural human reluctance of neighbours, who speak different languages, to try to communicate with each other – language creates its own barriers. The second is the breakdown in the democratic pillar of subsidiarity – there is no point decentralising government if there is a lack of communication at the lower levels. The third is the problem of someone living in the community but who does not converse in either of the languages of the regulations.

Language is about communication, and is meaningless if communication does not result. Even within one language a multitude of dialects can cause lack of communication (look what the Americans did to the English language), but the written word will invariably succeed.

Having used interpreters for business discussions for many years, and even afforded the time to work with the interpreter prior to the main event in order to familiarise the interpreter with my use of words and phrasing, much still gets lost in translation – result: lack of communication.

Therefore I propose that our United States of Europe move towards a single language for, at least in the first instance, government, business, finance, and law, as it already exists today in part. I would also propose that the most widely spoken language in Europe, including as a second language, is English. As English is also the most widely spoken international language in the world, especially for business, adopting this language also makes trading in the global markets much easier. It is also the easiest language for the younger generation to learn in that they are surrounded by media primarily in English. I remember one person I know, having studied English, was amazed at the increase to her watching pleasure on hearing the real voice of John Wayne, and Humphrey Bogart in Casablanca.

As regards relative population size the next logical choice word be German. However even Germany has recognised that the German language is practically exhausted in that there is little realistic capacity for expansion, and as such is not really a realistic choice for the future. Indeed the German language is already littered with English words where no suitable word exists in German.

In the late 1980’s I attended the annual American Banker’s Club dinner at the Savoy in London. The speakers were Jacques Delors, a senior French economist (I think Jacques Attali before he was head of the European Bank of Reconstruction & Development), and an Executive Vice President of CitiGroup. One comment from the French economist stunned the room into silence as he spoke of European integration and stated ‘of course the language of the resulting integrated Europe will be English’. The stunned reaction revealed the thunderous thoughts around the room that a French politician is stating that the language of Europe can only be English, and this was over 20 years ago.

I fully appreciate that, for the older generation and traditionalists, learning a new language can be a step too far. However, under the tenet of democracy, provision will exist for this situation, and I do not expect the other European languages to disappear in social society just as they have not disappeared in the USA or indeed in Brazil where a number of such languages survive, including Welsh. Full transition to a single language system will take at least a generation in any event. What is important in our model is to state that there will be a single language so that people can see the target and thus slowly, but surely, move towards it.

The major emerging economies of the future, such as India – a potential major trading partner, – already speak English. Thus the global nature of business and banking has already started the transition to a common language within Europe to meet the demands of global corporations, so all we need to do for our model is to formalise this process.

Thank you for your continued interest in this European venture.

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Bank Trader Bonuses – should they be paid if the bank makes a loss?

Bank Trader Bonuses – should they be paid if the bank makes a loss?

I have been cornered at a number of dinner parties and other discussions in recent years to be grilled on the controversial and sometimes hostile subject about whether or not the traders, and indeed deal originators, within investment banks should be paid substantial bonuses if the bank itself makes a loss. Having signed-off on such bonuses in the past I know what it feels like when you see the size of the number, sometimes staggeringly large, staring at you on the page, (but then most would gulp at our daily turnover of around US$ 3 billion) so I have tried to rationalise the argument ‘for’ or ‘against’.

In the early days of such traders, (latter part of the 1970’s and first half of the 1980’s), it was commonplace that the bank provided the desk, the capital, the prestige name of the bank, and the support operations. Traders were only paid a nominal salary to live on but would be entitled to a flat-rate bonus calculated at up to 10% of the net profits they generated for the bank. These traders were never considered part of the ‘family’ within the bank, and were remote to the culture of the bank. They were commonly referred to as ‘intrapreneurs’. This was a reasonable strategy for the bank in that they did not have the exposure of substantial salaries to people who might not perform, and the modest salary incentivised the trader to make profits. Many types of companies today adopt this attitude, and it is certainly a better business model than the soccer players I refer to below.

A significantly exaggerated example of this, and well recorded in books such as ‘Liars Poker’ by Michael Lewis, was the trading environment of the then Solomon Brothers investment house which was a ruthless production line of traders who performed to required levels of profit, or were discarded and replaced at will.

An analogy could be a comparison with soccer players who have a limited period of productivity (typically 5 – 10 years) who are paid substantial remuneration whilst valuable, but are readily discarded once their star no longer shines. Headhunters in banking play the role of the soccer player’s personal manager in both initiating transfer of traders between banks, and negotiating any settlement required to be paid to the former bank to overcome notice periods, garden leave, poaching costs, etc. Traders do not have a career as such, they have a window of opportunity to make large amounts of money before they burn out, and their general philosophy revolves around this short-term opportunism.

To add to this unitary approach it should also be stressed that there are a number of separate product areas within an investment bank, and they have separate profit centres which become the accumulated profit or loss of the bank. In general there is no interlinking of these profit centres within the bank, nor interdependency on performance. Therefore I suggest that a trader who performs well is entitled to their bonus, irrespective of its size, as it only reflects the quality of the person as a realised income contributor. I must emphasise that the profit against which the bonus is calculated should be fully realised without any future exposure. Accrued profits, e.g. on transactions that still have future potential exposure, is a contentious subject, and needs to be agreed on a transaction-by-transaction basis. If a trader makes losses not only do they not receive a bonus, but usually they lose their trading seat – and possibly their future as a trader.

At a simple level would you expect a car salesperson to forego the commissions due on their sales if the car manufacturer makes a loss? Scale this up to a salesperson who sells a $40 million commercial airliner on which I am led to understand they can earn a commission up to 7% of sales value. And both of these sales people will probably have a far longer career than a trader.

At the end of the day the primary difference between other corporates and investment banks is the scale of the commissions/bonuses. To put this into context an investment bank can easily turnover as much in a few days as a major corporate turns over in a year.

Please note that this blog relates to business income generators, not the fat-cats who sit at the top and mostly still receive bonuses when the bank makes a loss – this is a completely different story.

Egypt – a legitimate coup to restore democracy?

Egypt Flag

Egypt – a legitimate coup to restore democracy?

There has been much over the weekend about the problems in Egypt, and whether deposing Mohammed Morsi was a ‘coup’. It might be useful to step away from conventional thinking and consider this problem as a possible crude template for the future. Over many years in banking I have met a number of political leaders who gained power on a specific mandate, and once in power abandoned the mandate and pursued a completely different unpopular, oppressive, suppressive, etc agenda. If we consider Egypt and look at the basis of the revolution against Mubarak the fundamental cry of the people was for a secular democracy. This cry was echoed throughout the election process which Morsi won with just a little over 50% of the popular vote. It can be argued therefore that whoever became President the new constitution must follow the lines of a secular democracy. What Morsi then produced was a constitution for an Islamist state which was rejected by the secular ministers involved who felt so strongly that this was an abuse of the mandate of the people that they refused to participate. Morsi then seized even more power to enforce his will, again against the mandate of his office. This abuse of office ultimately led to his removal from office by the army.

Democracy would suggest that such removal should be via the ballot box. But how many times in the past has the remaining term of office for such a political leader given them the space to radically change enough of the state to impose much distress and oppression to the people. Is this a flaw in our current understanding of democracy? How many times in the past would it have been in the interests of the people to have a political despot removed from office? Do we need to look at this situation and use it as basis for global discussion on a means to safeguard democracy from abuse?

A possible solution would be an International body, such as the UN, that had the power of oversight on the actions of political leaders, and have the right of intervention in the event that it was agreed that a political leader was in direct violation of the mandate of the people via the ballot box. Clearly such a body could not be other political leaders – the UN Security Council clearly demonstrates that this would not work. But we also have the International Criminal Court in The Hague which, today, only deals with after the event issues, i.e. long after many people have suffered. What about another council within the UN that comprises the heads of the judiciary from countries where there is clear independence of the judiciary from the executive – a pillar of democracy. Call it the Judicial Council of the UN. This council would have oversight of the behaviour of leaders throughout the World to ensure that clear mandates are observed and that constitutions comply with accepted basic human rights. The head of the judiciary of any state would have access to this council in the event that it was deemed that a new leader was attempting to violate either their mandate or the constitution. Such council would need the authority to suspend a government until reparations, or ultimately depose the leader. In this case what happened in Egypt would be deemed a ‘coup to restore democracy’ and thus a more accurate description, and legitimate response in the eyes of the World. I commend this view to the wider audience for comment.