Archive for February, 2012

Trouble still following Rupert Murdoch

Last summer I wrote a piece about the phone hacking scandal which has engulfed Rupert Murdoch’s once all-powerful News International. More than six months later, the crisis still continues. The independent judicial inquiry into the state of the UK media, which has seen a string of newspaper editors give evidence, is still going on. It is quite possible that Justice Leveson’s inquiry will find that other papers – the Daily Mail and Daily Mirror are the ones most talked about – as well as Murdoch’s News of the World, were guilty of hacking people’s phones to get salacious stories.

While the scandal has sullied the reputation of all Fleet Street’s tabloids, it continues to do immense damage to Mr Murdoch’s media stable. Having been forced to close down the News of the World after it was revealed that the paper’s reporters had hacked the voicemail messages of murdered schoolgirl Milly Dowler, Murdoch is now coming under pressure to do the same to The Sun, Britain’s best-selling daily.

In the last couple of weeks, a string of senior Sun journalists have been arrested on suspicion of attempting to bribe police officers, the information allegedly passed on to the police by News Corporation’s own management and standards committee. For the first time since a bitter industrial dispute in 1986 when Murdoch scrapped the Sun’s print unions and moved the paper’s headquarters from Fleet Street to Wapping in East London, disunity and rebellion was in the air.

With characteristic bravado, Murdoch responded by promising that the Sun’s future was secure and that he would soon launch a Sun on Sunday to replace the News of the World. A brave boast, but one that stands no chance of happening if there turns out to be concrete evidence of illegal payments to the police.

Amidst this soap opera lies an important issue, namely, the future of print journalism. Most papers in the UK, and across the rest of Europe, are losing readers and money. The Sun’s profits help subsidise the huge losses of the Times. Russian tycoon Andrei Lebvedev runs his revamped London Evening Standard and the Independent on a skeleton staff. The Guardian Media Group continues to lose money despite a very successful website as does the Trinity Mirror Group, which owns the Daily Mirror. The future of the dead-tree press is not helped by a scandal involving its own.

There have been some crocodile tears at the Sun’s travails from its rivals and victims. Understandably so, since the Sun’s ruthlessness, hypocrisy and mean-spirited editorial stance has always generated a handful of enemies for every new reader. But while I’m not a fan of the Sun, I hope it survives. Rude, lewd, bigoted, funny, and so jingoistic that I often suspect that one of the requirements to be on the editorial team is the ability to still be able to belt out God Save the Queen with a sofa stuffed down your throat, it is an important part of Britain’s media and cultural landscape. Seeing its printing press close would leave a yawning vacuum.

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Reform, support and trust in the eurozone

About a year ago I was at a meeting addressed by Luxembourg’s Prime Minister and euro group spokesman, Jean Claude-Juncker, about the latest state of play in the resolving the Greek debt crisis. During his presentation Juncker came up with a phrase that has resonated ever since – to be honest, it is the roadblock that threatens to unravel the single currency and erode the basis of the EU: ‘support fatigue in the north, reform fatigue in the south’.

The Greek crisis has become a full blown tragedy, with the latest will they/won’t they machinations over whether the latest plan of swingeing spending cuts will pass muster with the north Europeans just the latest humiliation for Greece. Unemployment  already stands at a truly frightening 25% – the Gods who devised this tragic farce certainly have a penchant for black humour.

Nobody should be under any illusions about the scale of the sacrifices that the Greek people have been committed to. Public spending, which has already been cut by around 25%, is going to be slashed even further. The minimum wage will fall by 20%. Pensions will be further cut, taxes will go up. Former ECB Vice-President Lucas Papedemos, brought back from a professorial post in the US to rescue his country, has committed his people to a desperately tough but hopefully heroic future.

Needless to say, the price will not be borne by those responsible for Greece’s financial ruin – the political class that presided over the bust is still largely in place. Meanwhile, the country’s wealthiest, who dodged tax on an impressive scale, got their money out and moved to London and Paris. The idea that economic pain can be avoided is still being put about by the Nationalist party leader Antonis Samaras, whose party was responsible for at least one of the country’s statistical frauds, and is feeding rumours that, should he win the April elections, he will renege on the terms of the bailout.

But the blame for the current crisis cannot be laid exclusively at Greek doors. The divisions in Angela Merkel’s cabinet indicate that, no matter what penury the Greek people are signed up to, it will never be enough for some. Finance Minister Wolfgang Schauble is said to be the leading nay-sayer, with the likes of the Netherlands and Finland also said to be hoping Greece will leave the euro.

Samaras and Schauble are the two diametrically opposed sides of the same problem. To be blunt, Samaras needs to decide whether he is serious about Greece remaining in the euro and getting their finances in shape. Schauble needs to say if he just wants the Greeks out, regardless of what they promise. In fact, their political choice is the one which is at the heart of the reform fatigue/support fatigue conundrum. The debtor countries need to take steps to get their houses in order – the richer nations need to take their fellow European’s plans at face value.

Brussels’ numerous debating chambers are always awash with talk of ‘solidarity’ – often invoked by politicians who mean it least. The EU, with its concepts of ‘shared sovereignty’ and ‘co-decision’, is built upon trust and mutual dependence. So is resolving the debt crisis which, after two years, still engulfs the eurozone. It’s time politicians stopped talking, challenged their domestic electorates, and made their respective leaps of faith.

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More votes please, we’re British

Most of the hoary diplomatic clichés have been trotted out since David Cameron’s bizarre performance at December’s EU summit. But while the Tory leader’s cack-handedness has attracted anger and delight – most of it synthetic – his determination to isolate Britain as the odd one out of 27 raises a pertinent democratic problem: should British MEPs and Ministers be involved in decision making affecting only the 26?

This question has been subject of a long running debate in Britain. Back in 1977 Labour back-bench MP Tam Dalyell raised the unfairness of Scottish MPs being able to vote on matters that only affected English and Welsh people during the debates on the then unsuccessful attempt to create a Scottish Parliament. Dalyell’s query, which quickly became known as the ‘West Lothian’ question, re-emerged when the devolved governments in Scotland, Wales and Northern Ireland were established by Tony Blair’s government. The West Lothian question became particularly prominent in the 2005-2010 government of Blair and then Gordon Brown, when Labour was reliant on its dominance in Scotland and Wales for its majority in Westminster. As an issue, it still provokes anger, particularly on the Conservative benches.

In reality, an EU version of ‘West Lothian’ has been a dirty, unspoken secret ever since the Maastricht treaty. When it became clear that the UK, Denmark and Sweden would not join the single currency – although the ‘euro group’ was set up to govern the euro area countries – this did not stop MEPs and ministers from those countries being able to vote on issues that would not affect them.  In recent years, other issues such as the rules governing the Schengen agreement (which the UK and Ireland did not sign up to) and justice and home affairs policies (where the UK has string of potential opt-outs) have also come into the equation.

However, the main issue, particularly in the context of the current debt crisis that threatens a number of EU countries and, potentially, financial institutions, is the Eurozone. Both Parliament and the Council spent most of 2012 working on the economic governance ‘six pack’, establishing a series of stiff fines for countries that fall foul of the excessive deficit procedure. Love it or loath it, the economic governance package is arguably the most significant overhaul of the Eurozone since it was established.

Of course, only 17 of the 27 Member States have joined the single currency, but all bar the UK and Sweden are bound by their treaty obligations to join at some stage. Most of the countries which joined the Union in 2004 are making progress towards meeting the convergence criteria with a view to joining the single currency.

Indeed, given that the UK will not join the euro within the next decade, unless there is a dramatic change of public opinion, it is questionable whether they should even be allowed to vote. While both Labour and the Liberal Democrats are, at European level at least, far more integrationist (and, indeed, have committed their parties to supporting euro membership) the Conservative party remains strongly opposed.

The Parliament’s Rules of Procedure, which offers surprisingly therapeutic bed-time reading for euro-obsessives with a masochistic streak, actually has a clause to catch this problem – Rule 2 states that “Members of the European Parliament shall exercise their mandate independently. They shall not be bound by any instructions and shall not receive a binding mandate.”

But although this and other sections of the rule book imply that MEPs represent European citizens rather than just their own country, is this good enough? As an over-represented Brit, I don’t think it is. It is profoundly undemocratic for MEPs to have the right to vote on and influence legislation that they will never apply in their Member States, particularly as we know how MEPs bat for their national interests. For example, some MEPs tabled amendments to increase sanctions against debt laden Member States, when the country they represent would not be liable for the same sanctions if they were in the same situation. Fair? Surely not.

It will be interesting to see the developments of the fiscal union treaty for the EU-26. Some MEPs already want to have sub-committees on policy areas where some Member States have opt-outs. What happens if they push to harmonise corporation tax and introduce a financial transactions tax? Will British MEPs be allowed to vote even if their ministers are locked out of the negotiations? Now that the fiscal union treaty defines a clear line between the EU-26 and Britain, it’s time that the EU’s barrack-room lawyers gather together to resolve our unspoken ‘West Lothian’.

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