Cameron vetoes new Eurozone treaty

[bobalot]

The complete breakdown of the euro-pollyanna propaganda machine when that happens will be quite wonderful to watch.

Quite. If one happens to be a billionaire who can afford to lose huge amounts of money. For the rest of us common folk the prospect of one of the biggest economies of the world breaking up and ending in total chaos is not so nice an idea. Or do you seriously think that EMU or EU breaking apart would not cause major problems and quite frankly disasters to world economy? Or are you so brain-washed in your ideology that you don't even think about consequences?

This is the real problem that we are facing in a global economy: if USA goes bust, the world will follow; if EU goes bust, the world will follow; if China etc. goes bust, well, guess what happens. And I can't take any joy in thinking that "Yes, my economical/political ideology is proven right!" when such things happen. Especially when hard times tend to produce extreme reactions in people. I've seen many people referring in this conversations to 20s and 30s. I'd very much like to avoid any major extremist political movement, thank you very much: one round of communists, fascists and Nazis was enough, thank you very much. Of course, some of you may think that you will escape such hardships and take extraordinary glee in that fact. I hope that you live in interesting times for that.

Did you miss Starglider's doomerism and gold standard wanking over the year?

As for political extremism, it's already happening in places such as Hungary.

Neo-fascist thugs attacked Roma families, killing six people in a series of murders. The right-wing populists of the Fidesz Party won a two-thirds majority in the parliament, while the anti-Semitic Jobbik party captured 16.7 percent of the vote, making it the third-largest party in Hungary, next to the Socialists. Unknown vandals defiled the Holocaust Memorial with bloody pigs’ feet. A new law granted the government direct or indirect control over about 80 percent of the media. The television channel Echo TV showed an image of Nobel laureate and Auschwitz survivor Imre Kertész together with a voiceover about rats. Civil servants can now be fired without cause. Krisztina Morvai, a member of the European Parliament for Jobbik, suggested that “liberal-Bolshevik Zionists” should start thinking about “where to flee and where to hide.”

[folti78]

As for political extremism, it's already happening in places such as Hungary.

Neo-fascist thugs attacked Roma families, killing six people in a series of murders. The right-wing populists of the Fidesz Party won a two-thirds majority in the parliament, while the anti-Semitic Jobbik party captured 16.7 percent of the vote, making it the third-largest party in Hungary, next to the Socialists. Unknown vandals defiled the Holocaust Memorial with bloody pigs’ feet. A new law granted the government direct or indirect control over about 80 percent of the media. The television channel Echo TV showed an image of Nobel laureate and Auschwitz survivor Imre Kertész together with a voiceover about rats. Civil servants can now be fired without cause. Krisztina Morvai, a member of the European Parliament for Jobbik, suggested that “liberal-Bolshevik Zionists” should start thinking about “where to flee and where to hide.”

Actually, Jobbik just got a big setback since the election. They are boxed in by FIDESZ, who poaches right wing voters from them every time it can and their support base were already limited. Most of their big ticket promises were put into law by FIDESZ and they were fucked up the rest at the local level. Although it could change in the future if Orbán will continue to fuck up the economy even worse than they are now.

What's more problematic that King Orbán building a new dictatorship under the radar. Shit he pulled since that article:
- put cronies into key positions, including Chief Prosecutor, the Judicial Branch, the Constitutional Court and cemented their position by a set of "Lex Buddies" laws.
- dissolved or/and filled up key institutions with cronies, cementing them with laws requiring supermajority to change or overturn.
- gerrymandered the voting districts to their own advance
- changed the election system to first-past-the-post one to favour the biggest party(them).
- try to take over as much big business as they can
- introduced new Labour code, which allow employers to screw workers more easily with unpaid overtime, slashed vacation days and more easier and cheaper firing(although it may/may not be that bad), neutered the unions too.
- replaced the constitution with another one, tailored for them

Krugman is not happy too...

[K. A. Pital]

If the FIDESZ wins over the Jobbik electorate by ... uh... actually pandering to the extreme right with the constitution, etc. things, isn't that actually concerning as well?

[folti78]

If the FIDESZ wins over the Jobbik electorate by ... uh... actually pandering to the extreme right with the constitution, etc. things, isn't that actually concerning as well?

Umm nope, real far-right is a really small subsection of Hungarian voters, Jobbik itself is more of a coalition of a range of right and far right people/movements. What I meant, that FIDESZ were able to detach some of the less crazy voters from them. That 16%, Jobbik scraped together was the result of the public backlash against the previous "Socialist"-Liberal government.

Other than that, Orbán wants to be an an autocrat mini-dictator (like his pal Berlusconi was). He's doing that without turning to the far right cliches(actually there were crackdown against far right organizations like the Gárda and the various other ones hiding under the Neighborhood Watch law). And with the constitution and the cornerstone laws, he's pandering to the christian fundies and the big churches, not to the far-right.

Not that's any better. The "Family Protection" law turns every teenager below 18 to a 5 year old child for example. Total obedience to parents, not allowed out on the streets after 20:00 without parental escort ...

[K. A. Pital]

Not that's any better. The "Family Protection" law turns every teenager below 18 to a 5 year old child for example. Total obedience to parents, not allowed out on the streets after 20:00 without parental escort ...

What the hell? Oh, and obviously the teens can't sue since they have no rights. Masterful. Almost as masterful as Saudi Arabia's "Women shouldn't drive" rule which isn't a formal law and yet women don't drive.

[Starglider]

Concise and accurate summary from The Telegraph;

There are plenty of strands to explore while the dust settles, but one of the juiciest is the state of relations between Paris and London. That BBC slo-mo footage being played on a loop of David Cameron's tight-lipped smile as Nicolas Sarkozy ignores him tells a great story. A while back I relayed the Team Dave view that whatever was said in moments of passion, Sarko and the PM had forged an unshakeable bond of friendship through their shared effort in Libya. This morning, that tune has changed. In my morning briefing earlier I reported on No10 unhappiness with the French, and I've picked up a heap more since then. The events of the past 12 hours have exposed a truth that many chose to ignore, namely that in its relentless pursuit of its national interest, France's strategic objective has been to drive the UK to the margins – if not out of the EU – and to destroy the City.

The French narrative of the crisis is that it is all an Anglo-Saxon creation, and we must be punished for it. The failings of the euro so obvious to us are not recognised by the French. The British view is that packing the treaty proposals full of changes that Britain could never conceivably accept was a ploy to force us into a veto, and so into the departure lounge. Or here's another way of putting from inside the machine: "The French are out to screw us," one source tells me. "Despite all the jollity, the fact is that Sarko doesn't gives a s*** about us. It's all bull***. They have their view that the Anglo-Saxon model is a disaster and was responsible for the crisis. " Of course we should aim off for the frustrations of the moment. Mr Cameron will not forget their shared experience over Libya, or the specific help that Mr Sarkozy gave him when his father died. But the Entente ain't so Cordiale any more.

[folti78]

Not that's any better. The "Family Protection" law turns every teenager below 18 to a 5 year old child for example. Total obedience to parents, not allowed out on the streets after 20:00 without parental escort ...

What the hell? Oh, and obviously the teens can't sue since they have no rights. Masterful. Almost as masterful as Saudi Arabia's "Women shouldn't drive" rule which isn't a formal law and yet women don't drive.

Sue??? It's a "cornerstone law", you need 2/3 majority to change it or ask the Constitutional Court to review it(which has been watered down by adding 5 Viktorian judges to it), which ties to a ghetto edit to my previous post:

- the list of entities allowed to post any request to the CC has been drastically reduced. They are precisely a handful of government entities filled with Viktorian cronies.
- the ombudsman system has been reduced to a figurehead status with 3 out of 4 posts has been abolished.
- passed a law to form a new intelligence agency which has access to all private data
- last year formed the Antiterrorist Centre group in police, which are charged by "fighting terrorism"* and protecting government VIPs**. While the rest of the police got a 30billion HUF budget cut, they got some 20bHUF just to buy new cars(Audi Q7 and like).

* they fight valiantly against all kinds of terrorism from fat, middle aged tax evaders to fat and skinny nerds running illegal FTP servers and the odd crazy threatening to blow up his house. At least when they manage to raid the right address. No one saw them doing anything against the real heavies like russian or serbian mobsters.

** They are practically Orbán's private army, formed around his civilian bodyguards.

[Thanas]

Question to Starglider and others who think this actually was a good idea:

a) Would you agree to a treaty that would say German industry has to be exempt from any EU regulation, that it should be protected by treaty and that nobody else should have a say in that?
b) What is your alternative here?

For more context from the guardian:

Cameron hijacked the summit with his demands for protections, exemptions, and concessions for the City in any future EU financial markets regulations. It is 100% clear to me at least that he damaged rather than aided the City's interests. There are around 20 pieces of financial regulation in the pipeline from the commission. Once the commissioner in charge, Michel Barnier of France, gets going, why on earth should he do Cameron any favours? Jonathan Faul, his director-general (most senior Eurocrat), is British and was put there deliberately to temper Franco-Dirigiste zeal. He's now in a very difficult position.

Commission proposals basically go to QMV vote in council (27 governments) before passing. UK has no veto and more likely now to be outvoted. Cameron won nothing and with his veto forced the rest to forge an international treaty between governments on the euro crisis, meaning UK has no voice or vote there

Damian Chalmers, professor of European law at the London School of Economics told me:

60% of the EU's financial services are in the City of London. The UK has 9% of the votes under QMV. Cameron was asking for a lot of safeguards on UK financial services industry ensuring that the European Banking Authority continues to be based in London, a protocol that the UK could be exempted from future regulations. It's like the Germans saying they want to pull back from all regulation affecting the car industry. You've got most of the member states very fed up with financial services industry, and one state very dependent on it with weak voting power. But all the things Cameron's worried about could be done under existing EU law, he's not stopped it.

Turns out the measures will still effect the city anyway.

And pray tell, what was the risk to British banks anyway? Surely limiting the ability of hedge fonds to speculate is a good thing, right?

[Xisiqomelir]

The complete breakdown of the euro-pollyanna propaganda machine when that happens will be quite wonderful to watch.

Quite. If one happens to be a billionaire who can afford to lose huge amounts of money. For the rest of us common folk the prospect of one of the biggest economies of the world breaking up and ending in total chaos is not so nice an idea.

The ability to make money with the rise and fall of the prices of financial instruments has been available to us practically since the beginning of public securities markets, centuries ago.

It is unfair that people who are not professionally trained to anticipate these movements in prices are now being forced to do so. This is the consequence of a general dereliction of duties by most of the global leadership.

[UnderAGreySky]

Could anyone tell me what the impact of the treaty is on the budget-setting capabilities of the all those who have signed? Does it impose deficit or expenditure guidelines and are there any rules regarding debt reduction?

[Thanas]

Could anyone tell me what the impact of the treaty is on the budget-setting capabilities of the all those who have signed? Does it impose deficit or expenditure guidelines and are there any rules regarding debt reduction?

The impact of the treaty is that people will have to actually explain their budget in detail, with the commission then making recommendations. That is about it. There are no guidelines besides those already in place.

The impact will be more of a peer pressure thing (like "Hey Germany, you promised a reduction in debt. What are you doing spending a billion on new posters of Merkel?").

[UnderAGreySky]

The impact of the treaty is that people will have to actually explain their budget in detail, with the commission then making recommendations. That is about it. There are no guidelines besides those already in place.

The impact will be more of a peer pressure thing (like "Hey Germany, you promised a reduction in debt. What are you doing spending a billion on new posters of Merkel?").

That's strange, as from these two links (Martin Wolf and Alphaville) at the FT I got the following:

5. The rules governing the Excessive Deficit Procedure (Article 126 of the TFEU) will be reinforced for euro area Member States. As soon as a Member State is recognised to be in breach of the 3% ceiling by the Commission, there will be automatic consequences unless a qualified majority of euro area Member States is opposed. Steps and sanctions proposed or recommended by the Commission will be adopted unless a qualified majority of the euro area Member States is opposed. The specification of the debt criterion in terms of a numerical benchmark for debt reduction (1/20 rule) for Member States with a government debt in excess of 60% needs to be enshrined in the new provisions.

and



"automatic consequences" is WAY too loaded a term. Everyone except for Estonia, Luxembourg and Finland have fallen afoul of the 3% rule. There's another chart about the 60% rule too:



Something tells me I'm glad the UK didn't sign up, although for not quite the reasons Cameron has stated.

[Thanas]

That's strange, as from these two links (Martin Wolf and Alphaville) at the FT I got the following:

5. The rules governing the Excessive Deficit Procedure (Article 126 of the TFEU) will be reinforced for euro area Member States. As soon as a Member State is recognised to be in breach of the 3% ceiling by the Commission, there will be automatic consequences unless a qualified majority of euro area Member States is opposed. Steps and sanctions proposed or recommended by the Commission will be adopted unless a qualified majority of the euro area Member States is opposed. The specification of the debt criterion in terms of a numerical benchmark for debt reduction (1/20 rule) for Member States with a government debt in excess of 60% needs to be enshrined in the new provisions.

These rules are already in place since the signing of the stability pact. Only change is that before it was a political, now it is an automatic process.

[Zed]

I just can't help but think of the following headline whenever I read about this:

"Germany urges automatic sanctions for breaking rules it was first to break"

[D.Turtle]

These rules are already in place since the signing of the stability pact. Only change is that before it was a political, now it is an automatic process.

To be more specific, the biggest change is that while before a qualified majority was required to enforce the "automatic" consequences, now a qualified majority is required to stop the consequences - making them somewhat more automatic.

I just can't help but think of the following headline whenever I read about this:

"Germany urges automatic sanctions for breaking rules it was first to break"

Well, not quire first, but we definitely broke them when it was convenient - which of course was a bad precedent - which is part of the reason why the German government is now so adamant about making it harder to avoid the consequences if those rules are broken again.

[Thanas]

I just can't help but think of the following headline whenever I read about this:

"Germany urges automatic sanctions for breaking rules it was first to break"

Actually, the process has been used against Germany in the past so I do not get what you want here.

[Simon_Jester]

It undermines one's ethos when advocating harsher punishments for breaking a rule one has broken in the past.

If a politician is known to have used marijuana, was punished for it in ways deemed appropriate at the time, and then turns around and calls for harsher, more automatic punishments... he's going to look a bit hypocritical.

[Thanas]

Bullcrap. If we go by this statement, then clearly nothing should have been done by Germans to combat Nazism. After all, they were Nazis before so this automatically invalidates any further effort, right?

[Kryten]

It undermines one's ethos when advocating harsher punishments for breaking a rule one has broken in the past.

But are these even the same people? It could be a part of the German government opposing the apparent hypocrisy of another part.

[folti78]

News for the periphery ...

Hungary, Czechs wary of EU tax harmonisation plan

Hungary and the Czech Republic have raised concerns about the EU's plans for closer fiscal union, saying they should apply only to eurozone states.

Hungarian PM Viktor Orban said he did not wish to join any deal that moved towards tax harmonisation.

Britain has refused to sign up to an EU summit deal, but all nine other non-eurozone states say they will let their parliaments decide.
Czech PM Petr Necas said a common tax policy would not be "good for us".

'Warning' to Paris and Berlin

France and Germany have called for eurozone countries to have common corporation and financial transaction taxes, but EU leaders agreed only to work towards a co-ordinated economic policy.

On a visit to Budapest, Mr Necas said it was too early to speculate about the content of the fiscal compact on tougher budget rules that EU leaders hope to sign by March 2012.

However, he insisted that Prague supported an attempt to stabilise the single currency area. Hungary is also backing the tougher rules on debts and deficits.

But Mr Orban made it clear that any co-operation with the eurozone should not harm Hungary's competitiveness.

Our Europe correspondent Chris Morris says the two leaders' remarks appear designed to warn Paris and Berlin that there will be resistance if the two countries try to put references to a financial transaction tax and a common corporate tax into the draft agreement.

Britain vetoed an attempt at last week's EU summit in Brussels to turn tighter fiscal controls into a new EU treaty.

Prime Minister David Cameron said he was concerned the measures would harm Britain's financial services industry in the City of London.

Sweden has also expressed concern about the Brussels proposals but has decided to give its parliament the final say.

The first draft of the new agreement is expected to be circulated at the start of next week to the 26 countries that have indicated they are prepared to take part.

European Council President Herman Van Rompuy announced on Friday that another EU leaders' summit would be called by late January or early February to secure agreement on the text.

TL;DR, Hungary and the Czech Republic made a thinly veiled threat to the core EU that they'll oppose the new treaty if they weren't excluded from it's regulation. Which probably would be a good for the Czechs, but quite irrelevant for Hungary, because ...

But Mr Orban made it clear that any co-operation with the eurozone should not harm Hungary's competitiveness.

If it wouldn't be you personally whose actions harm whatever competitiveness Hungary still have.

Another news is that Orban was probably able to make a new record in EU and IMF reaction times with his "great" new idea for finally getting his hands on the Central Bank and it's money reserves. After passing the law (which took some 10minutes) ECB and the IMF reacted within a few hours. Bonus points for trying to fool the ECB by sending a different text of the bill then the one voted on ...

[UnderAGreySky]

Bullcrap. If we go by this statement, then clearly nothing should have been done by Germans to combat Nazism. After all, they were Nazis before so this automatically invalidates any further effort, right?

Actually, no, bad analogy Thanas. It would be more accurate if Germany went around in the 1950s wagging its fingers at the French and English for not combating Nazism in their own countries.

It's the reason no one takes the US seriously when they ask one country to stop intervening in another's affairs - I wouldn't. I remember how the Russians reacted to American reactions on their intervention in Georgia. It's also the reason why everyone looked sceptically at their actions in Libya because of their track record with Iraq and Afghanistan.

[Dartzap]

Looks like some senior French politicians are a bit miffed at the rumours surrounding a down-grading.

Beeb

Calm economic rhetoric, Nick Clegg tells French PM

Deputy Prime Minister Nick Clegg has told the French prime minister that steps should be taken to "calm the rhetoric" on the UK economy.

Mr Clegg told Francois Fillon that remarks from members of the French government "were simply unacceptable".

French finance minister Francois Baroin earlier described the UK's economic situation as "very worrying."

Number 10 said Mr Clegg was "absolutely right", and remarks from the French were "not helpful in any way."

Meanwhile, UK officials are to join continuing eurozone talks despite Prime Minister David Cameron's veto of an EU-wide treaty change involving all states.

Mr Baroin's comments came after the chairman of the French central bank, Christian Noyer, suggested on Thursday that Britain was a candidate for a downgrade ahead of France, amid fears in Paris that France might lose its triple-A rating.

The French prime minister, Mr Fillon, raised similar concerns during a visit to Brazil.
"When I look at our British friends, who are even more indebted than us and carrying a bigger deficit, what I see is that the ratings agencies so far don't seem to have noticed," he said on Thursday.

'Rather be French'

On Friday Mr Baroin heightened tensions when he told Europe 1 radio: "The economic situation in Britain today is very worrying, and you'd rather be French than British in economic terms."
A UK government spokesman said Mr Fillon called Mr Clegg from Rio de Janeiro to clarify his comments.

"Fillon made clear it had not been his intention to call into question the UK's rating but to highlight that ratings agencies appeared more focused on economic governance than deficit levels," the spokesman said.

"The deputy prime minister accepted his explanation but made the point that recent remarks from members of the French government about the UK economy were simply unacceptable and that steps should be taken to calm the rhetoric.

"PM Fillon agreed and they both undertook to speak again shortly to discuss economic co-operation."

Mr Fillon's office said he "took the initiative" to call Mr Clegg to "clear up misunderstandings" over his remarks about the British economy.

Downing Street said French prime minister spoke for 10 to 15 minutes in French to Mr Clegg.
It was stressed that the two men have a good working relationship and are in regular contact. The reason Mr Fillon contacted the deputy prime minister is that Mr Clegg is his equivalent in the British government.

The comments from senior French figures followed a recent warning from US credit ratings agency Standard and Poor's that France could lose its triple-A credit rating over the eurozone crisis.
Another agency, Fitch, confirmed France's triple-A rating on Friday evening, but revised its long-term outlook to "negative" from "stable".

BBC Europe correspondent Matthew Price says there has been an astonishing series of attacks coming out of Paris.

He says French officials are smarting from the expected imminent loss of their cherished AAA rating.

'Train crash'

Andrew Tyrie, Conservative MP and chairman of the Treasury Select Committee, said the remarks by senior French figures were "a reflection of the great nervousness around".
"We have been watching the slow-motion train crash about to happen for some time," he told BBC Radio 4's World at One.

"The plain fact is we have all got an interest in seeing an orderly resolution in all this.
"Trying to distract attention to other countries' problems is not going to help anyone."
Liberal Democrat Sharon Bowles, chairwoman of the Economic and Monetary Affairs Committee in the European Parliament, said countries should avoid criticising each other.

"We ought to try and be more positive and swim together rather than sink separately," she said.
Meanwhile Downing Street has said Britain will be "fully engaged" in the talks to decide what should be in a new eurozone fiscal pact, despite deciding to stay out of it.
Labour said the PM, who vetoed the treaty change arguing there were not sufficient safeguards for the UK, was "being forced to backtrack on his damaging decision to flounce out of the room".