This will be my last post on this blog I’m afraid, as you can tell from my absence there have been some problems.

No to austerity (Photo: Gérald Verdon)

It will be goodbye from me, on this forum at least. You can follow me doing my day job here.

But by the way of a farewell…

One of the bureaucratic mantras that you hear here in Brussels is that the EU deals “with states not governments”.

This axiom gives the EU’s game away as a Union of state bureaucracies (civil servants, regulators, police officers, officials and diplomats) not peoples.

Governments are elected and unelected, they come and go. The EU is a different set-up, a network of permanent officials that spans national capitals to take politics out of the democratic fray.

It’s pacta sunt servanda or the process of locking important areas of political decision-making, from the economy to justice and security (policing our civil liberties), inside a bureaucratic, public-free zone of EU governance without government.

It’s never been clearer when you glance at the impending EU-IMF austerity programme for Portugal.

Portugal is a country that is without an elected government after the collapse of the Socialist administration following parliamentary rejection of an austerity programme agreed with the EU, the fourth this year.

Now the Portguese “authorities”, the unelected officialdom of the state, will negotiate with their “colleagues” in Brussels an even more controversial new austerity programme, to be imposed by the EU and IMF.

There will be no more rejections this time, pacta sunt servanda.

The deal – just think how unpopular and unjust the Irish austerity diktat is – will be stitched up, copper bottomed and binding before the Portuguese people have the chance to vote on June 5.

After all, the EU recognises states not (democratically elected) governments. Why should an election get in the way of an EU negotiation?

As Ireland has discovered following elections in Feb, the EU is unwilling to re-negotiate austerity programmes even if voters elect new governments opposed to unpopular measures, such as reductions to the minimum wage or new taxes.

“They have to remember it is not their programme, it is ours,” said a commission official.

The commission today pooh poohed concerns over the democratic credentials of an externally imposed austerity programme negotiated between the EU-IMF and a caretaker government.

“Negotiations will be with the authorities of the country concerned,” said a commission spokesman.

“We will negotiate an economic adjustment programme with the Portuguese authorities. We assume that when the authorities engage in such talks they are empowered to do so. It is a domestic political issue.””

Quite.

I hope and trust that the Portuguese people, and other true Europeans, are not going to take this lying down.

The title of this blog – Europe not EU – was always meant to assert the principle of peoples against states as embodied by this Union of our unelected rulers.

The struggle continues – but not here on this blog. Goodbye.

Beware of Europeans offering “aid” and “solidarity”.

'Pay up!' - solidarity EU-style

The punitive amounts of interest the Irish will pay on the EU “loans” they were forced into accepting are beginning to emerge.

Britain – for example – will trouser £414 million in profit on its £3.25 billion bi-lateral loan, charged at 5.7 per cent.  There’s obviously a hefty “solidarity” surcharge as British borrows at far lower rates to service its own debt.

Irish families paying an extra €4600 in austerity taxes every year are unlikely to be grateful for knowing that their suffering is helping to bring their old colonial master a windfall.

As for that European Financial Stabilisation Mechanism (EFSM), the one created on the dodgy legal base of Article 122 of the Lisbon Treaty, this aid too is being charged at an extortionate 5.7 per cent.

Some might argue that Ireland would have to pay more on the open markets – but hang on.

Irish borrowing rates only went through the roof, above the 5.7 per cent Ireland is being charged, after Germany rocked the boat for its own narrow national interest at the end of October and after the European Central Bank started to brief against Dublin on Nov 12.

The real borrowing cost for the EU member states to raise the €22.5 billion EFSM loan to Ireland is 2.775 per cent – the lion’s share of the interest is a deliberately punitive 2.925 per cent surcharge to “dissuade”.

Here’s how the European Commission put it: “The borrowing cost or surcharge was agreed by all member states, including Ireland, last May. It is there to incentivise a return to the normal market and to disincentivise governments who fail to take action to address their deficits.”

Ireland, which has no money and was not allowed by the EU to give a “haircut” to the banks that fuelled the bubble that destroyed its economy, is effectively being fined an interest surcharge of €658 million every year to encourage it to pay back the cash quickly.

Over the seven and a half years of the loan that could well be a punitive surcharge of almost €5 billion.

This is not exactly what most of us would think of as solidarity – as the Irish opposition has noted too.

It’s punishment time, and the EU has also drawn up a savage programme of cuts to social welfare, just to rub salt into the wound. But what exactly are the Irish being punished for?

Ireland was forced into this loan and Irish people will be paying it off at profiteering rates for years to save the big banks (and the big Treasuries that have bailed them out) of Britain, Germany and France.

There’s a word for this sort of aid and the word is extortion.

Our old enemy TINA is in the driving seat, as Brian Lenihan, Ireland’s one time finance minister, now turned EU-IMF lickspittle, said today: “The suggestion that the opposition could negotiate a better interest rate… is frankly laughable. The only renegotiation possible is on the conditionality of the programme not the interest rates.”

Ultimatums and force is not what modern politics should be about. This is not the true European spirit.

The EU has become the mechanism by which big countries, such as Britain and Germany, coerce small countries, such as Ireland, in their own protectionist interests.

PS

Sorry for the hiatus, I’ve been off with flu

The Irish are going to pay a high price for the EU decision two years to bailout Europe’s failing banks.

TINA is never elected

EU finance ministers are meeting in Brussels to discuss the detail of €85,000,000,000 of EU-IMF loans to Ireland.

Not least will be the question of interest rates and how much the Irish public taxpayer will be paying every year to service the interest on debts that were forced on them by the EU.

These are debts, reparations even, forced upon Ireland with strings attached – such as cuts to Ireland’s minimum wage – that were insisted upon, not by the IMF bogeyman, but the EU.

David Humphreys and Steve O’Callaghan at the University College Cork have noted: “Popular consensus would appear to view the IMF as a ruthless cost-cutter with scant regard for social cohesion. However, recently the IMF’s approach has evolved towards a balance of fiscal consolidation while maintaining basic social protections. The EU, in contrast, has insisted on more severe austerity measures, overriding IMF concerns, likely a matter of significant importance for Ireland.”

Over 20 months ago, it was possible to see what was coming.

“Hurtling towards [EU leaders] is the prospect that bailing out the banks has merely transferred the “toxic” contagion to nations,” this blog noted. “The coming crisis is a crisis of states not financial institutions. It will be a crisis of politics.”

There is no more telling indictment of the political elites that have created this crisis than the myth that There Is No Alternative to bailing out banks – the EU’s founding TINA principle.

The crisis is a product of human agency, the choices and decisions taken by people facing circumstances that are man-made and, thus, susceptible to political intervention.

The huge liabilities created for public budgets by the political decision, forced on the Irish, to extend loans – on top of the vast existing contingency liability of bank bailouts – were not inevitable.

There is an alternative. Governments can restructure debt. Governments do not have to borrow from private investors.

Governments did not have to overstretch themselves, creating trillions in contingent liabilities to bail out banks. These are choices that the market “contagion” is reacting to.

People who use the TINA argument have given up on politics. A political class and EU that organises policy on that basis have failed to represent the possibility of choice, of rationality.

Rationality is not a detached or abstract concept. It is based on argument, testability and evidence. It is profoundly living, human and creative. It is the fundamental basis for proper democratic politics.

Public authority that is not based on argument but on TINA lifts itself beyond argument and thus the people. Authority exercised in this manner necessarily tends to unrepresentative as we have seen throughout this economic crisis.

A poll in today’s Sunday Independent, an Irish newspaper, shows that most of Ireland, 57 per cent, supports a default, to restructure the €77.6 billion of lending to the country’s dodgy banks.

But, as the same newspaper reports, when the question of default was raised during EU-IMF negotiations “the Europeans went completely mad”.

TINA says that a default and the market turmoil surrounding the destruction of failed financial institution is too high a price to pay.

But what of price that is being paid? The huge sums, that represent the biggest policy decision in over a generation, that have been committed arbitrarily – without rational argument in the name of TINA.

Let’s remind ourselves: three years ago the “contingent liabilities” resulting from government support to financial institutions amounted to 0.3 per cent of the EU’s total GDP.

In 2009, according to Eurostat figures this spring, these obligations, which depend “on whether some uncertain future event occurs”, had risen to 10.1 per cent of the EU’s GDP. Since then the figure will be even greater.

The “contingency” is banks, whose liabilities assumed by public authorities in TINA’s name last year stood at an astonishing €1,192,271,000,000.

The true figure is larger by a two-fold, at least, magnitude, according to the European Commission

“Public money amounting to about 2 per cent of EU GDP has been injected into the financial sector in the form of recapitalisation. These measures affect government debt, but not the deficit. Moreover, guarantees to the financial sector of around 24.5 per cent of EU GDP have been approved by the European Commission, of which almost 8 per cent of GDP has actually been granted so far. Impaired asset relief and liquidity support to the banking sector, similar in nature to guarantees, amount to almost 4% of GDP (approved).”

TINA must be stopped.

This is a new posting to move on the debate here.

Bad news

I am not a fan of Brian Cowen (who is?) but anyone with a heart had to feel some pity for the man this morning.

The Irish PM was in his country’s parliament (a body that is self-evidently no longer a sovereign people’s assembly) insisting there was no bailout.

“There has been no dictation from anybody. What we’re involved in here is working with colleagues in respect of currency problems and euro issue problems that are affecting Ireland, they’re affecting other countries. They’re particularly affecting Ireland at the moment,” he mumbled. “There has been no question, as has been stated all over the weekend, of a negotiation for a bailout.”

Oh yeah?

Christine Lagarde, the French finance minister seems to know something poor old Biffo doesn’t – is Ireland’s leader (and people) the last to know?

“Is it six months or a few days away? I’d say it’s closer to days,” she said of a bailout.

Didier Reynders, the Belgian finance minister, joked that the basics of EU bailout had been agreed, despite there being no request for help from the Irish.

“Now we have the answer, we are just waiting for the question,” he quipped.

Enda Kenny, the Fine Gael opposition leader, was all over it as the EU-IMF teams booked their flights to Dublin to take over the finance ministry on Thursday. The officials are known as “the Germans” by their resentful Irish inferiors, I’m told.

“The white flag has been raised. The towel has been thrown in and like the prowler waves of the west coast they’re coming on Thursday. And they’re not coming in here to say ‘well done Brian, well done lads, keep at it, you’re doing a great job’,” he said.

EU and IMF officials will be carrying out “intensified, short and focused” preparations for a bailout of Ireland. Ireland’s four year austerity budget has been delayed so the EU-IMF can check it line by line.

The final insult may be a bi-lateral offer from Britain – meaning that the EU-IMF and HMG (Her Majesty’s Government) will be in charge.

Was this crisis caused by markets? Some of it was but the turmoil was also deliberately whipped up by people including Herman Van Rompuy (it’s a “survival crisis” apparently) and the ECB. To its credit the European Commission seems to have refused to play that dangerous game.

The EU and G20 strategy to preserve financial institutions, banks, at all costs has destroyed Irish sovereignty.

Watching Cowen humiliated, in an Irish parliament that has been sidelined as much as he has, one has to ask: Just as national protectionism was a disaster in the 1930s, can we be so sure that the EU-IMF-G20 is what we need today?

Herman Van Rompuy’s euroscepticism leads to war speech last week is being thrown into sharp relief by the growing campaign for Ireland to abandon its historical desire for an “ourselves alone” independence.

'Courage is ignoring the risk of electoral defeat' (Photo: Council of the EU)

The EU president’s diatribe against “warlike nationalists” – something of a fantasy bogeyman to scare the children – was really an attack on the concept of sovereignty.

“In every member state, there are people who believe their country can survive alone in the globalised world. It is more than an illusion: it is a lie,” he said - full speech here.

It is a conscious attempt to diminish the idea that human beings, whether through their nation states, the usual unit of popular sovereign power, but not always, can control their own affairs, with an implicit defeatism or surrender to fate.

If even democratic and free countries cannot survive alone, our linked notion of individual autonomy must be even more of  “a lie”  – but I digress.

Within days of Van Rompuy’s speech, Ireland is coming under attack for having the temerity to think it can cope with its debt crisis and the arrogance to publicly say the Irish value sovereignty over the dependency the EU proclaims is the true state of human affairs.

Ireland is fighting for its political and economic independence in a world dominated by the globalist, or fatalist, outlook that says markets and bureaucracies, in this case the EU’s, cannot be bucked.

Irish ministers, whatever their own gombeen surrender monkey instincts, know that Ireland’s voters value their independence, a freedom earned through bloody battles with British imperialism, and resent the idea of others coming into to “help”, even “for their own good”.

“We have every confidence that we will be able to manage this economy,” said Batt O’Keeffe, Ireland’s trade and business minister on Sunday. “It’s been a very hard-won sovereignty for this country and this government is not going to give over that sovereignty to anyone.”

For contrast here is Van Rompuy again: “In every member state, there are people who believe their country can survive alone in the globalised world. It is more than an illusion: it is a lie.”

In fact, as developed by the President of Council in his Berlin speech last Tues, the principle of sovereignty and the denial of fate are seen as worse than “lies”. It is seen as nothing less than the source of fear, destruction, conflict – and euro zone crises.

Earlier on Tuesday Miguel Angel Fernandez Ordonez, Spain’s typically odious central banker and a member of the ECB’s governing council, blamed Ireland’s attachment to its fiscal sovereignty for dragging the whole euro zone into crisis in the first place.

“The situation in the markets has been negative due in some part to the lack of a decision by Ireland. It’s not up to me to make a decision on Ireland. It’s Ireland that should take the decision at the right moment,” he said.

As EUobserver reports, the pressure is now on Ireland to wake up to its responsibility as a modern euro “member state” by turning its back on the “illusions and lies” of independence. How dare these people tell Ireland that it cannot cope, that the Irish are not up to the job of self government?

Ireland must get on its knees and confess its helplessness, powerlessness and “interdependency” to come back into the club of the civilised-Van Rompuy-style EU. Ireland, like all of us, must learn its place. We are all subject peoples now – or so the EU or managerial outlook would have it.

History – which is still young – has shown us that it is the struggles of peoples, often constituted as nations, but not always, against the notion of destiny or as internationalists supporting the sovereignty of others which has driven progress, often against terrible odds or nationalism that denies others their self-determination.

Van Rompuy, the ECB and EU’s view will not see nation states disappear but rather the question of sovereignty – who rules – will be hidden behind a public-free zone of “rules-based” administration and management.

Popular sovereignty, increasingly painted as a dark and dangerous force, will be decoupled from national interests which will merely become bureaucratically expressed differences between civil servants of different nationalities.

As Van Rompuy celebrated: “I, for one, have really been impressed over the last year by the political courage of our governments. All are taking deeply unpopular measures to reform the economy and their budgets, moreover, at a time of rising populism. Some heads of government do this while being confronted with opposition in parliament, with protest in the streets, with strikes on the workplace (or all of this together!) and fully knowing they run a big risk of electoral defeat — and yet they push ahead. If this is not political courage, what is?”

If courage is ignoring voters then unelected officials like Van Rompuy are the bravest of them all.

It is actually cowardice. Leadership is taking people with you to develop a public interest as opposed to sectional bureaucratic interests. Is the world really safer from fear, war or conflict if our rulers ignore the “risk of electoral defeat”?

When popular sovereignty is expelled by the managerial administrators, the people become a threat or a problem to be managed and ignored. Government becomes a process, clearly hinted at here, defined by insulating decisions from democracy, from public accountability, via “electoral defeat”.

History does not show us that the affairs of humanity are better ordered without the “risk of electoral defeat”.

This project of expelling the people becomes so much easier if the very concept of sovereignty, of independence from a fate ordained by bureaucrats, markets, foreign powers or monarchy, is diminished. After all what choices are really left?

The internationalists and universalists among us will recognise that Irish freedom, like everyone’s, can only be threatened by a bureaucratic and elitist ideology that regards sovereignty as an “a lie”.