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Greece Is The Word

By Leslie Clark
June 24th, 2011 at 10:31 pm | 3 Comments | Posted in Economics, EU Politics

How to solve a problem like Greece? Former queen of daytime chat Fern Britton was flummoxed on the BBC’s Question Time on Thursday night. And like David Mitchell, I don’t really know either. However, on the wider issue of the durability and endurance of the European Single Currency – and to evoke that quote widely attributed to Mark Twain – some obituaries are prematurely written. Even as early as the turn of the Millennium, the late Milton Friedman prophesied its demise.

But claims of the Euro’s death have been greatly exaggerated. The current membership may change slightly with the most damaged economies perhaps opting to revert to their former national currencies, or in another scenario we could see the emergence of two monetary unions: a ‘Debtor €’ comprising the Med countries and a ‘Creditor €’ including Germany and other low-inflation states.

Personally, I’ve felt largely ambivalent on Euro membership. The fanatics for and against frequently bore me and the whole debate is couched using hyperbolic language. Nonetheless, I don’t think the Euro per se is intrinsically flawed or irredeemable. In the case of Greece, Europe would have been a lot better off if it had stuck rigidly to the rules set out at Maastricht, thus avoiding premature or inclusive membership.

Greece consistently breached the 3% deficit limit even prior to the current crisis and went unpunished despite the legal duty to comply with convergence criteria. Their unreformed public sector and high and unstable rates of inflation should have raised eyebrows prior to Eurozone accession. It is widely recognised that they were economical with the actualité and massaged the figures in order to meet entry requirements, something acknowledged by the former ECB Chief Economist Otmar Issing:

When I worked for the ECB, I suffered every time countries didn’t meet the criteria. Greece cheated to get in, and it’s difficult to know how we should deal with cheaters…There should have been better monitoring, better scrutiny and more sanctioning. This crisis wasn’t unavoidable.”

As in any other private members club, individuals are obliged to abide by the rules. Accepting EMU rules, devaluation or inflationary monetary policy were no longer avenues the Greeks could go down. They did nothing to lower their public debt but instead went on a spending binge. It does not seem fair or just that taxpayers’ money is being moved from countries who stuck (by and large) to the respective criteria to those who did not.

European leaders should not use the Greek crisis purely as a catalyst for more integration which would only further embitter sceptical national populations but rather to end the slack monitoring of the fundamental rules of the club.

Other Member States should not end up with a hangover for a party they did not attend.


In Insurance, markets and equality collide

By Andy Mayer
March 1st, 2011 at 5:22 pm | 3 Comments | Posted in Economics, EU Politics

Insurance is a difficult, not widely understood industry, in which equal treatment and markets collide. Pensions are very specific form of income insurance.

What Insurance does is put a price on risk. It does that by assessing the different profiles of groups, across thousands of data points, and evaluates the likelihood of default.

By nature this work is discriminatory. If for example it is the case that women generally have fewer motor accidents than men, they pay less for their car insurance.

And this is usually a good thing. The differential pricing discourages higher risk groups from engaging in risky behaviour while benefitting the cautious.

It is not entirely fair. Cautious male drivers pay more than girl-racers, at least at first, until the weight of evidence of their actual behaviour cancels out the group assumption.

That though is largely unavoidable. Perfectly fair personal insurance would require perfect foresight and perfect information about an individual. Neither will ever exist. Even future health insurance based on genetic profiling is still a probabilities game. Insurance needs to make assumptions.

Today’s furore about an CJEU ruling that gender discrimination in insurance and pensions is illegal then removes one assumption they can make.

It is not as the press are reporting a particularly ‘bonkers’ judgement by the Daily Mail’s least favourite Euro-quango. More a direct consequence of the law agreed between Member States in the European Council in 2004, as this analysis makes clear.

If the decision is daft, it is direct consequence of a daft consensus between national governments.

Whether it is so daft is where economic and political liberalism offer conflicting advice. Purists from either tradition will reach opposite conclusions. Pointless intervention that will distort prices and create many examples of reverse discrimination, or a valuable protection against undue penalty.

In the muddy middle we tend to believe exemptions from discrimination prohibitions should be proporionate, evidence-based, and carry few unpleasant unintended consequences. You might consistently believe that race discrimination in insurance was completely unacceptable (it creates a poverty trap), whilst welcoming post-code discrimination (you can move), and gender discrimination (men die younger and should have cheaper pension annuities).

The data on this specific change though would tend to suggest the status quo is pretty reasonable. It’s not clear what problem this change is trying to solve or what benefit it brings. 

Discouraging testerone-fuelled video games fanatics from competing for the M40 title strikes me as generally more beneficial than the resolving the injustice it imposes on Kid Cautious in his lonely struggle to achieve perfect cruise control sensitive to the conditions of the road.

The Council of Ministers need to think again…

Prisoner votes uses same law as Gibraltar votes

By Andy Mayer
November 3rd, 2010 at 12:48 am | Comments Off on Prisoner votes uses same law as Gibraltar votes | Posted in EU Politics

The basis of the current debate on votes for prisoners is the Article 3 of the First Protocol of the European Convention on Human Rights, and a case bought by a former convict, John Hirst, arguing the UK’s blanket ban was in breach.

“The High Contracting Parties undertake to hold free elections at reasonable intervals by secret ballot, under conditions which will ensure the free expression of the opinion of the people in the choice of the legislature. “

In 2005 he won. Or rather the court decided the ban was “disproportionate”, upheld on appeal. Meaning the onus was on the UK to demonstrate why for example shoplifters and those in prison for a day should not vote, if that day happens to coincide with an election. The deprivation of liberty should be proportionate to the crime, argues the court.

The expected compromise is that UK law will be adapted, in line with most other European countries, to raise the bar, perhaps to sentences of four years or more. The line from gloating idiot Hirst, that “murderers, rapists, and paedophiles” will get the vote, is then unlikely to be correct. The Liberal Democrat position is that removal of the vote should clearly be a part of the sentence, which is sensible. Keeping prisoners registered to vote in their home rather than prison constituencies would avoid prisons influencing marginal seats, and the miserable politics of canvassing votes you’d rather not have.

It should be noted though that some prisoners, those for example guilty of civil offences such as non-payment of fines can already vote.

It should also be noted by the Right, that the same article of the Convention was used by the Gibraltarians and Conservative Lord Bethell in 1999 to secure their voting rights in European elections, against the wishes of Spain and the then Labour government. The Liberal Democrats in the Lords shamefully supported Labour trying to stop this happening, on the ludicrous grounds that it might “complicate rather than help… relations with Spain”.

Our Party, or rather a part of it, then rather inconsistently seems to support universal human rights for those deprived of their liberty for some criminal offences, but not for law abiding residents of an overseas territory occasionally deprived of their liberties by an aggressive neighbour.

Conservatives conversely seem perfectly content to use the convention when it suits. Labour believe passionately in rights, unless it means bad headlines, at which point they are prepared to risk paying large amounts of compensation to prisoners from the national Treasury.

Dodgy principles and politics all round.

EU SWIFT Vote Ends Bank Data Sharing

By Sara Scarlett
February 13th, 2010 at 3:30 pm | 3 Comments | Posted in EU Politics

This is quite possibly one of the best things I’ve heard come out of the EU in some time and yet has been woefully under-reported:

The European parliament rejected an agreement on sharing banking data with the US yesterday, delivering a potential setback to long-running US efforts to track down terrorist financing.

Citing concerns about European citizens’ privacy, the parliament voted to scrap a deal that would have given the US continued access to data compiled by Swift, a co-operative that handles interbank money transfers.

The move means that for the first time since the September 2001 attacks, the US will not have access to large parts of the Swift database, which includes information from more than 8,000 financial institutions globally.

Crucially in this vote it was the Liberals (ALDE) who helped sway the vote in favour of our right to privacy. We should be very proud of the role LibDem MEPs played in ensuring this result. The end result was 378 MEPs voting to block the data sharing and 196 voting in favour of it’s continuation with 31 abstentions.

One has to wonder at the sheer nerve of the US:

The US had lobbied hard to keep the data flowing, with Hillary Clinton, the secretary of state, and Tim Geithner, the Treasury secretary, both contacting Jerzy Buzek, the parliament’s president, in an attempt to sway the vote.

The US Treasury had previously obtained the data through repeated subpoenas sited on US soil, but a decision by Swift to move key computer servers to Europe from last month means Washington must now persuade the EU to hand over the data voluntarily.

EU governments agreed, on an interim basis, to continue co-operation last November. Though some had reservations, most were swayed by US arguments that the Swift data led to valuable intelligence that could prevent terrorism in Europe.

No matter how the US try to spin this, it is a victory for the little people against the state. The US demands were grotesquely disproportionate to the threat posed by terrorism. Dutch Liberal rapporteur Jeanine Hennis-Plasschaert explained:

“If the US administration proposed something equivalent to the Congress – transferring in bulk all banking data on American citizens to a foreign power – we know what they would say”. In other words, the agreement provides for no reciprocity for the EU.

How French Women Aren’t “Real”

By Sara Scarlett
December 21st, 2009 at 3:00 pm | 9 Comments | Posted in Culture, EU Politics, UK Politics

I have just returned from happily linking “s-turns” on the slops of the French Alps. Whilst I was there I had the opportunity to speak to a couple of French girls my own age, who were, to my surprise, as politics mad as I am. After discussing everyone from Obama to Sarkozy and letting them know my disdain for the EU’s Common Agricultural Policy, it was time for lunch.

Now, since French women famously “don’t get fat‘ I couldn’t help mentioning that my political party had decided to pass a motion aiming at making advertisers show to what degree they had airbrushed their adverts…


Well, don’t adverts make you feel ‘inferior’ or put too much pressure on you to be thin? After looking at me like I was a space cadet for good few moment they simply shrugged, “non”. Admittedly they confessed to reading “Vogue” more often than the french equivalent of “Now” or “Heat”. To them Lagerfeld is a modern day ‘Picasso’, it is art. The adverts are simply not considered in the same nature or afforded the same status that Jo Swinson has incorrectly granted them.

As one of our few female MPs, Swinson should be in my big book of contemporary feminist heroes. Yet I completely abhor the “Real Women” campaign and its correlating motion and I continue to object to it on practical, libertarian and feminist grounds. On a practical level the rest of the political community gave a collective sigh of “ah bless”, it made us look twee and amateur. Speaking to Lynne Featherstone after the motion had been passed she described the motion as being about “honesty” and that’s a great thing. However, the Real Women campaign isn’t about honesty in advertising, it’s about honesty in advertising regarding womens bodies only. If it was truly about honesty in advertising then it should have a motion to itself including all advertising (including the degrading treatment of men by some advertisers) and not including any womens issues.

The fact of the matter is that the “Real Women” motion was a shill. It included issues as diverse as domestic violence and equal pay; issues that could (and should) have been afforded meaty motions in their own right. Yet theses more pressing issues were given the half-baked treatment in order to cynically use them as ‘window dressing’ for Swinson’s pseudo-censorship. This alone is testament to the tenuousness of the airbrushing segment; it could never have stood alone.

So where next?! We’re stuck with a poor motion that skims the meaty issues and makes a meaningless gesture at advertisers. You should not need to be told that fashion adverts are not true to life any more that you need to be told a Picasso isn’t figuratively accurate. The “Real Women” campaign is patronisingly maternalistic if nothing else. What women need is to get back to feminist basics. Women need to stop objectifying the women in fashion adverts. We turn them into rods and then proceed to flagellate ourselves with them.

The “Real Women” campaign has  been an orgy of weeping an wailing: completely emotional and irrational. It provides a salve for our self-inflicted wounds but has also granted us a greater capacity to inflict them and never let them truly heal. How women can truly help themselves is by truly ending this masochistic cycle. We need to see fashion as art. Art is useless; if an object has any function other than to aesthetically please it is no longer art. Therefore there is no reason for us to worry about not looking like a Chanel ad. Obviously that’s easier said than done but it is certainly preferable than turning yourself into a perpetual victim.

Placing limits on the human expression of consenting adults is a violation of their intrinsic human rights. It is also completely unnecessary. If you can’t break the cycle of masochistic madness then be an adult and withdraw your consent. Stop buying the products that are advertised in a way you find objectionable an the magazines that advertise them.

Swinson obviously cares about women a great deal. In this case, however, good intentions have not made good policy and done women a disservice in the process. This orgy of self-depreciation has to stop. To end on the words of my French friend: “Of course aesthetics are important but if I’m not fit I’m not free to do the things I want to do.” It’s time to stop being “Real” and start being down to earth!