EU: more Mandelson

In case you haven't seen it, the News of the World has a story to the effect that Mandy is being investigated for overly close links to a lobbying firm, BusinessEurope, the accusation being that they 'helped' him write laws.

As said before, he's nothing but trouble.

Italy: the PD

I don't often attend demonstrations but by chance found myself at the Partito Democratico rally in Rome yesterday. The organisers said 2.5 million people were there, which is wide of the mark and must have included those watching on television at home. The police said 200,000. It was about the size of the countryside march in London several years ago, perhaps a bit smaller.

It was, as Italian demonstrations usually are, colourful, noisy and good humoured. There were certainly all types of people. The youngest walking (there were several children carried) can't have been more than 8, the oldest can't have been less than 80. There were punks, students, the odd priest, academics, everything. And this in a sense is the PD's problem.

Formed of the old communists, democrats of the left and a rag bag of tiny parties, it was supposed to be a broad platform for the left-inclined voter. Instead it had been riven with discord, and recently suffered the departure of the Italy of Values Party led by the former anti-mafia judge Antonio do Pietro.

In the meantime Berlusconi, whom many thought to be an open goal, is way ahead in the opinion polls, having kept to his two seemingly unkeepable promises to clean up Naples within a matter of weeks, and provide an Italian solution to Alitalia. Both are open to criticism, as is much else, but it doesn't seem that way to the people.

The left needs to re-form, under a more charismatic leader than Veltroni, and it needs to learn discipline. At the moment the Italians want fewer dreamers and more people who can get things done.

EU: The Mandelson problem

The EU have a US Senate-style system of controlling who becomes a commissioner. I remember the parliament refusing some nice old Italian cove who admitted that he went to Church and supported the Church's teachings (not sufficiently pro-abortion, you see). They had ample chance to refuse Mr Mandelson, and anyone from Britain could have told them that they would be saving themselves a whole heap of trouble.

Why didn't they? Because Mandelson, like them, is a senior member of the political class. You don't refuse one of your own, no no. But they should have done.

Now that the UK press' spotlight had finally turned towards the real possible scandal, and away from Mr Osborne, the mess is becoming clearer. Mandelson, who led the public to believe that he hadn't met Mr Deripaska until recently and then not often, now admits that he had dinner with him in Moscow in 2004, after the announcement of his appointment as Trade Commissioner but before he even took up his duties. It would have been one of the first things he did.

Unsurprisingly several journalists have applied to be given details of his meetings, the request being made under the Transparency Rule, 1049. Here is the Commission's response:

"The concept of document to which regulation 1049 applies must be distinguished from that of information. The public's right of access covers only documents and not information in the wider meaning. Only information contained in existing documents has to be treated under the regulation."

Straight out of George Orwell, that first sentence. And note 'The public's right of access...' as if the public were something separate and alien to the real world of Euro-bureaucracy. Which, I suppose, it is.

I don't hold out much hope for reform, but if this sorry episode serves to inform the public just what a mad, undemocratic world we have permitted our politicians to create, it would be something.

EU: Austrian secrecy

They used to say that the genius of Austria was in persuading the world that Mozart was Austrian* and Hitler wasn't.

Now I think it's a talent for keeping things covered up. If someone had told me the ghastly story of Mr Fritzl and asked me to guess which country it had taken place in, I should immediately have said Austria. It is a country whose former president, Kurt Waldheim, managed to conceal his wartime membership of the SS.

Now we learn that the extreme right politician Joerg Haider, who campaigned for family values, had a homosexual lover.

*Salzburg didn't become part of Austria until the early 19th century

EU: King Sarko?

Talking of Sarkozy, the Belgian paper De Standaard reports that a plot is brewing between him and the Commission President, the former Maoist Jose Barroso, to make Sarkozy the permanent president.

The reason is that on 31st December Sarko has to hand over the presidency to the Czechs, who are pleasingly eurosceptic. There will be a lot of talk about special measures for these difficult times, and bribery of the Czechs, all of which I hope will be rejected out of hand.

EU: Climate Change Row

There’s a bit of a row breaking out in Europe over the climate change proposals. The ’20-20-20’ Proposals require by 2020 a reduction in greenhouse gases by 20% below 1990 levels through a 20% increase in the use of renewable energy and a 20% boost in energy efficiency.

Nine or ten countries, led by Italy, say that given the recession they can’t afford it. Sarkozy, who wants his name over as many world saving initiatives as possible during his six month presidency, says he will push it through by majority voting.

As with anything else in Europe and to do with the environment, the cost is unclear. The EU says €9.5 billion whilst Stefania Prestigiacomo, Italy’s Environment Minister, says it could be as high as €20 billion, and the costs to individual countries should be spread more fairly. France for example generates most of its electricity by nuclear with no greenhouse gas emissions whilst other countries use coal or gas.

Expect some sort of compromise which won’t please anybody except the awful Sarkozy.

UK: The Russian Yacht

Several stories emerge from the party in Corfu aboard the yacht of Mr Deripaska. An interesting, if minor one, is why we immediately assume that Russian billionaires are crooked. If the protagonists had been meeting with a Norwegian (but not Icelandic) billionaire I suspect the perception would have been a good deal less spicy.

A story which will emerge is of the talent of Peter Mandelson, worth his weight in billionaires to his party for his genius, I think there is no better word, at spin.

The main story was (it isn't now) that Mandelson had a close connection with Mr Deripaska and that in his job as EU Commissioner for trade, negotiating aluminium tariffs (Mr Deripaska is one of the world's largest aluminium producers) for example, it showed 'lack of judgment'.

Mandelson, upset that a private conversation he had with Osborne (to the effect that Gordon Brown was a disaster) should have been repeated, and needing to turn the spotlight away from himself, got a joint friend, Nat Rothschild, to spill the beans on Osborne talking about Deripaska donating money to the Tory Party: the suggestion being that it showed, yes, 'lack of judgment'.

What interests me is the relative weight given by the media to these two stories. It is of course grubby to see senior British figures gathering with the super wealthy like flies round a honeypot, but I should have thought the Mandelson story, alleging as it does that he may have been tinkering with international trade tariffs as a result of a friendship, was far worse. But the media have pursued the George Osborne story to the full, Nick Robinson of the BBC admitting that they were not really covering the Mandelson part. Osborne 'fighting for his political life' says the Telegraph, of all papers.

I think this is partly to do with the BBC, traditionally, and the Telegraph, lately, being anti-Tory. But in part it reverts to the genius of Mandelson: they are scared of him.

What is perhaps most terrifying is that all this happened at all. Why were two political opponents, Osborne and Mandelson, having a cosy little chat in Corfu anyway? It seems almost as if they were conspiring. Like in the Rheinmann Exchange, Robert Ludlum's story of the Germans and Americans doing a deal to prolong WWII, it smacks of the political class cosseting itself rather than working for its supporters or its ideals. And for my taste it doesn't smell too good.

EU: getting the money back?

With all these billions flowing about for the bank rescue, saving the £14billion we give to the EU each year must be seeming more and more attractive, hmmm?

Cricket: the little master

Congratulations to Sachin Tendulkar, who has surpassed Brian Lara's record for the most runs scored in Test matches, at just under 12,000.

Only 5ft 5in tall. he is known as the Little Master.

Crisis: do we want nationalisation?

Tim Congdon has a good piece in the Times, to the effect that the Bank of England's job is lender of last resort and it as no business taking equity stakes in banks.

The trouble is, the people, and the bureaucrats, rather like nationalisation. They like the idea of the government banning the bonuses of the traders, of sacking the management, of making the banks serve the people. Derek Simpson, joint general secretary of the Unite Union, said after the rescue plan was announed: "The measures announced today must be bound to undertakings by the banks of no job losses, no repossessions and an end to the bonus culture." So the government will be actively managing the banks, with social rather than profit goals?

And the people liked the line that was spun that the government would make a profit out of owning the banks' shares. Don't hold your breath, if Mr Simpson has anything to do with it.

As a libertarian I am against the government nationalising banks in this way. Its role is to keep the markets open by supplying enough liquidity. As to making a profit, just suppose they did what conservatives and libertarians want and gave the money to the people: how many of us would have invested in bank shares? Damn few, as the Scots say. And that is because we don't think they are a very good investment. So lets have no more pretence on that score.

Incidentally Darling's first idea was that the government would take special preference shares. No mention of how they were to be sold for the prospective profit (if the government were the only owner of preference shares there would be no market to sell them into, they would have to wait for them to be redeemed by the bank, at par and without profit). Then it transpired that the banks' statutes prevented such a thing anyway.

This aspect of the rescue will be a fiasco, I am thinking. Cameron should promise to get the government out of the banking sector as soon as may be possible.

Italy: cheese welfare programme

Agriculture Minister Luca Zaia has announced that the government will buy 100,000 parmesan cheeses and the same number of grana padano (a slightly inferior product from down the road) to give to poor people.

State intervention to help the industry would of course be illegal, but this is welfare.

Great to see the financial crisis being taken seriously

Italy: Berlusconi's slapstick genius

If you haven't seen the BBC's brilliant clip of Berlusconi in action in America, this should work:

http://news.bbc.co.uk/2/hi/americas/7668911.stm

UK: Brown planning departure?

So, the way it would work would be like this: Brown realises that he can't win the next general election (he knows what's in store for the country in 2009 and it isn't good). But he doesn't want to be one of the shortest lived PMs on record, without ever having the voters' mandate, so he concocts the idea of being ill.

Now that Hank Paulson has adjusted his intervention scheme to include taking equity stakes in banks, what Brown calls the Brown Plan (and Europeans call the Sarkozy Plan and economists call the Swedish Plan) has been adopted universally. The banks stabilise, interbank lending rates go down towards Bank Rate and Brown claims he has saved the world. He regretfully retires due to failing eyesight and leaves the stage to write his memoirs (everyone to blame except Gordon).

Mandelson oversees the coronation of the new Blairite champion. The Tories say Brown may have helped fix the banks but the real economy is up the spout and only they can save it. The election is closer than it might have been with Brown there, but the Tories win with a 30 seat majority.

If all this turns out to be nonsense I shall deny it was a forecast. If it proves correct, however....

UK: Brown can't see?

An extraordinary article in the Telegraph today, to the effect that Gordon Brown's eyesight is failing him. What is extraordinary is that the information seems to come from Team Brown: Damian McBride, Brown's chief spin doctor until the reshuffle reports 'His sight isn't very good.'; another official said: "If I want him to reply to an email, I always make sure it's in at least 36 point." That is five times as large as standard print size.

Normally one would expect such revelations to be the prelude to a resignation, but all the signs are that the financial crisis is doing Brown's poll ratings a lot of good and people say he is enjoying himself for the first time since becoming PM. A PM's resignation, even if it is Brown, would not go down well with the markets at this time.

We shall see.

Crisis: Suspend the markets?

It is reported that the White House has rejected suggestions by Silvio Berlusconi that the markets should be suspended for a day or two around a holiday in order to let them breathe.

Berlusconi is not a fool and this is a suggestion which has some merit. It has occasionally been the case that action by central banks has jarred the market into imagining things are even worse than they thought and so has a negative impact. At a time when the authorities are taking action I would certainly advocate closing the markets say Friday and Monday. It would not deprive traders of some God-given right to deal: there has been plenty of news about the crisis and plenty of occasions to sell. These are difficult times and a calming measure would be the right thing.

Italy: safe as palazzi

Meanwhile in Italy the finance ministry was delighted to learn that the Italian Banks had yet to get their heads around these new Special Investment Vehicles, Collateralised Debt Obligations and so on, or, more likely were still filling in the paperwork in order to buy some, and so were largely unscathed. Only one bank, Unicredit, has had a bit of a run on it and Berlusconi has said that that was because it had invested in a German bank.

Delicious.

Crisis: The new cod war?

There is plenty about the current credit crisis which people will find difficult to understand but perhaps the strangest is the existence of Iceland in it.

Iceland has a population around the size of Leicester and is known internationally for a very small number of things: the cod wars of the mid 1970s, the world chess championship being held in Reykjavik, oh, and a couple of bold, Australian style entrepreneurs who liked to invest in Britain.

We now learn that upwards of £800 million of British cash has been invested in Icelandic banks and Iceland is refusing to promise its safe return. But why is there all this British money in Icelandic Banks? It emerges that Kent County council has £50m invested; Transport for London has £40m. Why Iceland? Why not in the banks of Norway or Finland, larger economies, or if the temperature of the parent country is not important, South Africa or Singapore? Or Britain?

The answer can only be that the Icelandic banks were offering a better deal. It was that extra one eighth of a percent that they went for. And why were Icelandic banks offering more? To prop up their ailing companies.

One can't help feeling that it serves the investors right. Why should the government get involved?

A verbless London

The famous triangular revolving sign outside Scotland Yard, London’s police headquarters, suddenly changed a few years back. On it was written ‘Working together for a safer London’. The change was a key to understanding Sir Ian Blair, and why he had to go.

Anyone who was involved in politics during the (Tony) Blair years will remember the verbless sentences: ‘building a fairer society’, ‘working for the people’s prosperity’, that sort of tosh. Sometimes Tony could string six or seven of them together in a speech, scores of words without a verb in sight. Just to use such a construction meant that you were ‘on message’, and Sir Ian Blair was.

Tony Blair was adept at getting his people into important and supposedly non-political jobs, such as Andrew Marr as political editor of the BBC (Marr is still used now to give the Prime Minister an easy ride if things are looking difficult). Sir Ian Blair’s pronouncements were either crafted for him by the Labour spin doctors or his every action and word was, by extraordinary coincidence, straight off the New Labour hymn sheet.

He couldn’t possibly remain even if it were not for the Menezes shooting and this little difficulty of the £15,000.

Boris had to show he could win this battle and has done very well indeed: there were entrenched positions (the Home Office and the BBC) defending their man. Perhaps there is more to London’s mayor than I, and many others, thought. His next task should be to take the sign down.

What's in a name?

Six candidates in Brazil's local elections have renamed themselves Barack Obama. It's an odd name, pronounced the way the Americans pronounce 'baroque' which for me gives a bizarre, late-Renaissance flavour to the thing. Actually it comes from the Hebrew 'Baruch', meaning blessed. The only other famous person I can think of with this name is the 17th century rationalist philosopher Baruch de Spinoza, the enemy of Descartes. Perhaps Mr Obama was named after him.

Mind you, 200 candidates have renamed themselves after the president Lula de Silva, and lula means 'squid'.

The value of politicians

I am always hesitant about criticising the political systems of other democracies but an interesting difference between ours and the American one has come to light. In England the Chancellor of the Exchequer is a politician, someone elected who has climbed the greasy pole, as Disraeli put it. The first thing he would do on producing a rescue plan would be to check that it was going to be acceptable to the voters' representatives, to save himself from the ignominy of defeat. Hank Paulson, by contrast is used to issuing commands and having them obeyed, and voters never like that.

There is the danger of another difference: that in America at least the voters' representatives are being consulted. In my view it would not have been inappropriate to recall parliament early to discuss the crisis and vote on the plan (if there is one).