LIBOR

An acronym much in the news today, including some hysterical submissions from the ignorant end of the press and from the leader of the Labour Party.

It is about an answer to the question 'what is the interest rate?'. Many years ago when I started work in the City, the latest thing was syndicated loans, where as many as a hundred banks would group together to make a a huge loan sufficient for a major infrastructure project. Naturally one loan required one interest rate, so two or three would be nominated to give their cost of funds at a certain time of the morning, usually 11am after the initial frenzy had calmed down, and an average would be taken. That was the London Interbank Offered Rate, LIBOR.

These days LIBOR applies to literally hundreds of trillions of dollars worth of debt instruments and so has become institutionalised, under the aegis of the British Bankers Association and Reuters.

It now seems some banks have been guilty of feeding in a rate to suit their own book.

Now, I have a mortgage linked to LIBOR, most of our mortgages are, directly or indirectly. So I might have been worried when Ed Milliband said that the British Public had a grievance. But a close inspection appears to show that the rogue banks quoted low, so as to keep their own funding costs down. So I shan't be suing, thanks Ed, claiming I've been paying too little. The people who lent me the money might have a beef. But they're another bank.

This is, however serious: now this function will have to be overseen (by the Bank of England, for preference).

This has been crooked and dishonest, but no more than that. I think the heads of any banks indicted for this will have to consider their positions. But it's not the end of the world. Move along.

Egypt best of a bad job

Many people will be depressed about the result of the presidential elections in Egypt, some angry. That at least seems to be the feeling in the West, although I think it is mistaken.

For many, again particularly in the West, the Arab spring was a secular affair. In those days of the crowds in Tahrir Square it was easy to dream of a Western style democracy, with rights for everyone, but in truth whilst it may have started this way it was only because the Muslim Brotherhood was late on parade.

In the end the contest turned out to be between Ahmed Shafiq, a former Mubarak henchman whom nobody quite trusted and Muhammad Mursi, the Muslim Brotherhood candidate. Mursi won, but omewhere in the political mix lies the spectre of the military.

Mubarak was of course a military officer and he exerted his power through them. And the military have been reticent about giving up power, a surprise to some people but not to everyone. They want to be entrenched in the constitution, in the way the Turkish Army is. But Egypt hasn't yet got a constitution. The similarity is that like the Turks, the Egyptian army sees itself as a bulwark against Islam.

So if Egypt had voted fr the Mubarak henchman Ahmed Shafiq they would have got more army control. With Mursi there will be tensions, of course, particularly as he fights for authority in the constitution to come, but one side might well balance the other.

An Islamic government is probably bad news for women and quite possibly for minorities such as the Copts, but people may come to view it as the best of a bad job.

Keeping up with the times

Her Majesty the Queen, described by one paper as 'in touch with the times, as ever' has updated the royal precedence.

This means that The Countess of Wessex (née Sophie Rhys-Jones) has to curtsey to the Duchess of Cambridge (née Kate Middleton), even at home(!), whereas la Cambridge-Middleton (if these two women are married to princes why aren't they princesses?) has to curtsey to Princesses Beatrice and Eugenie and Princess Alexandra (no idea who she is), except when her husband is with her, in which case she can presumably show her respect with a two fingered salute.

It seems a wife takes on the splendour of her husband if he is there but not if he isn't. But what happens if he is officially there but is late, or has to go to the lavatory? Does A curtsey to B and then as William returns, zipping himself up, B frantically curtseys to both of them?

This kind of feudal chivalric nonsense harks back to the 13th century and really has no place in our modern life. I don't suppose anyone minds curtseying to the Queen but let's leave it at that.

HELLO? It's out of date crap...... No, no reply.

The death wish

Greek Prime Minister Samaras is recovering from eye surgery, whilst the new finance minister collapsed before he was even sworn in. The Troika of IMF, EU and ECB have delayed sending a gauleiter beancounter / Bohnenzaehler.

I think this is a good move by Greece. Given they need more money and have hardly applied any of the required supply side reforms, I would advocate an outbreak of bubonic plague.

PS According to the Italian Sole 24 Ore paper, whilst the Greeks claim to have reduced the civil service by 94,000 in the last 2 years, 70,000 of them, kicked out of the door, have climbed back in the window, so headcount has reduced by only 24.000. I'd stay in hospital, Mr. Samaras.

The housemaid's baby

Where the European Project, the whole damn thing from the Coal and Steel Community to the euro, comes a cropper is with democracy. You may remember the absurdly self-important José Manuel Barroso saying he didn't want any lessons in democracy. He said that Europe consisted of 27 democracies, but he didn't say that Europe was itself a democracy: the assembled journalists would have been rolling in the aisles clutching their sides.

Now Greece, for some the birthplace of democracy, has elected a government, supposedly from parties in favour of the bailout (in fact largely from the ones which agreed it) and they, trying to be as inclusive as possible, have said they want just a little renegotiation of the bailout, not a complete one. A housemaid's baby of a renegotiation. An extra two years.

Now in my view Merkel might have agreed to this, sent down a few beancounters (the word Bohnenzaehler really does need to be invented for this particularly Euro-use) and imposed a few more minor conditions. But she has come up against the great European bugbear. What, the Germans are now asking, if a future Greek government didn't want to agree to the terms? What if the Greeks, those pernicious long-standing democrats, voted for someone the Germans didn't like?

And it seems quite possible. The Greek system says that the party which gets most votes gets first shout at forming a government. So what has happened is that whilst the majority voted for parties against the bailout, Samaras has nobbled the mildest of these and got it to agree to the housemaid's baby. But Tzipras and Syriza will not be silent in the days to come and it is not impossible that it could force Samaras' government out of office. By the way when I say they were against the bailout, they weren't against receiving the money, oh no, it was the conditions attaching to it which they opposed.

So is Merkel prepared to take the risk? Expect another fudge.

Syria and Turkey

Interestingly the BBC led with 'Syria shoots down a Turkish plane' whereas several others had 'Syuria admits to shooting down a Turkish plane'. Perhaps a fine point of expectation or legality but this could be important here.

If the Turkish fighter was indeed inside Syrian airspace then the Turks will be red faced, firstly for making such a cock-up and secondly because the plane seems to have been shot down rather easily.

If, however, the Turkish plane had not crossed into Syrian airspace, then since Turkey is a member of NATO, whose charter says that an attack on one is an attack on all, there had better be some nifty diplomatic footwork.

One sometimes feels guilty about not getting involved but really the last thing we need is an escalation of this conflict.

Solstice

The summer solstice is today, the longest day of the year (in non-leap years it is the 21st).

For many it is the first day of summer. Where I am, the temperature is forecast to reach 35 - 37C (95-100F) so we are hoping summer isn't a lot hotter than this.

The very name summer solstice makes you want to howl at the moon or commit some pagan act, but I expect I shall have an early night.

Dumpty speaks, too

The other unelected president, Dumpty, is better known as Rumpy or Herman Achille van Rompuy (No.3 President is the elected leader of a member state, which from 1st July will be Christofias of plucky little bankrupt Southern Cyprus) . I don't quite know why, but Rumpy Dumpty also got to the lunch G-20 meetings in Mexico. His statement was almost as remarkable as Humpty's:

'Greek voters have made a clear choice about staying in the euro currency, following weeks of uncertainty in the financial markets'

In fact the Greek voters were voting for a ruling party, not whether to stay in the euro, but to this extent they have indeed made a 'clear choice': most of them voted for parties opposed to the bailout.

Humpty speaks

José Manuel Barroso, one of three presidents of Europe, is lunching attending the G-20 summit in Mexico. Asked by a reporter 'Why should North Americans risk their assets to help Europe?' he replied 'Frankly we are not here to receive lessons in terms of democracy or in terms of how to handle the economy.'

Many people, in particular those living in Spain or Greece, will have an opinion on how brilliantly the ruling European élite have handled the economy, but I wanted to pick up on this 'democracy' business.

You see, the G-20 is not just a meeting of 20 nations, it is a meeting of 19 nations plus 'Europe', and Europe, 500 million odd people, is represented by Barroso. Remember voting for him?

I have mentioned before how these Alice-in-Wonderland characters believe that merely saying something makes it true, but it defies belief that he thought he could get away with this: that a former Maoist, not elected to leadership but chosen by a few pals for whom he subsequently had to do favours, should purport to represent an entire continent and then tell the world he needed no lessons in democracy.

I think we all need a lesson in democracy, so we can identify Mr Barroso for what he is.

'When I use a word,' Humpty Dumpty said, in a rather scornful tone, 'it means just what I choose it to mean - neither more nor less'

Brian Hibbard

This blog is sad to record the death of Brian Hibbard of the a capella group The Flying Pickets. The group were solidly left wing politically, coming together during Mrs Thatcher's reign. They took every small decision relating to the band by popular vote.

They were horrified to hear that Mrs Thatcher liked this record. So did I.

The elections

In France, Marine Le Pen failed to be elected but her niece, the photogenic Marion Maréchal Le Pen seems to have won the vote in Carpentras. François Hollande has swept all before him and can enact his programme without support from any other party. It is an impressive victory but I can't help feeling that France has made a mistake.

In Greece, as I advised, it paid to take no notice of the doomsayers. New Democracy, the centre right pro-bailout party, beat Syriza and will now form a coalition with PASOK. So Greece will be run by the people who have run it since the Colonels, in other words the people who got them into this mess. The people's choice, though, was stark; Syriza thought it could call Merkel's bluff and stay in the euro, which was disquieting. Only a few tiny parties, with minuscule support, thought, as I do, that it would be in Greece's interest to leave the single currency. The Greeks, who believe, quite erroneously, that the euro is a good thing for them, played it safe.

So Greece is condemned to be welfare dependent. It cannot service its debts, it cannot borrow more money from the markets, and it cannot exp'ort its way out of trouble because its currency, the euro, is over-valued for Greek needs by at least 30%. It will leave the euro eventually and it is only to be hoped that some politician grasps the nettle, and that it is not too late, and too painful.

A dog writes

Politico 44 'A living diary of the Obama Presidency' asks whether the dog Bo is a political liability.

A spokesdog for the First Pet said it was typical: you climb the greasy dogbasket to the top and then the green-eyed monster begins to strike. Far from being a political liability, the country is going to the dogs because Bo's advice is never taken. Wife more popular than you? Dig up her vegetable garden. Trouble with Angela Merkel? Bite her on the leg.

It is to be hoped that this dogged pursuit of the only effective member of the White House team will now cease.

Who's up for a crisis?

And it's the Greeks' turn today. All the European Press have talked up this story to almost apocalyptic levels. I think it worthwhile taking a look at the facts.

Syriza, which nobody had heard of prior to the first round elections, is an agglomeration of leftists of all hues, Greens and special interest groups. It is not a movement.

These are not British style first-past-the-post elections. Syriza may well emerge as the largest party, although that is far from certain, but it certainly will not have anything like enough votes to govern on its own. On Monday there will begin the series of negotiations and horse trading which do so much to damage the world's perception of proportional representation. No need to panic yet.

Forewarned is forearmed, the saying goes, but it doesn't apply to the European élite. You'd have thought that with so much advance notice of this they would be ready with a series of responses to cover all contingencies. They're not, and will start to think about it when the grown-ups get home from the G-20 binge in Mexico.

If Mr Tsipras were to be able to form a coalition, he would then have to do as he promised and try to renegotiate the bail out package. Some leaders (Merkel) will be wholly against this whereas others (Hollande) will be grudgingly in favour. These negotiations could run for months, while the EU drip feeds the Greek economy.

Never forget that the Euro is a political game. Its supporters don't want anyone to leave, ever.

So no need for tht extra blood pressure tablet on Monday. What is likely to happen is in fact the worst case scenario, that no one knows what to do or dares do anything, and we carry on kicking the can down the road, until the next crisis..

France votes

Second round parliamentary elections in France. Hollande is expected to confirm his majority, which won't please La Merkel too much.

All eyes will be on the Front National, which is expected to get seats in the parliament, and in particular on Marion Maréchal-Le Pen (great name!), the third generation of her family to ..er..serve. Her chances are good, by all accounts.

Let's face it, she doesn't look like the Far right candidate

Magna Carta

Today is the 797th anniversary of the signing of the Magna Carta. Parts of it are still valid in English Law, and it remains one of the foundations of the American Constitution.

There is rather a nice article in the Daily Telegraph suggesting that we have this day as a national holiday, something I would favour.

Originals were sent to many cities, including Salisbury, Lincoln and London. Go and see one if you can. It sends a shiver up your spine.

The end and the beginning

This was just flashed by Reuters:

Draft conclusions for EU leaders' 28-29 June summit say there is a need for much stronger banking and fiscal integration, underpinned by enhanced Eurozone governance.

Blink and you could miss the extraordinary Alice-in-Wonderland nature of Europe. This is the publication of the conclusions of a meeting which is due to begin in a fortnight's time.

OK, I know the important part of these meetings is the lunch, but these are the leaders of 27 different countries, surely one of them might spark a debate by saying something interesting or original? They could decide that the weather was to blame for the crisis, or that Luxembourg should be kicked out for being too rich, or that the game wasn't worth the candle and rather than being governed from Berlin they'd all rather go back to their national currencies.

But no. They'll be told what to think.

The Falklands

The news, which reaches us on the 30th anniversary of the end of the Falklands War, that the Islanders are to hold a referendum on their choice of sovereignty, is, in my view, a bit daft.

Whatever the result, and it is almost certain to be a resounding vote to stay in (despite my revelation recently that 0.6% of the population is Japanese), the Argentines will claim, rightly, that we stuffed the place with British. Their claim, whatever its validity, is much older.

The effect the vote will have, though, is to stiffen the resolve of any future British government which thinks of giving them up. In this sense it is an astute move by the Islanders.

Major whinng

The Leveson Enquiry, a long-running investigation into the relations between government and the press in Britain, seems to hold the Westminster Village in breathless excitement, while leaving the vast majority of people indifferent. It certainly seems to generate more heat than light.

Latest up was Sir John Major, one of the weakest Prime Ministers we have ever had. According to his testimony he invited Mr Murdoch to dinner in February 1997 and was told that the Murdoch papers would not support the administration while it pursued its European policies.

And this is supposed to be something of an indictment of Murdoch.

Hell, if Major had invited me to dinner in 1997 I should have told him I wouldn't support him unless he changed his European policies. I think Murdoch is to be applauded.

Major was out a few months later. But his demise was not caused by the Murdoch press, it was because the British people were fed up with him and his party, and, in part, because of Europe. And we had a glossy alternative in the form of Tony Blair, who it turned out wasn't much different.

It's a shame to see Sir John whining about this15 years later, but really his memory should be a bit clearer.

Where they got the plan

A little déjà vu regarding the Spanish non-bailout





(Actually in dollar terms it was more like $120 billion and still not enough)

Round up the usual suspects

The USA has offered rewards totalling $15 million for information on the whereabouts of leaders of the Somali Islamic militant group al-Shabaab.

An al-Shabaab spokesman has replied 'Whoever reveals the hideout of the idiot Obama will be rewarded with 10 camels, and whoever reveals the hideout of the old woman Hilary Clinton will be rewarded with 10 chickens and 10 roosters.'

I think I may be able to help here: would they be young, breeding camels or the stringy old sort we usually see?

Spain

Perhaps I misunderstood, but Spanish Finance Minister Luis de Guindos seemed to give an arrogant little talk, almost telling the assembled hacks they were jolly lucky to see him at all. Normally Prime Minister Rajoy doesn't speak to the press but this time he stood up for long enough to declare that this deal is great news for Europe (I am not making this up). He then went off to see a football match in Poland, while other members of the government went to see a tennis match in France. Nothing to see here, move on please.

So, the Spanish banks are getting €100bn from Europe?

No. The Spanish state (the money will be paid to an arm of the Government) is getting €100bn from the European taxpayer.

The money is described as coming from The EFSF / ESM, which is confusing. The first of these bodies, the European Financial Stability Facility, is down to its last €200bn, but €93bn of that is due from Spain.

The European Stability Mechanism is not yet in existence, not having been ratified by, among others, Germany. The German Parliament has already said it shouldn't be used to rescue banks

So this will sort it?

Ummm....not really.First there are doubts as to whether €100bn will be enough. Spanish banks already have admitted to €80bn of bad property loans, out of a total of €400bn. Analysts expect the Spanish property market has a further 30% to fall, which could double the amount of property loans in the 'bad debt' category.

But the markets are happy?

Markets rose this morning, but how long that will be the case is a moot point. Firstly, Spain can now be seen not to be able to raise the money it needs on its own. Whatever Rajoy says about this not being a bailout, that’s what it is. Secondly, Spain is responsible for 12% of the Eurozone bailout funds, which must be worth commensurately less now.

Finally the loans will be on the terms designed for the ESM, which means that existing bondholders rank behind the EFSF / ESM, which will make them grumpy. Those which have English Law bonds will call default, as they did in Greece, and have to be paid off.

But Europe is happy?

We....ll, the Germans don’t want this, the Irish will ask for the same terms as Spain got, the Finns are refusing and want collateral.

Describing all this as ‘good news for Europe’ reaches a level of mendacity which would have made Tony Blair blush.

France votes

France goes to the polls today, for parliamentary elections. If the Socialists do well, Hollande will have his mandate for the changes he wants. He has already tickled his electorate's fancy by reducing the retirement age for some workers (just as every other country is increasing it). If he does badly, the changes will be more modest as he gets used to what the French call 'cohabitation'.

The predictions I have seen are that it will be somewhere between the two. Expect a good result for Marine Le Pen, as Sarkozy's UMP is leaderless.

The Inspector calls

Despite having a typical middles class obsession with the rule of law, I have never had much time for the British Police. The times I have come in contact with them I have found them blokey, rude, judgmental and racist. And they seem to concentrate austerely on things the public aren't interested in, whilst ignoring what we regard as important (robbery, violence etc).

I used to support the reintroduction of capital punishment until the West Midlands police showed how they stitched up innocent people in order to improve they success rate.

So this blog congratulates the Home Secretary, Theresa May, for recommending someone independent as Inspector of Police. I find it astonishing, and very unhealthy, that this post has always been filled by a newly retired policeman.

Good luck to Tom Winsor.

Europe: what's going on

We know a little bit more about the 'Plan' referred to previously, following Mr. Cameron's visit to Germany.

The Eurozone hates the British when we sound off on Europe, and indeed rather hates us for not having made the monumental errors they have. But the whole world is affected by what is going on in Europe and we are entitled to voice our opinion, as is Obama, who does so regularly, and the Far East (China has just said it will not buy any more European debt).

What the rest of the world wants is a quick solution to all this, before the contagion spreads. And for most people that means Eurobonds (ie Germany guaranteeing the debts of all the others). For myself I am dubious abut eurobonds economically, legally (are they permitted under the German post-war constitution?) and politically (is it in Britain's interest to have a united Europe kow-towing to an over-powerful Germany?).

Merkel recognises the potential constitutional difficulty and recognises the even stronger political dangers: she comes up for re-election next year, and a commitment to use unlimited wodges of German taxpayers' cash to bail out countries Germans don't approve of would be an albatross round her neck.

What Merkel wants now is a banking union, where 'Europe' bails out banks in difficulty and guarantees the depositors, as happens in Britain and the United States. This would, she knows, involve a number of new Euro-institutions, monitoring the banks, controlling individual states' involvement with their banks and so on. And she knows that some countries are not fit enough to go along with it and some countries will not tolerate the loss of sovereignty it implies. Merkel doesn't expect this banking union to include everyone. When she says the solution is 'more Europe' she means 'more Europe for the few'.

It's funny, when I used to campaign against the Maastricht Treaty the first thing the Europhiles used to say was 'of course nobody wants a two-speed Europe'. And now, that two speed version is exactly what the europhiles are campaigning for.

The banking union will take time: 2018 has been mentioned. And the short-term? Merkel wants to continue with the austerity.

I think Cameron is making a mistake pushing for eurobonds. Apart from the reasons above why I don't like the idea I think there is a political mistake here, too. They will come up with some new Euro-Treaty, which Britain won't like because it will effectively pawn the City of London (Michel Barnier the economics commissioner has already spoken about a 27-nation Financial Transaction Tax). Cameron will have to veto the Treaty and it will be clear he is vetoing the very thing he had been campaigning for.

Not clever economics, not clever politics. Meanwhile the German economy is tailing off, the French are forecasting a downturn, German and Austrian banks have been downgraded, Spain is insolvent and can't even prop up its own banks, and the Greeks are reduced to soup kitchens. And no one has apologised.

Venus passing

The wonderful pop group Dr. Hook used to sing a song called 'I got stoned and I missed it' in which, amongs other things, someone was giving dollar bills away but our hero, unfortunately.....

I was in fact in good shape for the passage of Venus across the Sun, which I am aware won't happen for another century or so - far longer than I am likely to live anyway - but dragging myself out to see a dot on the sun really didn't seem worthwhile.

I suppose many people felt the same. Anyway this is what we missed.

Da Chookie

This blog sends its best wishes to Prince Philip, Da Chookie Enbra, its favourite royal, for a speedy recovery.

The old seadog was being attended to by his nurses instead of watching a concert of Shirley Bassey, Cliff Richard and Tom Jones.

How he must be kicking himself!

The Death List

A couple of years ago I described the case of Anwar al-Awlaki, an American citizen whom President Obama had decided to kill. He was indeed killed, as I predicted, by an American drone.

Encouraged by this, Obama has created a system. Called The Death List, although not, I fancy, by him, it is brought before him on a regular basis and he decides who lives and who dies. If your name is ticked the stealth drone will come, maybe not today or tomorrow, but it will come, silent and undetected, and destroy you, and of course anyone who is anywhere near you: your children, your friends, perhaps a whole village of innocents.

I know there is a war on terror, but I am just wondering how comfortable you feel about this? I don't feel comfortable at all.

Urgency

Well! There's talk in Brussels of a plan! Yes! Exactly what we need now is a PLAN! And it would solve the problems of the banks by getting them bailed out without it costing the taxpayer! And the plan could be in operation by 2018! Yes! And there will be meetings and conferences and agreements and Heads of Agreement and Yes! LUNCHES! (general cheering).

In the increasingly less likely event of Europe having a monetary system by 2018, our prescient rulers have decided that all banks should be equal: that, for example, Romanian banks bail out German ones (six German banks have been downgraded today). And it wouldn't be the taxpayers that coughed up. No. It would be the people who had lent money or deposited it in, say, Commerzbank.

So between now and 2018 any bank which wants to expand, as a part of an economy growing to create more jobs, would find that no one wanted to buy its paper because the ruling class in Brussels has said that the people shouldn't have to bail it out if it all goes wrong. So they won't expand and the jobs won't be created.

If you were unemployed and your family struggling to make ends meet, you could be forgiven for wishing that some of these people (their jobs and pensions are OK by the way) just shut up.

The Face that launched....

A thousand ships and boats will assemble on the River Thames and sail downstream tomorrow.

Britain is in festa for four days to celebrate the 60th anniversary of the Queen's accession to the throne. The anniversary was in fact in February but it doesn't pay to hold celebrations in Britain in the winter months; indeed it seems likely it will rain on the flotilla tomorrow, but spirits are so high it won't matter.

The only other monarch to have a diamond jubilee was Queen Victoria. In those days a diamond jubilee was 75 years but it was reduced to 60 years because they needed to hold a trade festival.

Best wishes to Her Maj.

Ireland

Ireland voted yesterday on the Fiscal Pact - the only country in the Eurozone to be given a vote.

Only 50% of those eligible to vote did so. I think it was that most people simply didn't understand the arguments. This is not that they were badly explained; the ruling elite don't want the likes of us understanding the arguments.

The deciding factor appears to be that they might have need of the European Stability Pact in the future, which I suppose is fair enough. The other side of the coin is that they give up their financial independence.

Depressing.

Charles Taylor

Charles Taylor, former president of Liberia, has been sentenced to 50 years imprisonment at the International Court for aiding and abetting rebels in Sierra Leone during the  10 year civil war which ended in 2002.

I wasn't going to comment on this but by popular demand (Dave Phillips in Reno Nevada) I shall do so.

I say 'at' the International Court because Mr Taylor cannot be tried by them, his misdeeds having taken place before the Court was created. Instead he is being tried by the Special Court for Sierra Leone, set up by Sierra Leone under the aegis of the United Nations. The rules of this court state that the trial must take place in Sierra Leone, but in this case it was thought proper to ignore that.

I can't say I feel comfortable about all this.

Britain and America often supply arms and assistance to rebel groups - the recent overthrow of Gaddafi in Libya is a good example. The trick is to be on the winning side, which Charles Taylor was not. America, by the way, has withdrawn from the ICC, as has India.

Taylor was not present in Sierra Leone, indeed for all I know he has never been there, but has attracted the stigma of war criminal.

Doubtless there was some nasty stuff in the Sierra Leone civil war - there usually is - and doubtless Taylor is a nasty piece of work, but is what he was up to worse than our involvement in Libya or Russia's involvement in Syria? One day Assad will be ousted; will Putin and Medvedev be dragged before the court in the Hague? I don't think so.

Then there is the problem of imposing western values on other people (I have written about this before). Suppose some African tribal leader is hauled before these unelected judges, from such places, by the way, as Nigeria and Uganda, and indicted for eating missionaries. His people have always eaten missionaries, he says, indeed it is an essential tribal ritual. But no, he is guilty because British and Americans don't eat missionaries.

Mr Taylor is being tried essentially by Sierra Leone where, let's face it, they want a guilty verdict. None of this is such as to leave one feeling comfortable.

Taylor is not the sort of person you would want your daughter to marry and not the sort to invite to a dinner party. But should we have the arrogance to allow his former opponents to condemn him? My vote is no.

Assad: still there

'Diplomatic pressure on Assad mounts' says the FT. I'm not sure that a man who can order the systematic slaughter of children is going to be too upset by having his chargé d'affaires sent home from Portugal. He is still there, and his opponents must be wondering what it would take to dislodge him.

The West cannot intervene militarily. It's not just that we are tired of war, it's that it would be opposed by Russia and in all probability China. Equally we can't arm the opposition because it would start an East-West proxy war.

The only people who can do something, whether it is intervention, assistance to the rebels or diplomatic pressure, are the Saudis and the Qataris: nations that are sufficiently strong in energy-wealth not to fear the Russians, and for whom Syria is their back yard. The people of Syria are largely Sunni, like them, although the Assad government is Alawite, a branch of the Shia sect.

The Saudis and Qataris will be nervous of a Sunni-Shia conflict, and nervous of arming the rebels but I fear if they don't the butchery will continue.

The one thing the British can do is cancel the citizenship of his wife. We certainly don't want the expense of her taking up residence.

Tax Freedom Day

Today is Tax Freedom Day in Britain. Calculated every year by the Adam Smith Institute, it takes the proportion of our incomes we pay in taxes as a percentage of the year, showing the date on which we stop working for the State and start earning for ourselves.

Today, 29th May, is two days later than last year. Australia's Tax Freedom Day was on 4th April, America's on 17th April. France's will be some time in July.

This seems a good time to consider the benefits of small government, with this useful presentation by the Centre for Policy Studies:

Greek Cyprus

I call it thus because this blog, unlike the British Government, also recognises Turkish Cyprus.

In the middle of the euro-fiasco we seem to have forgotten them.

For a long time the political class in Brussels refused to contemplate the possibility of Greece leaving the euro, saying the process was irreversible. The Greeks, taking them at their word, have said they won't administer the austerity package, so that the Eurocrats have been forced into a U-turn, saying Greece would have to leave the euro if it didn't take the medicine (or das Medikament, as it's known in Berlin).

Of course we don't know what will happen and won't until a day after the 17th June elections in Greece. But we have all been advised to do a bit of contingency planning and I expect quite a lot of that will be going on in Nicosia.

You see, the Greek Cypriot economy is inextricably linked to the Greek one, and if Greece leaves the euro, Greek Cyprus will have to as well.

So what will it be? The New Drachma? Actually Cypriots have a rather interesting alternative. Their currency has never been the drachma (in my opinion Cyprus isn't Greek) but following its long period of Ottoman Turkish rule was run by the British from 1879 (annexed in 1914) and the currency was the Cypriot pound.

The Cypriot pound was divided into 20 shillings and each shilling into 9 piastres, making 180 piastres to the pound.

In 1955, sixteen years before Britain, the Cypriots decimalised, with 1000 mils to the pound. This excellent system subsisted until 1st January 2008 when they joined the ill-fated euro.

The solution is simple: they just revert to the Cypriot pound.

Incidentally the British bases on Cyprus, Akrotiri and Dekhelia, which are sovereign territory, are the only instances of  British territory using the euro. Poor things. I hope we are doing something to protect them.

Not this time, Silvio

Silvio Berlusconi is trying to start a movement to make the President of Italy electable by the people. Nothing wrong with that - a popular mandate would be far better than him or her being elected by the corrupt, time-serving envelope receivers that constitute the Italian parliament.

It's just that you don't have to read too deeply between the lines to realise what Silv is up to: he wants to be President himself and reckons he could get the popular vote.

No, caro. This blog never thought the man's private life made him unfit for the job of Prime Minister - the problem with Silvio is that he never actually did that job, his tenure being characterised by ineffectual posturing.

But the job of President is a different one to that of Prime Minister: it involves the non-political representation of 60 million people. The President is a figurehead and an example and Silvio's past life excludes him from the position.

Also he is a voice from the past, and the people want something new.

Berlusconi should retire to his girls and his villas and his yacht. If he wants to campaign for an elected President, he should undertake not to be a candidate himself. It was fun while it lasted, ma basta!

A Scoop!

This blog has succeeded in obtaining the menu for the next European summit:

Crudités (raw vegetables)
Pasta Povera (poor man's pasta with garlic and oil)
Kleftiko (Greek robber's mutton)
Crème Anglaise (to remind them that some countries are not in the euro)

Mrs. Merkel to bring her own cheese.

Er.... in your dreams.

Menu before the crash

The menu for the last dinner on the Titanic recently sold for £76,000. What would the menu for the last Euro-summit fetch?

Last week's was not the last, time for a few more tuck-ins before it goes down, but the excellent Marco Zatterin of La Stampa has discovered the menu

Lobster with asparagus
Fillets of San Pietro with vegetables
Chocolate mousse
Coffee

He says nothing about the wines, but describes the meal as 'moderately sober'.

Double your money?

Thanks to the excellent people at Zero Hedge who have followed the announcements of the rescue of the Spanish Bank Bankia

Bank Of Spain Formally Nationalizes Bankia, Says Insolvent Bank Is "Solvent", Adds There Is No Cause For Concern, Zero Hedge, May 9

Spain is taking over Bankia by converting its 4.5 billion euros of preferred shares in the group’s parent company into ordinary shares, BusinessWeek, May 21

Spain said on Wednesday its rescue of problem lender Bankia would cost at least 9 billion euros ($11 billion), as the government tries to clean up a banking system that threatens to drag the country deeper into the euro zone crisis, Reuters, May 23

Bankia SA will have to ask the Spanish government for more than 15 billion euros as part of its effort to restore its financial health, state-owned news agency EFE reported Thursday, citing financial sources, Dow Jones, May 24

Note that the cost more than trebled in three days. Almost as bad as the Olympic Games.

Bankia is a conglomerate of seven banks which include the wonderfully named Caja Rioja.

I can add to all that today's FT:

Spain to inject up to €19bn into Bankia.

Any more for any more?

Eurovision

The Eurovision Song Contest final is tomorrow, and looks to be about as much fun as everything else with the prefix 'Euro'.

Spain has reportedly told its entrant Pastora Soler not to win, because the winner has to hold the next contest and Spain can't afford it.

The UK also can't afford it, but our solution is to field jowly septuagenarian crooner Engelbert Humperdink (formerly Arnold Dorsey).

Let's hope it works.

A Liberal Haiku

This blog has received a transcript of a speech to be made by Nick Clegg, described as Deputy Prime Minister, to the lucky people of Berlin.

The full transcript is here, and I should give a health warning: it's ghastly stuff.

But amidst such tosh as

Management of financial risk, fiscal discipline, labour market reform; these are not just different chapters in an economics textbook. They are closely connected problems with consequences for us all. (getaway, Nick)

This is a European crisis. It must be solved at the European level.

We cannot let this crisis shake our commitment to Europe’s big idea – that union is worth pursuing as a means to peace and prosperity alike.

I found this gem:

The tree is falling, and we are pruning one leaf at a time.

This is so poetic, so beautiful, that I leave it to you in the form of a Japanese Haiku

The euro tree falls

But Nick Clegg is pruning it

One leaf at a time

Just think about that, the next time you wonder why this fool hasn't yet apologised for suggesting we join the euro in the first place.

Growth

To celebrate the new millennium European leaders agreed to make Europe 'the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion' by 2010. Having agreed that, they all breathed a sigh of relief, shook hands and sat down to lunch to celebrate the great things they were doing for their people. It was called the Lisbon Agenda because that is where they had the lunch were meeting.

Of course by 2010 Europe had actually slid down the list of competitive nations or areas of the world.

Why? The reason is that for most politicians in Europe, growth means government spending (you remember Gordon Brown used to call it 'investment'). Growth means more government not less.

Of course in the places we are competing with, the Far East, America and increasingly the Third World, growth means a refreshing absence of regulation and political interference. Perhaps the key words in the declaration are 'better jobs and greater social cohesion': someone slipped those in so it wouldn't matter if governments simply borrowed more money and handed it to the special interest groups in their countries in return for votes - that's how European politics works.

Now growth is back on the agenda. Leaders met in Brussels, some of them having just met at the G8 in America, and decided....er....to make a decision in June. Yes! A success!

I don't think we'll get a decision on anything in June, either. What they'll do is agree more infrastructure, more grands projets. Europe will become a dystopia of superb motorways and no trucks to drive on them.

And the money for the grands projets? Yes, borrowed of course. Greece will be invited to borrow money for high speed trains while being made to cut back on the health service.

This is Europe today: a dithering, self-important, corporatist political class which just hustles to stay in power at the expense of the poor.

Mouthy

David Cameron has made a couple of speeches lecturing the Eurozone on its plans, and offering warnings to Greece. His predecessor, Gordon Brown, was much the same and earned a reputation for hypocrisy.

I must say if I were a Greek or other Eurozone voter and found some mouthy youngster, who had made a complete cock of his own country's economy, telling me what to do, I should do the exact opposite.

This is a good time to shut up, Dave.

Robin Gibb

We mourn the death of Robin Gibb, far too young at 62

Earthquake

Sympathy to the people of Emilia - in the Bologna region - for the earthquake which has killed seven people. The aftershocks are still being felt.

I was there the day before. Strangely, when there was an earthquake at my home in Umbria, I was in Rome; and when there was a 'quake in Rome, I was in Umbria, so I have never experienced the phenomenon.

Not that I'm sorry.

Dietrich Fischer-Dieskau

Being away for a few days, I missed news of the death of Dietrich Fischer-Dieskau, the greatest exponent of German Lieder, aged 86

Donna Summer

And the sad death of Donna Summer, pioneer of disco music, aged 63

Referendum trick

There has been a bit of talk about the possibility of a referendum on the UK’s membership of the EU. What is being said is that the Labour Party will support the idea so as to try to expose the Conservatives’ differences on Europe, and that the Liberals will approve it thinking that the answer wil be yes and it will put the matter to bed. Thus Cameron will be bounced into offering it in his manifesto. Most people assume I am a supporter of the idea, but I’m not so sure I am.

I start from the basis of the conclusion I came to in 1991, that Britain would be better off, both financially and democratically, if it left the EU. Nothing that has happened since then has made me reconsider: if anything I feel it more strongly.

And it is hard to dispute the legality or constitutionality of a referendum. The matter is important enough to be put to the people, and there is the precedent of the referendum held in 1975 – so far the only nation-wide referendum ever held in Britain – when we decided to stay in.

So: important and constitutionally defensible. It is only then that the problems start.

First is the question, which will be asked by the government. Now, David Cameron has tried to spin himself as a eurosceptic, but in my view all his actions since coming to power and even before, point to a man who is quite comfortable in the EU. He wants us to trust him to be fair on this, and I, frankly, don’t.

It’s not just the nature of the question. I don’t suppose Cameron will try ‘Do you want us to leave the EU, with all that that will entail in terms of lost jobs and being politically isolated, or do you want to pursue the broad sunlit uplands of prosperity and peace with our partners, our European brothers?’ – although with most of the administrations since 1975 that is roughly what you would have got.

No, it’s the practicality of the matter. Cameron won’t call it ‘leaving the EU’ – he calls it ‘renegotiating the terms of our membership’. But every time we have asked for changes, the answer has been ‘Non’. The only difference this time is that it will be ‘Nein’. They don’t want Britain to become more efficient and prosperous by opting out of the ugly bits.

So the only occasion we can renegotiate is when they have something to lose. If Cameron had held his nerve on the Fiscal Pact, rather than giving in immediately and allowing them to use civil servants, partly paid for by Britain, to draft its terms and put it into practice, if only he hadn’t rolled over, we could have had that as a bargaining point: if you want your Fiscal Pact Britain opts out of the Common Agricultural and Fisheries policies, the working time directive, the health and safety nonsense which they pretend is part of the single market, the common policing, the European Arrest Warrant, European Army and all the rest.

Now, we can only have a negotiating point, a point d’appui, if they decide to have another grand treaty. And they aren’t likely to in the foreseeable future.

So Cameron reckons he can negotiate something simple and easy – cheaper biscuits in meetings and an undertaking the European Army won’t invade Norway -  and then put it to the people as the best that could be negotiated, thus silencing debate on the subject for a generation.

He has to be exposed and resisted. The only suitable question is ‘Do you want to stay in the EU or leave it?’.

Anything else is a con-trick on the British people.

Default

An interesting little tale reaches me.

When Greece did its 'restructuring' (which ordinary people call a default) it told private investors that they had to take a 75% hit on their holdings. These amounted to some €177 billion. However a small amount, we think around €6bn, was written not under Greek law but under English Law (the one used internationally for these instruments).

€450 million, a small amount in the context of things, of these 'foreign law bonds' became due today.

It is thought, but not known, that these bonds were held by the Norwegian Sovereign Wealth Fund,
Norges Bank Investment Management (NBIM). This outfit is worth $600 billion, and owns something like 2% of all the shares in Europe - ie pretty chunky. Now NBIM was annoyed at the Greek default, thinking the eurozone should look after its own affairs, and that it was disgraceful that the European Central Bank should remain immune from the default: the ECB, despite holding a lot of the paper, took no loss at all - everyone else paid for it.

So, it is rumoured, the NBIM said if it wasn't paid today, it would sue Greece in the London courts, which would have defaulted everything.

The Greeks have paid up. A Greek spokesman said it 'would not have any bearing on future decisions regarding other similar bonds'.

This is of course nonsense. The other €5.5 billion who have held out against the limited default - for most people it is a cardinal rule that you treat all similar creditors equally - now know they are in with a chance.

And every other investor knows that if the Eurozone pull this kind of stunt again they shouldn't go along with it.

And Mrs. Merkel knows that now if the ECB makes a socking great loss on a defaulting country's bonds, it is the Germans who are going to have to pay.

It's going to have a big impact, in my view.

The new team

Much was reported about the governing duarchy of Germany and France, named Merkozy. What are we to call the new pair? Merlande? - it sounds too much like the French for the fish, whiting.

Holkel?

No. I prefer the simple, but eloquent......

Merde.

Each silver lining has a cloud

Hate bankers' bonuses? Here's some good news for you. According to the Centre for Economics and Business Research bonuses have fallen from their 2007/8 peak of £11.5 billion down to £2.3 billion this year.

Like spending on health and education? Here's bad news for you. Because of the drop in the bonuses the government's income is down by £4 billion.

More Greece

My thanks to the Telegraph's incomparable MATT.

The latest wheeze - I'm sure you guessed it - is to have an unelected government in Greece, or rather one elected by a German woman who knows what's best for them

Israel

Israel is 64 years old today.

I don't suppose many people hearing David Ben-Gurion read the declaration of independence in 1948 seriously believed it would last this long. And of course many people wish it hadn't.

This blog is broadly (but not unconditionally) supportive of Israel although it acknowledges that the Israelis make it as difficult as possible to be so.

My advice would be for Israel to try to stay out of the news, although this will be hard. The West may need Israel to attack Iran this year, just as it needed Israel to initiate attacks on Suez in 1956.

Let's hope not.

German Hollandaise

A bad night for Mrs Merkel, with her CDU having its worst result in Nord-Rhein Westfalia (NRW) since the war. NRW is the most populous region in Germany.

Norbert Roettgen, CDU leader in NRW, fell on his sword. He had been regarded as heir apparent to Mrs Merkel. The region, or Land, is now governed by a clear SPD-Green majority, led by Hannelore Kraft, who is now being openly described as a competitor to Mrs Merkel in next year's national elections.

Other fallout has been that the Greens in Germany are saying that the austerity must end, and the PdL and IdV in Italy are warning Mario Monti that he too must change.

This is rather as forecast. Hollande-ism is sweeping Europe, and we haven't seen the end of it yet.

Greece

Beginning a discussion of Greece in the euro one thinks of the proverbial Irishman asked for directions, who says 'I wouldn't start from here'. Ollie Rehn, the Budget Commissioner, has stated that they knew at the time that Greece had fiddled the figures to get into the euro (by the way, documents in Helmut Kohl's office confirm that they also knew Italy had fiddled its figures). What you have to remember is that the euro was and is a political, not an economic project. It has no grounding in economics at all.

Equally, one can say that Greece (and Italy), having been let in, should have been told that it had ten years to sort out the corruption, failure to collect taxes, the inflexible labour market and of course its borrowing levels.

But that is what should have happened. Events are now running their course.

As I have often mentioned, the European project is at its worst when it comes up against democracy: the two don't mix. No one, for example, would have come up with the daft system of the civil servants presenting laws to a tiny group of the uninterested if they hadn't been terrified that the populations simply couldn't be trusted to pass them. Now the Greeks have come up with an unsatisfactory election result (unsatisfactory, that is, to the bureaucrats). Their system is that in order of the number of votes cast, the parties can try to form a government, and the top three have failed to do so. Greece should proceed to another election.

However, the President, Karolos Papoulias, has summoned them all to last ditch talks today to try to form some sort of administration. Mr. Papoulias has the look of a man who has received a one-sided 'phone call from Angela Merkel. The latest word is that these talks have failed. Those opposed to the austerity programme pointed out that the majority of voters had opted against it, so they would be letting the people down if they conceded it (it's a bugger, this democracy business, isn't it?).

Two things can happen when there is a big, abnormal vote for one political wing or another, and it goes to a second vote: one is that people, worried about upheaval, vote for the traditional parties again. The second possibility is that people who voted the traditional way now perceive that there is an option, it is OK to vote for the extreme, and so the balance is forced further away from the norm. Opinion polls suggest the latter: the Far Left, who are opposed to austerity, will gain dramatically.

We suppose now that Greece must leave the euro, and that, once the markets know that this can happen, the spotlight will move to Spain, Portugal and Italy. For Mrs. Merkel not to allow Greece to leave, she would have to stump up a lot of German cash, and she comes up for election next year. To leave, Greece would have to default on its debts (which, to a small extent it has already done). I hope there is a plan B to allow this to happen as quietly as possible.

To Merkel, Schaeuble and the unmourned Sarkozy, we must say that their dithering and their blind reliance on dogma have earned them this result. Their unwillingness to change tack has been as damaging as the Greeks' unwillingness to modernise their political system.

As a footnote, let me say that you will hear on the BBC that there is a danger that the Far Right will gain influence: this is a party called Golden Dawn which makes funny salutes and hardly gets any votes. Ignore the BBC: the danger to Greece is the Far Left. Greece is in for a very difficult time whether it leaves the euro or not: what is needs is a party which can guide it on the road to financial rectitude, albeit at a pace it can stomach. And that is not the Far Left.

Democracy: a lesson

Democracy prize of the year so far goes to the village of Cimolais in the northern Italian region of Friuli Venezia Giulia, population 507.

The mayor, Gino Bertolo, found that he was the only candidate for his re-election and was concerned that if he stood unopposed he wouldn't get enough votes, so he persuaded his best friend, Fabio Borsatti, to stand as well.

I’m sure you are ahead of me: Borsatti won, despite all his relatives having voted for Bertolo, by 160 to 117. ‘I never wanted to be mayor’, he said.

By the way, as a broad average, 70% of the population are of voting age, so that looks like a turnout of 78%. In the recent UK local elections it was 32%.

Celebrate!

Today is Europe Day, when we celebrate..er..

See the post below.

Europe: the state of play

Now seven eurozone governments have been toppled since the crisis: France, Italy, Greece, Ireland, Spain, Portugal, the Netherlands. There is a palpable move, not just to the left, but to anti-austerity. What will be perceived as the Hollande effect is sweeping its way across the continent.

In Greece, the two main parties, centre left and centre right, had clung together in a coalition led by a Brussels nominee. Following the election they can no longer form a majority. The axis of Greek politics is no longer left - right but pro austerity - anti austerity.

In Italy people are asking why they must have austerity if France has rejected it. The PdL, the party started by Mr Berlusconi, which did badly in last weekend's regional elections, has said that it cannot support ratification of the fiscal pact unless the powers of the European Central Bank are widened to intervene in debt auctions and issue eurobonds. They have said they will force out Monti's government by the autumn.

Spain has said it has to do something about its banks, which have fantastically high bad debts, but of course hasn't the money to do it.

Ireland, seeing the Hollande effect, could fail to ratify the fiscal pact in a referendum.

So what are the mathematics? If we move from austerity to fiscal expansion, who will pay for it? The German economy is showing signs of slowing down, Merkel's coalition is weakening and they are unlikely to be in the mood to offer more generous terms to Greece or anyone else. Nor are they keen on printing more money, allowing these countries to pay their debts with devalued euros. Volker Kauder, one of Mrs Merkel's closest allies, has said 'Germany could end up paying for the Socialist victory in France with more guarantees, more money. And that is not acceptable. Germany is not here to finance French election promises.'

The majority view in Southern Europe seems to be that they want to stay in the euro but want to behave as they always have and the Germans to pay the bills. It may become clear quite soon that this is no longer an option.

It doesn't look good.

Marlene

What with all the politics yesterday I forgot that it was the 20th anniversary of the death of Marlene Dietrich.

Here she is singing the original of the song the British stole from the Germans

The results

The elections went more or less as forecast below: Hollande, fiasco in Greece, minor headache in Schleswig.

Hollande made a speech saying members of the eurozone who were fed up with austerity could take their lead from France, which sent the markets into freefall.

Good start, François.

Elections elections

The polls are open today for the people of Schleswig Holstein. British Statesman Lord Palmerston is reported to have said 'Only three people have ever understood the Schleswig Holstein business: the Prince Consort, who is dead, a German professor, who has gone mad, and I, who have forgotten all about it.'

A bit simpler this time and the vote may cause some minor headache for Mrs Merkel's coalition, but not as much as the other two votes today, in France and Greece.

Hollande still seems the favourite in France and has vowed to overturn the fiscal pact. Whilst in practice he is unlikely to be so revolutionary, there will be trouble, no doubt about it.

In Greece people are flocking away from the two traditional parties, neither of whom is likely to gain any kind of majority. Together they might have enough votes, but they are, we had thought, opposed to each other. Probably one of those occasions where fundamental beliefs come second to keeping power.

By the end of today there will not have been a revolution in Europe but the political map will have altered and the ruling class will have got the jitters.

UK vote: the fallout

Only one of the ten cities decided to have an elected mayor, the Conservatives fared badly (not appallingly, but badly) but won the London mayoral contest, just. Turnout was very low.

Mr. Cameron is in the doghouse with his supporters. Doubtless he has plenty of advisers, but here is my take on the thing.

I think he should man up a bit.

Not many people like these metrosexual types who change nappies and erect flat pack furniture, and nobody wants one as PM. Now, more than ever, he needs to look decisive. He chickened out of holding a second election two years ago, nearly looked good when he vetoed the fiscal treaty, then gave in almost immediately and allowed them to use EU resources for something which wasn't an EU treaty. Since his election he has blamed everything on the previous government or his LibDem partners, and it won't wash any more.

The first thing he needs to do is sack Jeremy Hunt, for the simple reason the man is a pest. You can't open a newspaper without reading something negative about him. I learned the other day that he is an expert ballroom dancer. Dave: these people are all right in their way but as politicians they are not sound. Look at Vince Cable.

Having sacked Hunt he should maintain balance in the government by sacking Cable as well, eliminating both of their departments (Culture and Business) which are a waste of resources. He should tell the rest of the cabinet that anyone else who looks as if he can swing his hips to the lambada will be viewed with suspicion.

After that he needs a success: as any batsman will tell you, to gain confidence against the bowling you need to hit a six over the long-on boundary. I would suggest withdrawing from the European Court of Human Rights, but any decisive move against any part of Europe will be popular.

But he needs to do something.

Election fever 2

This is how it's done: the French Presidential run-off debate lasted for an extraordinary 2 hrs 50 minutes and was seen by 17.9 million people. Wow!

Whether this includes people who turned it on for the first two minutes, went to the Café des Sports for a couple of stiff Ricards and returned for the end, I don't know. But it is impressive, nonetheless.

The election is on Sunday (as is the Greek one).

Election fever (not)

A fair bit of voting going on in Britain, with local council elections, mayoral elections in London, Liverpool and Salford and ten cities voting as to whether they want an elected mayor.

I think they should be asking how much the mayor would cost. Is it another layer of bureaucracy or would he or she actually do something useful for the city? I'd want to be fairly certain about this, but I rather expect most people don't care too much and will stay at home.

Boris looks as if he will edge Ken in London, which is good news if you like double decker buses.

In the meantime, today is the 33rd anniversary of Margaret Thatcher becoming PM, and tomorrow will be the 15th anniversary of Tony Blair getting the job.

Fit and Proper

I have grave doubts abut the Murdochs, as I have outlined in previous posts, but we are now producing a raft of quite uninformed criticism of them which I believe may be counter-productive.

The Culture Committee, a concept so absurd it could have come from the pages of Orwell, has decided that Rupert Murdoch is not a ‘fit person to exercise the stewardship of a major international company’.

Of course none of these people has been even within a large sniff of the head of an international company, and, having had a look, seem to be careful not to list any former business positions they may have held (probably none).

They are not authorised (nor qualified) to judge whether someone can be the head of a company. They may (just) be authorised to pronounce on whether someone should hold a broadcasting licence.

Here we get to the nitty gritty. For myself, I would have approved the News International bid for the equity it did not hold in BSkyB, for the simple reason that the broadcasting market already contains a quasi-monopoly player – the BBC -  and a bit of competition from a medium sized player would be good for the consumer and good for the market.

The only caveat I would have made to this approval is if the Murdochs were deemed not fit and proper people to hold a UK broadcasting licence. This isn’t completely easy: there has been ‘phone hacking (my guess is that this was more common among the other tabloids than we yet know) and it seems clear they have lied to a commons committee about their investigations into it.

I think it possible that Murdoch and his son James did not know precisely what was going on but that the hacking was a result of the pressures to produce results in a culture they introduced, and that they failed to install the management systems to prevent their employees’ activities from becoming illegal.

But....I think the hacked people – who had their messages hacked by News International staff knowing their ‘phone numbers and guessing the password for messages – have only themselves to blame if they were public figures or people in charge of secrets. This does not of course include the family of Milly Dowler the murdered schoolgirl, but we now know that incident was not nearly as bad as it was initially made out to be.

So the Murdochs are guilty. Exactly what they are guilty of is another matter.  Hugh Grant not changing his password regularly is like someone leaving his house unlocked who is subsequently burgled. The burglar is guilty, of course, but the victim is an idiot.

Against which we have to set the obvious good that Rupert Murdoch has done for the British Press. People with long memories may remember that it resisted all new technology, that jobs were passed from father to son, that no one could say a bad word about the union: all these things were the signs of a very unhealthy free press, and Murdoch, single-handedly, saved us from that.

I would have allowed the BskyB bid probably 70/30, the caveat being unless Murdoch were to be found not a fit and proper person to hold a broadcasting licence. For me the second matter – the fit and proper issue - is closer, but I would have let him carry on 55/45.

Between two stools

A most enlightening article in the New York Times tells the story of Fotis I Antonopoulos, who tried to launch a business in Athens called OliveShop.com, selling olive oil and other products over the Internet. The wall of bureaucracy meant that it took him ten months to get started, having to collect forms from all over the city.

The banks professed themselves unable to process credit card payments - he set up a system with the American PayPal in ten minutes. A law says he could not have a warehouse in Athens, so he took a shop front and boarded up the windows. Hoards of Inspectors called, two of them unable to agree on the legality of having a spiral staircase, and finally telling him to decide himself.

Inspectors said parts of the website had to be written exclusively in Greek, and the team vainly tried to explain that hardly anyone outside Greece was able to read the alphabet, and that the site was intended for foreign customers.

Finally they insisted that since it was a food business, Anonopoulos and his partners should submit lung X-rays and stool samples.

Of course, Mr. Antonopoulos had refused to pay what is known as the 'speed tax': the bribes needed to bypass regulations, even necessary ones.

Humorous though it is, there is a lesson here for all of us. Greek unemployment is 50% and getting worse, yet regulations mean that new businesses find it difficult or impossible to get going. The same is true in Italy and Spain, and true to a smaller extent in all other European economies. Encouraging growth, which is the buzzword at the moment, is not just a question of government spending and the money supply.

It is a question of making your country an attractive place in which to do business.