Category Archives: Politics

European Union, Foreign Affairs, Government, Politics, Russia, Society, Ukraine

Ukraine and the difficulties ahead…

UKRAINE

Over the past two weeks events in Ukraine have moved fast. No day over the last fortnight has past in which something critical has happened. Following the ferocious rioting that led to 88 deaths, Viktor Yanukovych, the country’s former president, was dramatically dethroned. Events in Kiev, Ukraine’s capital, are being perceived as one of the most epochal developments in central Europe since the end of the Second World War. Disruption is far from over.

Ukraine is deeply divided, with half of the population in support of joining the European Union. These people see the benefits brought to Poland, a country of similar size to the Ukraine, that is now firmly embedded within the EU and Nato. Poland’s GDP is now three times what it once was and people there enjoy living standards that are envied by those Ukrainians who wish to see their country afforded similar benefits. The other half, though, are deeply loyal to Russia’s Vladimir Putin and aim to see Ukraine integrated as part of Putin’s wider Eurasia Union, a new and emerging federation of countries aligned to the political aspirations of Moscow.

Ukraine’s future leadership and direction is far from settled. With no clear coalescence around an alternative leader, Ukraine remains more representative of a volcano that has erupted with extraordinary violence and with the after-effects still yet to be felt. Russia has been a dominant force over much of Ukraine’s history, and the world awaits to see how Putin will play his hand.

Hidden from view in the confrontation that has ensued in the centre of Kiev is a chronic economic and financial crisis. Whoever replaces Mr Yanukovych will need to tackle pressing issues to secure continued Russian funding of the country’s debt. Without this, a more widespread collapse beckons.

For its part, the EU needs to look critically at its mooted trade agreements with the country to ensure a fair balance of reciprocal benefits. A major criticism at the present is that these favour EU exports over Ukraine’s well-endowed agricultural sector. Given this delicate economic situation, it is not just Russia but also the West that needs to proceed with great caution before the election of a new government in Ukraine.

The great fear for Western leaders is that Russia will intervene militarily in the affairs of its most important geopolitical neighbour. Such a threat cannot be ruled out. Putin will view this kind of struggle as a matter of personal prestige – he has a renowned reputation in humiliating his rivals, rather than a record of striking appeasement and deals with them. While in power, Mr Yanukovych, became one of Russia’s main allies.

That Mr Putin may act rashly in the days ahead was one of the ‘many dangers’ that William Hague, the British Foreign Secretary, has alluded to. Mr Hague also highlighted the possibility of renewed violence, or that ethnically Russian parts of the country, such as Crimea, will attempt to secede. This situation represents more of a direct challenge to the EU in particular, which has been attempting to woo Ukraine with a trade deal worth hundreds of millions of euros a year. Such a deal is not the same as membership of the EU, but for many it will not be far off. It would, for example, offer Ukraine guaranteed entry into a huge and developed market on its doorstep. Unlike Mr Putin’s recent offers and bribes to his neighbour of cheap gas and serviceable debt, the EU deal has few strings attached.

Ukraine needs a government, and elections will be held in May. In the coming days and weeks, Western leaders must do everything they can to promote a working economy in Ukraine so that its institutions can be free from corruption and outside interference.

Setting out a path to normalisation will be difficult, not least because the opposition forces in Ukraine are deeply divided. Hatred of Viktor Yanukovych masks profound differences in belief and ideology. An early and sympathetic engagement is vital if Ukraine’s open revolt and revolution is not to shatter the country even further and spark dangerous unrest across the entire region.

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Britain, Economic, Energy, Environment, Government, Politics, Scotland

The development of hydro-electric power in the Scottish Highlands was a revolution…

A SECOND REVOLUTION?

Intro: An investment appraisal and feasibility study is currently underway between the Scottish Government and Scottish Power for a new development of hydro-electric storage at Cruachan, beside Loch Awe

The development of hydro-electric power in the Scottish Highlands was seen as a revolution. It provided for a big leap in living standards, not just because residents in northern Scotland could have a reliable and dependable supply of electricity to light and heat their homes, but also because it became an engine of growth for industry and commerce.

The First Minister in Scotland, Alex Salmond, has announced a second expansion of hydro power. In conjunction with a feasibility study being carried out by Scottish Power, a major utility company, the aims are to more than double the current generation of electricity. Some suggest this could amount to a second revolution.

The technical feasibility is investigating the costs involved in doubling the generating capacity of Scottish Power’s Cruachan pumped storage plant located beside Loch Awe.

In principle, an expansion of pumped storage would be hugely beneficial, because it is regarded as the only reliable means of storing wind energy – which gets generated at times when there is no demand for it. Increasing the storage capacity would help to make wind a far more reliable source of energy supply, and also by reducing carbon emissions.

However, we should not dismiss the fact that this is a feasibility study that will take up to two years to complete. The associated costs and employment creation potential of the project are, at this early stage, a rough guesstimate. It may turn out that the Cruachan expansion plans, like Scottish Power’s schemes for carbon capture and storage at Longannet, and its proposals for the Argyll Array offshore wind farm, are too technically difficult or too costly for it to go ahead.

For it to work (effectively) as a 1,000 megawatt storage battery for wind power, there is the additional problem that the reservoir halfway up Ben Cruachan will have to be increased in size quite dramatically. The obstacles in overcoming resistance from environmental campaigners should not be overlooked, either.

The Scottish Government appears to regard the project as one that is more likely than not to come to fruition. But, notwithstanding whether the project ever goes ahead or not, this will become an investment decision that will serve a valuable political purpose. That decision is to be made after the referendum for Scottish independence in September.

In this context, energy is a problematic issue for Mr Salmond. Expansion of Scottish renewables – which, undoubtedly, the Scottish Government will see as a major source for employment as well as cutting the country’s carbon footprint – is largely dependent on a subsidy which is mostly financed by energy consumers in England and Wales.

Implicit in the First Minister’s arguments is that, such will be England’s needs, the people and businesses south of the Border will be willing to continue paying their ‘foreign’ neighbour the subsidy in maintaining continuity of supply. That’s a difficult assumption to make and certainly holds no guarantee.

History may be tempted to record that if the hydro revolution being envisaged fails to materialise, Mr Salmond has cleverly waved a diversionary red flag for political purposes. We can only hope, though, that the project investment at Cruachan gets the green light.

Under an independent Scotland, energy policy would be under the direct control of the Scottish Government.

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Britain, Economic, European Union, Government, Politics, Society

Addressing corruption in the EU is an urgent matter…

EUROPEAN UNION

Intro: Corruption throughout the EU is endemic. It needs urgent and effective attention

In southern and eastern European countries corruption is much more widespread than it is in Britain.

Cecilia Malmström, the EU’s Home Affairs commissioner, estimates that across the EU, the amount of money paid in bribes and racketeering may add up to more than a £100 billion.

This is a staggering sum of money. The estimate given is based on surveys of people who were asked whether they knew about specific cases of having to pay a bribe and what their general perceptions of the problems of corruption in their country were.

In the UK, less than 0.5 per cent of people had either experienced, or knew of, an instance of bribery, the lowest percentage in the EU’s member states. This compares extremely favourably to respondents in Croatia, the Czech Republic, Lithuania, Bulgaria, Romania and Greece, where between 6 and 29 per cent of those questioned indicated  that they were asked or had been expected to pay a bribe in the last 12 months.

Yet, the perceived rates of blackmail and extortion related activities in the UK compared to others in the EU are much closer. Even in Britain, where the actual rates are deemed low, 64 per cent of people think corruption is widespread. Across the EU, an average of 74 per cent believes this is the case. In Greece, the perceived rate rises to an astonishing 99 per cent.

The gap between actual experience of corruption and perceptions of it can be accounted for by the widespread publicity which is given to instances of political corruption and the attention which is drawn to interest and exchange-rate fixing scandals still emerging from the financial industry (such as LIBOR, the price of oil and, more worryingly, the true value of gold).

In those countries with the highest experience of financial bribery, most instances relate to healthcare. This has stemmed from the inadequacy of public health provision which has led people to bribe and blackmail doctors to secure early treatment of illness.

Ms Malmström, a Swede, asserts that stamping out corruption is not the responsibility of the European Commission. Rather, she says, that responsibility lies with national governments, on whom she is calling to do more. She is certainly right to argue that instances of bribery is not just draining resources from legal activity and feeding criminality, but that such activity is also undermining the trust that the public has in democratic institutions.

What is more, however, is that in the UK the report’s findings may well have the unintentional consequence of further eroding the fragile belief in the EU. Whilst this report makes clear that the Commission’s own anti-corruption unit is under-resourced and has a vast swathe of fraud allegations in EU spending it will never likely investigate properly, the unit has long been the subject of reports of incompetence and irregularities in the management of its own budget.

Rectifying this situation should be an EU priority. But the EU’s bribery report may well have the effect of colouring the view that many Britons already have – that it is even more corrupt than they ever thought. It is right to ask if British taxes which flow to the EU are being wasted or, worse still, whether they are being harnessed to feather criminal nests and extortion rings.

The possibility exists in the UK for an in-or-out referendum on British membership of the EU in 2017, following the pledge given by the Prime Minister since he has held office. But, this recent EU report will only confirm Eurosceptical prejudices. For Europe to be cleansed of endemic corruption, the European Commission must act with a degree of urgency and effectiveness in dealing with the issues that underpin it.

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