Sunday, 12 July 2015

EFTA And EEA: A Deliberate Deception?

We noted in our previous post regarding an article in Telegraph on the EFTA and EEA that it was not very reassuring when Icelandic and Swiss MPs are themselves seemingly unaware how their own country's agreements are made.

All is not what it seems however and delving in a little further shows that far from ignorance both authors of the piece Thomas Aeschi and Guthlaugur Thor Thordarson must be fully aware of the differences between EFTA and the EEA.

In the picture above second from the left sits Gudlaugur Thor Thordarson, as the EEA JPC ( Joint Parliamentary Committee) President. With him are Nora Skaansar, EFTA Secretariat to his right, Pat the Cope Gallagher, EEA JPC Vice President and Tarvo Kungla, European Parliament to his left. It's safe to say that Gudlaugur Thor Thordarson is in the thick of the EFTA/EEA action as it were.

We can see further confirmation of this from his profile on Althing, the Icelandic Parliament's website which lists the committees that he is a member of:
Present committees
  • Member of the Icelandic Delegation to the EFTA and EEA Parliamentary Committees since 2013 (Chairman since 2013) and 2003-2007 (Chairman 2005-2007).
  • Member of the EU-Iceland joint Parliamentary Committee since 2013 (Chairman since 2013)
Thus it's utterly inconceivable that he would not know that access to the EU market is via EEA agreements (or bilateral treaties) not by EFTA membership alone.

The second author of the piece is Thomas Aeschi of Swiss People's Party. A member of the EFTA Parliamentary Committe and as part of EFTA/ EU Parliaments delegation he is invited as observer to the EEA Joint Parliamentary meetings" (click to enlarge):

Not participants but observers. EFTA's impotence in EU trade relations made clear. In February of this year David Campbell Bannerman MEP hosted a conference on ‘Alternatives to EU membership, where Thomas Aeschi was a speaker (my emphasis):
Ruth Lea, representing Economists for Britain, Heming Olaussen who led the anti-membership campaign in Norway in 1994, Thomas Aeschi of the Swiss People’s Party, and Bill Cash MP all said that the European Economic Area (EEA) is not a good option (democracy by fax, against national sovereignty and so on).  
Clearly then Aeschi knows EEA and EFTA are not the same. A point emphasised further when he argues, in this speech below, that he is not particularly fond of the Swiss bilateral treaties:


Revealing at the end of his speech (14mins 10), Aeschi puts forward his preference for a UK exit - "EEA lite" or "EFTA plus". This is also the preferred option for David Campbell Bannerman, and it is a deeply flawed and unworkable option that Scribblings from Seaham (under his old guise of WfW) took apart last year.

It's understandable to be cynical as to the intentions of this article as Douglas Carter was in a comment on my previous piece. It's apparent that the misleading conflation of EFTA and EEA is very likely not to have been born of ignorance but a less than candid attempt at promoting a free-trade agreement for the UK.

Interestingly Daniel Hannan who has long advocated a position similar, tweeted this:

It's also worth noting that Guthlaugur Thor Thordarson is a member of the Alliance of European Conservatives and Reformists (AECR), who argue that the UK should seek a trade-only deal outside of the EU, which could provide the foundations for a greater economic union. And via AECR's official twitter account we see this:

And the secretary-general of AECR is...Daniel Hannan.

We guess international interventions in our referendum are going to be inevitable,and at least with the EU we can see the enemy coming. However with friends like this who confuse the issues and propose unworkable solutions...we will lose the referendum.

Saturday, 11 July 2015

EU Referendum: The Difference Between EFTA And The EEA

In Friday's Telegraph we see an article by Icelandic MP Guthlaugur Thor Thordarson and Swiss MP
confusion between EFTA (European Free Trade Area) and European Economic Area (EEA), with a blurring of lines between the Swiss situation and Iceland's:
The clue is in the name: European Free Trade Association. Free trade and national sovereignty turn out to make a pretty good combination. Income per head in EFTA countries is, on average, 56 per cent higher than in the EU. And both our countries export more to the EU, in proportionate terms, than Britain does.
Britain was once the leading EFTA state. It could be again. Come on in: the water’s lovely.
This has led to confusion on social media such as this tweet from executive editor of ConservativeHome and a former campaign director of the TaxPayers' Alliance Mark Wallace:
 
Perhaps it's not surprising Wallace comes to this conclusion given that Icelandic MP Guthlaugur Thor Thordarson goes onto repeat this mistake on BBC's today programme (2hrs 49mins), a mistake echoed by presenter Mishal Husain.

Not that this is a recent phenomenon, for example here on Conservatives for Liberty they write, (with no mention of the EEA):
The main complaint that constitutes the ‘in’ camp’s only real argument against EFTA membership is that these countries have to follow all the EU’s rules without having any say in how they are made.
The "ruled by fax" argument is one that applies to the EEA not EFTA. And blogger Living in Greece, makes such a hash of describing the contrast between the two settlements that it is completely wrong.

EFTA and the EEA are very different agreements. EFTA membership consists of four countries Norway, Iceland, Lichtenstein and Switzerland. Of those four, three have EEA agreements, the exception being Switzerland which is a member of EFTA only.

EFTA membership is required for EEA participation and it's the EEA which gives Single Market access for Norway, Iceland and Lichtenstein (so-called NIL countries). Given Norway is the biggest county, it's known as the "Norway option" or sometimes the "EEA option".

Conversely EFTA on its own does not confer access to the Single Market - there is no trade relationship with the EU - which is precisely why Switzerland has to have bilateral agreements which are made outside the EFTA framework. Switzerland's EFTA membership is in no way related to its bilateral agreements with the EU.

And such detail matters for UK eurosceptics. Membership of EFTA is not automatic, each existing country has veto regarding the admission of new countries. And in particular both Iceland and Norway have dissatisfaction with the EEA agreement, but they are not powerful enough to force a renegotiation. UK membership of EFTA would therefore be seen as advantageous but only if we sign up to the EEA as well. Without agreeing to the EEA our EFTA membership submission will very likely be vetoed.

In addition we have EU-Swiss relations which are in crisis with the rejection in a referendum by the Swiss of the "free movement" provisions, with the bilateral treaties on the verge of collapse. The deadline for resolution is in February 2017, difficulties which will be high profile during the run-up to our own referendum. That though is a bilateral treaty problem not an EFTA one, but the failure to make such a distinction will lead to misleading interpretations of EFTA.

The above is probably a bit "Janet and John" for regular readers but it's not very reassuring when Icelandic and Swiss MPs are themselves seemingly unaware how their own country's agreements are made.

The two MPs probably meant well but their intervention has done nothing more than muddy the waters to the detriment of the UK's "no" campaign.

Friday, 10 July 2015

The Euro And Greece: The Empty Trojan Horse


It is remarkably curious that Greece, a country of relative insignificance, whose economy is smaller than Volkswagen's, has dominated the UK media agenda with much frenzied anticipation of a eurozone meltdown. Leading economists began predicting 'Grexit' including the economist who is credited with coining the phrase, as did other 'experts';
"Grexit is inevitable, it’s an absolute certainty"
And not just economists, this what Daniel Hannan had to say on July 6th:

It's interesting that with a Greek deal looking increasingly likely when we went to find the above tweet last night we found Hannan has now deleted it. Thanks to the internet though it can be found elsewhere. I guess the deletion speaks for itself.

Among other predictions, such as the 'European project is dying' there has been ill-disguised Anglo-saxon gloating and praise for "little democratic Greece standing up to the bullying EU". Greece though did not vote to leave the Euro or indeed the EU itself. They had instead voted to keep spending Germany's money without the inconvenience of paying it back. It's worth noting that the UK is owed around £10billion by Greece.

Whatever the referendum was, an exercise in democracy it was not. Called at the last minute, the referendum was rushed through with no time to debate the complexities of the bailout package, there was an absence of a proper "yes" or "no" campaign, the government put the "no" option (which it favours) above the "yes" on the ballot paper, the Greek media have been accused of bias and breaking the law leading up to the poll and it now appears that the result has been ignored anyway.

In that sense the referendum cannot be fair, or be considered a reflection of a true democratic decision. Instead it was merely an exercise in trying to bluff the EU using the Greek people as pawns. We can only be grateful in this country that we have an Electoral Commission to help negate government referendum stitch-ups like this.

So rather blow apart the eurozone, instead Greece is capitulating. It has proposed and is accepting a deal far worse than the one which was put to its people in a referendum. It will crawl away with a whimper.

The reason of course, as we noted last month, is that the current crisis, and the Euro in general, has less to do with economics and more to do with politics. The current crisis has not come about because Greece ran out of money - there was a deal on the table - but due to Tsipras deciding to do politics, and he has not come out of this well. It would seem he has been rather naive when dealing with the EU and we venture as far as to say "out of his depth".

He had a much weaker hand than he seemed to think - Greece economically and politically is insignificant - and he played it badly. By calling a referendum he thought he would frighten the EU into a better deal by the threat of political contagion to the likes of Spain et al.

Instead the markets largely shrugged off the referendum result and the only consequence has been that he has annoyed just about every leader in the eurozone. Annoyed to the extent that the ever increasingly robust language coming out of the EU indicates how fed-up they are with Greece. Fed-up to the extent that Greece was given an ultimatum on to agree a bailout package or leave. Tsipras backed himself and Greece into a corner. He's had no choice but to climbdown.

And the reasons are two-fold. For all the gloating by the UK media, they have largely overlooked two key points. They can deal with the economic part of EU membership but uttlery fail to acknowledge the more important political aspect. For Greece to leave would be contrary to "ever closer union". The EU cannot politically afford Greece to leave.They will paper over the cracks until the "English Question" is resolved and then we will have a new treaty.

Secondly, despite "preaching" by British" commentators that Greece would be better of out, their own experience suggests the opposite:
When it comes to money, the Greeks learned a lot of lessons the hard way over many generations. The drachma has always been seen by them as a way for the series of corrupt governments to steal from the people through devaluations and inflation.
This is what monetary theft looks like from the Greek point of view, and why they don’t trust their politicians and central bankers in managing a currency. They’ve learned the hard way and won’t forget the drachma’s 82% devaluation against the euro in two decades.
Greece simply does not want to leave. So ultimately Greece's gestures were empty, they capitulated as we expected they would. If nothing else this saga demonstrates once again how badly served we are by our media which doesn't bode well for our own forthcoming referendum.
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Wednesday, 8 July 2015

EU: Damned By Their Own Words


We have been carrying out some housekeeping on this blog and have added a whole tranche of new quotes down the right side. The quotes are now separated out into two categories; EU and Euro. For all the europhile arguments that the EU is an economic project, the EU's own words contradict them. It becomes an odd position for europhiles to find themselves in when they contradict the founding father of the very project they're trying to defend.
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Saturday, 4 July 2015

EU Referendum: Global Britain

Above is an old Guardian cartoon from the '75 referendum that I've tweaked so that it has more relevance for the 21st century. The original version can be found here. EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU ReferendumEU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum

Monday, 22 June 2015

Greece And The Euro: A Matter Of Politics Not Economics


"The process of monetary union goes hand in hand, must go hand in hand, with political integration and ultimately political union. EMU [economic and monetary union] is, and always was meant to be, a stepping stone on the way to a united Europe"
(Wim Duisenberg, first president of the EU Central Bank) 

"The single currency is the greatest abandonment of sovereignty since the foundation of the European Community: the decision is of an essentially political nature"
(Felipe Gonzalez, a Spanish former PM, 1998)

"Europe will be forged in crises, and will be the sum of the solutions adopted for those crises."  
(EU founding father Jean Monnet)

As the eurozone goes through one of its periodic 'difficulties' there's much fuss being made about a possible Greek exit, or Grexit. Today "Greece faces a critical 24 hours as European leaders hold an emergency summit in Brussels that could break the deadlock around the country's debt crisis".

We have of course been here many times before and naturally such speculation results in a media plethora of economic analysis, graphs and statistics and goodness what else.

There's often incredulous analysis on why Greece hasn't yet left Euro and go it alone and why it should; the economic case is one which is largely obvious.

Yet to make such an economic case is to miss the point entirely. What is so often overlooked is that the euro, and indeed the EU, is a political project not an economic one. And as the quotes above make clear the EU, and its member states, make no secret of this. But despite proclaiming its political intentions so publicly it is a damming indictment that we can no longer rely on the UK media to even acknowledge this simple fact, which perhaps reflects the prevailing UK view in general.

But it's in this political context we must see the Greek crisis. The euro has always been a political project to achieve its "ever closer union" as per the opening sentences in the Treaty of Rome 1957. "Ever closer union" is the utter founding principles of the EU; they meant it then, they mean it now.

To achieve full political union requires salami tactics or the Monnet method. Normally with a currency union we should start off with political union first and then economics. However due to the difficulties of achieving the political union part first the EU quite deliberately put the cart before the horse. By doing so they ensured the euro was a flawed project from the outset.

By making it flawed meant it was inevitable that it would encounter a series of crisis. Each crisis needs a solution and that solution, if we may call it that, invariably would be a call for 'more europe'. More Europe, more power, more integration. Thus step by step a series of euro problems allows the march towards further integration to continue unabated.

What could not be achieved explicitly by the front door would be achieved less obviously via the back door on the back of an economic Trojan horse - of ultimately economic misery. The euro is the extension of engrenage or 'the Monnet method' writ large:
The Schuman Declaration was presented by Schuman on 9 May 1950 (9 May was later to become Europe Day). Monnet and Schuman believed that it was through economic integration that political integration would eventually be achieved, via a process called spillover. Monnet and Schuman were thus the first functionalist theorists of Europe. Indeed, this process of integration is often termed the 'Monnet method'.
Yet much of this obvious point seems so beyond our own media who seem to be willing the Greece to exit to reinforce their misplaced, wrong and self-important analysis that the EU is all about economics rather than deal with the real issues as they are.

Thus despite all the brinkmanship and threats of Grexit, ultimately someone will put up some money, more than likely Germany, to paper over the cracks and the eurozone crisis will be left on hold until a new treaty comes along. Bailouts are de facto fiscal transfers - essential for an economic union to succeed. All that is needed is to make them official via a new treaty.

It's with some irony that the UK is aggravating the Greek crisis by having a referendum in 2017. By doing so it is holding up the new treaty to try to resolve the euro crisis; the Fundamental Law of the European Union which now has to wait until the "English question" is settled.

Despite the dreadful economic statistics Greece will stay in, politics and EU integration ambitions ensures that it must.

Sunday, 21 June 2015

Parish Notice

Apologies to regular readers for the lack of new posts recently. It's no reflection on the lack of activities regarding a referendum. Plans are afoot on a personal level to make this blog a full time operation.

Normal service will resume shortly.

Wednesday, 27 May 2015

The Union Flag

Visiting the local dentist with Mrs TBF today we notice that not only the phrase on a fire extinguisher, pictured above, is; "European Approved" above a Union Flag, but also that the Union flag is effectively "upside down".

We also note that fire extinguishers regarding fire are subject to international ISO standards, not EU standards. And it's in international bodies where rules are really made, making the EU redundant.

EU Referendum: Queen's Speech

Despite the understandable reluctance of many in the eurosceptic community to take Cameron at his word, particularly Cameron's previous form over his "cast-iron" promise regarding the Lisbon Treaty, the Queen's Speech today contains measures to introduce a referendum bill to be held by 2017:
My government will renegotiate the United Kingdom’s relationship with the European Union and pursue reform of the European Union for the benefit of all Member States. Alongside this, early legislation will be introduced to provide for an in-out referendum on membership of the European Union before the end of 2017.
Politically Cameron never had a choice - it was a matter of political pragmatics. The idea that Cameron could be trusted was never an option, it was less about trust and more about reality. Politicians in general should never be trusted - which is why the concept of democracy exists, to give us the power to vote them out in order to concentrate their minds. Thus, by the Queen's Speech, and given that the Tories have a slim majority, it's clear we will get an EU referendum by 2017.

It is likely, and not unsurprising, that the referendum question will be similar to; "Should the UK remain a member of the EU?" which is well within the Electoral Commission's recommendations. The EC's preferred option was "Should the United Kingdom remain a member of the European Union or leave the European Union", yet it looks like the "yes/no" option will form part of the bill.

It could be argued that a "yes/no" vote enforces the status quo effect to remain in, but here we are reminded that saying "no" can be effective as per the Community Charge rebellion back in the late 1980's:

It's now down to us to win...

Tuesday, 26 May 2015

Scotland

Having returned from Scotland over the weekend, may we suggest that if it wants to maintain its reputation as "a clean, unspoilt destination with beautiful scenery", which generates at least £4bn per year in tourist spending, it stops desecrating all that lovely scenery with wind turbines.

We have never seen so many turbines - the presence of so many completely destroys any natural beauty the Scottish countryside has.

However on the brighter note we took the opportunity to visit parts of Scotland we hadn't got around to seeing previously. We had a little day trip to Dundee, despite the rain, and found our way to Tannadice Street home of both Dundee FC...
  
 ...and Dundee Utd FC.

They're so close together on the same street it's ridiculous (Dundee is on the right, Dundee Utd is just down the road on the left). 

And then we visited the Falkirk Wheel, which is an amazing piece of engineering - the 21st century upgrade of the Anderton boat lift in Cheshire:





And with engineering in mind, we note that passing across the Forth Road Bridge progress is being made on its replacement which is due to be finished next year. The reason for the replacement, despite being built in the 1960s, is the old road bridge is falling to pieces. What a contrast to the Victorian rail bridge, opened in 1890 which...er...is still there and needs no replacement. And is the bridge where the SNP are proud to stand outside.