Category Archives: Politics

Economic, European Union, Government, Italy, Politics, Society

A provocation and insult to democracy

ITALY

ITALY has had no fewer than 65 governments since the War – with an average survival rate of just over a year. The country is hardly renowned as a beacon of democratic stability.

Even by the standards of this volatile nation, however, the current political crisis is becoming more troubling and bizarre by the day. It proves yet again the disastrous folly of imposing the one-size-fits-all euro on countries for which it is so obviously unsuitable. Pertinently, it demonstrates that Brussels has no qualms about trampling on democracy to keep the dream of a European superstate alive.

Italy’s national finances are in a dire state. Marooned in a sea of debt, with a stagnant economy and crippling unemployment rate, citizens of that beleaguered land renounced their mainstream Europhile parties in a general election just three months ago. They rightly blamed membership of the single currency for their misery and elected a coalition of unashamedly populist, Eurosceptic parties – led by the maverick Five Star movement and Right-wing Northern League.

Yet, when radical economist Paolo Savona – a passionate opponent of the euro – was named finance minister he was vetoed by Italy’s slavishly pro-Brussels president Sergio Matarella, who then nominated his own man as prime minister and invited him to form a totally unelected government. It has no mandate of course and will soon fall. Mr Matarella could possibly be impeached for overreaching his powers. But what an affront to democracy.

Had this happened in some Third World state, it would have quickly been denounced as tyrannical and corrupt. Not in Europe. In both Paris and Berlin, Mr Matarella is being praised for his courage. There is no better example or illustration of how people across the European continent are being disenfranchised – and just why they are crying out for change.

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Britain, European Union, Government, National Security, Politics, Society

The Galileo satellite project

BREXIT

Galileo is Europe’s Global Satellite Navigation System (GNSS), providing improved positioning and timing information with significant positive implications for many European services and users.

BREXIT talks have turned into an extraordinary row over security cooperation as Brussels accused British negotiators of “chasing a fantasy”.

A senior EU official even threatened to bring talks to a halt due to acrimony over the EU’s Galileo satellite project and a post-Brexit security pact.

Brussels says Britain should not have full access to the £9billion satellite navigation system after it leaves the EU.

Britain has hit back by threatening it could demand the return of £1.2billion of taxpayer investment if Brussels goes through with its threat.

The UK also warned that the bloc’s hard-line approach to future cooperation on crime and security issues was in danger of creating “unnecessary risks to public safety”.

A senior EU official then struck back by warning of a halt to Brexit talks, insisting Brussels “would not negotiate under threat”.

The official claimed that British negotiators were “chasing a fantasy” and ignoring the “consequences of Brexit”.

The comments are likely to have infuriated the Government and Brexiteers, with talks now at a critical juncture ahead of a key summit at the end of next month.

The EU’s approach to Galileo has particularly enraged ministers, because Britain has already invested hundreds of millions in the programme.

Jean-Claude Juncker’s close ally Martin Selmayr is thought to be behind the tough approach, which has caused a split with other EU states that want security cooperation with the UK. Britain wants access to high-security elements of the Galileo programme, started in 2003 to rival America’s dominant GPS system, that have been factored into British military planning.

But Brussels claims that as a non-EU country, the UK should be treated similarly to partners such as America.

Britain warned the bloc that failure to provide the UK access to encrypted parts of Galileo would create an “irreparable security risk” and could cost the EU a total of £2billion.

Brexit negotiators said the EU would face a £880million bill if the UK continues to be frozen out of the programme – as well as a three-year delay beyond its expected completion in 2020.

In a position paper, the UK also said it would seek to claim back its £1.2billion taxpayer investment if Brussels refused to offer immediate unrestricted access. And the Government reiterated that it would push ahead with the development of its own alternative.

The UK’s demands were outlined in a combative paper presented to the EU negotiating team. The UK text said: “An end to close UK participation will be to the detriment of Europe’s prosperity and security and could result in delays and additional costs to the programme.”

The paper suggested that Brussels was deliberately overlooking the UK’s “considerable contribution” to European security.

It added: “The Commission suggestion that UK involvement in such exchanges and discussions ‘could irretrievably compromise the integrity’ of the system risks being interpreted as a lack of trust in the UK.” Brexit Secretary David Davis added: “A relationship based solely on existing third country precedents, as some seem to be suggesting, would lead to a substantial and avoidable reduction in our shared security capability.”

EU officials suggested that handing the UK security codes to the system would give them the ability to turn it off single-handedly while outside the EU.

An official also claimed that UK calls for reimbursement of its investments could breach a so-called “backsliding” clause that could allow talks to be frozen.

 

ARE the bureaucrats running the European Commission determined to damage the continent’s security in the pursuit of their grand project? There is no other way to explain the decision to try and exclude Britain from the Galileo satellite project after Brexit.

If this is an attempt to use Galileo to teach Britain a lesson it’s a mistake. This country’s vast military spending and world leading intelligence services mean the cards are overwhelmingly stacked in our favour. Far too often Britain’s negotiators have underplayed their hand. But rightly they have now issued an ultimatum: access to Galileo or our £1billion investment back, with the threat that Britain could go it alone – or join forces with Australia.

Meanwhile, the European Commission ought to consider much graver threats to the grand projects – Italy, crippled by debt and run by a ragtag coalition united only by loathing for Brussels, and the continuing rise of Eurosceptic opinion across more than half the continent.

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Britain, Business, Economic, Government, Politics

Carney: A Brexit investment boom once deal with Brussels is signed

ECONOMIC

Carney

Mark Carney told MPs on the Treasury select committee an investment boom will follow once a Brexit deal with Brussels is agreed.

THE Bank of England’s Governor Mark Carney has predicted that businesses will launch major investment drives after Britain signs its Brexit deal with Brussels.

Mr Carney said many firms had put off important spending decisions since the referendum but may turn on the taps when Britain’s future relationship with Brussels becomes clear.

In comments highlighting the importance of striking a deal, he claimed that families were already £900 a year poorer than they would have been if Britain had voted not to leave the EU.

But he said there may be a pick-up in economic growth and productivity once Brexit is settled.

Appearing before MPs on the Treasury select committee, he added: ‘It’s understandable businesses are holding back – there are some big, big decisions that are about to be made.

‘I could build a case to say that actually business will use those clean balance sheets, access finance and start to put capital to work, and we should see a sharp pick-up in business investment.’

Mr Carney – who warned before the 2016 referendum that Brexit could be an economic disaster – added that the economy was as much as 2 per cent smaller than it would have been if Britain had chosen to remain.

Mr Carney said: ‘Real household incomes are about £900 per household lower than we forecast in mid-2016, which is a lot of money.’

The comments drew an immediate riposte from Foreign Secretary Boris Johnson, a leading Brexiteer.

On a visit to Buenos Aires, Mr Johnson rejected the Governor’s view and argued that Britain will prosper outside the EU thanks to new trading opportunities with countries such as Argentina.

Pro-Brexit MP John Redwood dismissed the claims that families were £900 worse off, saying: ‘I see no evidence.’

John Longworth, former director-general of the British Chambers of Commerce, said: ‘He’s basing that number on forecasts which were flawed. There are lots of factors influencing that number.’

GOVERNMENT BORROWING

BRITAIN’S borrowing is at its lowest for 16 years as rising tax receipts confound warnings of economic doom following the Brexit referendum.

In a sign that the vote to leave the EU has done nothing to derail plans to put the country’s finances back on a stable footing, the Office for National Statistics (ONS) said the Government borrowed £40.5billion last year – down from £153billion in 2009-10 under the last Labour government.

It is also around half the amount George Osborne predicted Britain would borrow last year in the event of a Brexit vote.

The figures give the lie to warnings that the decision to leave the EU would crash the economy and hammer tax receipts.

Instead, last year’s deficit was 2 per cent of national income – the lowest since 2001-02, when Tony Blair and Gordon Brown began a debt-fuelled spending spree.

When the Tory-Lib Dem coalition came to power in 2010, the deficit stood at 9.9 per cent of gross domestic product.

Liz Truss, Chief Secretary to the Treasury, said: ‘Borrowing as a share of our economy is at a 16-year low.

‘This is testament to the hard work of the British people as we fix our finances and build a Britain fit for the future.

‘We are strengthening the economy whilst cutting income tax and investing in public services. Labour would put that all at risk with their bonkers borrowing binge.’

In the so-called dossier of dome issued two years ago, former chancellor Mr Osborne said borrowing would hit almost £78billion last year if voters opted for Brexit.

In the Autumn Statement in November 2016, the Office for Budget Responsibility (OBR) pencilled in borrowing of £59billion as it warned of the impact of the Brexit vote.

In fact, the Government borrowed £40.5billion as tax receipts rose 3.4 per cent to a record £701.8billion. Corporation tax receipts rose 6.3 per cent to £57.7billion.

It borrowed a further £7.8billion in April, the first month of the fiscal year – down from £9billion in the same month last year.

Receipts from income tax and capital gains tax jumped 12.3 per cent to £12.8billion last month as record levels of employment boosted Treasury coffers. VAT receipts rose 2.8 per cent to £11.5billion.

The figures will put pressure on Chancellor Philip Hammond to ease austerity and free funds for public-sector pay rises.

But with the national debt close to £1.8trillion, or 85.1 per cent of national income, he will be reluctant to embark on a spree.

The national debt has risen nearly six-fold since 2000, from just over £300billion to nearly £1.8trillion.

The Government spent £54.6billion in debt interest payments alone last year – which equates to more than £1billion a week.

INFLATION

PRICES are rising at the slowest pace for more than a year in a boost to millions of families, official figures show.

The ONS said the annual rate of inflation fell from 2.5 per cent in March to 2.4 per cent in April.

That was the lowest level since March last year and down from a post-Brexit referendum peak of 3.1 per cent in November.

Inflation has risen by far less than feared since the Brexit vote and now appears to be heading back towards the 2 per cent target, easing pressure on family finances.

Two years ago, then Chancellor George Osborne warned that a Brexit vote would push inflation towards 5 per cent this year. Instead, it is only a little above the 2 per cent rate the OBR forecast for 2018 had the country voted to remain in the EU.

Brexit supporters branded the warnings issued by Mr Osborne and other Remain campaigners ‘ridiculous and outrageous’. With inflation falling and wages rising at the fastest pace for more than three years, analysts have said that ‘things are looking up for UK households’.

Chancellor Philip Hammond said: ‘Good news on inflation – it fell to 2.4 per cent in April and is expected to keep falling. With wages going up that means more money in people’s pockets.’

However, it is feared that the rising oil price may keep inflation above the 2 per cent target for longer than hoped as the cost of petrol and diesel increases.

The ONS figures follow a string of reports showing UK employment at a record high, unemployment at a 43-year low across the country and government borrowing at the lowest level for 16 years.

The flurry of upbeat economic data contrasts with warnings that the Brexit vote would crash the economy.

Before the referendum, Mr Osborne warned of an ‘immediate and profound shock to our economy’ that would plunge the UK into recession, put as many as 820,000 out of work and result in government borrowing of almost £78billion this year.

Instead, the UK economy has grown for seven quarters in a row since the referendum, employment has risen by 609,000, unemployment has fallen from 4.9 per cent to 4.2 per cent, and borrowing was around half what Mr Osborne claimed it might be.

Conservative MP Andrew Bridgen said: ‘As time progresses, people are seeing just how ridiculous and outrageous this was. There must be many people who voted Remain who now regret it, who were intimidated by the prophets of doom and gloom.’

Oil prices have been climbing after US President Donald Trump said the country would leave the Iran nuclear deal, raising the prospect of a fall in supply from the Middle East.

Brent crude surged above $80 per barrel last week, sparking fears of further fuel price increases.

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