Archive for category Economic crisis

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”.

I was speaking last weekend at the Battle of Ideas conference in London on the theme of “Whose social justice is it anyway?”.

My full speech is below. Its aim is to state principles of equality against the dominant “values” or beliefs that undermine economic and social progress. It was a useful debate.

Prince Charles believes slums have a "sacred geometry" (Photo: European Commission)

>> I want to frame what I say by starting with two very different responses to injustice.

I’ll start with His Royal Highness, The Prince Wales, and an account taken from his new book, just out, called “Harmony”.

This is Prince Charles’s reaction to Dharavi, a slum in Mumbai that has become something of a playground for those, like the heir to the British throne, who are searching for a “new way of looking at our world”.

“When you enter what looks from the outside like an immense pile of plastic and rubbish, you immediately come upon an intricate network of streets with miniature shops, houses and workshops, each one made of any material that came to hand. I am sure, having seen this elsewhere, that such a layout comes from a kind of intuitive patterning” – “a sacred geometry”, says Charles Windsor, that “is inherent in all mankind” but a “natural pattern of humanity”, he claims, that has been “disrupted” by Western ideology”.

“Many observers of communities such as Dharavi,” writes the prince, “quickly note the absence of physical assets such as power, water and sanitation, rather than the presence of [an] immensely important but less tangible element of community capital [...] The temptation is to see their material poverty rather than the rich complexity and diversity that holds the community together despite such trying and uncomfortable circumstances – to see deprivation rather than how order has naturally emerged.”

Moreover, the prince proclaims, not only are the slum dwellers, whose principal activity is picking through the rubbish of wealthier people in Mumbai, in harmony with natural patterns but we, the voracious consumers of modern cities, have something to learn from them.

“In many countries there continues to be an intense discussion about the rights and wrongs of municipal waste collection and how best to achieve recycling targets but the people of Dharavi manage to separate all their waste at home and it gets recycled without any official collection facilities at all,” he writes.

Am I the only one here to feel uncomfortable with this outlook? I hope not.

I would like to contrast this right Royal view with an encounter George Orwell had over 60 years ago in a slum in the North West of England. The writer – in his 1937 book The Road to Wigan Pier – describes a train journey which passed by slums on a bitterly cold sleety, dreary day.

“At the back of one of the houses a young woman was kneeling on the stones poking a stick up a leaden waste pipe which ran from the sink inside and which I suppose was blocked. I had time to see everything about her – her sacking apron, her clumsy clogs, her arms reddened by the cold. She looked up as the train passed and I was almost close enough to catch her eye. She had a round pale face… and it wore, for the second I saw it, the most desolate hopeless expression I had ever seen. It struck me then that we are mistaken when we say that ‘It isn’t the same for them as it would be for us’ and that people bred in the slums can imagine nothing but the slums. For what I saw in her face was not the ignorant suffering of an animal. She knew well enough what was happening to her – understood as well as I did how dreadful a destiny it was to be kneeling there in the bitter cold, on the slimy stones of a slum backyard, poking a stick up a foul drain pipe.”

Hold those two views and impressions in your mind: The first, Prince Charles, who finds in the slum a glimpse of a preferred destiny for mankind; the second, Orwell, who shared the universal impulse of humans to recoil at such a fate.

Charles sees a kind of justice amid the deprivation, in harmonious living. Orwell sees injustice in poverty’s imposition of a miserable fate or destiny on a human being.

Windsor’s view is very much part of a mainstream culture war against economic growth and the characteristics of humanity, the attributes and principles that have driven social progress. The crusade takes the superficial form of a campaign against using Gross Domestic Product, or GDP, as a measure of human achievement or welfare.

The authors of “Beyond GDP”, a study by Boston University’s Pardee Centre, last year urged that new indicators, such as the “community capital” extolled by Charles, are needed to re-orientate society away from using economic growth as the marker of social progress.

“Across the world, the growth of economic activity is heralded as a universal remedy,” say the authors. At the time it was conceived, GDP was a useful signpost on the path to a better world: a path where increased economic activity provided jobs, income, and basic amenities… That economic activity has created a world…overflowing with people and manmade capital, where the emphasis on growing GDP and economic activity is leading the world back toward the brink of collapse.”

This view, essentially that growth is destroying the planet, was repeated in an highly influential “Beyond GDP” report, authored by Nobel laureates and promoted by Nicolas Sarkozy, along with many EU great and good, this spring. It has become the dominant outlook amongst those who talk of “global justice” and a “revolution” in how we think about progress.

Like the prince, Sarkozy made it clear that the report was also  about making people in the West rethink the principles of which society organises itself. “I hold a firm belief: we will not change our behaviour unless we change the ways we measure our economic performance,” he wrote.

What is wrong with this outlook?

Amartya Sen, the Indian economist and thinker, rightly observes that famines, where people starve and die, are only an injustice if they could have been prevented. On this basis, the Dharavi slum is an injustice because it is surrounded by booming Mumbai – something better can be done, it is being done.

Dharavi is an injustice, it is preventable, it is not a fate set by nature or inescapable circumstance. To trumpet, as Charles does, its “sacred geometry” is to celebrate deadly arrangements where there is only one toilet per 1,440 residents, with all the squalor and disease that comes without sanitation.

Charles, Sarkozy and the rest of the Nobel prize winning “Beyond GDP” brigade “value” the particular, harmonious “community capital” of slum societies that are said to bring wellbeing despite the deprivation. These “values” are now promoted as equally virtuous to growth.

Much is made of such “values”, beliefs that, as Sen puts it, people in slums have “the kind of life they have reason to value”. “In valuing a person’s ability to take part in the life of the society, there is a an implicit valuation of the life of the society itself,” he writes in his book The Idea of Justice.

In fact it is elites, the people who give out Nobel prizes to people like Sen, who are “valuing” poverty over progress. People’s resilience and ability to survive is turned into a more or less explicit “valuation” of slum life. This replaces judgement by the principle of equality which would use the operational standards of modern cities, which are better because all humans (bar a few cranks) would rather live in them.

Economic growth may not make us any happier than a slum dweller (or so they say) but increased production provides greater wealth, an increased means to develop new ends for human beings. Economic growth is the expansion of possibilities. The expansion of possibilities provides us with instruments to defy fate, to change destinies.

These are not beliefs or mere “values” but genuinely universal principles that give a real alternative to fate, the destiny, for example, of the misery that comes from poor sanitation, whether it was a Lancashire woman’s blocked drain in 1936 or disease in Dharavi in today’s 2010.

Those in the “beyond GDP” brigade are closing possibilities and thus “value” or believe in (the often imagined) attributes of those who are in harmony with their circumstances, or fate, or place.

What makes us human, all of us, is our refusal to accept fate. Equality is the lived reality of the human spirit’s struggle to resist a place or a destiny that is imposed by circumstances – it is universal. Our history – all world history – our civilisation – all world civilisations – have always been built on humankind’s struggle against the imposition of circumstance, first natural and increasingly in later epochs, limits that are social in origin.

This historical process, progress that is a reality not a mere “value” or belief, has been more profoundly creative and constructive than destructive as is evidenced by a world culture or civilisation that offers all of us vastly more possibilities or means than just a generation ago – even if social limits persist in denying them to everyone.

As Daniel Ben-Ami, writing on Spiked explains:

“If humanity really did simply consist of seven billion consumers – a giant swarm of human locusts – then the future would indeed be bleak. But if it is understood that humans are also capable of amazing feats of creativity and production, then the prognosis is entirely different. Humans are not simply consumers, but producers capable of remarkable ingenuity.”

Orwell’s response is a human one to the injustice of fate. It is moral because once the struggle against fate is seen as the basis of equality there is a duty to reach out to others, the sort of collective endeavour, politics, that changes lives, societies and potentially makes history. To do as you would be done by. Orwell’s glimpse and spark of shared human identity in Wigan set him on the road of a life of progressive engagement, nine months after the encounter he was fighting in the Spanish Civil War alongside those who refused to bow to the fate of fascism.

On the other hand Prince Charles, a man with 22 personal staff, who does not even put the toothpaste on his own toothbrush, visits a slum only to discover his own pre-existing prejudices, insights that he, Sarkozy and the “Beyond GDP” brigade, use to moralise, to preach against those of us who have not yet embraced the “justice” of place, of our fate in the world. <<

European leaders are here in Brussels to tie themselves in knots over the prospect of a change to the Lisbon Treaty.

Leaders of the Evasion Union (Council of the EU)

The agony and anxiety is not about the substance of creating a permanent “crisis management mechanism” (CMM) for the euro zone but the prospect that changing the EU treaty could lead to popular votes.

EU officials are working around the clock because all leaders – whatever their position on the Franco-German Deauville stitch up or an emerging Commission/Van Rompuy plan for a “two sentence, surgical amendment” – are absolutely agreed on one thing: There must be no referendums.

One thing truly unites the Evasion Union and that is stopping the terrifying possibility that voters might get the chance to have a say in referendums that would very quickly become judgments on how Europe’s elites have handled the economic crisis.

This is a frightening nightmare scenario for politicians who have premised their austerity measures and bank bailouts on keeping the public at arm’s length – or further.

How do we know that Germany’s demand – that countries embroiled in the CMM could lose their voting rights in Brussels – is nothing but a negotiating ploy?

It’s easy to tell because that demand would lead to a referendum in at least one country – possibly more. It is therefore only a bluff as no EU leader would trigger votes. “Can you imagine,” said one official, “the Irish Prime Minister going to voters and asking, after all that austerity, demanded by the EU, that the Irish offer to give up their national voting rights if it gets worse?”

It’s a bargaining chip, for the Evasion Union almost anything is possible but, on no account, must there be a referendum.

Here’s Jose Manuel Barroso, the European Commission President: “If treaty change is to reduce the rights of member states on voting, I find it unacceptable and frankly speaking it is not realistic. It is incompatible with the idea of limited treaty change and it will never be accepted by the unanimity of member states. And as you know a treaty change requires unanimity.”

The “Pandora’s Box” for Barroso and all the others isn’t really a CMM – that’s easy compared to the real horror of accountability via popular votes.

Here’s the deal (admittedly based on the Thurs afternoon corridors ): a CMM that only allows countries to get the cash after “haircuts” for markets and loss of sovereignty (using beefed up Lisbon Treaty articles such as 136, the basis for the Commission economic governance proposals in the first place). It’ll hurt in other words.

All this is difficult enough to hammer out (and Germany needs to get it past the Karlsruhe court) but if agreed, with a mandate for a later meeting and signing off next spring, it can be done by Simplified Revision Procedure (SRP) with the great attraction that no referendums will be needed.

An amendment to the treaty under SRP will have to be ratified in national parliaments but most assemblies (certainly including the supine House of Commons) are nothing like as frightening for the Evasion Union as having to confront the public with argument.

I’ll sign off with this wonderfully surreal quote from Barroso, made to a meeting of some parliamentarians in Brussels the other day.

“It is worth looking back at the negative referenda which derailed the ratification process of the European Constitution. This told us something. It told us that European citizens were worried, about their jobs, their pensions, their education, their quality of life and their environment. And they looked to the EU for answers,” he said.

Only in the crooked world of the Evasion Union can no votes to the European Constitution be interpreted as a popular demand for “answers form the EU”.

“When Barack Obama goes on vacation, is he not the president of the United States? When Nicolas Sarkozy goes on vacation, is he no longer the president of France?,” said the spokesman of our very own EU president.

Herman Van Rompuy is under fire for using his motorcade as a taxi service to run his family from Brussels to Paris (and back again) to get a flight to and from their sun drenched summer holiday in August – more here and here.

'When I am on holiday, am I still not the president of Europe?' (Photo: Council of the EU)

Apparently his security services decided that it would be simply too dangerous for Mr Van Rompuy to travel a few miles to Gare Du Midi to take a high-speed train to the Charles De Gaulle airport.

Instead, the president, his wife, his children, their spouses and his two grandchildren, a party of 10, were taken in a US presidential style motorcade of five cars (were there outriders I wonder?) all 162 or so miles to Paris. When they returned, it was the Caribbean I think, the limos and close protection teams were on hand to whisk them back again – round trips of 650 miles.

It is Mr Van Rompuy’s “don’t you know who I am” moment – more on the “AD99” outlook here. In this mindset, haiku Herman, while unelected, is at least as important as French or US presidents who were chosen by voters. His office (it seems out of character for the man himself)  is showing severe symptoms of delusions of grandeur combined with the easy sense of entitlement that is so characteristic of the droit d’eurocrat.

Never mind that Mr Van Rompuy, dubbed “Mr Nobody” by Helmut Schmidt, could walk unrecognised on the streets of Brussels, let alone other European capitals. Or, that one of his aides regularly writes to newspapers in green ink complaining that Mr Van Rompuy’s correct title is the President of the Council, and that he is not, repeat NOT an EU president such as heads of state like Obama or Sarkozy.

Never mind that his use of cars for a family trip would flagrantly break the rules in any other EU institution. Or, that real heads of state and government, such as David Cameron, regularly use the high-speed rail connections that are so close to Mr Van Rompuy’s Sint-Genesius-Rode home.

Never mind, that he is paid €298,494 a year, more, funnily enough, than either President Obama or Sarkozy. Mr Van Rompuy is so important, he is so very, very worth the fuss.

I am told that his cabinet are horrified that this shockingly “superficial” story has come out of the corridors into the open. They just don’t get it do they?