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!
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