EU Referendum

Showing posts with label engrenage. Show all posts

carousel[i-carousel]In the latest instalment of that curious crime known as "carousel tax fraud", Reuters is reporting that measures to prevent fraud in carbon permit trading may not be working. A patchwork of unilateral actions by a few EU member states, it says, could serve only to push the activity into neighbouring states.

The news agency has carried out its own investigation into this scam and found that a mix of tax loopholes, lack of regulatory oversight and easy market access that could open the EU's $90 billion emissions trading scheme to abuse. Investment banks and brokers are thus worried they may have to foot unpaid tax bills left after any fraud or face legal action for having traded unknowingly with anyone charged.

It was early last month that we reported on attempts to rob the taxpayers of EU member states of hundreds of millions, and although the UK took quick action to head off the scam at the pass, its efforts to catch the crooks have been unsuccessful.

High-profile action by HM Revenue and Customs (HMRC), which raided 27 properties around London following a 7-month investigation into a suspected £38 million fraud, had nine people were arrested. All have since been released without charge.

David Bates, a director at emissions broker CarbonDesk makes the obvious point. "It's put the innocent intermediaries in a very awkward position of responsibility and liability, which isn't fair," he says. And that is indeed the case. By the time the authorities pick up the fraud, the original perpetrators have usually long gone, leaving the downstream firms, who have been unwittingly scammed, holding the baby.

The latest target is the spot trade in carbon permits, an unregulated market worth tens of billions of dollars. It is particularly attractive because of its tax treatment in the EU and lack of oversight by financial watchdogs. But the irony of it is that, while governments stand to lose shed-loads through fraud, they make nothing because the VAT is eventually reclaimed anyway.

Furthermore, as James Emanuel, a director at broker CantorCO2e, says: "Carbon permits are a tax on emissions, and applying VAT to them is effectively putting a tax on a tax, which is kind of ludicrous."

“Ludicrous" is not a bad name to apply to the tax as a whole, which is estimated to cost European taxpayers some £40 billion a year, with British losses in 2005–06 running to between £2 to £3 billion.

To stem the losses on carbon credits, France exempted carbon permits from VAT in June. In July, Britain and the Netherlands followed France's lead, altering their tax treatment of the permits. However, there is nothing to stop fraudsters moving on to other countries such as Spain and Germany, where large amounts of carbon permits are traded.

The EU Commission, of course, would not comment on specific countries at risk and other countries are keeping schtum. So too, with the notable exception of Reuters, is the media in general.

It has always been a strange facet of this gigantic crime that publicity has been sparse. It is as if the media simply cannot cope with the scale of the losses, or that fact that, arising from an EU tax, the establishment does not want to acknowledge by how much it has been conned.

Interestingly, wherever this tax system exists, there is fraud and, wherever there is fraud it seems, the perpetrators get away with it.

In the final analysis though, the ultimate beneficiary will be the EU. Virtually unreported in this country, the Council recently adopted a proposal to set up "Eurofisc": a common operational structure "allowing" Member States to take rapid action in the fight against cross-border VAT fraud.

Soon enough, there will be an executive agency to run this system, with more eurocrats to feed at the tit of public finance, tightening economic and therefore political integration even further. Once again, we see engrenage in action – first create the problem and then come up with a solution that requires more integration. And no one seems to give a damn.

COMMENT THREAD

invisible+man[i-invisible+man]As the euro-elections come closer, The Economist has devoted an article to noticing that "Europe is invisible" in the campaign – telling us that it "shouldn't be".

As to the invisibility, that certainly is the case. The campaign literature from the main parties scarcely mentions the EU, while a Conservative Party circular letter tells us that the election "gives us an opportunity to send a message to this government, loud and clear: it's time for you to go". Media interest is minimal and the claque obstinately focuses on the domestic political scene.

However, in an article apparently devoted to this phenomenon of invisibility, the magazine offers little by way of explanation for it. The tide of European integration has slowed in recent years, leaving Britain with less to get worked up about. Also, Tony Blair was constantly talking up the EU while Brown has rarely shown the same zeal, and is anyway preoccupied with fighting a recession.

That's it. That is all we get on this bizarre situation, the magazine being more concerned with telling us why we should be interested in "Europe" than exploring why we are not.

Not least of the reasons why we should be interested – although not mentioned by the Economist - is a recent research which tells us that regulation generated by the EU has cost businesses across a total of €1 trillion in the last 11 years - equivalent to 12 percent of the gross domestic product.

That 12 percent figure is not exactly new, first reported in November 2004 and reinvented by Open Europe in February of this year. But what is intriguing about this current report is the view of one of its authors, Professor Francis Chittenden, who declares that EU regulations are largely driven by political motives, with little assessment of the impact they will have on businesses and the economy.

This, of course, is a theme which we have been plugging ever since we started this blog – and before. The primary purpose of EU regulation is not regulation, per se. It is a mechanism for promoting economic integration, from which political integration follows, the embodiment of the "Monnet method", relying on engrenage and latterly the "beneficial crisis" to drive the agenda forward.

David Frost, director-general of the British Chambers of Commerce (BCC), calls for this "massive burden of regulation on business" to be reduced, but he is whistling in the wind. The EU cannot and will not reduce regulation – it is its very raison d'être.

If EU politics was normal politics, on the national model, there could be change. Parliamentarians – in theory at least – could demand it and MPs holding themselves up for election with ambitions of forming a government could pledge change in their manifesto. But in the euros, there are no manifestos because the right of initiative is the prerogative of the EU commission. All the MEPs can do is conform with the "working programme" set by the commission, their power confined to making tweaks round the edges.

That is another of the reasons why the euro-elections are unreal. They don't matter because MEPs don't matter. They are a supreme irrelevance, serving as the gloss on a fundamentally anti-democratic system, there to give it the appearance of legitimacy.

The trouble is that, as the EU takes over more and more powers, and thus expands its legislative range, it also marginalises our own Westminster MPs. They also become irrelevant, thus ending up filling their idle hours with increasingly inventive schemes for self-enrichment.

And that is a true measure of the decay in our system. Collectively, in the last three weeks, both the politicians and media will have devoted far more time and energy to discussing parliamentary expenses than they have given to the EU in the last three years. That, however, leaves a huge vacuum and, in the way of things, if the politicians do not address it, others will.

COMMENT THREAD

euro[i-euro]It cannot be a coincidence that we are now getting a rash of media stories speculating about the possibility of the collapse of the euro. And, of course, it isn't. Ambrose, after all, has been banging on about this since before the ink was dry on the first euro note. What is different now is that the theoretical possibility now looks closer to reality.

Perhaps the most thorough of the most recent analyses comes from The Times which chooses a fairly level headline for its dissertation, simply noting "Cracks in the euro". Its strap tells us nothing we did not know already, that the economic downturn has exposed harsh differences between EU members. The stronger states are likely to have to bail out their weaker neighbours, it says.

The piece starts with a historical perspective, reminding us of the launch of the euro in 1999, when 3,000 blue and yellow balloons were launched into the grey Brussels sky, and "Europe's financial leaders popped corks on 9-litre champagne bottles." It misses a small but entertaining detail though, which we record in our book, The Great Deception. As the corks popped, the band struck up with a rendition of "Land of hope and glory".

There is very little glory now, and a lot less hope now that the euro – which hitherto has enjoyed a charmed life – is locked into a battle for survival, rocked by the deepest recession in living memory. But all The Times can do, as the strap itself does, is re-state exactly that of which the naysayers were warning at the time – that the "one size fits all" economic regime which accompanied a single currency could do nothing else but create problems.

The central issue, as it always was, is the arcane issue of "fiscal transfers", the willingness of the richer countries to bail out the poorer areas which are deprived from seeking their own salvation by competitive devaluation and adjustments of interest rates.

As long as the good times rolled, this was not a problem but now that whole economies are heading for Carey Street, this is top of the political agenda. Greece and Ireland are at the top of the list needing bail-outs, followed by Portugal and possibly Italy, Austria and Spain. And then there are the central and eastern European countries, not in the eurozone but also needing assistance, which muddies the water no end.

Jean-Claude Juncker, prime minister of Luxembourg and head of the euro group of finance ministers, is telling us that, "The credibility of monetary union is at stake." But it all boils down to whether the taxpayers of the bigger and historically wealthier countries like Germany are prepared to carry the additional tax burden of problems elsewhere, at the fringe.

With a general election in Germany this year, Merkel is going to have to box clever if she is to get this past the voters and the indications are that she is going to have problems. Thus we get Derek Scott, former economic adviser to Tony Blair, suggesting that the chances are that the eurozone "leaders" go for a short-term fix rather than address the fundamental issues. Perception, as always, will outweigh substance.

It is this which is having serious players asking whether the euro can survive. The Times tells us that half of top American investors already consider the break-up of the euro to be a "done deal". Central banks in Asia and the Middle East are slashing their exposure to the euro, according to debt and foreign-exchange traders, and there has been a collapse of investment from foreign buyers into euro-denominated assets.

Interestingly, Credit Suisse economist Neville Hill is rehearsing precisely the issues that the eurosceptics were raising way back, although they are now becoming mainstream. "It's about the problem of having one central bank and 16 individual policy-setting regimes," he says. "Nobody ever resolved those issues, but they were gradually forgotten about over time."

Chickens are now coming home to roost, and all the clichés can come out to play, not least the observation that our gifted leaders are "flying by the seats of their pants".

The original plan was to go ahead with a flawed construct on the basis that the Monnet dynamic of engrenage would eventually create such stresses that there would be a growing constituency for increased central economic governance, the trigger being the "beneficial crisis". Now that strategy is being tested to destruction and it is anybody's guess as to which way it will go.

Cue therefore, Newsweek with a piece written by Holger Schmieding, chief European economist at Bank of AmericaMerrill Lynch. He asks, "Is the euro at risk?" The risk being considered is its ultimate death, with worries that "Europe's most ambitious integration project to date, could break apart under the strains of the recession."

Schmieding concludes that the notion of a full-scale euro breakup looks vastly overblown, suggesting that the worst of the global crisis will be over, with luck, sometime later this year. Once that happens, he says, trading nations with a focus on investment goods, like Germany, should be able to recover lost ground. Thus, he tells us, the medium-term outlook for core Europe is still encouraging.

Crucially, Schmieding notes that the political logic argues very strongly against a demise of the common currency. All member countries have invested a lot of political capital into the European venture. They are not going to let that go without a gargantuan fight. As we ourselves observed, it is a question of hanging together or hanging separately.

The bottom line says Schmieding is that global investors have bigger things to worry about at the moment than a breakup of the euro zone. In the medium term, he concludes, the crisis may even enhance the position of the euro.

In the third of today's crop, however, we find that no such sanguinity troubles Roger Bootle. He freely writes of "the budding eurozone disaster", a tiresome epic of shallow triumphalism which need not detain us overlong. It revels in the travails of the euro, allowing Bootle to conclude that "we should thank our lucky stars that we have managed to escape the budding economic and political disaster across the channel."

Disasters over the channel, he might recall from history, have an unfortunate habit of exerting their malign influence here. It is one thing, therefore, rejoicing in the British escape from the euro. It is quite another to take any comfort from its demise.

In any case, though, the fat lady ain't sung yet and reports of the death of the euro may be a tad premature. Beyond speculation, no one has the first idea what is going to happen. We are in uncharted territory - all we have is our clichés.

COMMENT THREAD

online+shopping[i-online+shopping]Although great events dominate the headlines, as always, the slow, insidious process of EU economic integration goes on, this – in the Monnet mould – being the precursor to and the mechanism for political integration.

In the spotlight (not) is the news carried by the Irish RTE network which announces that, as of Thursday (i.e., 1 January), "a new small claims procedure has been put in place for people across the European Union to deal with cross-border complaints."

Like the Irish Small Claims Court system, this piece tells us, the new procedure is for dealing with disputes concerning goods or services of €2000 or less. The new system will make it simpler for people to resolve complaints against traders based in another EU country. (Previously a court action had to be pursued.)

Generally the new procedure will cost a fee of just €15, and no layer (sic) is necessary. Claimants will file a standard claim form, the defendant is given the chance to reply, and then judgement is issued in 30 days. The judgement is enforced by the member state.

This, of course, will not work – different systems and different priorities will cause all sorts of hang-ups. But you can see the progression. First, you "open" the borders to the free flow of goods and create a borderless system of trading. Then, inevitably, the cross-border consumer cannot get redress over faulty goods, so you must then have an official cross-border system to deal with that.

Then, in the fullness of time, when this is shown not to work, you must then introduce a common system of enforcement. When that does not work, you must have a "European" supervisory agency to ensure that the common rules are applied … and so on and so on.

By such tiny, barely-reported steps, each separated by many years, does the process gradually ensnare us so that, decades later, we look up and ask "how the hell did we get into this mess?" By then it is too late.

That the process is politically driven is well evident by our lack of arrangements with the USA. There, UK online (i.e., cross-border) trading volume is much higher, but it works on the basis of trust – and the old principle of caveat emptor. There is no official intervention, and no common small claims system. You take your chances and, by and large, the system works to the satisfaction of all.

The genius of engrenage, though, is that nobody notices. Each step can be justified, in isolation, on apparently good grounds – as long as no one understands that it is a process, and the end point is economic and then political integration. By such means are we thus enslaved.

COMMENT THREAD

FISH+-+rusty+boat[i-FISH+-+rusty+boat]We've written about it before, most recently in June last year and then again in the January of the same year.

This is engrenage - not talked about much in polite company and if you mention it to the average politician of journalist, you will be greeted with a blank stare. Yet, in our June post, we explained that this mechanism, loosely translated as gearing is one of the major drivers of political integration within the European Union.

We even went so far as to explain the mechanism, even in the certain knowledge that many of those who should know will steer clear of this blog, like it was the plague, and this remain in their desired state of blissful ignorance. For the rest, those of us who have ambitions to drive the tumbrels or cheer their passing, we wrote thus:

First of all, it prevents member states implementing their own controls in a vital policy area (such as immigration), and then starts to regulate in these areas itself. The regulation is invariably incomplete and functions poorly, requiring more legislation. It is then not long before there are demands for additional laws, whence the EU commission happily obliges with proposals – grandly declaring that the member states are calling for "more Europe".

So it is that we see another example of the mechanism, this one relating to what qualifies – despite intense competition – as one of the most disastrous policy yet to be devised by the EU, the Common Fisheries Policy.

Through this dire, bureaucratic construct, the EU has managed to devastate the fishing grounds of the member states and, in particular, the formerly teeming waters of the Continental shelf around the UK, variously reckoned to have held some 80 percent of the commercial fishing stocks in the waters that come within the boundaries of the EU member states.

But, all-encompassing though it might be – there is one huge gap in the policy. It leaves the enforcement of the EU fisheries laws to the member states. And having turned commercial fishing virtually a criminal activity, having demonised fishermen and driven most of them into penury or alternative livelihood, the EU commission is complaining that those foolhardy or desperate enough to remain in the industry are not being fined enough by their member state courts when they fall foul of EU rules, and that there is too much variation in fines for similar offences in the different member state courts.

Thus, in an absolutely classic example of engrenage the commission is asking member states to approve "dramatically tougher enforcement of fishing rules". There is no word, of course, of the EU itself having created a conservation disaster and an entirely unworkable, which creates the very "criminals" to whom the "tougher enforcement" should apply.

Instead, it invokes visions of "motherhood and apple pie", pleading that this move is necessary to "stop years of illegal catches that have devastated species such as cod and tuna."

With such noble ambitions declared – quietly sliding over the real agenda, the pursuit of political integration – the commission thus proposes that EU officials would receive new powers to pursue fishermen in their home countries for offences such as fishing in protected spawning areas or out of season for threatened species. Inefficient and costly checks at sea would be replaced by reinforced investigations at port.

Needless to say the fishermen must be punished severely under this new regime, with fines rising to as much as €300,000 for serious breaches of (EU) fishing rules - 100 times greater than current fines in some cases. Repeat offenders could lose their permits.

To bolster his case, EU fisheries commissioner Joe Borg declares that low fines and weak enforcement by some member states "makes a mockery" of the EU's "tough catch quotas," calling in aid one of its favoured captive NGOs, the WWF, to support it.

But, while the WWF exudes horror at the supposed depredation of the evil fishermen – thereby seeking to enlist the approval of all "right-minded people", who have been indoctrinated with decades of "anti-fishermen" propaganda – the EU gets a new brick in the growing edifice of its common judicial system, with a uniform application of fines across the EU, monitored and controlled, of course, by the EU commission.

We have already seen a similar attempt with EU environmental laws, this one driven through the ECJ, but this is the first overt attempt to standardise penalties through the direct application of a new EU law.

If successful, this will set a stronger precedent for a system of common penalties throughout the EU. In the fullness of time, possibly after the passage of many years, the commission will then look to encroachment into another policy area. And so, slowly, steadily and inexorably, the process of engrenage does its deadly work, so stealthily and cleverly that hardly anyone notices – much less protests.

Jean Monnet – deviser of the mechanism – certainly knew what he was doing.

COMMENT THREAD

EU+-+FlagsBrussels[i-EU+-+FlagsBrussels]Known as gearing, this is the mechanism by which the EU racks up its laws.

First of all, it prevents member states implementing their own controls in a vital policy area (such as immigration), and then starts to regulate in these areas itself. The regulation is invariably incomplete and functions poorly, requiring more legislation. It is then not long before there are demands for additional laws, whence the EU commission happily obliges with proposals – grandly declaring that the member states are calling for "more Europe".

Without fully realising it, that is what The Daily Mail is complaining about today, with a long lament about how police across the European Union are to be given free access to the DNA of four million Britons, millions of fingerprints, and to vehicle and driver registrations.

This is the so-called "Prum Convention " on cross-border police co-operation, which has now come into force throughout the EU, allowing for the mutual sharing of personal data held by police forces within the Community.

The Tories are also calling the convention a "sell-out", not least because this deal would have been part of the EU constitution, but has now been agreed separately as an intergovernmental agreement. London MEP Syed Kamall, for instance, says: "We are sleepwalking into a Big Brother Europe while our government stands idly by."

The problem is, though, that within the framework of our membership of the EU, the arrangement is both consistent and necessary. The Treaties oblige us to allow free movement of the citizens of EU member states across our borders; we are required to allow them to take up residence and they are allowed to bring their vehicles and drive on the licenses issued by their home countries.

Furthermore, we are not allowed to carry out any border checks and we cannot impose any conditions on entry – such as requiring evidence that individuals do not have criminal records.

The problem is, of course, that freedom of movement extends to criminals and as well as honest citizens, leaving the police in an impossible position of having to check out potential criminals – to say nothing of drivers and vehicle of EU citizens resident here - when their records are in another country.

Thus, with EU law having created the situation in the first place, and prevented member states from implementing their own controls, we are more or less forced to accept further EU-wide agreements to deal with the consequences – in this case the Prum Convention. That is engrenage in practice.

It is all very well for the Mail and the Tories to moan, therefore. But the answer to dealing with incoming criminals – without resorting to EU-wide agreements – is re-instate border controls and develop enhanced co-operation through Interpol. Neither of those options are available, however, as long as we are members of the European Union.

If the Tories and the Mail don't like the current arrangements, therefore, there is only one answer – but, needless to say – it is one they are not prepared to countenance. Instead, we get empty rhetoric, while engrenage continues to drive the process of European integration.

COMMENT THREAD

immigration+desk[i-immigration+desk]First, our political classes impose a Treaty which has profound implications on all of us, for generations to come. Amongst other things, it creates a right of "freedom of establishment" which permits the citizen of any member state freely to set up residence in another state. This is the "Europe without borders".

For sure, we get a referendum, but that was in 1975 – two years after our masters decided we should join the then EEC. That means that no one currently under the age of 50 got a vote, and there was never another, not even when the membership of nine – as it was when we joined - increased to 25 and then, on 1st January, to 27.

Thus it is that we are compelled to permit entry to the citizens of 26 other member states. The number that has taken advantage of this must be well into the millions by now. Perforce, it includes a goodly number of criminals who have upped sticks to pastures new, and fresh victims. And, in the absence of a system to ensure otherwise, and without compulsion and sanctions, there is no way the police can identify these people, or get access to their criminal records.

Thus it is that a judge, in desperation calls for an EU criminal records system.

This was Judge Stephen Robbins, who made the call after "serious difficulties" had been experienced in getting accurate information on the previous crimes of foreign offenders, saying that it was a "matter of pubic concern" that the courts in England were having these problems.

Trying to check on the previous convictions of two Lithuanians convicted of gun-running had shown how "very difficult it was to glean details, let alone precise details" from their home country, Robbins said. Despite all the efforts that had been made, it had not been possible to find out details of the criminal careers of the Lithuanians.

Nor had the police had not been able to determine whether a 10-year sentence that one of the men had received had been imposed for rape. Apart from confirming that he and his co-defendant had been in trouble before, a prosecution office in Lithuania had been able to provide nothing more than a useless list of penal codes, some of which were outdated.

The judge, who jailed three men at Southwark Crown Court in London last week for a total of 32 years, has deferred a decision on whether they should be allowed to remain in Britain amid concerns over "double jeopardy" issues.

Orestas Bubliauskas, 34, from Chigwell, Essex, and Andrius Gurskas, 26, of no fixed address, were each sentenced to 11 years, while Darius Stankunas, 34, who lived in Sheffield, was sentenced to 10 years.

They used a car fuel tank to smuggle an "assassin's armoury" of revolvers, silencers and ammunition from Lithuania, an EU member since May 2004. The Russian Baikal pistols, 20 rounds of ammunition and a silencer were then sold to gangs in Britain for as little as £1,500.

So it is that, in order to protect British citizens and to ensure that justice is done, the call goes out for a better system – and EU system. How logical that is and how unreasonable it would be to oppose it. And the EU commission would be delighted to implement a system. In the fullness of time, member state governments will agree to one.

What we are seeing, therefore, is a system of integration which is incomplete and throws up all sorts of anomalies and inconsistencies – which can only be resolved by more integration. And through this means, step-by-step, as the problems are resolved, the political classes will get their full political integration, which they could not have been able to achieve in one hit.

That is called engrenage. Translated literally, it means "gearing". A more practical definition is "salami slicing". And we're looking at another example of it.

COMMENT THREAD

link[i-link]If this wasn't a family blog, the title would be a lot, lot stronger believe me – although we always say that resorting to swear words simply displays a lack of vocabulary and imagination. Ripping someone to shreds without resorting to such low tactics, we say, is a refined art that takes considerable practice and skill.

That said, I am going to rip the throat out of that detestable, smug, self-satisfied little turd – unfortunately, only metaphorically. How dare he! That closed-minded, ignorant, fatuous little prat. He needs to take his head out of his backside once in a while and look around, once he's cleared his own shit out of his nostrils. Then he should turn round and crawl back in his little hole and pull the lid down over him and never, ever re-appear.

And the provoker of this invective? Need you guess? The Boy Wimp scores again, with an interview in The Telegraph, heralded by a front page piece entitled: "Cameron to Tories: Back me or we will lose again".

camerontotories[i-camerontotories]To that I say to Cameron, in the style of Tonto to the Lone Ranger in that famous joke: "Who's this 'we' white man?". "We" will not lose again – you will lose it for us, you tosser. You and the phalanx of dim, dismal sycophants around you who are so wrapped up in their own egos that they actually think they know something of this world and the people in it – ye preening, posturing creatures of less value than the low-life scum that inhabit the increasingly lawless streets.

The full text of his interview is here, the full horror of which emerges as you read and re-read it, pulling the meaning from it, revealing a vain, empty little man in a position far above his ability to sustain.

But what brings on the red mist is the blithe assumption of this poltroon that all that went on before his foetid little ego got on the scene was "outdated", simply a manifestation of "idle thinking" which the party must ditch. About some specifics, he says:

I think that was outdated thinking, sort of idle thinking, that needed to go. So there were things that needed to change and I think we have had the courage to change.

What this amorphous slime doesn't realise – is not even capable of realising – is that outside his Notting Hill love-fest, there are a lot of people who have been doing nothing else but thinking, people a lot more capable than he, people who put a great deal of effort into hard, detailed policies, the like of which are as far from "idle thinking" as the Boy is from having a brain.

FISH%20-%20boat%202[i-FISH%20-%20boat%202]I speak, of course – but far from exclusively – of the fishing policy devised by Owen Paterson, the skill and subtlety of which is such that it is still not recognised by the bulk of the Eurosceptic community, for whom it was devised. Based on the principle of reverse engrenage – as well as being a superb technical policy - it was our ticket out of the EU and a reversal of the devastating effect the policy is having on our fishermen and their dependants.

The EU dimension is, of course, why the flaccid Boy had to ditch the policy, which he did as one of his first acts on stealing the leadership of the Party. But such is his moral turpitude, he did not even have the guts to declare this, leaving the news to drip out through his aides, the slow-motion realisation reducing the impact of his betrayal.

But in other areas, we also worked on policies. On Bovine TB, for example, which is set to cost taxpayers £2 billion – YES, TWO BILLION POUNDS – for not eradicating the disease, we devised an incredibly advanced scheme based on cutting-edge science which would have squared the circle, satisfying the genuine animal welfare lobby and the farmers, bringing to an end a disease which is causing havoc in the countryside.

Of course, this is part of the real business of government, something on which the Notting Hill dick-heads are far too grand to soil what passes for their intellects. So into the dustbin labelled "idle thinking" went that policy too, to the despair of the dozens of very expert and dedicated people who worked countless hours to produce it – people who saw hope in a rejuvenated Conservative Party and who will never, ever vote Tory as long as Cameron is even a smear on the face of this planet.

The man is a total, absolute loser. "I don't go out to annoy...", he tells the Telegraph. Well, we have an answer to all your problems Dave. Stop breathing. You owe it to yourself - to everyone. And think of the carbon you will save.

COMMENT THREAD

us%20eu%20flag[i-us%20eu%20flag]I have to admit that I am struggling with this blog, between offering a balanced spread of stories on EU and related issues in general, and the need to pursue more focused coverage of the defence/foreign policies that we have been following.

Looking at the problem in the round, however, I am coming to the conclusion that we are close to the end game in the battle over European integration, with the "colleagues" perilously close to winning the match, without anyone even realising it. In this particular post, therefore, I want to address this issue and seek the views of our readers on matters which will become apparent through this piece.

Returning to this issue, in terms of my rather bald statement that we are entering the "end game", readers may rightly feel it contradicts earlier assessments published on this blog. Variously, we have argued that the European Union has reached the limits of integration and – with the failure of the constitution - politically, the construct is dying on its feet. It is only a matter of time, we have suggested, before the whole thing collapses under the weight of its own internal contradictions.

That, actually, still probably remains the case. History is littered with the wreckage of grandiose political constructs, but there is nothing to say that that the collapse of the EU will come soon or suddenly. More crucially, in the time available to it, it continues to grow and expand its powers, as does its capacity to cause enormous harm, and damage to UK interests.

Taking that on board, one has to understand that there are two separate models of European integration at work, each with their own advocates, their own power bases and their own agendas. As they interact with each other, we see a confusing interplay of events, which is difficult to interpret and, at any one stage, can attract different conclusions.

Cutting to the chase, though, the two different models can usefully be described – if approximately – by the horrendous labels of "neo-functionalism" and "intergovernmentalism". Both have as their end point the political integration of Europe – effectively a United States of Europe - but each rely on different methodology and have as their end point fundamentally different structures and ideas as to the division of power.

The first of the two, the "neo-functional" model, embodies the "Monnet method" approach, relying on step-by-step economic integration gradually to ensnare the nation states by the classic process of engrenage, thereby bringing them into the maw of a single economic entity that then assumes a political dimensions, emerging as the government of Europe. Crucially, at the heart of this construct is the Commission, comprised of appointed technocrats ruling as benign Platonic guardians, protecting the interests of all the peoples of Europe.

The second, "intergovernmental" model differs in that crucial respect in that, while the objectives are exactly the same, the ruling body is a cabal made up from the leaders of the member states. This, in the current institutional structure of the European Union is the European Council, which sees itself as the heir to the mantle of the "government of Europe" and would prefer to treat the Commission as its civil service, subordinate to it in all material respects.

This is what so few people understand about the European Union – that there are two competing models. There are two separate institutions which aspire to the Crown. They are not complementary parts of the whole, but rivals, competitors which – unseen and unrecognised by most of the world – are fighting out a deadly battle for dominance.

What so few people also understand is that the failure of the constitution represented a massive defeat for "neo-functionalism" and, by default, a victory for "intergovernmentalism", the nature of which is only beginning to become apparent. What it did not represent was a defeat for European integration, which proceeds apace.

To understand this, one has to appreciate that we have been here before. It was in 1952 that a European constitution was formally proposed as the framework for a European Political Community (EPC) which, in turn, was to provide the political structure for a European Defence Community employing its own European Army.

If nothing else, this reminds us that the core ambition of the integrationalists was always to develop what is now called a "European defence identity", under a broader political umbrella. That had as its main aim the projection of a European common foreign policy and through that the re-creation of a new European empire in its own right. This remains the core ambition – the rest is detail, a means to that end.

Jean Monnet inspecting the first steel ingot produced under the European Coal and Steel Community regime[i-Jean Monnet inspecting the first steel ingot produced under the European Coal and Steel Community regime]That the EPC was rejected by the French Assembly in 1954 was a major defeat for Monnet and his supporters, which led to a change of tactics and a reversion to the step-by-step "neo-functionalist" approach which had been pioneered in the European Coal and Steel Community. In effect, by going for the EPC, Monnet over-reached himself and the subsequent Treaty of Rome was a more cautious return to the original plan.

While the overall effect of the rejection of the EPC, therefore, was to delay the timetable, it did nothing to sate the appetites of the integrationalists, whose plan re-emerged in the run-up to the Maastricht Treaty when the hope was that the then Community would emerge as a full-blown European Union, complete with a foreign and defence policy along the lines envisaged back in 1952.

However, the member states were not yet (or at all) willing to surrender that amount of power to the Commission and what emerged was an unholy compromise of a three-part treaty comprising three "pillars", the first constructed on the "neo-functionalist" model and the other two – foreign policy and "security", and justice and home affairs – on intergovernmental lines.

Ever since Maastricht, the Commission and its allies have been seeking to demolish this structure and bring all the components into a unified whole, increase their control of the elements. This process is known in Community jargon as "collapsing the pillars". That was what the constitution was really all about. That the Commission and its allies failed is now history, but that has not deterred them trying to salvage their plans. They will continue to do that – and have so far failed - because that is what they must. Their very survival depends on it.

Nevertheless, that has not stopped many commentators – ourselves included in the earlier stages before the process became clearer – claiming that the "European Union" was attempting (and in some cases succeeding) to implement the constitution, without ratification. But, as we tried to point out in an earlier post, that is not what is actually happening.

The trouble is, of course, that the two institutions, the Commission and the European Council, are variously described in short-hand terms, as "Brussels" or the European Union, the latter often as "European Union leaders", which obscures the nature of the battle going on, and fatally undermines attempts better to understand the dynamics of integration.

What is actually happening, though, is something very different. The "intergovernmental" cabal in the European Union are flexing their muscles, introducing elements which were in the constitution – and some which predated it – but in many ways freezing out the Commission and keeping the power within the ambit of the European Council and participating member state leaders.

In this sense, within the EU, all the prime ministers and heads of state (that participate in EU affairs) have two separate and distinct roles. In one, they act in their familiar domestic capacities but, as members of the European Council, they are in effect cabinet members of the putative government of Europe. And it is there that many of the decisions concerning the high-level issues of defence and foreign affairs are made, to be implemented by the self-same "cabinet members" using their own domestic resources.

This does make the process of integration very difficult to understand. The popular perception is of "Brussels" forcing unwilling member states to do its bidding, whereas in the sphere of "high politics" it is the "double-hatted" cabinet members of the European Council using the resources of their own countries in the service of European integration and the projection of European Union power. In the UK, therefore, we may have a prime minister in Blair but, as a member of the European Council, he has a higher loyalty to a different, superior government.

The poodle and his master?[i-The poodle and his master?]Now, in respect of the UK, the understanding is doubly complicated by the perception that Blair serves two masters, the European Union and the United States in the persona of George W. Bush. In fact, in the light of the Iraqi adventure, probably more people see Blair as Bush's "poodle" than as a servant of the European Council.

Here, though, the perception is almost certainly wrong, not least because Blair – apart from the then perceived domestic advantages of joining in the second Gulf War – has continued a traditional foreign office line. This holds that a close association with the US somehow strengthens the UK's influence in the European Union. Although this strategy has spectacularly backfired on this occasion, that is the perversity of the Iraqi adventure.

When it comes to dealing with the current counterinsurgency in Iraq, however, the equation has changed in an important respect. Whatever enthusiasm Blair may have had originally has evaporated. Although he is maintaining troops in southern Iraq, it is clear that this is a token presence which is performing very little useful service in the prosecution of Bush's "war on terror". In effect, Blair is paying lip-service to the US-led coalition, while looking for the first available opportunity to make a dignified exit.

Whatever the words, this is evident from the facts on the ground. The prosecution of the campaign in Iraq requires new types of equipment, different force structures and tactics, all of which require huge expense. The US is making this investment but Blair is simply unwilling to commit anything of what is needed.

This is because such resources as he has available are already committed to the European defence identity and, in particular, to equipping the British component of the European Rapid Reaction Force. And, so different are the equipment, force structures and tactics being devised for the ERRF that they will be useless for dealing with anything else but the nebulous "peacekeeping" tasks for which the force is designated.

The eventual retreat from Iraq by the British, therefore, will also mark a retreat from the US-led coalition and a move more fully into the "intergovernmental" structure of the European Union, where Blair's (or his successor's) foreign and defence policy will be increasingly defined by his colleagues in the European Council "cabinet".

At this point, with or without the EU constitution, the UK will be almost completely absorbed into the political European Union, which will be acting as a "superstate" in all but name. And so entrenched will be the systems and so integrated will be our armed forces and other structures that extraction will be virtually impossible.

Therein lies the point of this post. Although we have referred to Bush's "war on terror", the broader campaign is to achieve the spread of democracy – which is the ultimate aim of the occupation of Iraq. The EU, on the other hand, it committed to a policy of "stability". It is not particularly interested in democracy. It is not a democracy itself, so why should it care?

Thus, we have a choice between "democracy" and "stability", the choice between supporting – and occasionally leading – campaigns and initiatives alongside the United States and its allies, or supporting the foreign policy initiatives of the European Union and its allies. And, as it stands, we are sliding towards the latter, in a contest between two incompatible world visions.

If we are to reverse this, the litmus test is actually Iraq and to a lesser extent Afghanistan. While the cries are for a rushed withdrawal of troops – as soon as can be arranged – the truth is that installing democracy in Iraq is a long-term task which will require a commitment for decades rather than years. As importantly, it requires massive investment and all that goes with it to conduct an effective counter-insurgency campaign, rather than the tokenism in which we are currently engaged.

A scene from the Iraqi election[i-A scene from the Iraqi election]By that measure, as I see it, one of the most crucial issues of the day – and the means by which further political integration into the European Union can be avoided – is to pursue a campaign for a more active, effective and longer-term engagement in Iraq, staying there until we have a fully-functioning, liberal democracy. This is not only in the interests of democracy, but in the interests of the United Kingdom itself. Therefore, Iraq, in my view, is not only the crucible of a new democracy, it could also be the salvation of the UK as an independent, democratic nation. On the other hand, a retreat from Iraq is a de facto retreat into "Europe".

So convinced am I of that thesis that I am moving – with my colleague – towards focusing this blog more towards to "high politics" end of the spectrum, with more analytical and discursive posts, and fewer routine news items on EU and general politics. It is that on which readers comments would be welcome.

COMMENT THREAD

The flags may be the same - but the institutions are not[i-The flags may be the same - but the institutions are not]We (or I) – according to one of our revered forum members - should be killing the fatted calf over the leader in today’s Telegraph, headed, "Brussels will never take no for an answer". We – or so we are told - all have said this for years, "but when the by-far-the-biggest non-redtop endorses it," it is a cause for celebration.

Frankly, I'd sooner slaughter the leader-writer. It is precisely this type of muddle-headed, superficial diatribe that confuses the issue and makes it so hard to progress the debate.

Consider, if you will, the opening offer: "You may be outraged by the EU's declared intention to revive the European constitution. But, if you have been reading these columns over the past 12 months, you will not be surprised."

Leave aside the little bit of self-promotion – you will not be surprised (but much better informed) if you read this blog, not least that the intention is to delay any attempt at reviving the constitution, rather than any confirmed intention to bring it back to life.

The substantive issue here is the use of the "EU". As a generic term, this can mean all sorts of things and we all use it as a convenient short-hand. But, in this context - as the next part of the leader makes clear - the reference is to the "leaders of the 25 member nations". It is they, according to the Telegraph, who "have pledged to ratify the main parts of the document by 2009".

The Council - increasingly running the show[i-The Council - increasingly running the show]In other words – no, in the exact words – it is not "Brussels", as such that is doing this, but the democratically elected leaders of our own governments who are hatching this tryst. One of those is Tony Blair who, in any case, is unlikely still to be leader in 2009 but, if his successor takes the same line, then our problem lies not in Brussels, but at home.

Further, it is not the "leaders" who ratify treaties – they sign them. Ratification is down to the parliaments, with or without referendums. Leader can propose – parliament disposes.

On the slender basis thus established by our leader-writer, however, he launches off into the stratosphere, telling us that "there is never a Plan B in Brussels; Plan A is simply re-submitted over and over again until it is accepted." That maybe the case, but it may not. At the moment, plan A is actually stalled and there is no sure way of working out what happens next. The "colleagues" are at as much of a loss as everyone else.

To "prove" the point, though, The Telegraph tells us that "with or without formal ratification, most of the policies and institutions proposed by the constitution have been, or are being, enacted anyway: the European Defence Agency, the External Borders Agency, the Human Rights Agency, the EU foreign ministry and diplomatic corps, the European Public Prosecutor, the Charter of Fundamental Rights, the European Space Programme." Therefore, "the EU … is behaving as if the French and Dutch electorates had voted "Yes" and the constitution were already in force."

Errr… no. What is happening is a lot more subtle, and more complex. For sure, we have the European Defence Agency, but this has been set up not as a community institution but as an intergovernmental agency. It reports via Solana to the Council and relies for its existence of voluntary annual subventions from the member states. In terms of the Monnet method, it is an aberration and, to the integrationalist orthodoxy, a dangerous one at that.

Similarly, while the commission is providing administrative support to the External Borders Agency, its "teeth" are supplied by member states and its continued existence depends on co-operation between member states, with the Council at the helm. We do not have a KGB-type force wearing the ring of stars, answerable to Brussels.

The same intergovernmental framework applies to the space programme, again funded by voluntary contributions from member states – which is why the Galileo programme is in so much trouble. The commission would like control but it remains outside its grasp.

We saw the same with the "diplomatic corps", certainly slated as a backdoor attempt to introduce the constitution, and worrying in its own right. But, in the final analysis, the plan relies on the voluntary co-operation of the member states. And, what can be given, can be taken away.

What is happening, therefore, is a subtle but important shift in the very nature of the European Union. While the constitution was supposed to consolidate and extend the powers of the commission, entrenching the Monnet method – even bringing the European Council fully into the institutional structure – its failure has given a boost to the rival and instable process of intergovernmentalism.

Jacques Delors - crying foul[i-Jacques Delors - crying foul]In that important respect, therefore, the constitution, as devised, is not being enacted. It is, in strict community terms, being subverted. If the commission president was more versed in the orthodoxies of the Monnet method, alarm bells would be ringing, but Barroso is going with the flow. It has thus been left to former commission president Jacques Delors to accuse member state leaders of driving the Union into its "worst ever crisis". In his own terms, he is right to do so.

From all this though, it is possible to gauge the complexities and subtleties of a game, the nature of which The Telegraph seems to be entirely unaware. In its ignorance, it rehearses the one-dimensional stereotype. "Brussels" it says, behaves this way "because, in short, that is what it has been designed to do."

Thus follows a "Janet and John" dissertation of the basics of the engrenage process – without, of course, that term being used - with a concluding peroration which asks, "How much longer can decent democrats subject themselves to such a system?"

And therein lies the unacknowledged paradox. The system is being hijacked by those self-same "democrats" – our very own leaders, who subject themselves to the system - and increasingly run it - because it suits them. They are our problem, more so as the ways of the Council, which they employ, are even more secretive than those of the commission. Strangely, they are Brussels' problem as well.

COMMENT THREAD

The Boy King in his true colours... courtesy of Anoneumouse[i-The Boy King in his true colours... courtesy of Anoneumouse]Never let it be said that the MSM is slow on the uptake so, having reported it on this blog in December last year, it is still good to see the Daily Telegraph catch up with the news today with its report headed, "Cameron drops plans to pull out of Europe's deal on fishing".

Never mind that Booker also reported it on 7 May in The Sunday Telegraph and that it appeared in last month’s edition of Freedom Today, which we also reported, this time on 30 May.

No, never mind all that. Toby Helm, Mr Chief Political Correspondent Of The Telegraph has a newspaper to fill and a mortgage to pay so, with his eye on the ball as usual, he decides it's news. And suddenly it's news. Just remember, though, you read it here first, six months ago.

In making out that it is "new" news, however, Helm must invent the fiction that – as he writes – "David Cameron has made a further dramatic break with the Tory past by dropping his party's long-standing commitment to pull Britain out of the European Union's much maligned Common Fisheries Policy."

Family blog or not, there is only one response to that: bollocks!

The man was always against the idea and there is no one in the business who did not know that, at the first available opportunity, he would junk the policy and revert to the status quo. And he did that last December.

Owen Paterson, former shadow fisheries minister (right)[i-Owen Paterson, former shadow fisheries minister (right)]The policy, as it currently stood, represented two years of gruelling hard work and the personal commitment of then shadow fisheries minister, Owen Paterson who produced in December last a credible alternative to the CFP in the form of an opposition "green paper". That had to be personally approved by Howard and, in seeking that approval, throughout the whole process, the main obstacle was Howard's then aide, none other than Mr David Bloody Cameroon, the Boy King himself.

Furthermore, in a little piece of untold history, the only thing that forced Howard to give the go-ahead for developing the policy was the political courage of Owen Paterson and his then immediate boss, John Whittingdale. On the eve of the 2004 Euro-elections, they threatened to resign unless Howard honoured previous commitments to the fishermen on repatriation of the CFP. The resignation of two of his shadow team, on this issue, at such a critical juncture when UKIP looked like it was about to sweep the board, was potentially so damaging that he caved in and produced his "famous" 10 June letter.

It is a measure of just how little the political correspondents really know of what is going on that what amounted to a major political coup went entirely unnoticed. Nor indeed was any notice taken when the man who, by general acclaim was the best shadow fisheries minister the party had had since it went into opposition – none other than Owen Paterson – was quietly reshuffled to transport last December as a precursor to ditching the fishing policy. The Boy King knew full well that, with Paterson's personal commitment to it, had he remained in post, he would have had no alternative but to resign, seriously damaging the Boy King's fragile Eurosceptic credentials.

However, why the fishing policy was so important, and why we invested so much time and effort in it, is now only hinted at in Helm's piece, when he writes:

It is understood that Mr Cameron, who is trying to tone down his party's hostility to the EU while retaining a strong euro-sceptic edge, had been warned by colleagues and experts that withdrawal would have been unachievable without provoking a huge legal crisis in the EU.

To provoke a "huge legal crisis" was precisely the aim. Within the institutions of the European Union, the "holy grail", the one single, untouchable dogma, is the inviolability of the acquis communautaire, the principle that, once made, EU law cannot be un-made.

Tories%20policy[i-Tories%20policy]By demanding the repatriation of the CFP, a popular issue where the failure of the EU is so easily demonstrated, we were quite deliberately challenging that central dogma of the EU. By so doing, we hoped that, if successful, a precedent would be set for further unravelling a host of other issues. We even had a name for this strategy – reverse engrenage – unravelling to EU, step-by-step, after the commission's own strategy of engrenage, the step-by-step accumulation of power.

There is no doubt that the Boy King was aware of this. Advised by the "old guard" Europhiles, including Clarke, Heseltine and Gummer, he was also fully aware of the danger, which is why the repatriation commitment had to go. With it goes any shred of pretence that Cameron is in any shape or form a Eurosceptic. As we see from Hague's speech yesterday, he is a "heart of Europe" man, wholly wedded to the status quo and not in any way inclined to rock the boat.

That same day it was that the Boy King engineered yet another photo opportunity by riding his bicycle decked with an English flag. Had this charlatan shown his true colours, he should have been kitted out with the ring of stars. That, at least, would have confirmed that, as long as he is at the helm of the Conservative Party, there is no hope whatsoever of achieving any progress in the battle against Brussels.

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