Olympics Report 4

Britain's athletes are not having a good Olympics. There was too much speculation, even assumption, that we would get a gold in this sport, another in that. Counting chickens before they are hatched, and the gods of sport don't like it.

The poor performance seemed to me typified when I saw headlines that a schoolgirl from Plymouth had won gold in one of the swimming races. Unfortunately she only lived, went to school and trained in Plymouth: she was swimming for Lithuania.

Britain's gymnastic team were on for a silver medal but the Japanese complained that they had been judged harshly and their appeal was successful. I really think the Olympics should be about objective victory - faster, higher, stronger is the motto - and we should ditch those 'sports' which are just about looking pretty in the subjective assessment of judges who just might be regionally or nationally biased.

One example is Tom Daley. A good looking boy and popular with the crowds, his sport is perfectly ridiculous. Synchronised Diving! Away with it, together with any other 'sport' where the winner can't be objectively assessed. Mr Daley should try swimming.

A Tale of Two Headlines

Daily Telegraph: Bankers found to have rigged Libor rates face jail

Financial Times: Iran sentences bank fraudsters to death

You can imagine the left-wing press cheering on this robust approach to bank regulation but I can't see it working here.

Although....

Olympics Report 3

Apparently a set of keys to the stadium, formerly in the hands of the police, have been missing for a week. The news is being treated with equanimity, as the organisers say that security has not been breached. How they can say this unless they know where the keys are, I don't understand.

Now imagine how it would be in the press if the private security firm, G4S, had lost the keys.

Rebalancing Britain

Chancellor of the Exchequer George Osborne will have breathed a sigh of relief last week as Standard & Poor's confirmed the UK's AAA rating with stable outlook (although the other two main agencies have it with negative outlook).

Much remains to be done in Britain and, as with the rest of Europe, it is not just about tinkering with the money supply. Osborne himself has spoken about rebalancing Britain and there is work to do on three fronts.

The Industrial Mix
Britain is overly reliant on the financial services sector, which constitutes 10% of GDP compared with 8% in the USA and 4% in Germany. It supplies around 10% of the tax take. Britain has more, bigger banks, so when the credit crunch came we were hit harder.

However, there is nothing wrong with doing something well, and rather than reducing our activities in the financial services sector, the solution is to build up other sectors, by making it more attractive to invest in Britain.

Nor should we return to old fashioned industries. We cannot compete in shipbuilding, clothing (except high fashion) and several other industries. It is interesting to note what has happened in the car industry. Britain last year produced a record 1.3m cars, but the growth has only happened as cars got more sophisticated, with more electronic and high added value engineering. Aircraft engines, at which we excel, provide a similar example. Life Sciences, pharmaceuticals, high-tech computer chips, these are the things we should be encouraging, without of course the government picking winners; we have had enough of that in the past. The Government needs to create the environment necessary for people to invest in these areas; it will do that by reducing taxes and cutting regulation (including opting out of much of the European system of red tape).

Diversifying markets
Britain is far too closely linked to European markets, with which we do around half our trade. Europe is no longer the great hope for the West; it is a declining, decaying structure based on the values and politics of the previous century. Growth will be in the East, in the developing BRICS economies, Brazil, Russia, India, China, South Africa and in Africa generally.

North-South divide
Lastly, something will need to be done about the regions other than the South East. For a while I thought that the proposed high speed rail link would help, but we can't afford to take it even as far as Birmingham.

Shovelling money into projects chosen by the government, or worse the EU, doesn't help. It never has. Paying successful companies to set up factories in deprived areas doesn't work either.

The only solution I can see is for the government to move out of London and into the regions. This would save money since property prices are lower away from London and wages less. With modern communications including video conferencing there would be no need for anything except rare visits to London by any except the top personnel. And the devolved offices would draw industry towards them as London does now. If you are a defence contractor you want to be lobbying where the Ministry of Defence is (Cornwall would be good). The hapless G4S Olympic Security maestros need to be brown-nosing the Home Office in their new offices in Newcastle, and so on.

Unfortunately all this will never be achieved while the Conservative Party is in coalition with the Liberal Democrats. The Business Secretary John 'Vince' Cable is a 1970s style socialist who seems unable even to peer into the current century.

It will have to be done some time, though.

Olympics Report 2

The opening ceremony was the most astonishing and impressive event I have seen. There was music aplenty, humour (including an excellent cameo by Rowan Atkinson) and Her Majesty's acting debut as she greeted James Bond and then seemed to parachute out of a helicopter into the arena. She delivered her lines like a pro.

I thought the ceremony was a bit long and it had unfortunately been hijacked by the bien pensant left. In a panic to seem racially inclusive they even had a black Victorian mill owner, which would have been a surprise at the time; agricultural labourers were seen trudging unhappily towards appalling industrial towns whereas in fact they couldn't wait to get out of the countryside, where many were starving.

And then there was a long piece about the National Health Service. I am a great fan of Great Ormond St. Hospital for children and indeed have contributed to its appeals, but there was too much of it. As for 'NHS' being illuminated everywhere, while children bounced on beds and nurses danced, it was ridiculous. The reason Great Ormond St. Hospital has so many financial appeals is that the State funding system is unable to provide it with enough money so it has to appeal to the public. The British Health Service is a failure, and nothing short of a national disgrace. Many of the nations present have a better health service, by dint of theirs not being owned and operated by the state, and they do not treat it, as the British do, as a religion: hospitals where people die from diseases caught in the hospital make for a rather shabby god.

Apparently the Director, Danny Boyle, was personally responsible for this, it being a reflection of his political views. It is a tawdry reflection on socialism that the State took money from the people to put on a spectacular, advertising the right-on political beliefs of the literati minority.

It is a disgrace that Mr. Boyle was allowed to get away with this, and we deserve an answer from Lord Coe and the other comfortably paid advisers as to how he did.

The rest of the ceremony was good, though.

PS Why on earth is the principal language French? Who let them get away with that?

In the wrong order

In Britain a plumber has been jailed for 12 months for taking money in cash and not paying tax on it.

You may remember a rather silly remark recently from a Treasury minister called Gauke to the effect that paying plumbers in cash was immoral. Of course it was nonsense -  you are quite entitled to expect that the plumber pays his tax - but a criminal offence occurs when he doesn't pay the Revenue what it is due. The Revenue have taken the unusual step of publishing the guy's photo on line.

All right and proper. It's just that I can't help feeling it would have been better optically to have prosecuted a couple of rich people first, then got on to the poor ones.

Olympics Report

Part of an occasional reporting series, to show I'm not just a moaning minnie.

To the surprise of many of us, the Games got underway two days before the Opening Ceremony. This would be, you would have thought, for some minor sport, to get the crowded schedule over with. But it was with football, the most popular sport in the world. In the ladies matches, Britain won, as did North Korea, despite having withdrawn for a while when the organisers put the flag of South Korea on the TV screens.

The men's football is tonight, which should at least see the end of our lot.

David Cameron made a pretty speech for the not-the-opening-ceremony, and this, I think, is the right thing to do. He needs to associate himself as much as possible with this, and if he can, bring in George Osborne to claim that, having masterminded Bradley Wiggins' victory in the Tour de France, he will now be taking the credit for any other successes.

Despite warnings from this blog, Team GB has not yet changed its title to Team UK.

Fixing the blame

British GDP dropped 0.7% in the last quarter, the radio waves are filled with breastbeating and ill-informed analysis, and Lord Oakeshott, a backbench LibDem peer, has called for the Chancellor George Osborne to be replaced by Vince Cable.

In my view, Osborne is far from perfect, but probably the best of a bad lot, except for those like William Hague who would be much the same. What we really need is for the media to stop allowing politicians to get away with recommending solutions which involve more government spending. On this, Labour's Shadow Chancellor Ed Balls is like a stuck record. And he's wrong.

Britain already has a bloated state, which has been built up on  borrowings which have reached the level of insanity. Even though we have record low interest rates, we spend just under £50bn a year in interest. Even after the 'savage cuts', 'too far, too fast' as Mr. Balls would say, we are spending, in real terms, the same as in 2007/8.

Osborne's plan was this: if he could be the first European Finance Minister to make cuts he would get a reputation for prudence and he wouldn't need to cut so much. In fact, he's hardly cut at all: current spending, even in real terms, is higher than in 2008/9 or any previous year. As for what cuts there have been, Osborne wanted to make them as painless as possible, keeping the LibDems on board; and so instead of cutting current expenditure, he cut public investment, which at £26.6bn is around half what it was when they came to office.

So the Osborne strategy was minimal cuts, making savings with lower investment, relying on growth in the economy to drag us along. I said at the time that I thought it a mistaken policy, because we needed desperately to reduce the size of the State: we needed to cut much, much further, not on welfare, which would be impossible, but on the myriad other claims on the taxpayer's purse. What was certainly not wrong with the plan was cutting too much.

It started well, with 800,000 new private sector jobs, vastly outnumbering the couple of hundred thousand lost in the public sector. What Osborne was not anticipating was Europe.

When we joined the EEC we traded with the whole world, a relic of our once having been the world's premier maritime nation. After 1973, the EEC (now the EU) pursued a policy of 'Fortress Europe', putting tariffs on imports from abroad. In particular, in going along with this, we hurt the Commonwealth, the old Empire. After a while our principal trading partner, for imports as well as exports, was Europe, as the Eurofanatics had intended. Now Europe is in trouble - I once described our policies as 'holding on to the coat tails of a man falling back on top of you'. The Commonwealth, by contrast, is doing well, growing at a much faster rate, and that is where we need to redirect our energies. I shall deal with rebalancing of the economy in a later post this month.

What Osborne could not have guessed, and nor did anybody else, myself included, was the incredible dithering of Merkel, Sarkozy and the rest. When it was obvious, two and a half years ago, that Greece needed to leave the euro, instead of kicking them out in order to save the rest, they put tiny bandages on a massive wound and the problem is still ticking over to this day. In addition Spain is now going under, Italy not far behind, and even Germany has been threatened with a downgrade by the ratings agencies.

Europe, our main trading partner because of the insane British Foreign Office policy since 1975, is going under, and dragging Britain down with it. The reason is, as I have mentioned before, that the euro is a political manoeuvre - it  never had any basis in economics - and they are loathe to look like idiots in abandoning it. And the Eurofanatics aren't just in Brussels: the Foreign Office, which I believe should be closed in the public interest, is crawling with them.

Osborne could not have known that it would come to a mass European suicide - I, an ultra sceptic didn't guess they wold be so stupid - and cannot be blamed for it. But the result is that our export markets are depressed just when they were supposed to be showing the growth that would pull us out of the mire.

Osborne must make stronger cuts, and use the money saved to reduce taxes on people and on businesses, and he must steer the British economy away from the sinking ship across the channel.

Let's carry on with the same captain, only more determined to hold his course. 

Europe

I am indebted to Fabrizio Goria for this...

Bread and Circuses

I know I have hardly mentioned it, and I want to assure readers that I am aware of a major sporting contest taking place in the UK. I don't want to seem like that judge who didn't know who the Beatles were (a popular beat combo, m'lud).

But I remember remarking at the outset that the bidding process was a good contest in which to come second and I harbour my resentment to this day. It's just that the organisers are saying there's nothing we can do to change matters, we've got the Olympics, so let's stop whingeing and make the best of it.

Which is fair enough. But I don't think critics should be silenced, so just for the record....

I resent the fact that this has turned into a commercialised kitsch-fest. Andrew Rawnsley in the Observer said said that 'It is like stepping into a dystopian future in which Britain is run by a military junta headed by Ronald MacDonald.' I expect only some of the stories are true, like inspectors banning bagels in the five-ring symbol, but there is without doubt an unnecessary degree of control over people's behaviour in the name of commercialisation. Life in Britain is cheap and crappy enough without this invasion of commercial gauleiters.

I resent, at the same time, that this is costing the British taxpayer upwards of £10 billion (some say £20 billion) despite the heavy handed use of sponsorship. If there's going to be plenty of sponsorship it should be costing us nothing. This absurd expenditure comes at a time when the Chancellor's, and the trade unions', view of savage cuts is shaving a few hundred thousand off welfare. I discount David Cameron's suggestion that when you factor in the gains from the Olympics we are making a profit as daft at best, dishonest at worst.

I resent the fact that this is making Britain 'a showcase to the world'. It is going to show up a lot more than we might wish. If the G4S security scandal showed us anything, it is that our civil servants are incapable of writing commercial contracts, because they are too sheltered from the grubby facts of life. Of course G4S shouldn't get their £57 million management fee when they have drastically underperformed, but they will get it unless it is written in the contract. Equally it seems obvious that to save money they held off on recruitment until the last minute and we didn't monitor them.

Another aspect which will be showcased is our trade unions, with border staff and tube drivers striking at the last minute, in the latter case even after we bribed them not to. It was known even seven years ago that there was a new breed of disruptive left-wing union leaders and that alone should have shouted that we weren't competent to run the games. Now anyone who was thinking of investing in Britain who has seen this 'showcase' will know what the place is like.

I resent the fact that no one has highlighted the constitutional element of having the army on the streets. This is something we have tried to avoid these 300-odd years.

I resent the fact that people have been forced to have missile batteries on top of their homes.

I resent the fact that some of the roads we have paid for will be taken from us and allotted to the IOC nomenklatura.

And I resent the corrupt, cosseted IOC themselves. In my view they should have been arrested as soon as they got off the plane.

Having said that, On With the Show!

Bearing up

The horrifying events in Colorado, where a young man opened fire in a cinema, have led to mumblings, but no more than mumblings, about gun control. This is, after all, an election year. Even so, I should have thought some brave journalist might have asked Messrs. Romney and Obama whether they had had cause to reconsider their views on the subject.

In Britain the key date was 1997, also an election year, where, after a massacre in  school in Dunblane, the then Conservative government and opposition Labour Party were tripping over themselves to show they cared. Anything of this sort is likely to result in a curtailment of civil liberties and so it proved. Relatives of the bereaved formed the rather tweely named Snowdrop campaign and persuaded Tony Blair to ban all pistols (they were by now known as 'handguns') as soon as he became Prime Minister. In a way Blair's statement 'I don't think people should be allowed to own handguns' said it all: in his rush to show he cared he forgot that our system of government is not that you can do something if the State permits it, but that you can do anything you like unless the State forbids it.

This difference is extremely important. It means that it is not for us to show why we want a gun, but for him to show why we shouldn't have one.

In the end gun crime went up in Britain, and the British Olympic shooting team had to practise in France.

It is in America that this difference is spelled out. There is a specific right to 'bear' arms (although no concomitant right to 'bear' cigarettes, another thing which can damage your health, or to 'bear' an open bottle of beer in your car, even though you are not drinking from it).

A Texan once told me that he insisted on having a firearm in case National Government invaded his state. I don't know, perhaps we are all mad.

But the American system would appear to allow a little chipping away at this 'bearing' arms business. They might think - and a bold candidate might announce it as policy - that a young man should not be allowed such sophisticated weaponry, or to buy arms and ammunition over the internet.

But I don't reckon they will.

Do it standing up

What the British Health Scare Industry is going to make of the news that a sedentary lifestyle kills as many people as smoking, I don't know.

Perhaps they will ban sitting down at work or in public spaces; make it illegal to drive while sitting down when you have a child passenger; put health warnings on seats 'Sitting kills'.

My own take on the matter is that smoking kills even fewer people than sitting. So perhaps we can have an apology for the persecution of smokers.

Syria

The admission by the Syrian Government that a suicide bomber has killed both the Defence Minister and his deputy, who is Assad's brother-in-law, gives pause for thought.

One's first thought is to wonder if this conflict, for so long kept out of Damascus, may now be reaching its endgame. For myself, I don't think so - it may serve to make Assad's regime, now desperate, more dangerous.

The second thought is to wonder how it happened. They have plenty of people to choose from to guard top level meetings, and it must have been difficult for this one to have got through the security checks, equally difficult for him to be turned.

The next ting is to wonder, as I have before in these pages, what sort of people the 'Free Syrian Army' (who have claimed responsibility) are. We know what type of organisation usually uses suicide bombers.

Lastly there are the statements from passers-by, who say they heard no explosion and saw no broken windows. Has Assad had a disagreement with the Defence Staff, executed them (as Saddam Hussein used to do) and tried to persuade the world that it is insane terrorists from extremist Islamic groups who are trying to overthrow the regime?

Maybe we shall never know, but it is further evidence that, unless we do, we should not involve ourselves in this conflict.

Sicily

There is talk that Sicily is likely to default on its debts, and that Prime Minister Monti has written to the Governor who, confusingly, is called Lombardo, asking him to resign. Well, that should pay it all off, eh Mario?

So what is this? If the debt had been guaranteed by the Italian State it would be included in the national debt figures (which are high enough as it is, at a smidgen under €2 trillion). No, these are debts incurred by Sicily on its own. People, companies, have lent money to Sicily, expecting to get it back. How much is it? I bet we don't know to within 50%.

One forex magazine simply said 'Who collects a Sicilian debt?'

Good grief!

In, I think, the first time they have played together the two music giants Bruce Springsteen and Paul McCartney had the electricity turned off as they were playing in Hyde Park, London, because they had gone over the allotted time. One of the musicians said that if they had finished they would still have been off stage by 11pm.

It is incredible that we have still got these people, whose more-than-my-job's-worth attitude seems to have ruined a memorable occasion. Here, I think, is a good direction to point the expenditure cutbacks.

Oddly enough it is not the first time it has happened to McCartney, whose Beatles concert from the studio roof in 1969 was also stopped by police.

Le Quatorze juillet

Bastille Day today, and this blog's good wishes to our French friends, Les Grenouilles.

New President François Hollande will be leading the celebrations. At his inauguration the Heavens opened and the poor chap was soaked to the skin. Let's hope he fares better today, though showers are forecast in Paris.

Friday 13th

Friday 13th July, 1934  Hitler announces the completion of and his responsibility for the purge known as the Night of the Long Knives

Friday 13th July, 1962  British Prime Minister Harold MacMillan sacks seven members of his cabinet, in a move known as the Night of the Long Knives.

Friday 13th July, 2012  British Prime Minister David Cameron, in a move known as the Night of the Long Knives....nah, he hasn't the courage.

The Stones

50 today



When I was a kid, you were either Stones or Beatles. For me it was only Mick and Keef and the boys.

I hear they're rehearsing again....

Inglorious Twelfth

It's an old joke and I've probably told it before in these pages

Captain: We are about to land at Belfast Airport. For those of you adjusting your watches, put them back 300 years.

Today is 12th July, when Protestants in N.Ireland celebrate the Battle of the Boyne, a skirmish between a Dutch King of England and an Anglo-Scottish former King of England 322 years ago.

The modus operandi is for the Protestants to march past Catholic areas, taunting them, until the Catholics rush out and they all have a fight.

This year the Protestants say they have a secret plan to avoid casualties, but I can give them a better one: don't do it. Stay at home and behave like modern people.

Italy: and now...

The Financial Times reports that investors are already asking themselves what is likely to happen after Monti, who has said he will not stand in 2013.

And well they should: the PdL, the largest party, has been doing polling as to which leader would get them most votes. And it's not the current leader, Mr. Alfano......

Bonjour, mon petit

François Hollande has been in London on an official visit. Turns out the French have come up with another shorty. Although his election publicity puts him at 5cm taller than his predecessor (presumably without Sarko wearing his heels), he appears a little altitude-challenged.

There is a healthy rivalry between the two countries at these events, and as well as having a bodyguard of the Coldstream Guards, a regiment which fought at Waterloo and later occupied Paris, he was conducted conducted by the superb figure of Major James Coleby, against whom he looked like one of those children that footballers bring on to the pitch at the start of a match.

The French Press are claiming he was tricked and that Sarko would have avoided the encounter.

The House of Lords

As I write, the House of Commons is debating for the second day a bill to reform the House of Lords. There will be a vote tonight.

When I was born, there was only one sort of 'Lord'. A few families had the right to send their eldest member to parliament and when he died his son got the job / privilege. Then Life Peers were introduced (known to the hereditaries as 'day boys') and there was some sort of balance. Then Tony Blair, in a bid to 'reform' the second chamber, got rid of all but around 90 hereditaries, but replaced them, not with a new system, but with his own placemen.

With the system of hereditary peers, if you closed your eyes and crossed your fingers, you could almost see some sense in it. It never claimed to be democratic, you got what you were given, almost as if the Upper House had been chosen by God. Some were hard working and clever, others were stupid or feckless or both. A brilliant soldier could father a worthless fool, an idle good-for-nothing could father a brilliant lawyer.

It was indefensible after about 1850, but in some respects it worked.

The system introduced by Blair was the worst of all options. Whoever commanded the House of Commons could stuff the Lords with his cronies (Blair did).

So the thing needs changing.

I have no objection to an Upper House 80% elected and 20% appointed: the appointed ones could help the machinery of government work, introduce some specific talent like the Church or the Military and stop the thing being too political. And let me say I don't believe it would create some constitutional anomaly if both houses were elected: that they would both have the right to claim electoral legitimacy. Most other countries have two elected houses and they each know what they are there for.

But a word needs to be said about how they would be elected.

The proposed system, of 'party list' is the worst of all Proportional Representation versions. What happens is that you would vote for your party and the party would decide who was first on their list, second, etc. There would be no connection between the electorate and the person who got the position. We can't have this, particularly since the people have recently voted in a referendum against using some new system for elections. It means the political class would have an even greater grip over our country (you don't imagine anybody who spoke his mind would get the job, do you?), at a time when they are already too strong. Strangely enough, most of the media, in particular the BBC, accept PR as naturally fair, as if there could be no argument against it.

The peers need to be non-proportional (see the electoral legitimacy point above). I would suggest two per old county, so the Isle of Wight would get as many as Middlesex, and their job would be to speak up for their region. This is what happens in the USA and there is no reason why it wouldn't work for us. There would be a straight ballot and the two candidates with the most votes would be elected. This would keep the Upper House at under 150 which would be good.

This new bill is rushed and, with its PR element, the creature of the Liberal Democrats, who I had thought were supposed to be junior partners in the coalition. Mr Cameron has given into them for short term political advantage, playing with our constitution for his own narrow political gain. He should be ashamed of himself.

The people of Britain deserve a properly thought out amendment to their constitution and when we have got one, they deserve to vote on it.

The right result

The crowd ooh-ed and aah-ed, his pretty girlfriend cried and it looked as if the Duchess of Cambridge might too. Andy Murray, the first British men's singles finalist since anyone can remember, seemed to me to lose rather well.

And that is what we Brits like, isn't it? I was left wondering what we would have done if he'd won: applauded his Swiss opponent to the roof, suggested that maybe Federer deserved better and that our guy, whilst skilful, was a bit lucky? Let's face it we like a plucky loser and the audience seems to have taken the rather unloveable Mr Murray to its heart.

My favourite Murrayism:

Commentator: how difficult will it be for your parents watching you?

Murray: I'm not bothered, really. It's worse for me.

Gotta love him.

The Brits

As I write, England beat Australia at one-day cricket, a Brit was one of the winning men's doubles at Wimbledon, where a Brit will contest the men's singles final this afternoon, and a Brit, Bradley Wiggins wears the maillot jaune in the Tour de France. 

It probably augurs badly for the Olympics.

Eurozone: where we are now

Well, there's to be another summit, giving hope to the millions of people who...er...are interested. And Our Dear Leaders, conscious that the people want something new, are, this time, not having lunch. But dinner. I'm sure my readers will join me in hoping they get nice things to eat and drink. It will be in Brussels where both the chips and the chocolate are excellent.

Let's see what has been going on since the last success.

At the summit at the end of June, as we all know, there was a coup against Chancellor Merkel, orchestrated by Mr. Monti of Italy, which made the heir to Bismarck cave in on whether Spain's banks could borrow money rather than Europe giving lending it to the Spanish Government which would lend it on to the banks. Woo-hoo! Also the ECB would be able to invest, if that's the right term, in Spanish and Italian bonds.

Now we learn from an EU official that in fact the Spanish Government would have to guarantee these loans. What the official thought this guarantee was worth he didn't say.

In the meantime we hear from Finland that it has not agreed that the rescue funds should intervene on secondary markets, as Mr Monti said, and that it would not stay in the euro if it meant bailing out other countries (a bit late for that, I should have thought). Holland seems to agree, while Germany still hasn't even finalised the existence of the rescue fund.

Further south, you will remember that Greece elected a new government which was in favour of the bailouts in principle but would aim for gentle renegotiation. After the first meeting with  the Troika, the ECB, IMF and EU, the finance minister said they couldn't go for renegotiation since they hadn't fulfilled their previous promises (in fact they have hardly done anything towards fulfilling them). As I warned before, there is now likely to be widespread civil unrest, as Syriza-organised protest loses its patience with what can only be described as a bunch of liars.

Then Southern Cyprus, which has run out of cash. It is one of the three presidents of Europe, for the second half of this year, so at least there will be one vote in favour of bailing the blighters out. Christofias, the Prime Minister, has said they should receive generous treatment because all they did wrong was invest in Greek government bonds which were..er..worthless.

The markets were cock-a-hoop when they pulled off the last massive success, then enthusiasm declined and now Italy is paying more than 6% for its money and Spain is paying more than 7%.

I wonder what unanimous success story they can achieve on Monday night?

LIBOR (2)

Show me a judicial enquiry, or for that matter a Royal Commission, and I will show you a weak politician or a corrupt one. Jim Callaghan was the master of this, having hordes of lawyers and civil servants scribbling away on any issue he found difficult, confident in the knowledge that, by the time they reported, the issues would be forgotten by the public and Sunny Jim would be safe in the House of Lords.

In this case it was the Opposition which wanted a Judicial Enquiry, hoping by the time of the next election they would have got over the stigma in the public's mind of having brought the economy to its knees. The Government is right not to let this happen and, of course, is enjoying itself enormously.

Let's just deal with where the bankers come into this. I joined the City of London in the mid '70s and found the people simply normal. I never heard any of this 'my word is my bond' stuff: it was intended for stockjobbers, a now defunct breed, to the effect that if they agreed to sell you shares at 10p, they wouldn't subsequently sell them to someone else for 11p. It wasn't a morality statement, just a contract term. Closer to the City's working methods was a friend in an American bank, who said his employers' unofficial motto was 'If you can't kick a man when he's down, when the hell can you kick him?'

Normal people. If you leave a £50 note outside it will eventually disappear into someone's pocket. Normal. Unless, that is, it is watched night and day. That is what we call regulation.

When Gordon Brown became Chancellor he wanted to emaciate the Bank of England, which he didn't like, and set up a new tripartite system of regulation, involving the Bank, the Treasury and the new Financial Services Authority. It has been an unmitigated disaster. Nobody knew what anybody else was doing. In the case of the FSA, which also had to regulate the insurance policy on your fridge, it was either out of its depth or asleep on the job. Probably both.

So to those who want an enquiry into bankers' behaviour let me say this: The City employs some very intelligent and aggressive people. The reason they are always trying to make as much money for their banks as possible is that that is what they are paid to do, and the more they make for their employers the more they earn. There, glad I could help with that.

A couple of extra points. The way to stop people losing confidence in LIBOR is to base it on real trades: the quoting banks submit their last five trades and an average is picked, ignoring any obvious anomalies.

Secondly, is there much difference between fiddling the LIBOR quote downwards and Quantitative Easing, where interest rates are fiddled down by the government by printing more money and buying government debt?

Greeks bearing CVs

Having said just a week or so ago that he will 'roll out the red carpet' for French tax exiles, Mr. Cameron now 'vows' (did this take place in a church?) to protect Britain from Greeks fleeing their country's economic collapse.

Doubtless he hasn't a racist bone in his body (in fact I sometimes wonder if he has any bones in his body), and I shan't make my own preferences clear, but if this is the way he is thinking he should tell us which nationalities he likes and which he doesn't like, perhaps setting out his reasons.

Life and Liberty

It's the 4th July.

'We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness.'

And while we are on the subject of Liberty, here's another quote 'I will close Guantànamo Bay' - B.Obama

There remain 120 people in Guantànamo who have had their liberty taken away without being charged with, much less convicted of, any offence.

Alice

Two anniversaries today. As for the more recent, it is 150 years ago that Charles Dodgson, a mathematics don at Oxford, together with a friend, took the three daughters of Dean Liddel for a boating trip (they'd probably be asked to sign the sex offenders register today). Over tea on the riverbank Dodgson invented and told a magical story which he undertook to write out for Alice, one of the girls, and published using his nom de plume Lewis Carroll.

And thus was born the European Union Alice's Adventures in Wonderland.

Cameron and the referendum

In Britain, David Cameron has been making a complete idiot of himself over the possibility of a vote on the EU. He was in favour, then he was against, now he seems to be back in favour. His own party are fed up, the opposition are calling it a 'shambles' (fair enough) and the people must be wondering what they've got which passes for a government. Cameron dithers until the moment when leadership is required, then vacillates.

My own position is clear. I came to the conclusion in 1991 - more than 20 yeas ago - that Britian would be better off both financially and democratically if it left the EU. Therefore what I want is for the government to stand up and say 'enough is enough. It is time for us to leave.' In view of the fact that there was a referendum in 1975, albeit over a different body, there may be a need for one now, for symmetry. But belief is required to make such a decision, and our Prime Minister has no beliefs at all.

But I am not on the side of the in/outers. A referendum is not a viable policy in itself. My side might lose it, if the Eurofanatics, amongst whiom we must include Cameron, persuade the public it is too risky to leave, and a small adjustment to the Fisheries Policy will be enough.

And Cameron doesn't want an in/out referendum any more than I do. What he wants is to renegotiate what we can and then put it to the people. I don't much object to this, except we are relying on Cameron to negotiate toughly (ha!) and not just say that some trivial change was the best he could do. His backbenchers must hold his feet to the fire, and produce a comprehensive shopping list of what he ought to achieve.

But the thing now is timing. Cameron will try to say that there is no need to do anything immediately, because a new Europe is emerging and we should wait and see how it turns out. He mustn't be allowed to get away with this: it is more vacillation. It may be that something new happens in Europe before the next British General Election, but it is unlikely to be anything in our interest: Merkel and Hollande and that funny little Belgian bloke aren't likely to say the future is a loose association of nation states based on free trade, are they? It will either be more Europe or, equally likely, more dithering and the same thing. We don't need to wait for that.

If they are to move towards more Europe they will need a new treaty (they may in any case need one for the latest accord to bail out Spanish banks) and as soon as this is mooted Cameron must be in there with his shopping list while he still has the threat of a veto. That is how to negotiate.

But I do wish it was anyone other than Cameron in charge of this.

Recovery

Those who are concerned that a country leaving the eurozone would face massive devaluation and subsequent implosion should remember Thailand.

The Asian financial crisis began 15 years ago today, and the Thai Baht rapidly lost half its value. Thailand started to grow again within a year and despite world slowdowns has grown at around 5% since then, doubling the size of its economy since the crash. It is predicted to grow at 5.5% this year and 7.5% next.

It can be done.

The Revoluciòn is back!

Congratulations to Enrique Pena Nieto, who appears to have won the Mexican Presidential Election, but without a strong popular mandate..

His party, which glorifies in the oxymoronic name 'the institutional party of revolution' (PRI) just about sums up the Mexican electorate: it's got to be racy (Revoluciòn!) but you never know with change (Institutional). The PRI ruled Mexico without interruption from 1929-2000 (institutional indeed) when they were voted out on charges of corruption.

Unfortunately the sorry lot which replaced them weren't much better and so institutional revolution is back with a..er..whimper.