The year that's gone

Well, it’s been quite a year. 2011 may be remembered for the Arab Spring, and it may be remembered for the year the wheels started to fall off the euro. Neither of these plays has yet reached a denouement, although we should see more clearly the outcomes in the first half of 2012.

First, some of the people who will not see 2012:

Steve Jobs, the genius behind Apple.

Kim Jong-il, the genius behind..er.. N.Korea

Muammur Gaddafi of Libya.
Amy Winehouse, singer, only 27 years old.
Liz Taylor, actress.
Osama bin Laden
Boxers Henry Cooper and Joe Frazier, cricketers Basil d’Oliveira and Fred Titmus, golfer Sevvy Ballesteros
Politicians Garrett Fitzgerald and Vaclav Havel
Knut the German polar bear

Heidi the cross-eyed opossum at Leipzig zoo.

We say hello to Southern Sudan, separated from its neighbour following a referendum.

In other news:

England won the Ashes in Australia for the first time in 23 years

The long running News of the World newspaper was closed, following a celebrity ‘phone hacking scandal (at least Hugh Grant was scandalised and the few who were interested in his private life were probably disappointed). Prince William married Kate Middleton, in a ceremony broadcast around the world and which it seems everyone except me thought was wonderful.

Britain, France and America bombed Libya and helped to bring down Gaddafi, but did not send in troops because the Arab League told them they couldn’t.

An earthquake and tsunami in Japan damaged the nuclear installation at Fukushima, causing many countries to review their nuclear policy. Sexual accident-prone ‘gorilla’ and Head of the IMF Dominique Strauss Kahn had to resign his job and his French Presidential bid after a chambermaid accused him of raping her in a hotel. The BBC persistently failed to pronounce his name right.

American troops left Iraq, after 9 years. Apple are selling an App for Roman Catholics to confess their sins. Current models do not, however, grant absolution.

Italy celebrated 150 years as a republic and said goodbye to 66 years of democracy as the European Union forced in a ‘technocratic’ (which seems to mean ‘unelected’ in Italian) government, bringing about the downfall of Silvio Berlusconi, the only world leader who told good jokes.

Not much has changed for Silvio, though, as he continues to spend most of his time on his court cases. In this respect David Mills, the husband of former cabinet minister Tessa Jowell, accused of giving false evidence in Silvio’s favour, has said he made it all up.

In Norway, a man called Breivik killed 92 people in a gun attack. Norwegian authorities are trying to decide whether he was mad or not.

Wall St was occupied because nobody likes bank clerks, there was looting in London because everybody likes free TVs and trainers, and riots in Athens and Rome because nobody likes reality.

President Sarkozy of France soured relations with Britain and Turkey in a bid to get re-elected.

David Cameron vetoed a Euro-treaty, some say enraging the diminutive Frenchman. Others say it was what he wanted all along. Britain said no to the Alternative Vote system, which wasn’t proportional representation and wasn’t what we’ve always had, but otherwise nobody had a clue about it.

Amanda ‘Foxy Knoxy’ Knox was acquitted, while UK Defence Minister Liam ‘Foxy Foxy’ Fox had to resign due to an inexplicable relationship with the best man at his wedding.

Scientists at CERN thought that neutrinos could travel faster than light. Something to bear in mind during a transport strike.

Harold Camping said the world would end on 21^st May, which would have made for a fairly short marriage between the Duke and Duchess of Cambridgeshire, and again on 21st October. Mr. Camping is fortunately still with us.

Belgium swore in a government after 535 days without one but nothing much has changed.

One of the nominees for the BBC’s woman of the year is a panda.

But the main items were two. The Arab spring saw an overthrow of dictators in Tunisia, Egypt and Libya and, equally important, made a number of governments review their often limited democracy and poor rights records: Morocco, Jordan, Bahrain, Saudi Arabia. Against that there have been outbreaks of religious and sectarian violence in many of these countries, and the path towards democracy is still far from clear. Syria is effectively in civil war.

In the Eurozone, the prediction made by many of us that the single currency could not survive its first real crisis looks as if it may come true. The havoc that a disorderly break up would generate is a brutal threat to the capitalist system which has made us rich. A controlled break-up seems difficult for political reasons. Some are saying that Germany, when creating and joining the euro, implicitly accepted that it would have to bail out countries in crisis. Germany says that it would only do that if it had control of the financial levers in those countries. To me, the system looks half-baked, and even countries like Britain, outside the euro, will be lucky if they don’t suffer from this dichotomy.

This blog will be following these and other stories in the year to come, and I hope you will keep reading it. I wish you a Happy and Prosperous (ha-ha) New Year.

The sound of silence

A new Year’s message to the Protesters, the Church and the moaners

Dear All,

I address you, the Protesters, without knowing who you are or indeed, as I hope to explain, what you are doing there. I don’t know what sort of people you are. ‘Idle scum’, said one man, looking at the camp outside St Paul’s Cathedral.

For myself I don’t think of people as scum. I enjoy it when they hold different views to my own, and have many friends with whom I agree on almost nothing. It is from such debate that I have formed my own views, and I hope you will take this in that spirit.

I do think the word ‘idle’ applies, however. Not idle in the sense of workshy, which has a different meaning to ‘unemployed’, particularly in the present economic climate. I mean idle intellectually. A couple of reporters have been to your camp to find out exactly what you are protesting against. One reported that nobody was willing to speak for your cause, there was no leader or spokesman. Nothing wrong with not having a leader, indeed there is much to be said for it. But not having a spokesman is slovenly: it implies that you are scared to let your message out in case someone ridicules it. But all political arguments, like scientific theory, should be subjected to discussion and review. The other reporter said the people he spoke to would only mouth trite slogans like ‘the bankers are to blame’.

What I am saying is ‘Argue your case publicly’; express your arguments forcefully in interviews and newspaper reports. Don’t just shout trivia into the microphones, explain your views.

And now we come to what that message is. Complaining that other people have more money is not a philosophy, much less a morality tale, unless you can prove they have money which would otherwise be yours. You can’t show that, indeed the opposite is the case since the ill gotten gains incur taxes. Then there is the argument that, as I have heard Mary Ann Sieghart in the Independent and many others say, ‘the people bailed out the bankers’. This is an unnecessary personalisation: we didn’t bail out the bankers (who by all accounts were doing jolly well for themselves and didn’t need bailing out); we bailed out the banks. Would you have rather they went bust? Explain.

Ah! You are blaming the bankers for making the banks go bust. If this is what you think, articulate it. My own view is that of course they did more and more deals: architects want to design more and more buildings, evangelists want to convert more and more people. But we were paying people to rein them in. If you keep a fierce dog, and it attacks you neighbour, it isn’t the dog’s fault, it just did what it does, it is your fault. We failed to regulate the banks because the political leadership at the time didn’t want to reduce the taxes coming in. Are you against that lack of regulation? Explain.

Are you complaining about cuts? In fact public spending will continue to rise for the next six years. Are you complaining about where it is spent, Trident not schools, overseas aid not hospitals? Explain.

As things stand, the protests outside St. Paul’s Cathedral have done more damage to the Church than to the banks (or the bankers). Is that what you wanted? Explain.

Now, the Church. I know you, or at least I used to. But things have changed, haven’t they?, and you have some explaining to do. We seem to have an archbishop who, like Tony Blair, ‘doesn’t do God’. Yes, the Lord campaigned on behalf of the poor, but this isn’t a protest about poverty. Yes, He complained that the rich should give money to the poor, but the Church hasn’t been arguing in favour of philanthropy (it should, in my view). Several clerics have resigned because they didn’t want to remove the protesters (and yet, like me, they can’t have a clue what the protest is about, except the notion that bankers are horrid).

Well there it is. I get angry and have probably gone on too long. I am of the views that crises are a part of the capitalist system, that this one was brought about by poor regulation, and that whilst bankers are overpaid that is simply the business of the banks’ shareholders (and is one of the reasons why I don’t own any bank shares). What I would really, really like in 2012 is for someone to argue cogently against these points.

I wish you all a cogent and articulate New Year.

Before the day-star

A surprising, and I think intriguing seasonal post from the anti-EU journalist Mary Ellen Synon. However it is not about Europe but about the relationship between physics and religion.

She begins with a quote from the Tridentine Mass (her translation):
'"In the brightness of the saints, from the womb before the day-star I begot thee".

Which rather supports the suspicion I've had since the Large Hadron Collider got going: all those scientists underneath that mountain in Switzerland are asking questions about the wrong side of the big bang.. the big question is not what happened after time got going, but what happened just before.'

Just as well someone's giving it some thought: the Church doesn't seem to bother any more.

One of those nights

Due to a shift in the International Dateline, Samoa will go to bed on Thursday night and wake up on Saturday morning.

I know what it's like.

This must stop

The EU has banned blue cheese made in Stilton from calling itself..er..Stilton.

When are we going to call a halt to this nonsense?

Hunting

Boxing Day, or the Feast of Stephen, is the traditional big day for foxhunting in England, despite the practice being, supposedly, illegal. The papers, without much in the way of news or in the way of duty reporting staff, usually carry a big picture of the hunt going out, the huntsman and the hounds.

Today it is accompanied by a particularly silly article in the Daily Telegraph, which concludes 'What we see at work today, therefore, is a classic piece of British pragmatism. The Act is wrong, does not work and should be scrapped..... The time will come when a sensible Parliament will reverse one of the most illiberal and pernicious laws of recent times. Until that day arrives, tally-ho! '.

Now, I wasn't in favour of the foxhunting ban, designed, as it obviously was, to give a bit of red meat to the Labour backbenchers in Tony Blair's first term, in a possibly conscious attempt to mimic the giving of red meat to the hounds. I think it is a bad law and should be repealed. But let's get a few things straight.

This is not, by a large margin, 'one of the most illiberal and pernicious laws of recent times': the statute book is laden with poorly thought out and casually drafted attempts to limit our freedoms and individuality; this affected a very small number of people, attempting to stop them doing something they spent very little time at, and only in a certain season.

It is, however, puerile as it may be, the law of the land. The fact that hunts go out regularly and openly and that no one connected with a recognised hunt has ever been prosecuted is not a classic piece of British pragmatism, it is a disgrace.

If the police and the Prosecution Service are saying that you don't need to obey silly, ineffective laws, then we can feel free, this holiday season, to have a few drinks before driving as long as we are sober, to smoke in a public place and to ignore a vast number of European Directives.

Try a bit of racist abuse, too.
Tally ho!

The wrecker's choice

When Gordon Brown went to such efforts to keep Britain out of the euro, I had rather mixed feelings. I was convinced that it was for the basest of motives - that with France and Germany already in he wouldn't be allowed to play captain - but I knew the result was right for Britain. Brown just mumbled about the national interest and his five-point plan

Now, I wonder if I have been maligning him - I don't think so but it is just possible. You see, a minor storm has arisen around the head of the External Action Service (the European Union's new Foreign Office), the fantastically unsuitable Baroness Ashton. It is said that she fails to prepare for meetings and fails to keep the 130 embassies and delegations round the world informed as to policy.

Could it be, could it just conceivably be, that Gordon Brown recognised the danger to Britain's national interest in having a crazed, bureaucratic dystopia getting involved in foreign affairs, and parachuted into the job the most incompetent person available, who, he knew, would wreck it from the start? Was he that devoted to us?

Perhaps we shall never know.

Genocide folly (2)

Now it seems that President Erdogan of Turkey - odd that you can go virtually a whole year without hearing a thing about Turkey, then it crops up twice at Christmas - President Erdogan has decreed that the French committed genocide in Algeria after the war, and that Nicolas Sarkozy's father, who served in the French army in Algeria at this time, knows all about it.

So everyone seems to be doing it.

Have you committed genocide, or think you may have, perhaps without knowing it at the time? Write in to 'I'm a mass killer, News International, London.' Confidence guaranteed.

Genocide folly

The French lower house, the Assemblée Nationale, has passed a bill making denial of genocide punishable with a year in prison and a fine of €45,000.

At first looking merely quirky, the bill is in fact about two things: French farming and Nicolas Sarkozy's prospects of re-election.

Without saying so, it relates to the war between the Ottoman Empire and Armenia, which took place in 1915. Hundreds of thousands of Armenians, perhaps more than a  million, it is said, were massacred by the Ottoman Empire forces. France recognised the events as genocide in 2001.

There are 500,000 ethnic Armenians in France, and Sarkozy wants their votes. At the same time, he wants the votes of the powerful farming lobby, and hopes this will be an additional tool in preventing Turkey from joining the EU.

The main effect is on the French. The situation if the bill passes is that the French state - for which read the President - decides what is genocide and you can be imprisoned if you don't agree. If for example some future President were to decide that the Battle of Crecy or the Battle of the Somme were genocide against the French by the British and the Germans respectively, it would be illegal to argue.

This is a descent from justice in a once great country.

PS I wrote about Obama's attitude to this here last year

The Falklands: at risk?

This blog began in September 2007 and I never thought I would write a post with this title. However the President of Argentina, like M.Sarkozy in France, has found that Brit bashing pays dividends, and whilst Ms. Fernandez is not coming up for re-election, times are difficult in Argentina and she needs all the base public support she can get. She, and Sarkozy too, will find that Argy-bashing and Frog-bashing also play well in the lower forms of the British Press.

What Ms Fernandez has done is to persuade Mercosur, the free trade association comprising Brazil, Argentina, Uruguay and Paraguay, to ban ships carrying the Falklands Islands flag from docking at ports in any of these countries. It is a small gesture, since the ships are entitled to carry the British flag, but an inflammatory one.

Is Ms Fernandez hoping to inflame tensions in the run up to the 30th anniversary of their invasion, which takes place next April? She would be ill-advised to do so. Mr Cameron, under criticism for not seeming sufficiently Churchillian or Thatcherite, can probably hardly believe his luck. The islands would be easier to defend now that there is an airbase, Mrs. Thatcher is frail and may have a state funeral next year and the political dividends....

Back off, Christina, is the advice from this blog.

The Druid Year

Today is the Winter Solstice, after which the nights become shorter, which will be a relief.

Druids, Pagans and such folk regard this as the New Year, and from Stonehenge the Druid-in-chief announced that 2012 was going to be a good year.

He must be reading different newspapers to the ones I read. I think it's going to be ghastly.

Happy Christmas

Best wishes to everybody for Christmas

From Tim

Confused

A footballer called John Terry, who appears to be or have been the England captain, will face criminal charges for calling another footballer, Anton Ferdinand, a 'black ****'.

Any idea what's going on here? Presumably if Mr Terry called Mr Ferdinand simply a ****, that would be all right. It must happen every day (not necessarily to Mr. Ferdinand).

As to the rest of it, if I go up to a black man and say 'you are a black man' I can't see that I have broken any law. No black men seem to be discriminated against in the game of football - quite the reverse, I should have thought.

Suppose Mr. Ferdinand had called Mr Terry a 'white ****'; would he be arrested?

In an appallingly pompous statement, the Chief Crown Prosecutor for London, Alison Saunders, said 'I am satisfied.... that it is in the public interest to prosecute the case.' Why? Why should it possibly concern either the Prosecution Service or the Police, or indeed interest the public, what one footballer calls another during a game?

This is why we have no police on the beat and rioters can break into shops without fear. It all really needs to stop.

On whom the burden really falls

A salutary tale of greed and bitterness. The restaurant in Rome's Senate, which is of a very high standard, was so heavily subsidised that diners paid 13% of the total cost, the taxpayer 87%.  Examples of the fare were risotto of turbot and pumpkin flowers €2.34, carpaccio of fillet steak with lemon sauce €2.76.

The Monti regime, sensibly, decided to reduce the subsidy, from 87% to 50% and so outraged were the senators that the restaurant is deserted.

And the result of that is that nine of the waiters face unemployment this Christmas.

No senators lost their jobs.

Kim Jong-il

Obituaries, like real life, can go from the sublime to the ridiculous, and we now record the death of Kim Jong-il of North Korea. I don't know if I regret to announce it or not.

Mr. Kim (the Dear Leader) inherited the job from his father, Kim Il-sung (the Great Leader) and is bequeathing it, they say, to his son, Kim Jong-un (the Great Successor) who is believed to be 28.

Of course little is known about what is going on or has gone on in North Korea, but speculation seems to be whether the DL was fundamentally different to the GL (or the same but worse) and whether the GS will be any different to the others. It's a bit like buying a Ford Fiesta.

It is equally probable that the Kim family are simply a front for the people running the country.  One might have thought it was China, but it is hard to see what they would gain by keeping a whole population poor. It is more likely that China tolerates the North Korean regime as an interesting buffer to South Korea, whose dynamic economy must, until the last few years, have shown China up to be backward.

Most likely is that the Kim family are a front for the generals, who are really running the country, which would make it like Burma, but without an organised opposition and with nuclear weapons.

Perhaps Kim Jong-un will stand up and say 'enough of this nonsense!', but for myself I find it hard to be optimistic. It is equally likely that he will decide the route out of poverty is to use some of the weapons they have accumulated.

Vaclav Havel

This blog mourns the death of Vaclav Havel, the former Czech dissident and President.

Havel's family lost everything when the Communists came to power and he too, as a dissident playwright, suffered under the regime.

In 1989, as leader of the Charter 77 movement, he was at the forefront of democratic change. Incredibly, with quiet determination, he spoke to the people who had imprisoned him without trial and banned his works, and persuaded them to let the new democracy emerge without bloodshed. It was known as the 'Velvet Revolution'.

Retiring from the Czech presidency, he helped other dissidents around the world.

A truly great man.

Iraq

As the last of their troops leave Iraq, surely only the most blinkered of Americans will regard it as having been an unqualified success. The war has lasted almost as long as the First and Second World Wars together, has cost the lives of 4,500 troops and upwards of a trillion dollars, increasing America's already excessive debt by 8%.

Iraq is now a democracy, although we must have doubts on how perfect a system it has and how long it will last. Violence is not absent from the streets and there is some sign of improved infrastructure but not a lot.

The difference with Libya will be interesting American generals. In Libya the allies supported and armed a nationalist group, thus requiring only missile and air attacks on Gadaffi's military installations. No invasion was to be permitted or indeed proved necessary.

It may be we have learned something from Iraq, although it was quite a costly lesson.

What the average Iraqi thinks about it will be just as mixed: many, many thousands have died and whilst there might be the prospect of an improvement to their lives, it isn't visible yet. Perhaps it all depends on how the oil money is distributed. Some people will say that was always what it was about.

Chirac

Many of us will have been pleased to see the conviction of Jacques Chirac, and to those, myself included, who would have liked to see the old fraud behind bars, we could never realistically have expected it. This is the first time that the Fifth Republic has prosecuted a former president and it has been worthwhile, not least for France, where the Head of State, following the constitution designed by de Gaulle, has far too much power, and too many means to keep his excesses quiet.

What interests me most is what this might do the candidacy of Dominique de Villepin, who was a protegé of Chirac and very much associated with those times.

Well, at least he isn't Sarkozy.

Bradley Manning

The trial of Bradley Manning has begun in the USA. The soldier, named after a WWII general, is accused, you will recall, of leaking military information to the Wikileaks website. Now, I can't get too excited by the crime. The information leaked has been, in parts, embarrassing to the USA, but it was freely available to between 2.5million and 3 million people, and I have difficulty in calling that secret.

There has grown up a caucus of Bradly Manning defence supporters, and I suppose that is right.

But, I ask them, what is the US supposed to do? Pte. Manning undoubtedly leaked information to which he had privileged (or fairly privileged) access. The USA has a number of other, more important secrets, the revelation of which might cause untold damage, not just to them, but to us in the West. How can they not come down hard on Manning? How can they not send a message to their remaining millions of employees that the release of privileged information will not be tolerated?

Manning may turn out to be a martyr, although actually I suspect he won't, and we may sympathise with him, but he must, under all circumstances, be prosecuted.

Etiquette

Christien Noyer, head of the Banque de France, the French Central Bank, has said 'The downgrade does not appear to me to be justified when considering the economic fundamentals', another clear indication that France has received notification that it will be downgraded within a couple of weeks.
'Otherwise,' he continued, 'they should start by downgrading Britain...'

Thanks, grenouille.

It may well be that Britain should be downgraded - there are, as M. Noyer says, more debts more inflation etc, and it may be that it will be; but I should have thought his remarks should raise some eyebrows. In cricket it used to be that fast bowlers would not send bouncers down at other fast bowlers and I should have thought the same kind of etiquette would have subsisted within the circles of central bankers.

The point, Mr nut-tree, is that Britain has not committed itself to a fixed exchange rate with Germany and, in order to maintain for political reasons an artificial currency zone in Europe, committed to bail out all manner of other debtors. France is on the hook for Greece, and, it may be seen soon, Italy. And it can't afford it (no more could we).

Perhaps Britain will be downgraded, but they will start with France.

Addio Billie Joe

This blog regrets to report the death of Billie Joe Spears, aged 74

Our problem

Today we welcome a report from the University of Bath to the effect that the financial crisis was not caused by bankers' 'bonus culture'.

It was caused by poor regulation - not too little regulation, but ineffective regulation. That regulation was imposed by governments we elected (and this explains why it was worse in the UK than in other places).

It is our problem - Gordon Brown and the cackhanded tripartite regulatory structure was our problem - and we must take responsibility for what has gone on, not push the blame on to some invented bogeyman.

Outs who are in

'We need to get some clarity on what this treaty might include', the FT reports a senior diplomat in Brussels as saying.

Oh.

We thought - did we not? - that they had concluded a Treaty and Britain was left on the sidelines, isolated, no seat at the European Table (which looks increasingly like the Last Supper, only with more food).

But no. One of the interesting points is the position of the 'outs who are in'. Of the 27, 17 are in the Eurozone, Britain is 'out out' and there are 9 countries who are not in the Eurozone but voted for the treaty (without seeing the wording). Do they have to send their budgets to Brussels for approval before they are put to their own parliaments? Can they be fined for running too large a deficit, even though it's none of Brussels' business?

The negotiations begin on the treaty tomorrow but it seems some are already having second thoughts.

Could we stop it?

I wonder if Britain could ever have stopped the euro. That is to say, if we had argued firmly against it, as opposed to cowering on the sidelines apologetically, could we have persuaded them that there can be no currency union without a fiscal union?

We shall never know, but a similar opportunity is arising now. The others have made a deal which is outside the EU, and therefore cannot use the EU institutions - not just the buildings as has been suggested, but the civil servants, the advisers in the Central Bank - to further their deal. To use these institutions, and I don't reckon they can get anything done without them, they would need a separate agreement at EU level, that is to say including Britain, they they should be allowed to do so.

Cameron's first reaction - 'you can't use this building to do it' - has now been tempered somewhat and there are signs that he is apologetically nuzzling up to Angela Merkel, sorry for causing so much trouble.

But Britain has a golden opportunity to say 'we don't agree with this path you are taking. We're not joining it but we don't agree that it's good for you. The proposed budgetary constraints, the fines, all these things were there when the euro started, and it was France and Germany who broke them first. They don't work, and the austerity programme won't work, we are too good friends to you all to allow you to embark on this course of self-destruction. If you feel you have to commit suicide, you do it on your own.'

I don't think Cameron will, though.

The News

President Sarkozy is now playing down the importance of France's AAA rating - just a hiccough, just one opinion. I'm sure no one assumes this means he has prior knowledge that France will be re-rated.

There are murmurs in the City that the markets might have a pop at a Eurozone country before Christmas, which would mean the deal done last week would be out of date by the time they had written it down.

Italy's bond yields went into new territory at 7.2% before buying by the ECB brought them back below 7%.

Some are saying that the German Commerzbank, Germany's second largest, may need to be rescued.

Polls show a decent majority of the British electorate think Cameron did the right thing.

Story is Angela Merkel wants another summit before the end of the year. Well, that should solve it.

Another chapeau in the ring

'Pass the Dominique', I said to the friend helping me with the cooking. Without hesitation he passed me the veal pan; Dominique Marie François René Galouzeau de Villepin was then famous, although we haven't heard much from him recently.

Villepin was famous for a number of reasons: he became Prime Minister of France without having been elected by anyone. In France the President can appoint anyone he likes as Prime Minister and Jacques Chirac liked the handsome poet from the foreign office who had been his chief of staff.

The man with the matinee idol looks is famous for a couple of other things, too. In September a lawyer called Robert Bourgi claimed to have been an intermediary between Chirac and Villepin and some African leaders, whereby the Africans handed the French wodges of cash. He said the envelopes he handed over seldom contained less than $1m and often more. The matter was dropped recently for lack of evidence.

Villepin was also accused of publicising that Sarkozy's name was on a list of people who took bribes for arms sales. The document turned out to be false.

So, an exciting life so far, and one untroubled by the democratic process. He doesn't like Sarko (who does?) and might not have stood if Strauss-Kahn were standing. He almost certainly can't win, but he will take votes away from the President.

Greed and folly

The Italian parliament has declined to ratify a decree by the Monti administration that parliamentary salaries are reduced to the European average.

The reason given is the technical one that a decree cannot be issued on what is purely the business of the chamber, but stopping it is a bad mistake and will seem like an excuse. The whole world now can see that Mario Monti's power is subject to the whim of parliament. This was a money saving measure (although that is not its real importance) and they have, effectively, denied a part of his budget and could deny other parts. The markets are not blind.

Secondly the Italian people despise the venality of their leaders who are given pay, pensions and perks far in excess of what an ordinary person could even aspire to (a basic salary of €168,000 to begin with). The political elite either doesn't know, or doesn't care how unpopular it is.

As Burns wrote 'O would some power the giftie gie us, to see ourselves as others see us.'

That veto

There's a whole range of opinion in the press this morning about David Cameron's veto, from 'Now we no longer have a seat at the top table' to 'At last we have stood up to the euro-bullies'.

To be honest, the going of separate ways has been looming for years. It was obvious that Britain had no intention of participating in the euro and in the supranational bodies which they now deem necessary, and, as a large country, we don't like to see the whole thing stitched up by France and Germany. The UK could have nodded through a treaty we didn't agree with, but there would then be pressure on us to put our money where our mouth is, and in any case, nodding through something we didn't like in the cause of European integration was what we did last time, and the time before and the time before that.

I think history will see this moment as both sides accepting what should have been perfectly obvious from the start.

It is going to be a bit messy, though: Britain will be on to the lawyers regularly if it sees the 17 poking their noses into what is the business of the 27 (tax harmonisation, for example) or if it sees them use the 27's resources - eg the European Commission - for their private business.

In the meantime the changes announced to not constitute a saving of the euro, either in the short term where a huge rescue operation has to be prepared in case Italy and Spain no longer have access to the debt markets, nor in the longer term, where they must even up  the competitiveness of individual members, to stop the same crisis happening again in the next few years.

That is where the real work has to be done.

Merkozy pick a fight

Oddly enough, despite all the talk over the years of Britain ‘wielding the handbag’ over Europe, and always being isolated, David Cameron’s recent nolle prosequi is the first time we have used the veto. It is to Cameron’s credit that he had the courage to do so – his civil servants, euro-fanatics all, will have advised him not to – and he will have earned credit with his party, something he can use right now.

But the background, and the implications, are more complicated.

Sarkozy always wanted a decision taken among the 17 of the Eurozone, not among the EU as a whole, and got his way with Merkel. Merkozy, as they are called, presented a bare threat to Cameron concerning the regulation of the City of London, which they knew he could not accept, forcing him, I suspect against his will, to opt out. And they were right: if he had gone back to England without even protection for our largest industry he would probably have lost his job.

The implications are interesting. Tory MPs are scenting blood, and pointing out, correctly, that because the Eurozone countries can force majority decisions on the rest of Europe, it is time to reassess our relationship. At the same time, if Cameron goes too far on this it will break up his coalition.

So we could find ourselves come next Spring with a general election, in which I suspect Cameron could achieve a serious working majority: he just needs to play the independence card which goes down well with the country. The Liberal Democrats would be annihilated and the UK Independence Party would seem largely irrelevant. Labour have neither the money nor the credible policies to fight a serous campaign.

So Cameron could find himself, without ever having wanted it, as a committed anti-EU operator. Merkozy will have picked a fight when they really didn’t need to.

US Republican Primaries

He won't win, but it would at least be something different for America:



I'll say it again: Ron Paul is the only one of these sorry losers who would be good for America, and might, just might, return it to its former status.

But they won't. They won't change, they won't choose him, they won't see reality.

It hurts me more than it hurts you

Elsa Fornero, Minister for Welfare in Mario Monti's 'technocrat' government, has burst into tears while making an announcement on pensions. A university lecturer in normal life, Ms Fornero was explaining that there would no longer be inflation adjustment for pensions worth more than €1,000 per month. As she was trying to mouth the word 'sacrifices' it all became too much.

Way to go, Elsa, as our American cousins would say.

I'm afraid even worse things than this are going to happen in Italy, and elsewhere, and we desperately need people who can exhibit real pain in public. I always think George Osborne's 'we're all in this together' doesn't seem to carry sufficient conviction. He needs to get in touch with Ms Fornero and discover the technique, be it the onion, the ammonia or the vaseline round the eyes.

There is a sort of suffering-chic coming into play in European politics and someone - Silvio Berlusconi would have been ideal but I suggest the well-fed José Manuel Barroso of the European Commission - needs to offer up something really ghastly for the public's delight, such as the need to sacrifice the young first-born, and burn their emaciated bodies for soap, while beating his breast and hitting his head on the laquered rococo table.

Only then will we feel our political class is suffering enough.

The mark of Cain

The American presidential race and the party primaries leading up to it constitute an endless fascination for me, like a freak show coming to town every four years. At the moment it is the Republican race and it is full of interest. Rick Perry, the front runner, suddenly forgot his own policies and is sunk. Mitt Romney, the current front runner, seems like an empty vessel, a rictus grin on a head devoid even of the intelligence needed to run a market stall.

Another leading contender is Newt Gingrich who, Americans have presumably forgotten, was fined $300,000 for making a misleading tax declaration, and who in 1998 presided over the worst mid-term performance of any party since the war.

Now Herman Cain steals the spotlight. A stream of women have claimed he sexually harassed them, and now another woman claims to have had a thirteen year affair, which Cain has denied but made no effort to disprove. Last night it all came to a head and he resigned his bid for the candidature.

Each time there seems to be someone who forgets that in running for President they will be subject to media scrutiny, some of it hostile. What sort of person with skeletons in his closet would be daft enough even to attempt a run? But they do. Someone always thinks he can cheat on his wife and nobody will know. Remember Gary Hart? John Edwards?

Addio Herman.

Next!

A Summit! The Grand Bargain arrives!

What’s happening next week? You’ll never guess, so I am going to tell you. There’s going to be a euro-summit. Yes.

Obviously if you are a chef or a gourmet eurocrat you probably can’t contain your enthusiasm, but some of the rest of us are finding our palates a little jaded.

The story is being put out that they are near to a deal on saving the euro, and that will certainly please the markets. Indeed we all have an interest in the current turmoil abating. The agreement is being called The Grand Bargain.

However it would be wrong not to sound a small note of caution. The proposed plan will be, as it was always going to, a synthesis between the French and German positions. That is to say that the French want the weaker countries to be bailed out, and the Germans are worried about moral hazard: that they will spend their money and it wil just encourage the naughty children to misbehave again. Angela Merkel wants a legal framework, giving the Brussels budgetary office the right to inspect the budgets before they are put to national parliaments (you will remember that the Irish Prime Minister was found asking permission of the Germans for his December budget before announcing it to his MPs). The European Court of Justice would enforce budgetary discipline.

But there are implications of this: the first is that some countries might not like the idea. New found democracies tend to guard their independence rather carefully. And of course the German parliament and constitutional court might still find the terms over-generous. And it will take some time to amend the treaties, during which it is the nature of euro-negotiation to descend to the level of the pork barrel. Mr. Cameron’s MPs want him to demand repatriation of some powers before agreeing to a deal.

Another problem is that whilst the payments imbalances are serious, they are in some respects only the symptoms, not the disease. The reason Italy and Greece are in trouble is that they have not modernised their economies and are still hopelessly inefficient. It is thought that, since the introduction of the euro, Italy’s competitiveness has fallen with respect to Germany’s by 50%. Suppose that Italy doesn’t reform its labour .laws, or that in order to get the budgetary measures through it gives out some more generous rights to trade unionists (already it is almost impossible to lay off Italian workers). Would the Brussels commissioners have authority over that, being able to forbid country-specific labour laws? Or regulate anything which affected productivity, such as education? How will other nations react to that?

The further we get down this path, the further, it seems, that we still have to go.

Idiots

As you may have heard, the car show presenter Jeremy Clarkson has said the wrong thing on a BBC TV programme.

This of course is nothing new. Clarkson has ranted against gays, cyclists, women drivers, people from Liverpool, all manner of minorities. He does it, not to offend, but to draw attention to himself, something he does rather well. He is famous all over the world.

When the above happened (you will recall we are getting towards Christmas and many celebrities have DVDs coming out; Clarkson has two) the self-righteous Guardian newspaper ideotically demanded an apology, as if in a conspiracy to make him more money. Since then, 21,000 people have complained to the BBC.

It makes me want to slap each and every 21,000 of them

LIGHTEN UP!

PS I am indebted to Heresy Corner for the statement by Dave Prentis, General Secretary of the UNISON union which includes this jaw-dropping drivel: 'The One Show is broadcast at a time when children are watching - they could have been scared and upset by his aggressive statements. An apology is not enough...Whilst he is driving around in fast cars for a living, public sector workers are busy holding our society together... they deserve all our thanks...'

Good grief.

GOOD GRIEF!

What could be wrong?

So, years after the crisis started, Angela Merkel comes out with her solution.

It's that countries in the Eurozone should submit their budgets to .. er .. the Eurozone and they would be told what they could and couldn't have, and that would be the law for these countries and it would be enforced by the European Court of Justice.

What could be wrong with that?

OK, countries which, stupidly, guarded their independence, particularly when they hadn't been independent for long, like Ireland, the Czech Republic, Slovakia, Poland, would see their ability to make independent decisions taken away from them, but, hey, it's only democracy, and who could possibly have any objection to giving up their democracy for a German political zone?

No, I think it should go OK.

The consequences of inaction

Extraordinary goings on in the financial markets. It would appear that several European banks were unlikely to be able to roll over their US$ short-term debt, and no procedure existed in the Eurozone to help. Accordingly a group of central banks, led by the US Federal Reserve, guaranteed the $ / € swap needed to prevent the contagion spreading all over the world.

If this is true, as unfortunately seems likely, it is a damning indictment of the indecision, incompetence and poor planning of the Euro-financial system. It is said that we get the politicians we deserve but I can't believe anyone deserves this lot.

Bailed out by les Anglo-Sassons.

Autumn Quiz

Q All these people lost their jobs this year. Apart from that what have they got in common? Zine ben-Ali, Hosni Mubarak, Muammar Gadaffi, Ali Abdulla Saleh, Silvio Berlusconi, Giorgios Papandreou.

A Nothing. The first four lost their jobs in attempts to impose democracy, the other two lost theirs in attempts to get rid of democracy.

Autumn to winter

Chancellor of the Exchequer Gideon 'George' Osborne presented his Autumn Statement today, which was more interesting in the background than the content. Growth forecasts have been downgraded from 1.7% this year and 2.5% next year to 0.9% this year and 0.7% next year. The previous forecasts, whilst credible at the time, seemed to err towards optimism and now we are getting the raw, unpleasant facts.

The problem is that the nation's economic strategy relied heavily on growth to reduce the deficit: as has often been mentioned in this blog, there are no cuts as such.

The upshot is to delay Osborne's plans by two years. Barring other disasters - and there may be many - the economy will look to be in good shape by 2017, but there has to be an election by 2015, which will now be fought on the Conservative side in the context of continuing economic pain. Britain is likely to avoid recession - which is defined as two successive quarters of negative growth - but not by much. Against that, it is likely that the Eurozone is already in recession.

On the one hand, Osborne is unlucky: neither he nor anyone else could have predicted the appalling economic mismanagement conducted by Merkel and Sarkozy which, coupled with a heavy dose of incompetence from America and Japan's economic model still failing, has brought much of western capitalism to its knees. Osborne's plans might have worked, now they are subject to ridicule.

On the other hand the Chancellor (isn't it about time we called him the Finance Minister? The whole thing desperately needs a more modern image) - on the other hand he is lucky in his enemies. The British people have accepted the need for belt tightening and do not believe those, such as the felicitously named Mr Balls, who say we could have it easier. If it isn't hurting it isn't working.

I am reminded of H.L.Mencken's dictum: 'Democracy is the theory that the common people know what they want, and deserve to get it, good and hard.'

Osborne's other measures were a raft of Government initiatives, such as more spending on railways, ideologically unsound and leaving the Government open to suggestions that it should have done more of this and earlier. Fortunately, Osborne has very little room for manoeuvre and these are not large enough to cause any lasting damage. Far better would have been to opt out of swathes of legislation coming from Brussels, an earlier rise in the pension age - 2026 is too far away to make much difference - and a reduction in corporation tax. Better than that would have been to identify whole areas of life in Britain in which the government shouldn't be involved at all. At least they are keeping a cap on public sector wages, which is something for the tribunes of the people to think about when they take tomorrow off.

Politically, the thing for Osborne to do now is keep his head below the parapet. I suggest spending more time at Euro-meetings, if his waistline can tolerate it, returning every so often to say we aren't doing quite as badly as them.

December is coming

Wolfgang Munchau, the FT columnist, who has moved from pro-euro fanaticism to pronounced scepticism as reality has slowly dawned, now reckons the Eurozone has until 9th December to save itself, with a mixture of measures which essentially mean Germany guaranteeing everyone else.

9th December is the day of the big euro-summit, and on this day Croatia is set to join. Yes, whilst it must seem incredible that anyone wants to join this mess just as it is breaking up (the rules say new applicants must promise to adopt the euro), our unelected rulers are still pursuing their policy of enlarging and deepening. For the Croats, the Prime Minister, Jadranka Kosor, has said that the country is guaranteed to receive €3.5bn in subsidies in the first two years alone. We had to bribe them to come in.

Croatia's unemployment is at 14%, its external debt is more than 100% of GDP, the ruling party is likely to lose the election a few days before the accession deal is signed, and the government is riddled with corruption. The similarities with Greece are alarming for any normal person.

But none of this bothers the Euro-loonies. Quite unaware that there could be anything wrong with the euro-template, they proceed as if everything were normal.

Latest news from the Madhouse

They are all talking in the Eurozone - that's what they do best, other than eating - and the signs are not good. France and the other nations want the European Central Bank to assume responsibility for the crisis - that means, effectively, Germany guaranteeing the debts of the weakest nations - and Germany is, unsurprisingly, not enthusiastic.

Now there are the first signs of the market not much liking Germany either. Yesterday (Wed 23rd) Germany tried to raise €6bn of 10 year debt and there were few takers. Just €3.6bn were sold. This is pretty well unheard of, and puts France's bailout strategy into perspective: ECB bonds or guaranteed paper issued by the EFSF bailout fund, cannot be more creditworthy than German debt - Germany is the best economy in Europe. But the markets are turning up their noses at German Bunds: growth is falling in Germany. This doesn't bode well. Stephanie Flanders of the BBC, an organisation which will stretch credibility to support the euro, says

"In my conversations with analysts, traders and officials I'm finding more and more of them are talking about the end game for the euro"

It must, surely, be getting to the stage where solvent countries realise it would cost less to bail out their own banks who have lent to the insolvent countries, than it would to  bail out the creditors themselves. Equally, the indebted nations must be starting to realise that they are going to be shafted by Germany and France, and it might just as well be at a time of their own choosing.

Cairo

The disturbances in Cairo - they do not yet seem to have spread to the rest of the country - are at the same time confusing, disturbing and cause for hope.

We read that the protesters - again occupying Tahrir Square as in the successful protests at the beginning of the year which ousted Mubarak - want quicker change, but at the same time want to cancel the elections held for Monday, which had supposed to be held in September. It seems that they have no trust in the election procedures, but, more importantly, are concerned about the role of the military after the parliament has been elected. They want an unconditional confirmation from the generals that military rule will end as soon as the deputies are in office.

Where this is disturbing is that it is difficult for a heterogeneous group to portray, en masse, such a complicated thought process. The generals might publicly conclude that the people are not ready to rule themselves: indeed that appears to be the stance adopted at the moment. The USA, Britain and other countries, including the ineffective Arab League, must push for elections to be held in due course with independent verification of their independence.

Where there is cause for hope is that the Army now knows that the people are on their case, and that they will risk bloodshed for democracy.

Syria

You could easily imagine Messrs. Cameron and Sarkozy licking their lips when violence flared up in Syria. Fortunately they will not be allowed to take military action through the UN because Russia and China are furious at the way they exceeded their UN mandate in Libya, which was for the protection of the people not for the pursuit of Gadaffi.

Whilst the Libyan escapade was given UN approval in part due to the inclusion of the Arab League, with Syria the League has been left on its own. And what a mess it has made. It secured Bashar al-Assad's agreement to stop slaughtering his own people, only for Assad to ignore this the following day. It has tried several times to get some meaningful peace plan together but to no avail: Assad is fighting for his life - and not just his political life - and isn't going to give an inch.

All we can hope for is that sanctions by the West starve the people into desperate measures against their ruler.

A sad business.

At least someone's saying it

Nigel Farage at the European Parliament

Libya and the foreign busybodies

Following the arrest of Col. Gaddafi's favourite son, Saif-al-Islam, a rather curious thing happened. Someone from the International Criminal Court in The Hague flew down to Libya to ask if he could be tried there.

Now, there is a case, where a new nation hasn't got its institutions together, for criminals to be tried elsewhere, although not much of a case, in my view. But the whole purpose of our intervention in Libya was to make it a cohesive nation, to stop one part attacking its own side, and to build the blocks of a proper state with laws, justice and so on. you would have thought that Libya was in a good position to hold a trial.

Instead we have a curious system of an international body bidding for the ability to put someone on trial. Why? Why are we paying for Libya to be a proper nation based on the rules of law, and at the same time paying for another body to tell them they aren't capable of holding a trial which that body deems important? Have the ICC been trying to involve themselves in Burma, Zimbabwe, China? No.

Saif-al-Islam should receive a proper trial according to the laws of the country where he was born, lived and committed his alleged crimes,

The sooner this bogus international body is closed down the better.

Spain: not at the crossroads, nothing to see

Spain goes to the polls today, a little reluctant and without, it would appear, much in the way of hope. A curious feature of the elections is that, rather like the last ones, they don't seem to be offering the voter any choice about Spain itself.

Until 2004 the Prime Minister had been José Maria Aznar, who was coming to the end of a second 4 year term. You may recall the fiasco over the Madrid train bombing, which happened just a couple of days before the 2004 election. Aznar claimed it was the work of Basque terrorists (the Basque ETA group had tried to assassinate him at least once) whereas the atrocity was in fact committed by an Islamist terror group, as a protest against Spain's involvement in the Iraq war.

On the back of this Aznar's party lost the 2004 elections, bringing José Luis Zapatero to power. Following their re-election in 2008 Zapatero was burned out and this election  will be between two men not previously in the front line: neither of whom seems to be much loved by the electorate. The disappointed Spanish believe that there is little difference between the two on the most important topic, austerity measures, and that they probably both have to toe the Merkel-line anyway.

Nothing much to see here.

Monti makes a start

Mario Monti has got record levels of approval  from both houses of parliament for his cabinet of academics, and discussion is now turning to what he will do and how long the administration will last.

As to the first, he has said he will be making demands on those who have given least. It would be an extremely popular (as well as populist) gesture if he reduced salaries for MPs, but they are such a venal lot that even in the present climate I don't think it would get through. I haven't been able to find anyone who has heard of the new cabinet members. It may be worth recording that they almost all come from the university system, and that whilst Britain has three universities in the world top ten, Italy doesn't have one in the top 300. But it would be unfair to prejudge given the fact that I'd never heard of any of them, either.

As to how long the 'technical' government will last, Monti has said it should last until the due date for elections, that is to say 15 months, whilst Berlusconi has reminded everyone it is not a democratic government and that it will last as long as the elected politicians want it to. In fact it is quite convenient for a populist politician that the difficult decisions are implemented by an outsider. If it goes wrong he will say 'I told you so' and if it goes right he will return to power and claim the credit.

Monti is off to see Merkel and Sarkozy and the rest of the Euro-gang next week, and he will be welcomed with open arms. He is, after all, one of them.

Ireland and the death of European democracy

Speaking of things appearing to happen before they in fact do (see below: this blog has the earlier posts shown later - oh, never mind) but speaking of that, the Irish Taoiseach Enda Kenny went to see Angela Merkel the other day and, would you believe it, next month's Irish budget is published in Germany more than a fortnight before it is due to be discussed in the Irish Parliament. Reuters reports the details having been given to the German Parliament's budget committee, and that they include a rise in VAT.

So now the European establishment is running Greece, Italy, Ireland and to those we can add Belgium which still doesn't have an elected government. Don't think so? Let's see if we can answer two questions: first, would the rescue plans have continued if, say, the Italian President had nominated a caretaker government headed by someone who didn't have the 'correct' view of the euro?

Second, before being offered a bailout, were these countries told it would spell the end of their democracy, so that they could at least hold a referendum?

This is a bad time for Europe: not since the 1940s have we seen formerly independent countries run by foreign delegates.

Those pesky particles

It seems they've done it again - checking their previous experiment it appears that scientists in Italy have again made a neutrino - or lots of them, who's counting? - go faster than light. A neutrino - of course you knew this - is like an electron but without the electric charge, a sort of 'ron'.

I'm sure this is all frightfully important but it seems to me to have its comic side. A scientist on BBC Radio this morning said they were going to test it by sending neutrinos from Chicago up towards the Canadian border. 'Some of them', presumably referring to the less discerning neutrinos, 'just keep on going.'

This raises all kinds of questions about time travel. Sorry if you've heard that one before. 'Which one?' you ask. Come along, we're now supposed to be able to see things before they happen.

'We don't serve neutrinos here'

A neutrino walks into a bar.

All for one....

Le Figaro reports that France is against the idea of a directly-elected President of the European Commission, because Germany, having more people, would have a better chance of their candidate winning.

It is like the Monster Raving Loony Party complaining that UK elections were unfair because the other parties had more supporters.

Further evidence that these guys really, really, don't like democracy.

Still, good to see them all pulling selflessly together towards the European utopia.

The EU and your taxes

Most people don't have a problem with EU rules on not subsidising favoured industries, in fact it is one of the few worthwhile bits of the Single Market. If, to draw a nationality at random, the French want to subsidise their pharmaceuticals companies, they are not allowed to because it gives an unfair advantage over other European pharma companies.

Now have a look at what is happening in Gibraltar. The new finance measures involve eliminating profits taxes on offshore companies: that is to say that profits taxes are only charged on companies actually working in Gibraltar with employees there (the offshore companies have to pay other charges and these are presumably enough).

The European Commission have decreed that this is in effect a subsidy.

So not charging taxes amounts to a subsidy. How much tax would you have to pay before it wasn't a subsidy? You will remember that the French have tried to ban Ireland from having a low corporation tax rate in order to attract businesses and jobs. In a sense that was understandable (although wrong) because Ireland was being bailed out by, in part, the French.

But Gibraltar is not in receipt of such handouts. Why shouldn't it be able to set its own tax rates? 

The answer is that Spain, which is next to Gibraltar, has received the assurance, in return for something else, that the EU will oppose this (Spain doesn't want companies finding it cheaper to set up on the southern tip of the peninsula). That is the grubby way the EU works: secret backroom deals favouring the bully boys.

The right to kill (yourself)

The British Medical Association wants to ban you smoking in your own car.

Since the passing of the Suicide Act in the1960s it has been legal for me to get a knife and slit my throat, or to jump off a cliff. The two ways I cannot kill myself are going through the windscreen of my car (because the busybodies make me wear a seat belt) and, increasingly, smoking. They say that the second hand smoke is dangerous, but of course if I am smoking in my car I am treating myself to first hand smoke and so won't be worried about that.

In fact the 'debate' on smoking in public places reached the low point of British science. They said second hand smoke was dangerous, without specifying how much of it was dangerous, how much the risk was reduced if the room was well ventilated, or, if a large room, how much the risk changed by proximity or otherwise to the smoker. They didn't give any of this data, essential to forming a view on the subject, either because they didn't know or because it was unsuitable for their position in the argument.

They just don't want you to smoke. Some of them say it is because the National Health Service has to treat you, but if that were the problem we would have banned homosexuality because gays are more likely to get AIDS. No, it is just bigotry: they want you to conform to what they do.

Supertask for Supermario

Mario Monti, as the whole world knows, is now Prime Minister, but rather than, as one commentator said, being 'put in as the head of the government', he has not yet formed his administration. Today, Monday and tomorrow, Tuesday, will be taken up with getting the views and agreements of both sides. Theoretically, there could still be an election, but nobody wants that (except the people, of course). We don't yet know to what extent there will be politicians (who would be opposed by the other side and therefore have to be balanced out) or just technocrats. Fortunately for Monti two of the senior players, Alfano and Bersani, favour just technocrats. In this context it is believed that Monti would choose university professors. This is not quite as good as it may sound - there is a world of difference between teaching it and doing it and the professors are themselves sometimes political operatives.

Mario Monti

What will Monti do? Imagine Italy were a person, in trouble with his debts. If he isn't to go into bankruptcy, or default, he has to do a number of things.

First, he has to stop borrowing more and more.This means cutting out some expenditure, and it is this which the Europe-inspired austerity plan sought to address. It is worth noting that before Berlusconi fell from grace, Ollie Rehn, the budget commissioner, said that the proposals were not enough. But suppose they were just enough - maybe to balance the budget by 2014 instead of 2013 and that were acceptable - there is then the problem of putting the plan into operation. I have said before that there is no real appetite for austerity in Italy and the people, for all that Europe hopes to bypass them, could cut up rough. Level of difficulty: 6/10.

Next our over-borrowed man needs a little bit of cash to tide him over - particularly for paying the interest on his debts. In Italy's case this liquidity loan (I am not talking about refinancing all its debts) would be around €750 billion, it is estimated. Who's got that kind of money? It's a lot, even for the Chinese. The European Central Bank, that's who (it can print it). But Germany, you may remember, is against the ECB chipping in, saying it is against its Constitution. It would create a core inflation all over Europe. So getting something to tide Italy over may be as difficult as refinancing everything. Level of difficulty 8/10.

Last we need to make sure our man doesn't get into this state again. Since the start of the euro Italy's labour competitiveness has deteriorated by 50% vis-a-vis Germany. On the face of it this means either the Italians need to work for half pay, or they work twice as hard as Germans. Neither of these is remotely possible. But changes can be made. The State is too big in Italy and that means not just that it needs to be financed, it means it interferes in all kinds of areas where it shouldn't. Opening even a shop is a nightmare, you have to register with all kinds of bodies and jump through all kinds of hoops. If you employ more than 15 workers it is impossible to lay some off when business is slow. Trade Unions are entrenched in society and in the law and are far too powerful. And speaking of the law, if you have even a modest trade dispute it is likely to take at least five years to resolve it through the  courts - most people don't bother trying. Even if Monti managed to get agreement to all this, the effect would be of rendering unemployed more than a million State workers, which would push the country into recession which means a bigger overdraft (see above). It would take years to re-employ them in the productive sector (think Britain in the 1980s). Level of difficulty 9/10.

Monti - even if he were Supermario - can't do all this. All he can do, reasonably, is put into place Silvio's commitments to Brussels. Then Silvio, or his PdL party, will say 'that is what we were going to do'. Elections will almost certainly have to be held in 2013 if not earlier, and the PdL is fairly confident it can win them.

The solution to Italy's problems looks increasingly like default, leaving the euro and allowing a massive devaluation, and at the same time putting into place the efficiency measures. It's going to be a bad couple of years.