US Election shock

There's not much to smile at with the Republican primaries but Americans are doing their best:

Smoke and mirrors

News in Italy this morning is that MPs' salaries are being cut by €1.300 a month (they are currently €14,000 a month).

However a brief examination, before we open the prosecco, shows that this reduction is simply a removal of the extra they would have got from a change in the calculations of their entitlement.

No. These chaps don't vote for reductions in their remuneration.

Nothing to see here. Move along.

Summit strike

Happily, today's European summit - yes, another one! - will take place amid a general strike in Belgium. There won't be a bus (not that these guys travel by bus) or a taxi or even a plate of turbot and a glass of Gewurztraminer.

That should, at least, keep it short.

The guys in the Justus Lipsius building won't care or understand much about ordinary people, though. They have secured for themselves decent salaries, wonderful pensions and a couple of weeks fully paid in a spa if the stress gets too much.

All these other people are required to do is pay for it.

Look for the letter

Faisal Islam, of Channel 4 News, is reporting that a leading European bank is discriminating between euro notes issued in different countries. I have reported on this possibility before: German notes are marked with an X, French ones with a U, Greek with a Y, Italian with an S.

What this means if it is true is that there is now an internal exchange rate within the EU.

Actually I don’t really think it is true. Only a tiny proportion of a bank’s balance sheet is actual notes so it probably wouldn’t be worth the effort, particularly since it could go to the ECB and exchange them at any time. But it is intriguing: it means that if there is a sudden removal from the euro, and the central bank of the departing country doesn’t have time even to put a sticker on the notes, the ECB will simply eliminate from the system all notes beginning with, say, Y.

And if it is going to these lengths, it means the bank thinks it is worth it.

What Croatia can expect

Having described Croatia's decision to join the EU as a mass loss of sanity, I thought I ought to expand on the subject.

We began the year with two Eurozone governments, in Italy and Greece, having been replaced by pressure from the unelected European Commission. The post of prime minister is in each case held by a Euro-placeman.

Now it's Hungary's turn. You may recall that Hungary used to have a Euro-apparatchik in charge; his name was Ferenc Gyurcsany, Prime Minister in the early days of joining the EU, from 2004. His government was deeply corrupt, but the Eurocracy doesn't mind that. In addition, Gyurcsany had lied in Greek fashion about the country's financial affairs in order to get into the euro, but they don't mind that either. The euro is a political project, not an economic one, so it's enough that you are west of the Urals and that you want to join (and that you're not Turkey).

But Gyurcsany's government was very unpopular and, as happens in democracies, he was thrown out by the people. The man they elected in his place is Viktor Orban, who is very much not a Euro placeman. For a start Orban wanted to replace the constitution which had been imposed by Stalin (the European Commission hadn't minded it) and he wants to 'Hungarianise' a lot of the country's institutions. This is to an extent shorthand for Nationalism, and it may be you don't like the cut of his jib (nor do I) but he is what the Hungarians have voted for and democracy implies the right of the electorate to make a mistake.

Eurocracy implies the limited right of the electorate to vote as their masters in Brussels require.

So the European Commission, using your taxes, is trying to oust a democratically elected government. It is taking legal action against Hungary, saying it does not have the right (!) to take the measures it has and threatening to cut off the subsidies it receives if it doesn't toe the line.

You may recall that the EC got all supranational fascist with Austria when it dared to elect Joerg Haider against the wishes of Brussels. Austria and Hungary: seem to go together somehow.

But it isn't just them. The FT reports today that Germany wants to take away Greece's power to enact an economic policy - even one that has been decided for it - and that the economic government should be undertaken by a budget commissioner.

So Greece is no longer a nation state, Italy is scarcely one, Hungary will soon cease to be one. Croatia should realise this: that joining the European Union will give it the freedom to do....as it is told.

The BBC

Whoever it is who makes appointments to the BBC is said to be looking for a replacement for Mark Thompson, the current director general.

OK. Since you beg. I'll do it.

And in accordance with Dave's interference policy in people's salaries, I won't need Thompson's £670,000 salary. In fact I'll do it pro bono publico. For zilch.

And here is my manifesto.

1. Public service broadcasting means doing things which need to be done but which the private sector won't do. So it doesn't involve long running soap operas and it doesn't involve reality TV, because the others do those things, too.

2. Unlike the Prime Minister, I have no objection to the talent-free Jonathan Ross earning £6m a year. Somewhere else. And I don't know if Des O'Connor is still looking for work but the answer's no.

3.There would be one BBC News service with a vast number of outlets. It would feed reporting to National and local TV and Radio, the website, the World Service. Large events such as the Olympics would not have representatives of each of these jostling with each other.

4. Apart from the news, the BBC would just be commissioning programmes, not making them.

5. There would only be a need for 2 TV channels (one news and politics, one culture) and two radio (essentially Radio 3 and Radio 4) and the World Service, which would be expanded but just called the BBC.

6. The BBC would not be judged on how many viewers and listeners it got relative to the private sector, but on the quality of the service.

7. The fantastic cost savings entailed would enable the licence fee to be cancelled. The BBC would be set up as an independent trust, serviced by the return on a government endowment, sale of London property and income from programme resales abroad. People in other countries would have full access to the BBC for a subscription.

8. Anyone with an obvious political bias - Andrew Marr is an immediate example but believe me there are plenty of others, including the euro-loony chairman of the BBC Trust, Chris Patten and his deputy Diane Coyle - would be fired.

When do I start?

The Costa Concordia 3

I confess I should like to know a little more about the company Costa Cruises. It seems to have behaved in a very strange way throughout this saga. It has clammed up when it should have spoken, and offered misleading information when it did speak. There are claims, admittedly from Captain Schettino and his defence team, that it was company policy to sail close to the island of Giglio.

Costa is owned by Carnival Cruises, an American company. Imagine President Obama's panicked response if this had happened in American waters, with a ship owned by Europeans or, worse, the hated British.

Costa has now offered survivors compensation of €11,000. My advice to them is not to take it. This one has a long way to go.

In support of Stephen Hester

I don't suppose you'll find that headline in many newspapers this morning.

Stephen Hester is, of course, the Chief Executive of troubled bank RBS, which is 83% owned by the Government (not as many people seem to think, by the taxpayer). Mr. Hester receives a salary of £1.2 million a year and was due to receive a bonus this year of about £1.5 million, payable in RBS shares. After a lot of hoo-ha, the Government said this was too much and finally his bonus has been negotiated down to just less than a million. The unions and the ignorant are up in arms.

Many critics begin their argument with 'Mr. Hester is a civil servant'. He's not. The last government, a socialist one, by the way, had plenty of opportunity to put a civil servant into the job (maximum salary usually about £250,000) but it didn't. It chose to put in a banker and negotiated a remuneration package for him. This, as stated above, was a basic salary of £1.2m and a bonus to be decided by the bank's remuneration committee, according to certain pre-arranged criteria. I have no idea whether Mr. Hester would have done, or would now do, the job for less, but that is the deal which was agreed. The Government cannot go back on that deal, and when they tried to lean on the remuneration committee (in order to make it look good politically for David Cameron) they threatened (some say the whole board threatened) to resign. Indeed how could RBS take on new employees if they thought the Government might interfere after a year or so and cut their wages for political reasons?

Mr. Hester should insist on the money he is entitled to. I hope he's worth it, but that's another matter.

Burns night

The Angus lads had nae gude will,
That day their neebours' blude to spill,
For fear, by foes, that they should lose,
Their cogs o'brose; all crying woes,
And so it goes you see, man."

If you enjoy reciting maudlin doggerel, such as the above, taken from The Ball a'Sherriemuir, eating sheeps innards and drinking whisky, tonight is your night. Go to it with a will. It is a night to shed a tear over the '15 and the '45, to dream of independence and the glories of (that's enough of this drivel, Ed.)

In my experience the celebration of Burns Night is a mistake, and I think, as you accept that extra wee dram, that you know it, too. Don't you?

Croatia

In what at first appears a mass loss of sanity, Croatia has voted to join the EU, with a substantial majority of 2:1. So just 20 years after becoming a democracy it is giving it all up.

The voting figures show a turnout of only 44%, which means just 30% of the electorate said yes.

How easy it is to lose your rights, and how hard to get them back. 

The loser's race

'Mitt' (his real name is Willard) Romney has been forced to show that he only pays 13% tax on his substantial earnings, which is scarcely going to go down well with middle America, which is feeling the pinch.

Meanwhile, the Republicans come up with the brilliant idea of Newt (Newton, which is far nicer) Gingrich, who carries so much political and personal baggage he can barely walk.

The Democrats are having difficulty deciding which candidate would suit Obama, who ought to be unreturnable, better.

Has there ever been such a cock-up in American political history?

Cosy capitalism

The British political year has begun with all sides saying they wanted 'responsible capitalism' or some nonsense of the sort. They all hate bank employees for earning so much money and huff and puff hoping people believe they will do something about it. The amount an employee is paid is of course purely a matter for the shareholders. In another context, Mr. Cameron cannot, for example, insist that Wayne Rooney is paid too much because he hasn't scored any goals recently (apologies to Mr. Rooney if he has), or that Cliff Richard is rewarding himself for failure.

In the case of the banks where the Government is the dominant shareholder, it can ban bonuses or halve salaries, but will be told that if the taxpayers are ever to get their money back they need to employ some top people. Who charge a lot.

Ensuring bonuses are paid in shares rather than cash is about as far as they can go.

A famous investment banker used to tell staff that they should start the day 'ready to bite the ass off a bear'. And that is what I like to see when investing in a company: raw aggression, so it can kick the competition into second place.

I need a return on my investment to keep me warm and mildly drunk in my old age. I don't want them musing on being nice to children.

Enter the Dragon

Today begins the year of the dragon. The characteristics of the dragon are dominance, leadership and ambition.

Let's hope the Chinese zodiac applies to us all, not just the Chinese.

A thistly question

Scotland is due to have a referendum on independence from the UK, to be held in 2014. Already people are discussing who should vote. How do you define a Scots person, when all their lives their nationality has been British? Is it people living in Scotland (some of whom are English, French, Pakistani, whatever)? Or would you have to trace your ancestry back to before the Act of Union 1801? Or will it be like qualifying to play for the rugby team, where you just come up with a grandfather? Under these circumstances I might be eligible myself (only a chronic inability at the game has prevented me from applying for the blue shirt).

Some are saying that the English should have a vote. But if all the English voted against and all the Scots voted for, the vote would be lost by 8:1.

Equally likely is that the English would vote to cut them adrift and the Scots would vote to remain in the Union. What would we then do? Kick them out? If we'd thought of this before we could have got rid of Northern Ireland and Wales years ago.

Name of the Rose

"What's in a name? that which we call a rose
By any other name would smell as sweet"

 Maybe so, but I feel I must record that neither Newt nor Mitt sound like the name of a President.

On your screen now

News reaches us that for-profit abortion clinics are to be allowed to advertise on UK television. A sign of the times?

Abortion is of course legal in the UK – this year will be the 45^th anniversary of the bill receiving Royal Assent, and the performing of abortions for profit is also legal, but one can’t help feeling a little disquiet at the news.

Advertising is used to distinguish one brand from another for the purposes of profit. On what basis are these abortion clinics (they call themselves post-conception advisory services; why do they need a euphemism?) competing with each other? Quality? Will someone be allowed to offer cut-price, only slightly risky abortions? I don’t suppose so.

What about the nature of advice? Catholic charities have been prevented from advising women not to have an abortion (family-friendly PM David Cameron voted for this). So, no, it won’t be the nature of the advice.

Will they try celebrity endorsement? If one of the in-crowd like Katie Price or Lady Gaga have entrusted themselves to a particular clinic will other women think it a good idea to emulate them?

Or is all this just to they can advertise abortion itself, to promote the concept? Britain has one of the highest abortion rates in the world, and I have often wondered if we shouldn’t be trying to find out why.

Etta James

This blog regrets the passing of Etta James, aged 73

Entente cordiale

I am greatly indebted to Guido for this, being one of the comments to a post on his blog:

Coming back from another recent EC summit in Rome, various European leaders were forced to take the train due to a strike by Swiss ATC controllers; sitting together in the same compartment, travelling through the Swiss Alps, were Sarkozy, Cameron, Merkel and the young and very attractive female Irish foreign minister.

The train goes into a dark tunnel and a few seconds later there is the sound of a kiss followed by a loud slap.

When the train emerges from the tunnel, Sarkozy has a bright red hand print on his cheek. No one speaks, everyone is extremely shocked and embarrassed.

Angela Merkel thinks: Sarkozy, not able to help himself, must have kissed the Irish girl in the dark, and she slapped his cheek.

The Irish girl thinks: Sarkozy, not able to help himself, must have tried to kiss me in the dark, but missed and kissed Merkel and she slapped his cheek.

Sarkozy thinks: Why me ? That perfidious Cameron must have groped the Irish girl in the dark knowing that I’d get the blame for it and she slapped me…the English bastard.

Cameron thinks: I can’t wait for another tunnel, just so I can kiss the back of my hand again and smack that little French sod another time.

The Costa Concordia 2

The whole world has now been treated to a recording of a conversation between the coastguard at Livorno and the captain of the Costa Concordia, the coastguard urging the captain to return to his ship. It is not hard to tell what people’s attitude will have been.

What I should like to know is who released this recording, and why. And in return for what? Why didn’t the police and the coastguard, aware that there would be an investigation and the possibility of criminal proceedings, not scoop up the evidence and keep it safe for use in the case?

In any sensible legal system the people now in jail would be those who released the tape, charged with interfering with the course of justice.

How, with the whole world thus set against him, can Captain Schettino possibly get a fair trial?

There is another aspect to this which I find disturbing. This ugly tale will reinforce the stereotype of the ‘typical Italian’, which started after the Second World War, as a coward. The BBC even reports with a sneer that Schettino called his mother from dry land. This stereotype detracts from the heroism and effectiveness of the Italian rescue teams, whose divers searched the blacked-out wreck for survivors, even though it was perched precariously on the rock and any movement would have put their own lives in danger.

This is a bad business.  

Now for the cover-up

The thing to remember about philosophers is that when they appear to have got it wrong, it is your fault for not understanding. I should have known that when the former football star Eric Cantona announced his bid for the French Presidency, and wrote to 50,000 mayors as is required, he was in fact just complaining about social housing.

It's a shame, he would have brightened the race up.

My new preferred candidate is Kendra Drider, a Muslim woman who is campaigning against the banning of the burqa. This blog is opposed to the State telling citizens how to dress.

Unfortunately I don't have a photograph of Ms Drider, since she is always covered up. We shall have to trust that it is indeed her on the campaign trail and not, say, Wayne Rooney.

The Costa Concordia

It is nearly 100 years since the sinking of the Titanic and there is an inclination to make rather too much of the sinking of a cruise liner off Giglio in the Tyrrhenian Sea. Still, six people, perhaps more, have been killed (more than 1,500 on the Titanic) and the matter needs some thought.

There needs to be an independent investigation of this, not a national one of the sort that gets sucked into the Machiavellian politics of the country. The idea, currently receiving an airing in the media, that the captain had gone too close to the island in order to honk the horn at a friend of his, and that he had subsequently departed the ship before the passengers, is too horrible to contemplate.

Some commentators have said that this is evidence that cruise ships are too big, but I don't think so. There were more than 2,000 on board the Titanic, and I think that 100 years later, with a better attitude towards safety (in part brought on by the Titanic disaster itself) as well as modern technology, double that number should not be excessive. In fact it is a miracle, little remarked on, that so few people have been lost.

So what do we expect? The Titanic was within regulations only having lifeboat space for 1,100, but of course regulations these days are far better. Lloyds of London approves the safety and design of modern ships, and they have a lot to lose so they generally get it right.

I think it is within modern capability that if the captain erred too far from an approved deep water channel an alarm would sound and that he would have to confirm independently that he knew what he was doing. I also think there should be a black box, as there is on an aeroplane, so that all actions are traceable. There has been talk of a power failure and of course there should be backup systems. I am sure there are.

My guess is that, once there has been an inquiry, this will not have been enough to deter people from taking a cruise. I certainly would, if it weren't for the frightfully dull people you have to share an enclosed space with.

Time for commonsense

Who is time for? What is time for? I don't mean these questions in a metaphysical sense, more 'for whom or what purpose do we measure time in minutes, days, etc?' The answer's easy: it's for us, you and me, so that we know that when it is four o'clock, in sixty minutes it will be five o'clock.

The reason I ask is that there is a lot of nonsense going on amongst the pointy heads in their universities and laboratories, the people who often seem quietly to rule our lives. They invented their own time, like a clock that never needs winding, and they measure it against the decay of a radioactive substance called caesium.

Now, what the little cleverheads hadn't taken into account is that the rotation of the earth is slowing: only very gradually but it is grinding to a halt. But caesium, in its own sweet way, decays at exactly the same rate all the time. So pointy head time tended to get ahead of yours and my time.

They got around this by adjusting it, every so often adding in an extra second. In fact their adjustment is usually made every 500 days or so.

But now they don't want to bother adjusting it any more: they will tell us what the time is, and it's caesium time, and that's that.

The problem is that after a little over 80 years, when today's children are coming to the end of their lives, we'll be a minute out. And after years and years it will be daylight in the middle of the night. But what I'm trying to say is that this time business is ours, not theirs. If they want to measure time accurately they should find some material, let's call it Timium, which decays at the right rate.

And leave us alone.

Some good

The Duchess of York as was (she is now called Sarah, Duchess of York for reasons too unimportant to mention) has been charged by the state of Turkey with breach of the country's press laws when in 2008 she participated in a documentary about cruelty in orphanages there.

There is some good in Sarah Ferguson, it's just that it is sometimes difficult to put your finger on it.

The system's rubbish

Nicola Cosentino is a deputy with Berlusconi's PdL party. He is regional organiser for the Campania region, which includes Naples.

Cosentino is accused of having an association with the organised crime syndicate the Camorra to which, it is said, some of his relatives belong, and to having received bribes concerning the Naples rubbish scandal. This, you will recall, involved the city's entire refuse system being appropriated by organised crime, and space sold on the allocated rubbish tips so that there was no room for the rubbish of the people of Naples and they threw it out on to the streets. Some say the water supply has been poisoned by tipping of illegal materials.

The authorities wanted Cosentino remanded in custody - held in prison - and approached the Parliament for permission to do so. Parliament has now refused so Mr Cosentino is still at large and still a deputy. Mr. Monti, the unelected Prime Minister, says he doesn't want to get involved.

There is something deeply wrong with all this. If he hadn't been one of the political class - la casta - he'd have been locked up awaiting trial.

Anwar

I happened to be in Malaysia when the story broke, in 1998. Anwar Ibrahim, the political darling, protégé of long-serving Prime Minister Mohammed Mahatir, the man Malaysians regarded as their future, was arrested for sodomy.

The way the business people thought of Anwar was that whenever Mahatir came up with some particularly hare-brained scheme he would tone it down, make it acceptable for the markets, keep Malaysia progressing. Mahatir needed this: we are talking about a man who, having won the right to stage the Asian games, insisted on designing the seats in the stadium himself.

Mahatir and Anwar fell out, fairly publicly, and then there was this. I spoke to someone close to the political class, who told me that actually sodomy was rife in Malaysia, particularly among the upper echelons, so he couldn’t say that Anwar wasn’t guilty, but that it was certain that even if he was it was a stitch-up.

In fact the first charge was for corruption, which he denied. After the sodomy charge was overturned he was arrested again, also for sodomy.

During all this time, in prison and out of it but banned from politics, Anwar’s wife Dr. Wan Aziza Wan Ismail not only stood by him but substituted for him, becoming leader of the opposition party. She resigned her parliamentary seat in order to let her husband back in.

The recent news that all charges against Anwar have been dropped may just herald a new beginning for Malaysia. I hope so.

Melancholy marked him for her own

Here's an interesting story. An Italian minister called Carlo Malinconico had a holiday at Porto Ercole paid for by a suspect property developer.

Not so interesting, you may say: this sort of stuff has been going on for years, hasn't it? But there are interesting aspects to it.

What Mr. Melancholy (which is what the word means and is, now, somewhat apt) says is that he went off to Porto Ercole in good faith, running up a bill of nearly €20,000 (it was a 5 star hotel) and imagine his surprise when he found that the bill had been already paid.

Well, it could happen to any of us.

But this was a while ago. Malinconico was working in the last pre-Berlusconi Government, under Romano Prodi. He was appointed rather than elected, and a Knighthood was procured for him (Cavaliere di gran croce dell'Ordine al merito dell Repubblica Italiana). He held two jobs with Prodi, with whom he is pals.

Mario Monti, unelected Prime Minister, is pally with Prodi, too: they were European Commissioners together and Prodi became President of the Commission.

So we still have the grubby old friends network running Italy, a funny handshake here, a title there, dodgy dealings and a ministerial car in every case.

This time it was supposed to be different.

Cometh the hour...

The happy news reaches us that footballer turned actor Eric Cantona is to try for the French Presidency.

Voters now have to decide which is the least absurd candidate from tiny, unpleasant Nicolas Sarkozy; dull serial failure François Hollande; chauvinist firebrand Marine Le Pen; smooth, ineffectual François Villepin; and about eight others you have never heard of and never will again. And 'King Eric'.

Qualifications? In 1995, after aiming a kung-fu style kick at a football fan, Cantona said to a press conference 'When the seagulls follow the trawler, it's because they think sardines will be thrown into the sea. Thank you very much.' He then got up and left.

Yes. For my money, oo-aa-Cantona might just edge it.

To catch a drunk

The latest tiresome exhortation from the State to drink less - this time that we should take two days off the booze a week - comes, incredibly, from the over-excitable drunks in the British House of Commons.

But the idea may have some merit. Let's close the taxpayer-subsidised bars in Parliament for two days a week.

In fact, since they obviously think alcohol is a bad thing, let's close them for good. We want our lawmakers in tip-top condition, and sober.

More money saving ideas, please.

Change

I have often written of the difficulty of sorting the euro into a viable currency zone. The debt troubles we see at the moment are unfortunately, serious as they are, only a symptom of the problem.

The southern countries - I am excluding Ireland for the moment which has problems of a different nature - are, quite simply, less efficient. This is caused by lack of investment, by bizarre inefficient labour practices and by regulation. They are not liberalised economies.

A while ago my computer crashed on a Monday morning. After lunch I 'phoned the computer shop who said he couldn't help me until the following day. Why not? He must have been open or he wouldn't have answered the 'phone. Oh, he was working, he said, and had time to solve a fairly basic problem for me, but by law he could not open on Monday afternoons. So I met him in the local car park, surreptitiously handed over my computer, both of us feeling like drug dealers, and collected it in the same way later.

Now Mario Monti has liberalised opening times for businesses so that, subject to, say, public order regulations for bars, they can open whenever they like and do not have to observe the half day closing in mid-week. A chemist or a clothes shop can open 24 hours a day.

Now, you would think that all this would pass easily and happily, making Italy a better place to live and work in. The effects would not be immediate. Attitudes take time to change: when the Prodi government made the momentous decision to allow people to get their hair cut on a Monday not much altered since the barbers had to have two days off; Saturday was their big day so Monday was a good day to close. Now a barber can open 7 days a week if his customers can get used to the idea.

And they're up in arms (not just the barbers). There is a deep seated suspicion that this will favour large suppliers who, with many staff, can always find someone to work on a bank holiday or a Sunday. The Region of Tuscany has referred the matter to the Constitutional court. The Lazio business federation, which covers Rome, says 100,000 enterprises could close. What? Why should they? Because the supermarkets will be open on the Feast of the Assumption and put the religious shopkeeper out of business?

Tempora muntantur nos et mutamur in illis: times change and we change with them. We have to change, we have to adapt to new circumstances. But we shall see, I think, that like the building of Rome, this isn't going to happen in a day. A Greek cabinet minister threatened to resign if they de-regulated the issuance of taxi licences. It will take ten years of concentrated effort to eliminate the vested interests in these countries and thus to make supply-side change possible and drag their economies up towards German levels. And this change has to happen first: otherwise any amount of subsidy to Italy will disappear into the black hole of its inefficiency.

Either Europe is ten years late in beginning the changes or Mrs Merkel has turned the austerity screw ten years too early. And as so often happens with the Europe Project, it comes up against the wishes of the people. They don't want change, either to efficiency or austerity.

It's going to be messy.

Rupe tweets

Startling news of the year is that Rupert Murdoch has joined Twitter, and this blog is the first to be able to bring you his initial tweet:

G’day, or rather howdy because I’m now American. All my kids have left, leaving me in charge, and the guy who brings my cocoa Not much 140 ch

The year begins

Greece has announced its first strike of 2012: of doctors and chemists.

The only reason they left it so long is that yesterday was in any case a holiday.

So, what will it be like?

I ought to be be wary of making forecasts, because they so easily go wrong. Last year I was correct about the price of oil, but forecast the FTSE index to finish on 6500 (it ended at 5572). I and, to be fair, most people, completely underestimated the lack of leadership in Europe. They had to make a decision on substantial support for ailing southern Europe economies, or suspending them from the euro. They managed neither. Also unguessed was Angela Merkel’s blind insistence on austerity, when the root of the problem is on the supply-side: a lack of growth.

I believe Merkel will have dragged the Eurozone into recession in the first half of 2012.

This is the first time I can remember that the ordinary guy in the street has understood and openly discussed the idea that all economies are connected: the whiff of 1950s socialism which still pervades much of Europe made people think as if each country were N. Korea, self-contained. The recession in Europe will spread, not only across the continent but across Africa, Asia and America.

Against that, the American economy appears to be in fragile recovery, and this will generate a certain optimism. Obama may well be re-elected on the back of this, but if he is it will be principally because the Republicans couldn’t come up with someone who could kick a ball into an open goal (or whatever you do in American football).

2012 will see elections in Russia, China, USA, France and Greece (and quite possibly Italy). Normally the first two of these wouldn’t be worth worrying about, but there are signs of opposition to Putin which are quite interesting. China will ‘elect’ another faceless automaton. Sarkozy could be returned for a second term in France, for the same reasons as Obama, that the socialist candidate, François Hollande, is character-free. The French are tempted by Marine Le Pen but not that tempted. Elections in Greece could pose a threat to European financial stability.

The Arab Spring is at tipping point. The goal line is holding free elections on a liberalised constitution. The West should offer financial and commercial incentives to liberalise and grant rights for women, but we haven’t the money. Tunisia has just about made it, and I am still optimistic about Egypt, but with less reason. Assad will presumably fall in Syria but we don’t know what he would be replaced with: the country is close to Iran, and not just topographically.

2012 may see the demise of Castro in Cuba, Chavez in Venezuela and the retirement of Christina Fernandez-Kirchner in Argentina, who is ill. All of these might be good news but probably won’t be. The Pope will go to Cuba and could even grant Castro the last rights, if he has long enough for the confessional part, a brutal dictator and mass murderer being absolved by a former member of the Hitlerjugend.

The oil price rose about 13% in 2011 and is likely to be weakish this year in the face of a slowing Europe. What could change that is the possibility of heightened tension or war between Israel (and the West) and Iran. If the Iranians carry out their threat to block the Straits of Hormuz the sky’s the limit.

China is slowing, the repercussions of which are more political than economic. Some are forecasting a ‘hard landing’ for China but I don’t think so.

Currencies: the dollar will look stronger, particularly in the first half. Further indecisiveness in Europe could induce massive dollar-printing to save the financial system, which would send it weaker in the second half. If Britain retains its AAA rating the pound should be fairly strong, but we don’t know how far the economy will slow in the first half. I am fairly optimistic, and fairly often wrong, although the Olympics and Queen’s Jubilee will create some counter-cyclical spending, which is good. As I write the euro is looking weak and the thing to remember is the Germans won’t mind that: they don’t want their engineering exports priced out of their markets by a strong currency at this stage. Many people are saying the euro will hold together, Greece and all, for another year, but I can’t really believe it. France is likely to lose its AAA rating, devaluing any rescue package, and Italy has to renew €440 billion of debt this year.

Most of the world is looking forwards to austerity, rising unemployment and civil unrest. It won't be pretty; I think we’ll all feel the squeeze in 2012. Good luck, keep low and keep moving.

Made it!

If you are reading this, it means you have made it, bruised and bleeding perhaps, into another year. I was thinking about Harold Campion, who twice forecast the end of the world last year, and remembered this: