Archive for May 15th, 2010

Saturday, May 15th, 2010

Confusion

At lunchtime today I listened to Any Questions, a recording of Friday evening’s live broadcast. There was a very distinguished panel of Parliamentarians, old and new. There was a question about the 55% vote for dissolution, should the proposal for five year fixed term parliaments, almost universally welcomed, become law. None of the panelists showed any clear sign of understanding the issue and all talked a good deal of nonsense. The facts, once again, are these.

Under the Constitution, no matter who votes for what or in which proportion, the only person with power to dissolve parliament is the Queen, because we live in a Monarchy, however it is dressed up. By convention she delegates her powers to her Prime Minister. By convention if he loses a vote of confidence in the Commons he must go to her and offer his resignation. She would then either accept it or ask him to form another government. If he failed to get another vote of confidence with this new government, she would accept his resignation and take advice as to who else might form a government. If a new Labour leader, having won some bye-elections, reckoned he could have a go because the Lib Dems had jumped ship and if he were successful, this new government would carry on for the remainder of the unexpired portion of the five year term. If it became clear that there was nobody who could get a vote of confidence through, the Queen would dissolve parliament.

Parliament cannot pass any kind of law to dissolve itself. It can pass a law binding the Prime Minister to seek a dissolution from the Queen if it asks him to, on whatever majority it sets. It amounts to no more than window dressing since the law itself could be overturned at any time by a simple majority of one. This really is an argument about nothing.

Saturday, May 15th, 2010

The Euro

I have always been rather ambivalent about the Euro. This Blog is about to take a position which requires focus on the issues. The upside of the single currency for the EU is that everybody can trade on even terms with everybody else and business can operate without the costs and risks of fluctuating currencies. There is a huge, business, commercial and tourism advantage.  I remember many years ago driving across Europe to get to the Tyrol, high in the mountains between Austria and Italy. The route took me through nine countries each with its own currency. I became an advocate for just the one after that.

The downside is that there is a flip side to what a currency is. It is the product of the economic structure, values, social and taxation policies and aspirations of the country of which it is the legal money in circulation. If it is one country that is fine. If it is lots of countries there a problems. If those countries have diverse conditions, traditions, values and assets as well as wealth creation capability, it becomes unworkable and sooner or later it must fall.

There are reports of a Sarkozy moment when he raged at Merkel and threatened if Germany did not pay up to help Greece, France would pull out of the Euro. That would be bad. If Germany refused to pay and itself pulled out of the Euro and went back to the Deutschmark, which is almost certainly what the majority of Germans want, it would be a calamity. The only solution is for there to be one Federal Economic Council controlling all financial policy in Euroland, leaving the nation states no more control of their economic affairs than individual States in the U.S.

This council would be dominated by Germany , whose support would be required for every significant decision.  Many governments in Europe, especially the smaller ones, may favour such a step, but there is now hardly a population of any nation in Europe which would vote for that in a referendum other than Germany. It is not likely to happen.

If it does not the Euro is doomed. It could well be that, after all, the preferred British vision of Europe, as a Union of Nation States operating independently and in competition, but without trade barriers and in common political purpose, will be the vision which inspires the model on which all finally unite to fashion.