United States of Europe - or Bust

The word holds its breath while the future of the global economy is decided by what agreement, if any, can be reached between Angela Merkel and Francois Hollande and how this interplays with the results of Greece's election on June 17th.  Barack Obama and David Cameron are playing supporting roles and repeating the mantra that the choice between austerity and growth is a false one.  True that may be, but the real choice - and it could still go either way - is between economic meltdown or the decades delayed theft of the democratic rights of eurozone citizens, orchestrated by the European political elite of times past.

The previous era's elite, headed by Chancellor Kohl, Jaques Chirac and before him Francois Mitterrand, bequeathed the Euro to their citizens in the full knowledge that to avoid or survive a crisis like the one that has been unfolding for the past two years, the prize of fiscal and therefore political union would have to be realised.  Though these particular heads of state were not known to be scholars of economics, they were surely aware that a currency union, in which mobility of labour is hamstrung by linguistic and cultural barriers, could not ultimately work without fiscal harmonisation.  The payment of taxes by every eurozone citizen to a supranational agency, allowing automatic fiscal transfers between the more and less prosperous states, was always the endgame.  The cynicism of the previous elite allowed the construction of a currency union ultimately doomed to self destruct without the eventual quantum leap to fiscal union - which in ordinary circumstances would never command the support of the citizens it affects.

Monetary union was foisted upon the collectively skeptical European peoples who were made to believe that they could share one currency, a common interest rate for an entire continent, with each nation state continuing to maintain sovereignty over taxation and spending.  That lie - one of the greatest in political history - is now being exposed.  

The choice now is between a so called 'Grexit', following which the risk of a total eurozone banking meltdown is too high to countenance, or the mutualisation of debt - Eurobonds - as a holding step before fiscal harmonisation, and ultimately a European superstate, can be achieved.  This current era of European political leaders find themselves well and truly hijacked by their forebears.  The idea of an exit followed by devaluation for Greece or any of the peripheral EZ countries leading to tolerably short term chaos followed by a rapid return to growth as exports from those markets become 40% – 70% more competitive is a false one, given that the component economies and markets are too entwined to be unravelled without the near certainty of mutually assured destruction.  Merkel & Hollande are faced with a perfect Hobson's choice.  Let Greece go, and likely Portugal, Spain and possibly Italy as well, and risk total Eurogeddon or ignore the wishes of the German people by issuing Eurobonds and then go against the wishes of all EZ electorates by creating the superstate they never wanted but which will, one hopes, safeguard their prosperity.  

Maintain relative prosperity and accept a fast track to a United States of Europe, or otherwise maintain democratic free will - possibly - if democracy is able to withstand the ensuing economic chaos.  That is the choice bequeathed to the European peoples & their leaders today by Kohl, Chirac and Mitterrand.

Britain's rendition shame

Jack Straw, who served under the previous Labour governments as Home Secretary from '97 - 2001 and Foreign Secretary from '01 - '06, has previously stated unambiguously that the British Government has neither been involved in - nor turned a blind eye to - rendition or torture of any kind.  Straw has, apparently, been forced by MI6 into a very serious admission.

It is now on the record that he personally signed the order for the extraordinary rendition of at least one individual.

The individual in question is Abdel Hakim Belhadj who was detained while seeking asylum in the UK.  After being detained he was apparently - and true to the tune of the previous Labour administrations' craven attitude toward the Bush regime - handed over to the CIA who then rendered him, with the UK's full knowledge & cooperation, to Libya.  The same Libya whose Qaddafi regime we recently had a major hand in toppling.  This is highly embarrassing as whilst it was right to take the lead with France in toppling Qaddafi in the genuine aim of protecting the Libyan people, it is much easier now for those who wish to question the government's motivation in this endeavour. Whilst it was right in the prevailing circumstances of the time for Blair to take the lead in bringing Libya in from the diplomatic & economic cold in return for renouncing her programme of WMD - in the early 2000's - it is now so much easier for those who wish to paint that pragmatic move as an exercise in cynicism.  It was, however, unambiguously wrong for the UK & US to outsource the dirty business of torture to Libya or any other insalubrious state.  Complicity, in any way whatsoever, in a practice that is both morally repugnant and against international law, is a crime, committed by a state in the name of its people.

You and I are examples of those people; I know I didn't sign up for this and I doubt you did either.

Ordinary people are serially punished for crimes ranging from the petty to the serious but 'the rule of law', something the UK is supposed to be at the vanguard of, is there to ensure those who occupy the highest positions in the land are subject to the same laws as those they rule over.  Moreover, those who make, interpret and implement the law must be scrupulously, and be seen to be so, held to account for their actions.  This essence of the 'rule of law' is the water that separates an inherently civilised polity from one a bit more primitive and it is the enforcers who must strive to be spotless and must be held fully to account if they are found wanting.  

Why should any citizen respect the law if those who make, interpret & enforce it are not seen to be held accountable to the very highest standards?  It is encouraging, therefore, that Scotland Yard has apparently launched an investigation into Jack Straw.  Clearly that investigation should be extended to every member of the cabinet of the period in question.  The UK is ruled by the concept of 'collective ministerial responsibility' meaning that every policy is endorsed by the cabinet in its entirety.  This concept was diluted during the Blair years but still applies to any government of any particular flavour.  

At a dinner with friends in Belgrade some years ago when the issue of Kosovan independence was at fever pitch, the subject of our behaviour in Iraq was raised.  These particular Serbs were understanding, albeit reluctantly, of the reality and inevitability of the situation; that Serbia would lose Kosovo.  They didn't like it but at the same time rejoining the community of civilised nations was even more important than the totemic issue of Kosovo.  The fact that we bombed Serbia because of Bosnia - the right thing to do - and  did so again because of Kosovo - also the right thing to do - was something that they had, extraordinarily, come to terms with.  What these Serbian friends couldn't accept, however, was that the enforcers - us - the UK alongside the US - were conducting a war in Iraq where its implementation was in many cases seen to be as bad, or perhaps worse, than the excesses of the Milosevic regime we had twice bombed.  

As one friend put it - "you are not the good guys anymore".

He was right.  We covered ourselves in effluent during those years.  It was a different government with very different players but the world doesn't care who was in power, the world simply remembers the UK/US and words like rendition.  

Our current administration is taking great strides in attempting to repair this image problem but the only way to convincingly purge ourselves of the guilt we should rightly feel for that period is for our representatives of that time to face justice.  

Scotland Yard is investigating Jack Straw.  A good start and whilst this is likely to sound fantastical it needs to be the thin end of the wedge.  The US is not a signatory to the ICC but the UK is, and we must practice what we preach.  It is incumbent upon every one of us to demand that, at the very least, the ICC investigates Jack Straw, Tony Blair and the rest.  Politicians lives are serially destroyed for trivial 'moments of madness'.  In this case war crimes, no less, were allegedly committed by our state and whether that allegation ultimately proves to be true or false, justice must be done and be seen to be done.

Update to The Rule of Law #UK, #France, #Bahrain, #Ukraine

- The European Court of Human Rights as now ruled that Hamza, Qatada and others can be extradited.  Common sense has prevailed and by not losing patience with due process the government has maintained its credibility. 

-  The Bahraini Grand Prix will go ahead next weekend as concerns about human rights abuses are subordinated to other imperatives.

- Sheikh Nasser bin Hamad al-Khalifa - a Bahraini Prince, allegedly implicated in the crack down on pro-democracy protesters, will be granted VIP status at the London Olympics.  The Sheikh is reported to have said of those involved in the pro-democracy movement - "Anyone who called for the fall of the regime, may a wall fall on his head, whether he is an athlete, socialite or politician - whatever he is - he will be held accountable...Bahrain is an island and there is nowhere to escape".

- Former British Home Secretary - Jack Straw - apparently admits to having signed orders in at least one case for the extraordinary rendition of a terrorist suspect to Libya.  It seems that though there is a pretty good record internally, the UK hasn't been so diligent in observing the 'rule of law' in relation to foreign affairs.  Shame.

 

The Rule of Law #UK, #France, #Bahrain, #Ukraine

The planets are aligned for this post given that 1) There is a great deal of noise in the British press as to why our Prime Minister (or more accurately Home Secretary) cannot deport the likes of Abu Qatada & Abu Hamza (Mr hook-hand) in defiance of legal rulings as Sarkozy has done in France.  2) The Bahraini Grand Prix is likely to be pulled as a result of egregious human rights abuses in one of the more liberal Gulf states, 3) Ukraine, the great hope of the civilised world after the so called 'Orange Revolution' in '04/05, has slid fully back to unfettered 'rule by the rulers' without even the pretence of something more benign. 

The British Government is being vilified in the press for being too timid to defy court orders and deport persons who have, by an independent judiciary, been given leave to remain in the country.  Clearly the British Government wants the two Abus Qatada and Hamza out of the country.  Probably they are a threat to the country's security though hopefully the threat is diminished by the close attention of the security agencies.  One - Hamza - is demanded for extradition by our close ally for the most serious of crimes.  But, the British Government, like the US Government (though it certainly appeared otherwise during Bush Junior's tenure) is subordinate to the law; statute that it and its predecessors have proposed to and had scrutinised and amended by an active legislature; law that is interpreted by - and forgive the  repetition - an independent judiciary.

French citizens by contrast do not enjoy such significant safeguards.  What started out as the Napoleonic code - and is of course massively more liberal and sophisticated now - still enshrines the power of the state over and above the citizen.  The French state can ignore the law and be tolerated by its citizenry in a way that its Anglo Saxon counterparts cannot.  This is of course inconvenient, and frequently so.  Sarkozy gets rid of two extremists yet Theresa May has her hands tied by the courts re the two Abus.  We may not, in many cases, like the judges' opinions but thank god our masters can be held to account.  It's impossible for any society to perfectly calibrate the balance of power between the legitimate imperatives of state and those of the citizens it is supposed to serve but if either party is to be overly empowered please let it be the citizen.

The French state can slap compulsory purchase orders on anything that stands between it and its policy.  This contrasts favourably with the British system if efficiency is the main imperative.  It took, amazingly, more than a decade of public enquiry before Heathrow Terminal 5 could be built but which system would you prefer?  People marvel at China's infrastructural great leaps forward but the implementation is done without reference to law, the populace or environment.  'Getting things done' is generally celebrated but those 'things' must be checked, scrutinised and sometimes stopped, even if we don't always like, agree with or even comprehend some of the resulting road blocks.  The flip side of living in a fully functioning democracy where the government is held to account by the law is that on occasion one Abu or another will be given leave to stay against the will of government and even against what seems to be blindingly obvious common sense.  Eventually the government will legislate effectively - in a fashion that cannot be overturned by our courts or Strasbourg - and in the interim it will cost a lot of taxpayers money; all of this seemingly flying in the face of common sense.  But, at least if the government or any one of its enforcement agencies wants to 'fit you up' it takes a massive amount of concerted effort.   Not impossible of course but the citizen has significant safeguards to rely upon.

A prosaic example: if a police car stops you for speeding in most northern EU countries he must produce video evidence of the alleged offence whereas in France the Gendarme doesn't have to provide a shred of proof, as a sworn agent of the state his word is the law.  Shades of Louis XIV's "l'etat c'est mois' - and the potential for state sponsored injustice goes all the way up the legal food chain. 

Bahrain:  This is one of the more liberal Gulf states (which doesn't say much for the state of Gulf liberalism) yet is likely to have the Grand Prix pulled as a result of egregious human rights abuses over the last two years as the ruling family clamped down on protesters while the rest of the world was celebrating the early stages of the so called 'Arab Spring'.  It surely seems wrong that certain members of the family dictatorship reside in London and enjoy all the trappings of liberal London and its rule of law whilst the Bahraini regime behaves in a less civilised fashion at home.  

Ukraine:  After the 2004 presidential election was blatantly stolen by Leonid Kuchma and his PM Viktor Yanukovich, the Orange Revolution ensued and was a rare display of genuine people power in a former Soviet republic.  The world hoped that a nation tainted by allegations that its president ordered the decapitation of investigative journalist Georgiy Gongadze might join the community of civilised nations; hope that was stoked by newly installed president Yushchenko and his PM Yulia Timoshenko.  Unfortunately Yushchenko proved far too weak for the machismo of Ukrainian politics though was probably the least venal president in the country's history.  Yulia, known as the Gas Princess for the massive wealth she accumulated from within that sector mainly during the period her friend Lazarenko was PM - since jailed in the US for money laundering up to $200m - was hoped to be a poacher turned gamekeeper.  Whatever her past, and whether or not in office she was more 'poacher' or 'gamekeeper', the fact is that despite having teamed up to overturn the stolen election, she and Yushchenko could not politically coexist due to their monumental loathing for one another.  Whatever their intentions this led to the government being fundamentally dysfunctional which in turn led to inept policy making and ongoing corruption amongst those affiliated to it.  The result was the disillusionment of the Ukrainian people who had been so brave in the face of a potential Bahraini style crackdown when protesting against the stolen '04 election.  The catastrophic political failure of Yushchenko and Timoshenko, however, led to the election next time around in 2010 of Viktor Yanukovych as president - precisely the man who under Kuchma's tutelage tried so hard to steal the Ukrainian people's votes in '04.  In a body-politic as cynical as this there are no red lines for the rulers or indeed the ruled.

There were, apparently, three lasting benefits of the Orange moment which many thought would continue to prevail. 

1)  EU passport holders had the need for a Ukrainian visa lifted in a drive for foreign investment.  This maybe the most minor achievement of the Orange period but as far as I can tell the only one that still prevails.

2)  A free media.  The word 'Temniki' is uniquely Ukrainian and refers to the instructions that were issued to the media - prior to the Orange Revolution - about which topics could and could not be covered.  The system of 'Temniki' was blown apart during and after the Orange Revolution and was considered to be a genie that could and would never be forced back into the bottle.  Sadly the perception of irreversibility has proved false and Yanukovych's regime fully controls the Ukrainian media once again.

3)  Legal persecution:  The world believed Ukraine would, albeit slowly and falteringly, move toward an independent judiciary.  Even after the thugs returned in 2010 friends in Kiev would state - seemingly authoritatively - that Ukraine is not Russia.  Well, whatever Yulia Tymoshenko has done wrong in the past, she is being pursued, jailed and some would argue tortured by her political opponents as the courts do the bidding of those in power.  The use of legal 'administrative resources' extends beyond Tymoshenko's persecution to many opponents of the Yanukovych regime.  There is no due process.

4)  Free elections:  The Orange Revolution achieved this at great personal risk to thousands who camped out in protest at the stolen '04 election.  The dark side won power back, fairly believe it or not, in 2010 but that will be the last free and fair election in Ukraine for some time.

Conclusions re rule of law:  UK and most of northern Europe are pretty good though please allow a qualification re the UK - this is in relation to a legal dynamic between the British government & its citizens and excludes the shameful abuses committed - allegedly - during the war with Iraq.  France is not good enough for a leading EU member.  Bahrain - its tough to justify that this is a regional ally.  Ukraine - a living example of sheer amorality dressed up as a state.

Postscript:  The European Court of Human Rights as now ruled that Hamza, Qatada and others can be extradited.  Common sense has prevailed and by not losing patience with due process the government has maintained its credibility.

For more on Ukraine here's a link to an article in the FT:

http://www.ft.com/cms/s/0/e564501e-7f44-11e1-a06e-00144feab49a.html#axzz1rjFkUVJR

Anatol Lieven - Global Strategy Forum ('GSF')

Mr Lieven was surprisingly dismissive of the suggestion that VV might perhaps be the richest man in Europe (and maybe, just maybe, in the world) at yesterday's Global Strategy Forum.  The point was picked up upon by Tony Brenton - former British Ambassador to Russia - who concurred with the view that corruption is not just a byproduct of the regime but in fact its 'raison d'etre'.

Why is the esteemed Mr Lieven so reluctant to accept the point or entertain the suggestion?

http://www.telegraph.co.uk/news/worldnews/1573354/40bn-Putin-is-now-Europes-richest-man.html

http://www.guardian.co.uk/world/2007/dec/21/russia.topstories3

Putin's record

Here we are pursuant to Vladimir Vladirmirovich Putin's anointment and appointment - for the  third time - as the Siloviki's kleptocratic representative on earth.  Let's deconstruct a few myths about Wonder-Vlad:

1) He brought stability after the chaos and lawlessness of the Yeltsin period.  Actually, the process that started in earnest by Yegor Gaidar under Yeltsin's aegis finally started to yield fruit - to be precise GDP growth for the first time in a decade - with a posting of 0.9% growth in 1999.  Not exactly a boom but after contraction upon contraction of 7% - 12% of GDP annually; '99 represented a watershed.  A watershed that Putin had had no opportunity to influence.

2) The government under him headed by Kasyanov launched a process of credible economic reform including the 13% tax rate.  Remember this was during the period that VV (Vladimir Vladimirovich Putin) had promised - for 1 year since his appointment - not to change any key figures.  This was Kasyanov's programme, and Putin who knows nothing about economics other than his rent from Gunvor and other similar entities with semi-privatised cashflows, continues - allegedly - to kill and steal to ensure his rent seeking yields results.

3) In the early days of Putin's tenure private businessman Vladimir Guisinskiy was hounded into exile in Spain and forced to give up his commercial interests in Russia. The totemic interest was NTV which produced satire such as Kukliy - broadly based on the UK's 'Spitting Image' - which disappeared along with any other coverage that didn't fit into the category of fawning and sycophantic.

4) Yukos.  Needs no explanation though indulge me please if I point out one delicious fact:  just days after the main production unit - Yugansneftegaz - was sold, after being stolen, through a rigged auction to an unknown outfit registered in Tver and later absorbed by Rosneft, The Moscow Times reported that Igor Sechin had become Chairman of Rosneft.  Draw your own conclusions.

5) Berezovsky - no wonder the mutual hatred is so extreme; Boris is possibly the only character on the radar screen to rival Putin for the ultimate prize of being utterly inhuman - some might say.  Its a pity we give him asylum & its an embarrassment - no more no less - that he resides here given reasonable grievances by the Kremlin but they cannot understand that a judicial decision is independent of the executive branch of government. 

6) The biggest tax fraud in Russian history was committed by those who killed - murdered - Sergei Magnitski - whom I had the fortune to know briefly.  The perpetrators have been promoted and are enjoying their $$$$$$$$.  See this link:  http://russian-untouchables.com/eng/

 See this link:  http://russian-untouchables.com/eng/

7) Respected commentator on Russian affairs - Stanislav Belkovsky- alleges that Putin is worth circa $40bn through shadow holdings in Gunvor, Gazprom, Surgutneftegaz and others.  Belkovsky is on the record serially in the mainstream media.  He has never been sued. 

8)  Putin was elected president in 2000 after extremely mysterious - and very timely - apartment bombings of civilians that played to his - perhaps coincidental - electoral strategy of painting anyone who was not of fair skin as a potential terrorist.  Ryazan anyone? Hexagon??  The real pity is that the main thrust behind exposing this appears to be Berezovsky - thus neutering the gravitas of the point.

9) Journalist Andrei Babitsky kidnapped though fortunately unharmed.  Journalist Anna Politkokskaya - amongst others - dead.

Obama, Tax, the ‘Buffet Rule’ and fairness

It is said that if a Brit is feeling doubtful about being a part of the European family then a 6-month stint in the US will cure him of those doubts.  That seems like overkill when in fact all it takes to be a confirmed European is an awareness of the political debate in America.  And that is despite the seemingly insane situation across the channel where France is on a trajectory to elect a 1970’s style unreformed socialist and Angela Merkel – if she’s not bluffing – is apparently going to let the whole eurozone blow up for the sake of maintaining Germanic principles of fiscal discipline.

France has apparently found a time machine in the guise of Francois Hollande who will transport a country that was timidly, gingerly experimenting under Sarkozy with the idea - if not the implementation - of being something other than an anti-Anglo Saxon outrider, back to the Mitterrand era.  Mitterrand 1.0 that is - pre-1983.

The second largest economy in the Eurozone - already knocked off the AAA sovereign peak - is apparently turning left onto the path of extreme fiscal irresponsibility at the very same moment that Germany is massaging the throats of Greece, Spain & Italy to continue swallowing the pills of ever more austerity whilst blocking off the obvious solutions to the two larger of these troubled countries’ solvency issues.   

But if this seems bonkers, just take a peek across the Atlantic.  The Republican Primaries have boiled down to a slug-fest between Mitt Romney – a Mormon worth circa a quarter of a bill’ and Newt Gingrich who refers to one of the world’s most oppressed peoples as the “so-called Palestinians”.  The former – and favourite for the Republican nomination – paid an effective tax-rate of under 14% on $40m of income over the last two years.  Whilst high marginal rates of tax are counterproductive  & the UK’s current – and apparently ‘temporary’ – top rate of 50% is wrong both in principle and practice, it cannot be right that someone who is unambiguously rich pays a lower marginal rate than their cleaner.

President Obama, that extreme pinko who apparently wants to remake America according to the principles of Marx and Engels – if you believe pretty much what any Republican has to say – is simply suggesting that the rich shouldn’t pay less than 30% of their income in tax.  If that is to be imposed as a floor for the effective top rate of income tax - on income and dividends combined - it compares extremely favourably to the top rates levied in just about any European Union jurisdiction.

Definitions of ‘fairness’ are very subjective but can anyone really argue with the so-called ‘Buffet Rule’ that the rich shouldn’t pay a lower marginal rate of tax than those less well off?  This is as manifestly unfair as overtaxing is counterproductive.  Overtaxed - in the form of a 50% rate that represents a political gesture rather than a genuine mechanism for generating revenue - the UK is, and now carries the stigma of being a high tax country.  The 50% rate might raise an additional couple of billion per annum for a year or two before revenues fall as a result of behavioural changes.  But those behavioural changes will happen.  People will leave and those who considered coming here will demur.  And it seems that many policy makers have forgotten their Economics 101 class and the ‘Laffer Curve’ – a bell shaped graph that seeks to represent the highest marginal rate than an economy will withstand before the disincentives of ever-higher rates kick in and revenue is reduced.  In a European context this is widely considered to be circa 40% on income.  In the US, given a valid cultural allergy toward tax, it is probably lower.  There are compelling arguments as to why the rate of capital gains tax should be competitive - lower - to encourage entrepreneurship but a marginal rate of 15% on both capital gain and dividend income when most Americans are paying between 25% and 35% on wage income is indefensible.  And who do American voters have to thank for the current mismatch?  George W Bush of course.

Did Putin write Hungary's new constitution?

Being half-Magyar is a badge I’ve generally worn with pride.  Hungarians bravely tried to rise up against the totalitarian regime in ’56 only to be brutally suppressed.  Whilst the Solidarity movement in Poland did most of the heavy lifting that led, after a decade long struggle, to the fall of the Berlin Wall it was Hungary that played the final trump card by opening its border with Austria in May '89.  The Soviet Union’s satellite states had been provided with a corridor to the West, the Iron Curtain had been irrevocably pierced and within months the Wall came down and the Eastern Bloc ceased to be.

There are narcissistic affiliations too.  The expression that a ‘Hungarian who enters a revolving door behind you always exits first’ is a flattering one!

In the mid 90’s Hungary seemed so grown up politically, swapping governments between Neo Liberals and former Communists with ease and with all embarking on a similar reformist trajectory.   It was a source of pride that a country so nascent in its democratic transition could enact the necessary market reforms, regardless of the label or past of whichever party was in power at the time.

All this has changed with the ascent of Viktor Orban and his Fidesz party.  The comparisons between Orban and Russia’s Putin abound in the press.  The genesis of each, at least in terms of foreign perception, is uncannily similar.  This is not to suggest that Orban had a secret services background; quite the opposite - he was a visceral anti-communist but the warning bells have been ringing for many years now.  There has been a long forewarning of Orban’s nationalist and authoritarian tendencies, along with rebuttals that he’s just a decent guy trying to get the country on track, all so similar to how earlier fears about Putin were so plausibly, and disingenuously, explained away.

Putin’s first assault was on NTV; a staunchly independent television station though editorially ‘manicured’ according to the personal imperatives of its then Oligarch owner - Vladimir Guisinsky.  The state takeover, or expropriation, appeared an acceptable price to pay for what then seemed like the first stable government the new Russia had seen.   The naivety of those of us who accepted this position was laid bare on July 3^rd 2003 when Platon Lebedev was arrested and the Yukos affair began.

Concerns about Orban’s likely inclination toward a takeover of all state institutions were diluted by the previous Socialist government’s incompetence and barefaced lying as to the parlous state of Hungary's finances.  A free market nationalist with a strong hand might just be what the doctor ordered to get the country back on track, some thought.  It is even true the Fidesz party fairly won the parliamentary super majority they have since used to pass into law the new constitution.  

However, whilst the evils of the Putin clan in Russia - including sham democracy, subjugation of the rule of law at every level to political whim, vast personal enrichment to the tune of $billions (and serious allegations of extra judicial killing) – are of a magnitude that dwarf Orban’s sins; it is a fact that Orban & his Fidesz party have, in passing a grubby new constitution, consigned Hungary’s well earned democratic credentials to the dustbin. 

The Central Bank is now under the political control of one hegemonic party.  Constituencies have been gerrymandered to ensure that Fidesz should always maintain its 2/3^rd’s majority - a play straight out of Putin’s handbook! 

To quote the Financial Times: ‘The authority of the courts has been limited and the judiciary subjected to closer political supervision. The constitution asserts state control over personal conscience and faith. Abortion and same-sex marriages are outlawed and recognised religions limited.’

The problem for Orban is that Hungary is a small country of 10 million people without natural resources or any particular geopolitical importance.  Whereas Putin enjoyed 8 years of extraordinary economic boom as commodity prices soared, while the political vice tightened & the world kept schtum; Hungary is already experiencing the damage the markets can inflict upon states that engage in such malfeasance.  Hungary’s sovereign debt has been downgraded to Junk status and the Forint is at an all time low against the Euro.  Yet another EU country is on the brink of default.  The question is; does a country with such a constitution deserve to be in the EU at all?

Stephen Lawrence

Having grown up in a country where, as a child, various forms of racial abuse were everyday chat - from someone who was apparently not so bright being labelled 'a bit Irish', to a completely unprovoked comment in the town of Warminster that "Blacky needs a wash" - we were then clearly much less sophisticated people than the polity we apparently - or hopefully - comprise all these liberal years later.  Post Thatcher; Major; Blair; Brown and in the first flush of Cameron; there is a lot to be praised.

Perhaps it is counterintuitive to praise a system that was originally responsible for the wrongful acquital of at least 2 of those guilty of Stephen Lawrence's murder.  It probably seems odd to use the word praise within the context of Mrs Lawrence battling for 18 years from the first bungled and failed prosecution against a gang of overtly racist thugs, to a private prosecution, which also failed, to finally a guilty verdict (18 years later) against two of the neanderthals who were amongst the number of those responsible for Stephen's death that evening in Eltham in 1993.

It is appalling that the police originally seemed determined that the crime must be a result of 'black on black' violence despite overwhelming evidence to the contrary.  It is, or at least was, a massive endictement against our society that those accused gave the impression of such impunity as they were entering the court all those years ago.  Their pugnacious demonstration that day - itself almost tantamount to a boast of responsibility; the footage of which is seared into our national consciousness - took nearly two decades of Mrs Lawrence's tireless work to be righted.

All this is a terrible indictment of how things were.  Are things perfect now?  Far from it.  Is the Metropolitan Police Force no longer 'institutionally racist'?  I don't know; but we do know that laws were changed post enquiry and for a large section of society beliefs were modified as a result of the suffering of the Lawrence family.  One of the most significant public enquiries of the last two decades found incontrovertible evidence of terrible institutional prejudice amongst the very body charged with the protection of us all.  However, those findings led to massive - unprecedented in fact - change within the Metropolitan Police Force.  The fact that such change was required is an indictment within itself but, sadly, every society has its racist thugs, their victims and examples of police incompetence or even complicity.  Stephen Lawrence was not the only person to have been killed because of his colour; but his is the only murder in living memory to have had such a seismic effect on the institutions that govern us all.  That the body politic and society in general could, albeit at such a cost, respond in this way deserves some praise.  Cold comfort but hopefully some comfort at least?

The awful Republicans

I have no idea as to Blog etiequette but i guess plagiarism is frowned upon.  Anyway, here's an excerpt form The Economist:  Nowadays, a candidate must believe not just some but all of the following things: that abortion should be illegal in all cases; that gay marriage must be banned even in states that want it; that the 12m illegal immigrants, even those who have lived in America for decades, must all be sent home; that the 46m people who lack health insurance have only themselves to blame; that global warming is a conspiracy; that any form of gun control is unconstitutional; that any form of tax increase must be vetoed, even if the increase is only the cancelling of an expensive and market-distorting perk; that Israel can do no wrong and the “so-called Palestinians”, to use Mr Gingrich’s term, can do no right; that the Environmental Protection Agency, the Department of Education and others whose names you do not have to remember should be abolished.

UK, France, EU, US and much else including Christmas

A new dawn in Anglo-French political cooperation, demonstrated by the signing of a potentially ground breaking military treaty & followed by unprecedented physical cooperation in Libya has given way to unedifying sniping worthy of jostling teenagers in a school playground.  France has now apparently agreed to cool the temperature on the basis that it should be understood that Britain - or more precisely George Osborne - started it!  The childish behaviour by both sides relates however to a serious subject; the relative likelihood of each country hanging on to her AAA credit rating.  The crisis has led to ballooning deficits and public debt in both countries though also, it's fair to say, credible austerity programmes in both.  However, just as Britain's job is made dramatically more difficult as a result of Gordon Brown having run a deficit of 3% of GDP and more, over 7 years of economic boom prior to Lehman's collapse; France's medicine is far bitterer than would have been the case had Sarkozy not wavered from his election platform to trim the size of France's leviathan State.  In not one year since Sarko came to power has public spending fallen below half of the entire economy — not exactly the 'rupture with the past' he had promised on the campaign trail. 

The most recent Anglo-French hostility is of course a result of Cameron's veto wielding at the last European summit.  What is surprising is just how genuine the hostility appears to be.  There was a popular view that everyone was playing their preordained role with France and Germany proposing changes to the Lisbon Treaty that all players knew very well the UK could never accept.  Having played the only card in his hand and exercised the veto, Cameron gave the Eurozone 17 and any others who wished to participate, the necessary freedom to negotiate an intergovernmental treaty which would not - unlike a change to the Lisbon Treaty - automatically trigger a referendum in many of the participating countries; thus allowing the process of fiscal harmonisation amongst the eurozone members — essential though not sufficient for the currency's survival — to proceed at a less snail-like pace.  It seems those of us who read the situation this way were labouring under a massive misapprehension and that, in fact, France and Germany really did expect Cameron to roll over and agree to a modified Treaty without any of the relatively modest safeguards the UK was seeking for the City.  Moreover, various countries do still, it seems, need to ask their electorates to vote yay or nay to the proposed intergovernmental arrangement.  The level of ignorance displayed by all sides is baffling; both on the part of our negotiators who apparently had no idea as to our European partners' unwillingness to entertain the UK's proposals (for preserving the competitiveness of the City), and that of France, Germany & the European Commission in not understanding that their proposition could never have been accepted by any British PM - Tory or indeed Labour.  What on earth were the diplomats up to in the run up to this summit?  Anyway, after all that, the summit and the proposed intergovernmental treaty seem to have been for nothing and the eurozone, the Euro and hence the global economy all remain on the very edge of a precipice.  2012 could spell the word UGLY in floodlights if Merkozy and the ECB don't come up with a game changer.  

Things are perhaps a touch better in the US where there is at least growth, some anyway, and Obama has managed to outwit an intransigent congress to get the payroll tax cut extended by two months.  Given that this is already being touted as a major victory for the man the party with the intellectual capacity of amoebae - that is to say the Republicans - believe is a hoof and horn sporting communist, it seems likely that the Tea Party headbangers egged on by the abominable Grover Norquist will do everything in their power to subordinate the American economy to their singular & myopic aim of ensuring Obama is a one term President.  If the price of ousting their nemesis is economic rack & ruin they seem predisposed toward signing the cheque on behalf of the American people and the rest of us.  

All this in the context of North Korea's totalitarian self styled monarchy now being headed by a child and Iran apparently ever closer to acquiring a nuclear weapon; something the US and Israel will not tolerate, and all that this implies.  To boot, Israel's PM Bibi Netanyahu is a disingenuous player who has no interest in making peace with the Palestinians and so, akin to the Republicans in the US, will merrily subordinate the fate of his own people to his perennial political vanity.

Given all the above and the changes we have seen/are seeing in Tunisia, Egypt, Libya, Syria and Russia; the world is possibly at its most unstable than at any time since the height of the cold war.  Add in the two wild cards of North Korea and Iran, plus an economic context that might, if the eurozone does implode, be worse than anyone's greatest fears; and the Mayan prophecy for 2012 is perhaps something we should credit as more than just a fringe belief!?

I'd like to make the disclaimer that the author of this page is naturally an optimist!

Merry Christmas everyone and to misquote Shane MacGowan & Kirsty Maccoll - let's hope it's not our last!

South African model for Russia?

This post is in response to the following question asked by a good friend of mine in Moscow: "What would you see as an ideal, however realistic scenario (use real current players on both sides)?"

Judging what is or what might be realistic is a very difficult call given that what was deemed utterly unrealistic yesterday has a habit of becoming tomorrow's reality.  2011 is converting the realm of fantasy into stark reality with alarming speed.  Those who hoped to see Mubarak tried for corruption - as the lightest charge deserved - were occupying an unrealistic position until he appeared in court.  Saif Gadaffi was deemed the leading light of the reform movement in Libya but will now go on trial for crimes against humanity either in Libya or - less likely - The Hague.  The Syrian people are rising up against the Assad regime in a fashion that would have been deemed utterly unrealistic not so long ago.  The idea of 50,000 Russians, a people so emphatically disengaged from politics, demonstrating in Moscow would have been fantastical until Putin was booed at a martial arts fight setting off a chain reaction which led to 50,000 protesters becoming a reality.

What realistic scenario can emanate from the current political crisis?  Moreover what constructive scenario can follow?  The bottom line must be that the parliamentary election is re-run.  Right now that seems unrealistic but might not seem so tomorrow.  The main demand is that the people's votes are counted and that they are represented accordingly.  This would almost certainly lead to a government comprised of parties other than United Russia and, consequently, of someone other than Putin becoming president next March.  Therein lies the fundamental problem: Putin must run - and win - and his colleagues must stay in power as he & they see it as the only way to keep the staggering number of $ billions - perhaps well in excess of $100bn - that have been amassed over the past decade.  They also see it as the only way to maintain their freedom.  Andrei Piontkovsky quoted a 'Kremlin ideologist' in an excellent editorial in the Wall Street Journal (not usually my favourite paper) today as saying "We perfectly realise what is going on.  But its too late to jump off the train.  The new authorities will come after us and arrest us if we lose power.  That's why we have no option but to keep running like a hamster on a wheel".  There's the rub; every single actor on this stage could be prosecuted.  The entire edifice is rotten to its very foundations.  Everyone knows the corruption is monumental but the rot goes beyond kickbacks and the theft of state funds.  What would happen if the apartment bombings of '99 were thoroughly investigated?  What would happen if we could benefit from a proper enquiry into the destruction of Yukos, and those who profited from it?  What would happen if those responsible for the murder of Sergei Magnitsky (whom I had the fortune to know, albeit briefly) were brought to justice and their wider relationships with more senior actors in the corridors of power exposed?  Pull on one thread and it all unravels.

Russia has had enough revolutions and re distributions; something the protesters and Russians in general are apparently weary of.  So how does one reform the system and make a dramatic break with the past without tearing down the whole damn edifice, leading to inevitable profiteering by those claiming to rebuild it in the name of the people?  There needs to be a 'way out' whereby the perpetrators of crimes can know they will at least keep their freedom.  

The only process I can envisage is justice without retribution.  The populace needs to know exactly what has happened, who has stolen what and the details of crimes which are likely to include many far worse than theft.  By instituting a system similar to South Africa's Truth & Reconciliation Commission - whereby those who admit their crimes in detail are granted immunity from prosecution - Russia can benefit from the catharsis she was denied in the aftermath of the Soviet Union's collapse.  Unlike the examples, to name just three, of Poland, Estonia, & the Czech Republic where the old guard were largely expelled from political involvement; so many of the nomenklatura remained in power in Russia - and now not a few are billionaires guarding their treasure - which is the root cause of the imperfection of Russia's transition and why it has been so much less complete than is the case for its former Eastern Bloc vassals.  

Justice without retribution would, or might, allow those who are guilty to finally relinquish power without blood being spilt and allow the people to understand the full extent of crimes committed and lies serially told; thus affording a more transparent, representative, responsive and effective system to develop.  A system that would not rely on the current regime's preferred mechanism of show trials and jailings.  That might not seem realistic now but between now and March '12 who knows?