Blogoir

Here is my piece over at Commentator on Drone Warfare, beginning with exploding the tragic George Monbiot and proceeding thusly:

Not that long ago Europe’s parents and grandparents were being blown to bits in their tens of thousands by bombs simply dropped from planes in the general direction of the target. The sheer precision of modern weapons has saved countless more innocent lives caught up in armed conflict than, alas, still get taken.

One perverse result of this development is to give new life to Stalin’s reputed infamous observation that “the death of one man is a tragedy, the death of millions is a statistic”. Precisely because so few people are now killed in modern warfare, the numbers of those who die shrink to the point where individual deaths of unarmed civilians can be ‘personalised’, and attacks on specific military targets start to look more like ‘assassinations’ or common law murder than war. At what point can (or should) we start to think about war and the legal parameters of it completely differently?

...

The Guardianistas’ Monbiotish pronouncements on human solidarity and existential Gaian interconnectedness in, for example, the ‘climate change’ or development aid contexts seem to evaporate when it comes to defence questions. Yet the issues are exactly the same.

Just as the planet can be seen as a single organism worthy of collective respect, so too can the technical infrastructure which supports human life these days. No country in the world can survive in any meaningful sense without some reliance on the networks of real-life equipment (power-generators, communications cables, data storage computers) by which things get done and new inventions happen. Who protects those facilities?

Classic international law tells us that, in principle, it is for each state to protect those facilities sited on its own territory. But what if a state is too weak to do that, and/or allows terrorists and sophisticated criminals to use its territory as a base for plotting attacks on key installations in other countries?

If a country and its citizens want to enjoy the manifold benefits of belonging the modern global networked space, do they in turn have to accept an implicit obligation to take responsibility for defending those networks pro-actively and vigorously against those who, for whatever reason, want to wreck it? And if they can’t or won’t take the action needed to deal with such people, can they complain if other powers acting under a new version of the doctrine of collective self-defence step in to do that job instead?

Interventions need not be anything so crass as invading with huge numbers of soldiers. Rather the best available tools can be found to neutralise these threats from afar, including swarms of hi-tech drones that identify an enemy, watch the enemy’s movements to minimise the risks of collateral injuries – and pounce.

That sort of remote-controlled intervention in principle offers the most moral, controlled, restrained and proportionate expression of legitimate military self-defence the human race has ever seen. Which, of course, does not make it perfect or fool-proof. Or wise.

Several good comments - Commentator attracts a more, shall we say, thoughtful class of commenter than Daily Telegraph blogs.

The other day we had the pleasure of meeting senior colleagues at Edelman London, part of the global team who prepare the annual Edelman Trust Barometer. The online survey aims explicitly at educated people round the world who follow current affairs.

This year's survey concluded that trust in governments had suffered a sharp erosion in the past year, a finding that is both unsurprising and (as far as it goes) welcome. Yet it also suggested (perversely) that people wanted more government action in the regulatory field. Here's a snapshot of the results as recorded by the BBC.

Trust in government stayed high in several countries including China (perhaps because people there 'trust' the authorities to watch the replies in online surveys like this one?) yet in China trust in NGOs had leaped - NGOs there seen as an emerging force for alternative views?

Trust in business had also declined. Not surprisingly perhaps, given what is going on.

Such surveys are more interesting and indicative than strictly scientific. Yet this one coincides with what we might expect. Basically, as people round the world get access to new cheap IT, the emerging energy of networks is disrupting the established power and effectiveness (and legitimacy) of hierarchies. The rate at which government is unable to cope is accelerating: new laws and policies can be out of date or rendered irrelevant before they are promulgated.

Plus the Tower of Babelisation represented by 'social media' makes it all worse - facts, rumours and complaints all appear and circulate at startling speed, creating strange echo chambers in which truth, sense or nonsense alike are amplified to a meaningless crescendo. Governments are unnerved by this clamour and start to look for instant results. See the latest shameful row over RBS bonuses in the UK, where the government seem to have bowed to 'public opinion' and pressed a private citizen not to enjoy the bonus he is entitled to under his contract.

People in all countries sense this confusion and look to other ways to get things done, while hankering after greater certainty or order which (they still think) only government can provide. Examples in all directions: mainly incoherent, such as the creepy collectivist demands of assorted 'Occupy' tendencies.

One of the ideas which the survey throws up is the proposition that we need to move away from (rigid) Rules towards (more flexible) Principles or Standards. But how?

Look at the Eurozone drama unfolding once again today, as I type. The EU leaders are scrambling to come up with even more rules, in the shape of a brand new treaty which is intended to impose strict requirements on errant member states. Yet we all know that the new rules are unlikely to be enforceable, and new standards are unlikely to be respected when things get difficult. No-one in power dares suggest that the EU structure as currently configured is itself the main problem. Instead they press their leaking euro-canoe on towards the deeper faster rapids, proclaiming that that is the only sensible thing to do.

Trust in fact is what is wrong with the Eurozone. The Germans conclude that (say) the Greek government can not be trusted to do what is right and so must give way to EU-imposed technocrats. The Greeks (not unreasonably) think that they'll get stiffed by such a procedure which is designed to prop up German, French and other over-stretched banks.

Meanwhile the world peruses this unseemly flailing around and concludes that a bickering and demographically declining Europe can not wholly be trusted to repay money it has borrowed, hence imposes higher interest rates to help cover the risk.

Trust, in short, is simply another way of looking at Confidence. And as the Edelman 2012 survey suggests, it is unsurprising that global popular confidence in 'government' is declining - but not easy to work out what sensibly might be done about it.

Do any long-standing readers remember this?

Here is my own Grand Unifying Theory of Politics.

The core question of politics and economics is Trust. More specifically, under what circumstances can and should one trust strangers?

The greater the ambient level of trust in any given social space, the easier it is to do things quickly and well. People who scarcely know each other or who have never even met can strike sophisticated deals, knowing (a) that other partners are likely to be reliable, and (b) that if things go wrong the local state institutions will honestly help sort out the problem.

Without Trust of this sort, personal and organizational horizons shrink. Extended family networks and associated corruption thrive as the best way of dealing with the trust problem.

Or one trusts primarily members of one's own group/clan/religion/community. And assumes that members of other groups/clans/religions/communities are doing the same, so they are not to be trusted too far since their primary loyalty (like one's own) is not to a fair, neutral process.

All this is massively obvious across the former Yugoslavia space. Political leaders must represent 'their' national communities first and foremost if they are to get elected; voters distrust other communities and make a mainly ethnic/national choice as a form of political fire insurance.

Even in the UK where there is no serious complaint about the intrinsic fairness of the legal system and Trust is at civilizationally high levels, many Scots want a different political structure, viz some sort of independence from England. Likewise Quebec, Kurds, Chechens and countless other examples. The Israeli/Palestinian problem seems capable of being settled only on an ethno-national basis.

Thus the so-called 'nation-state' turns out to be a sophisticated device for enabling trust to operate, often at much higher levels of population. This has created conditions for the surge of economic growth and creativity seen around much of the globe over the past couple of centuries. Greater attention to this fundamental trust issue would pay huge dividends in the international development industry. 

Our success here in Europe (and the ruinous experience of the two World Wars where certain national ambitions ran amok ) has brought us to think that there is a new 'higher' stage of development.

The European Union is a unique example of an attempt to create a wider context of trust at a supra-national level. But it too risks making a fundamental blunder by trying to insist on, or sneakily nudge people towards, a new 'European' uber-identity which supersedes supposedly drearily parochial 'national' identities... 

True then. Even truer today.

Here is my new Daily Telegraph blog piece comparing the problems of the Eurozone with the fates of the USSR and former Yugoslavia.

In those two cases (but for very different reasons) the Centre had became the problem and duly crashed, whereas in the case of the Eurozone the majority of EU states are struggling to hold the Centre (ie Eurozone) together, even at stunning cost.

This one even has added Literature:

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

You know the sinking feeling when you hear some precious moments of music from Mozart or Shostakovich used to support a TV ad or, horror of horrors, served up in a lift as "background music". Beauty has been melted down, turned into a trinket of cliché.

This has happened to the famous poem The Second Coming by W B Yeats. So vivid is the imagery and somehow so suited to our dismal times, his great lines pop up all over the place and start to sound trite.

But you have to applaud Mr Yeats’s prescience in sharing with us his poetic yet trenchant thoughts on the eurozone, and in particular the idea that “the centre cannot hold". Indeed, some people are now wondering whether the eurozone will go the same way as the Soviet Union or even the former Yugoslavia, and abruptly disintegrate...

... The problem is that keeping the Centre going also incurs unfathomable costs. EU capitals squabble furiously as they try to distribute these costs away from themselves and on to all the others. The world's markets observe this unseemly spectacle and conclude that they might be wise to call for higher interest rates to park their money in such a neurotic economic space.

No one can tell how this drama will play itself out. It's all very well the eurozone's leaders demanding that the EU Centre be held at almost any cost. Those costs are being dumped on European taxpayers who, sooner or later, are likely to insist that enough is enough. Then what?

While you’re mulling over that question, read this scarifying account of Greece’s looming deadlines. Then run out to buy tinned food.

What rough beast, its hour come round at last,
Slouches towards Brussels to be born?

Note the post-modern irony (mis)use of the word scarifying.

In due course I'll need to share thoughts on the lessons of the break-up of the USSR for Scottish independence (or not).

In the meantime, I need to recover form two hours of blather from a suave, persistent but ultimately unsuccessful solar panels salesman.

As readers know, assorted Crawfs went to a Turkish resort for a short holiday last year. The signs of feverish economic activity were there to be seen on the way from the airport - all sorts of buildings and other structures popping up in a madcap way.

Turkey is booming! Or is it?

I have not linked to the ever-gloomy Spengler for a while, but here he is with some unnerving graphs and accompanying analysis indicating that Turkey too has borrowed too much, too unwisely:

Erdogan has the weirdest economic views of any serving head of government. He justified the credit bubble on religious grounds, pledging repeatedly to cut the "real" interest rate (the cost of interest minus the inflation rate) to zero.

"We aim to cut the real interest rate in the long run, so people will increase their incomes through working, not through interest," he said last April. "Eventually we aim to equalize the interest rate and inflation rate."

Erdoğan believes that this would fulfill the Islamic injunction against lending for interest; if the real interest rate is zero, he seems to think, the sharia ban on interest is fulfilled de facto. In order words, Turkey provided nearly free money to bank customers. Erdogan's program set in motion a series of perverse effects. One is a sharp fall in the exchange rate...

... The result is a vicious cycle: excess credit creation weakens the currency, forcing the central bank to put up interest rates; higher interest rates push up the cost of debt service for Turkish borrowers; Turkish banks lend more money to their customers to finance the higher interest costs, so that credit keeps expanding and the currency keeps weakening.

Turkish banks continue to increase lending at a 40% annual rate, but most of the new lending will finance interest payments on the old loans.
Fine. Then what?

.

So, the same old story. Political leaders believing they can defy reality and gravity, combining with banks keen to cash in. Result? A fast emerging mess.

The notable feature of the apparently looming Turkish mess - as Spengler points out - is that the booming 'Turkish model' (ie a dynamic, modernising economy with strong Muslim features) was hailed for a while as the best outcome of the Arab Spring tendency. What if that model flops too? 

Spengler's view of what this means:

Now I predict that Turkey's economic crisis will undermine the stability of the Turkish state as well, leaving the Muslim world without a single enclave of stability from the Libyan-Algerian border to China's Xinjiang province...

Here at Commentator are my vivid thoughts on the way The Rules drive out common sense discretion in public services in general, and at Leeds Crown Court in particular:

Stop right there, Mr Ambassador! What would happen if the Embassy in Warsaw went out of its way at a senior level to help this one hapless citizen? That would set a precedent for the whole network -- word would get around that one person in Poland had had a lot of active support from the Embassy and the Ambassador personally, and everyone else would expect the same! Worse, it could even be a breach of their Human Rights if they did not get it!

... So there it is. After years if not decades of Citizen's Charters and all sorts of official Mission Statements, Objectives, Targets and goodness knows what other noisily proclaimed expensive initiatives intended to make public servants helpful and responsive to the public, this forlorn group of public servants were bent on driving a few taxpayers and citizens out into a howling rainstorm for no reason other than the fact that The Rules appeared to require it.

The point?

The standardisation of public service needed to deliver what, as far as possible, counts as equality of treatment for all can be achieved only by deliberately excluding competition and any serious incentives to improve services.

Those people at any level of public service finding a clear case for common sense and discretion which somehow goes against The Rules risk getting into trouble (or think they do).

And in such an uncompetitive, neurotic context The Rules breed like crazy, as we see in English education where the state's instructions to schools now run into hundreds of pages and have catastrophic results.

Outcomes deteriorate. Dumbed down stupidity and officiousness result. Confidence in the state erodes. 

But as the Leeds episode shows, the public can fight back. When confronted with an obviously insane decision, politely insist that those concerned use their discretion or demand to see where The Rules say that no such discretion exists.

The officials concerned are visibly rattled by the thought that maybe, just maybe, The Rules in fact allow them to think.

Civil servants! If you have any examples of this working against good practice, just send them in. Key thing: do you think your hierarchy will support you if you do the smart thing, even if it goes against established procedure?

One of the themes of this website is how our institutions and beliefs of all shapes and sizes are struggling to cope with the way new technology creates complexity at ever-soaring rates.

In other words, the faster our machines the faster they can do things and generate information, which in turn allows us to see new patterns and connections and (therefore) try to have 'smarter' policies. Which doesn't work because our policies are too slow anyway,  often out of date before they begin.

All of which, as we know, gives some advantages to small, fast, determined things who Keep things Simple (such as single-issue busybodies, terrorists, pirates, assorted Occupiers) over clunky big unwieldy things (such as the Eurozone, or even Democracy as currently constituted).

Here is a fabulous article by David Weinberger about what this means for science itself. Take a few minutes out from your busy day to read it and learn something:

The result of having access to all this data is a new science that is able to study not just "the characteristics of isolated parts of a cell or organism" (to quote Kitano) but properties that don't show up at the parts level. For example, one of the most remarkable characteristics of living organisms is that we're robust -- our bodies bounce back time and time again, until, of course, they don't.

Robustness is a property of a system, not of its individual elements, some of which may be nonrobust and, like ants protecting their queen, may "sacrifice themselves" so that the system overall can survive. In fact, life itself is a property of a system.

However, just as we realise that we can't work out what is happening at the most basic level of our own bodies, governments strain to micro-manage almost anything that moves. This way of running things is philosophically doomed to fail, and failing it is around the world.

Hayek was right. Capitalism and free markets are essentially information networks, and need to be treated respectfully as such. This in turn shows why the Eurozone is wobbling. Hundreds of millions of people are now able to examine its deepest practical and moral foundations and are finding them badly designed.

In short, the Eurozone system as a metaphor for the 'Western Social Model' is over-complex. But under-robust. It's science, see?.

We cherish the idea that we clever Westerners have something called 'freedom of the press'.

But what exactly does that expression mean? Does it mean that those who constitute the body of publishing folk who define themselves as 'the press' have special status and associated freedoms which may or may not be enjoyed by the rest of us mere citizens?

Or does it mean that everyone has (in principle) the right to find access to printing devices and then get stuff out there, ie the main newspapers and other large media outlets have no status separate from the rest of us?

I of course incline to the latter view. Indeed, perhaps unwisely I take it for granted.

The whole issue is complicated because once upon a time there was literally no way to get views circulated in any sort of written way other than by getting access to a printing press machine.

This really matters.

Why? Because it goes to the heart of any concept of democracy.

Is there an elite - a 'mainstream media' - who assume to themselves the right to have special freedoms denied to the rest of us? If such an elite group of opinion-formers has some sort of extra legal status, where does that leave laws aimed at defining what sort of speech is allowed during an election campaign, and by whom?

Plus, what happens when as in the USA the majority of mainstream media outlets act as blockers for one political tendency (currently the Obama Democrats)?

There was an interesting insight the other day, when a pro-Obama academic breezily proclaimed the Obama Administration impressively if not unprecedentedly scandal-free - by defining scandals as only those scandals which the mainstream media report!

Anyway, Volokh Conspiracy (leading US group law blog) takes a good look at rival interpretations of what 'freedome of the press' means in formal US legal/constitutional terms, and explains a lot:

But other judges and scholars — including the Citizens United majority and Justice Brennan — have argued that the “freedom ... of the press” does not protect the press-as-industry, but rather protects everyone’s use of the printing press (and its modern equivalents) as a technology. People or organizations who occasionally rent the technology, for instance by buying newspaper space, broadcast time, or the services of a printing company, are just as protected as newspaper publishers or broadcasters...

Both sides in the debate often appeal at least partly to the constitutional text and its presumed original meaning. The words “the press” in the First Amendment must mean the institutional press, says one side. The words must mean press-as-technology, says the other. Citizens United is unlikely to settle the question, given how sharply the four dissenters and many outside commentators have disagreed with the majority.

So who is right? What light does the “history” referred to by the Citizens United dissent shed on the “text” and the Framers’ “purpose”?

The answer, it turns out, is that people during the Framing era likely understood the text as fitting the press-as-technology model — as securing the right of every person to use communications technology, and not just securing a right belonging exclusively to members of the publishing industry. The text was likely not understood as treating the press-as-industry differently from other people who wanted to rent or borrow the press-as-technology on an occasional basis.

Read the whole thing. It directly affects you both as a reader and as a potential publisher of your own thoughts on the Web or otherwise..

And if you are in any way interested in how the tension between mass printing and personal freedom first emerged, read an awesome book by Adrian Johns on the way mass publishing started. Note especially the startling scope of  cheating and stealing as printing presses became more widespread across Europe - Newton and other great scientists had huge problems stopping other brainy people elsewhere in England or on the Continent simply republishing their work and claiming it as their own.

This, by the way, explains why Parliament proclaimed that a copy of every book published had to be sent to the British Museum and other grand 'legal deposit' institutions - there had to be at least one verifiable original against which fraudsters' work might be measured.

The way everyone tried to take advantage of the surging technologies of the day back in the seventeenth and eighteenth centuries is eerily reminiscent of the myriad problems we now face in dealing with Internet piracy and so on.

Adrian Johns explains all this in a magnificent way. I bought his book on the subject while I was at Harvard in 1997 and stupidly lent it to someone, never to get it back.

So in writing this blog post I have just reordered a copy via Amazon. I warmly recommend you do the same - a true book about books:

One of the things I do on training courses aimed at telling people how to Write with Impact is to cite Shrek. Issues and Shrek are like onions. They have layers.

No piece of writing can address all the layers of any problem. The trick is to show awareness of other layers but focus on one or two of them to help the reader make sense of it all.

Likewise it is a good idea to take a single issue and use it to illustrate a wider point. Or to take a seemingly obscure but nonetheless interesting question and force it to the top of people's attention.

All these devices help achieve the basic rule of good (and therefore impactful) writing: if you want it to be read, make it readable.

One of the best examples from my own career came in early 2004, not long after I arrived in Warsaw from Belgrade. Poland was set to join the European Union. Colossal numbers of Poles were likely to start moving to and fro between Poland and the UK - we had decided to open our Labour market unconditionally, much to the utter disbelief of the Polish leadership.

Once those Poles started moving with the aim of getting richer faster, what would they get up to? I thought it worth analysing one possible source of income - illicit cigarettes.

Hence a telegram I sent to London warning them in very simple language that the UK's multi-billion pound problems with the informal cigarette market was about to get a whole lot worse overnight.

I did this by spelling out in the simplest possible terms the economics for the average Pole of informal cigarette-selling, even within legal limits.

This telegram wittily called Smoking Ants - Coming Our Way? caused a minor sensation in the Cabinet Office. Officials scrambled round to change the rules to limit the numbers of cigarettes which people from the new EU member states could bring into the UK duty-free.

And, thanks to the miracles of Freedom of Information, I am pleased to share this telegram with you today. The FCO cheekily cut out a line or two on the grounds that UK relations with Poland might be adversely affected(!). But otherwise it's just as I drafted it. A nice example (if I say so myself) of drawing senior attention to an unexpected new problem by delivering work written in a bold way which no-one can avoid reading.

Diplomatic Folly Note: look out for the amusing reference to 'Trilateral' at the end. That was a footling attempt by Tony Blair to set up an inner UK/France/Germany driving force within the EU, which collapsed in no time at all in the face of the obvious objections (not least those emanating from one S Berlusconi).

Thus:

SUBJECT: EU ENLARGEMENT: SMOKING ANTS, COMING OUR WAY?

SUMMARY

1. Incentives for Poles to make a reasonable living in the UK's dodgy cigarette business. Policy contradictions.

DETAIL

2. As a non-smoking connoisseur of Balkan tobacco activities I recently met the local BAT team to talk about regional cigarette smuggling. Some striking conclusions.

The Big Picture

3. BAT have studied tens of thousands of discarded cigarette packets. They conclude that some 70 billion cigarettes are sold legally in Poland every year, with a further 20 billion smoked "illegally" (ie sold outside the official excise structure and smuggled into Poland).

4. A good proportion of this illegal trade is conducted by an army of "ants", individuals who carry small quantities of cigarettes into Poland from points East. But up to 50% of the illegal cigarette business is well organised, involving hundreds of truckloads of cigarettes each containing up to 10 million "sticks". [redacted]

5. The emergence of this lucrative illegal trade can be traced readily back to 2000, when Poland pushed up excise duties. Until then almost all the 90 billion cigarettes smoked in Poland each

year were passing through normal procedures. Smuggling soared with these new higher duties.

6. Sharp price/tax/excise differentials as between Russia, Poland and Western Europe are set to continue. Currently a pack of cigarettes which costs 50 cents in Russia sells for 1.30 dollars in Poland and up to 8 dollars in the UK. These ratios will change somewhat in the coming years as Poland raises the effective price of a pack towards EU levels, thereby giving serious new local incentives to regional smugglers (one good truckload can generate a profit of 1.5 million dollars). BAT expect some 50 billion cigarettes per year to be smuggled from Russia to Western Europe; this generates a 5 billion dollar profit - more than double BAT's own global annual pre-tax profit. Implications for UK of EU Accession

7. BAT point out that as things stand every Polish citizen is allowed to bring legally into the UK 200 cigarettes a trip. But after accession this figure jumps to 3200 cigarettes per trip. A pack of Dunhill can be bought in Poland for about £1 and be sold in a UK pub for up to £3.00. Each Pole entering the UK can hope to make a quick profit on the cigarettes of £250 per trip, not to mention extra money by importing a few bottles of cheap vodka. With a return coach fare of £50 and monthly unemployment benefit here of about £80, it is not difficult for a poor Pole to work out what to do. Better to get involved with UK officialdom by filling in UK benefit forms, or make easy money sitting on a bus?

COMMENT

8. The scale of the illicit cigarette business caused by price/tax differentials as between the UK and continental Europe is obvious and well known. It is part of a global compound interest drama: as rich countries get richer, the absolute wealth we generate gives ever-growing and vast incentives for honest people and gangsters alike to "play the margins". The cigarette price effects of EU enlargement is more of the same, albeit a great deal more of the same. But the upstream consequences of this illegality for the region are considerable.

9. Our Policy contains Contradictions. HMCE/HMT are looking at reducing the amounts of cigarettes which accession nationals can bring into the UK. Meanwhile we and our EU partners laboriously try to "train border guards and customs officials" on the EU's Eastern Borders. But only a couple of truckloads of cigarettes inject more resources into corrupting these official structures than we are injecting into reforming them. The corrupted structures then can be exploited not only by cigarette smugglers but also by human traffickers, global drug dealers and even terrorists - serious security questions here.

10. The cost of all this is not on a scale to destabilise the whole of Polish society as has happened in Serbia, to the point of the assassination of the Prime Minister. But it is a serious and systemic obstacle to reform. Scope for a new, hard look (Trilateral or in another smaller group first?) at what else might be done on the strategic level?

To pass the time and take my mind off my bright blue foot, I have done a couple of quickies for the Telegraph Blog site where there has been a lot of energetic stuff about the EU Summit and all that.

Thus yesterday:

We awoke this morning to various commentators and Twitteristas bewailing the fact that British intransigence has left the UK “isolated". This ridiculous assertion needs to be knocked on the head, once and for all.

If “isolated" means staying well clear of the clumsy and ultimately undemocratic eurozone project, that’s a damn good place to be. The measures needed to prop up the eurozone involve intrusive inspection of national financial affairs by Brussels and other changes (such as harmonising tax rates) which necessarily amount to surrendering national sovereignty to EU HQ. Without the protocol he demanded, David Cameron could not have stood up in the House of Commons and honourably told the British people that the UK would be spared that.

In fact, even with that protocol there would have been in serious risk of eurozone “mission creep" in legal terms had the Lisbon Trinity route been used. Not that that risk has gone away even with the proposed new treaty outside the existing Treaty structure, but it is arguably for now rather more manageable.

Now what?

The proposed new arrangements for the eurozone would have been good had they been introduced right from the start. It is not clear how far if at all they will satisfy the planet’s markets and investors now. The crisis is set to drag on.

More generally, the whole European integration ambition looks like a nervous tightrope walker wobbling more and more severely with each new step. The contortions needed to stay balanced are impressive but grotesque.

And today:

As the sheer scale of the new requirements expected in the new treaty become clear – intrusive Brussels inspection of national budgets, balanced budget constitutional provisions and so on – bits will start to fall off the bandwagon. Different local factions will demand some or other political price for conceding their support to these radical changes. Public opinion will be aroused, with demands for referenda here or there. And so on.

The best thing about writing for a national newspaper's website is the giddy delirium of the many comments one attracts, for and against. Many people seem unable to understand what one writes, or miss the self-indulgent witty touches completely, or assume that because I am an ex-Ambassador I a priori am a pompous Sir Humphrey type living on a vast pension blah blah blah.

Therefore you get stuff like this:

Charles Crawford - a breath of fresh air. I bet you don't get many invitations to opine on the BBC!

For the first time, I actually have to agree with much of Mr Crawford has to say. Perhaps he could offer his expertise of the break up of the former Soviet Union during his time in the FCO, for the government for Britain's withdrawal from the EUSSR?

Magisterial and wise as one would expect from a 'Sir Humphrey' enjoying his astronomically high pension at our expense...It's rather majestic when the British Establishment makes a 'fleet turn'; all those wonderful old ships of the line coming round. The trouble is that they need an awful lot of sea room and they already got much too close to a lee shore.

Whatever leads Crawford to the conclusion that an 'amicable separation' is on the books? Why wouldn't our former partners just screw us to the floor as much as they are able? What is the USP that would stop them, if they ever climb out of the mire where they are?

Thank you Charles for your explanation, especially posting the speech by Howe.  Incredible how the same old arguments are being trotted out by the same old europhiles ignoring the twenty year interim where *nothing* turned out as predicted.  And all the guff about influence--what influence?  Although we have wasted a lot of treasure on the european experiment and the most worrisome aspect of our economic outlook is our closeness to the european economic (disaster) zone.

Dave has done more u-turns than a boy racer, so will have no problem with one on this matter.
Has to be said, Chas is a definite Rolls Royce blogger. Maybe he could get a job as Foreign Secretary, if he was quickly ennobled.

Walked the dogs earlier - a bit cold but a nice day for it. Notably, no-one from Antwerp, Lower-Saxony, Tuscany or Valencia stopped me for a chat.Looks like the isolation has started to bite

You, sir, sound like a traitor and should be treated as such. I am thinking naked, tar, feathers, high street parade, but maybe this would infringe one or two paragraphs in the EU human rights chapter, or whatever. You display all the characteristics of an aparatchik who forgot that you are/were a servant of the people and in your generous loftiness are throwing some crumbles of your superior intellect to the benighted masses.  

That last one hits it bang on the nose.

Anyway, my second one linked to this excellent Economist piece offering a detailed account of what the UK Prime Minister wanted and why he did not get it. Well worth a read if you want to look at some hard-core analysis and not a lot of heated knowledge-free opinion.

What does it all boil down to?

Not enough, if the main aim is to stop the Eurozone failing horribly as the planet's investors think we've all gone mad and draw their money out of the system.

But maybe just enough (for now) if you want to get re-elected as President of France?

Do global investors see this blood-stained arena as a sensible place to park their hard-earned money? No.

While the self-absorbed British commentariat divides into Europhile/Europhobe factions like Bertie Wooster's aunt mastodons bellowing at each other across a primaeval swamp, the real story is that the Summit did not do anything serious to tackle the eurozone's acute credibility problem.

Why did it not do more? Because top European opinion is completely divided on existential questions to do with the moral hazard involved in different eurozone rescue plans. And because step-by-step Europe's leaders have set up structures of such intricacy and complexity that it is next to impossible to identify what needs to be fixed, and then muster the practical agreement to do the fixing.

Famous Australian philosopher Tim Blair has coined a trenchant saying which is now known round the world as Blair's Law. It illuminates a depressing but seemingly inexorable tendency:

"... the ongoing process by which the world's multiple idiocies are becoming one giant, useless force"

Almost anything said by the Western world's increasingly bedraggled and violent Occupiers falls into this category, a footling mish-mash of ignorant platitudes jumbling up anti-capitalist slogans with Green and feminist 'demands' of all shapes, genders and sizes.

But these dim light-bulbs are as nothing compared to Naomi Klein who operates on an intergalactic if not utterly cosmic scale of forceful idiocy. Something has gone badly wrong at the Browser who link to what they call her 'outstanding essay' on Capitalism and Climate.

Well, to be fair, it is outstanding. Outstandingly communist and odious.

It's very long and gets increasingly hysterical as she tries to create a new way of looking at things which moves on from both the Greedy Neoliberal Right and Statist Left:

The expansionist, extractive mindset, which has so long governed our relationship to nature, is what the climate crisis calls into question so fundamentally. The abundance of scientific research showing we have pushed nature beyond its limits does not just demand green products and market-based solutions; it demands a new civilisational paradigm, one grounded not in dominance over nature but in respect for natural cycles of renewal—and acutely sensitive to natural limits, including the limits of human intelligence.

So in a way, Chris Horner was right when he told his fellow Heartlanders that climate change isn’t “the issue.” In fact, it isn’t an issue at all. Climate change is a message, one that is telling us that many of our culture’s most cherished ideas are no longer viable.

These are profoundly challenging revelations for all of us raised on Enlightenment ideals of progress, unaccustomed to having our ambitions confined by natural boundaries. And this is true for the statist left as well as the neoliberal right.

Anyway, Naomi wants a heck of a lot of collective action, which (it turns out to no-one's surprise) necessarily involves incredible coercion by the Statist Left inflicted on the rest of us:

Climate change is a collective problem, and it demands collective action. One of the key areas in which this collective action must take place is big-ticket investments designed to reduce our emissions on a mass scale.

That means subways, streetcars and light-rail systems that are not only everywhere but affordable to everyone; energy-efficient affordable housing along those transit lines; smart electrical grids carrying renewable energy; and a massive research effort to ensure that we are using the best methods possible.

The private sector is ill suited to providing most of these services because they require large up-front investments and, if they are to be genuinely accessible to all, some very well may not be profitable. They are, however, decidedly in the public interest, which is why they should come from the public sector.

This is the very same public sector which is wasting trillions of dollars by messing up the Eurozone.

We are not talking about a return to authoritarian socialism, after all, but a turn toward real democracy. (But why do you think people will vote for this folly? What happens when they try it, find it's crazy, then vote against it? Presumably you'll stop this happening by refusing to turn back the wheel of history)

The thirty-odd-year experiment in deregulated, Wild West economics is failing the vast majority of people around the world (Drivel - the 'vast majority' of people on earth have been getting richer precisely because authoritarian socialism has been dumped)

These systemic failures are precisely why so many are in open revolt against their elites, demanding living wages and an end to corruption. (Yup - the Arab Spring sure is all about the Arab masses rising up against neoliberal economics.) Climate change doesn’t conflict with demands for a new kind of economy. Rather, it adds to them an existential imperative...

Anyway, on she drones at vast length. But amidst all the rambling, this one especially outlandish thought caught my eye as summing up just why she is so confused and perhaps dangerous (my emphasis):

The way out is to embrace a managed transition to another economic paradigm, using all the tools of planning discussed above. Growth would be reserved for parts of the world still pulling themselves out of poverty.

Meanwhile, in the industrialised world, those sectors that are not governed by the drive for increased yearly profit (the public sector, co-ops, local businesses, nonprofits) would expand their share of overall economic activity, as would those sectors with minimal ecological impacts (such as the caregiving professions). A great many jobs could be created this way. But the role of the corporate sector, with its structural demand for increased sales and profits, would have to contract.

Just say we all decide that 'corporations' are too powerful and somehow need to be 'reined in', favouring state-driven 'planning' instead. Where do jobs and innovation then in fact come from?

What is missing in Klein's wild rant is any sense at all of the role of personal creativity. Growth is nothing more than the cooperation of people inventing and doing new things, preferably within a solid legal framework to help mobilise others to invest their efforts and accumulated savings too.

It is theoretically meaningless to 'reserve' growth for parts of the world pulling themselves out of poverty. Every time anyone anywhere has a good new idea, the potential for growth asserts itself: how even in theory do you limit that? Poor people in principle of course can be as inventive as anyone else. But it is only capitalism and market processes which allow that creative energy to be reproducible on a significant scale for general benefit. Poor people are poor because they do not have capitalism but usually gangster statist socialism instead. 

To go the Klein route means that huge millions of people will be sacrificed and die for 'the planet'. As market mechanisms are dumped in favour of 'planned' outcomes, we'll no longer have any coherent basis for working out what anything costs and what is 'affordable'. Every industry now existing will be run down. Medicines will not be developed. New, cheaper technologies for fixing things and saving energy won't be invented.

And since there is no prospect of containing people and their creativity in this insane way except by brute force, democracy will have to give way to the Statist Left on Steroids, aka one-party communism. Which we have tried.

It was not such a good deal for the Planet, as the systemic information deficiency and suppression of innovation caused by mass oppression stopped even the most elementary environmental concerns from being registered. Ecological disaster on a scale greater than anything else ever seen on Earth took place:

This is what Nutty Naomi wants to re-inflict on us, as an 'existential imperative'.

All the greatest idiocies rolling inexorably into one gigantic useless force.

No thanks. Please go away.

Update  I needn't have bothered. JoNova does a far better and ruthless demolition job by looking at how Naomi ignores the numbers:

Klein thinks the answers to feeding the poor lies with “Big Government”, but rational thinkers know that more than anything, the fate of the poor depends on clear thinking, real evidence, and polite debate. None of which is on offer in this article.

Reading Klein is like visiting a parallel universe — her religious devotion to her ideology means nearly every sentence is the exact opposite of the truth.  More’s the pity that The Nation has no editors who recognise innumerate drivel and an ideological rant based on a logical black hole.

Bad mannered bluster, blind assumptions, and religious rationalization have always been the tool of witchdoctors and con artists.

Naomi Klein: Nice writing, shame she can’t think.

.

Readers here know all about MTS and non-MTS.

It seemed a good idea to explain the idea to Telegraph Blog readers. Done here, with a nice stormy seas picture:

Hence the core diplomatic policy conundrum: over what timescale is success measured?

One of the metaphors I deployed to explain Bosnia’s problems to bemused Whitehall officials was the tall, steep sand-dune. You rush at the sand-dune and try to get to the top, but find yourself stuck. If only you had seen that strong tuft of grass over to the right before you made your dash! You could have reached that and tried to pull yourself upwards. But any movement towards it or in any other direction makes you slide backwards.

From good if over-optimistic or even naive intentions you can end up in a hopeless place, where no good move is available. This is why the eurozone problem is so difficult for our top policy-makers.

Eurozone leaders designed an ornate gondola for drifting affably round the elegant decay of Venice. They now find themselves swept by an unimaginable (or at least unimagined) current into horrible stormy seas.

The vessel is sinking! No life-jackets! The Greek can’t swim! The German is hooting that everyone tighten their belts! The Frenchman blames capitalism! The odious Brits preferred their own shabby dinghy: they watch with cynical amusement from choppy but still (they believe) manageable waters.

Basically, the eurozoners have allowed themselves to get far out of their depth. And they smugly refused to pack any safety kit.

I swung by the FCO today for a quiet adult chat about repatriating powers from the EU. What does that mean, if anything, and how might it be done or at least systematically attempted.

Many interesting points emerged. Some unexpected, to me at least. Watch this space.

Plus, a Scary Thought about FCO consular work: what would HMG do if Greece's money system crashed during peak holiday season, leaving a million Brits stranded there with cash machines not working?

The FCO mind boggles.

Most people are bewildered by what is going on in Greece. So am I.

But here is a wily view from everyone's favourite Serb Paleocon, Srdja Trifkovic, who explains how the whole manoeuvre looks like a quirky judo move to floor the opposition and so end up making the whole EU austerity policy towards Greek debt more likely to be implemented (not that that is necessarily good for Greece).

Not just the Greek opposition feel unbalanced and dizzy. Perhaps the French too:

On the foreign front I still suspect that Germany (but not France) may have been briefed in advance of Papandreou’s referendum gambit, and that he will use the aftermath of the scare to exact an even greater “haircut” in the weeks to come—primarily to the detriment of the three big French banks.

Meanwhile anyone with any sense (and, more importantly, any Euros) in Greece will be shipping out those Euros in case Greece crashes from the Eurozone and those Euros end up worth massively less in newly denominated New Drachmas.

This capital flight of course makes it all worse! As is happening in Italy. In effect 'Italian' and 'Greek' and some other national Euros are now worth less than 'German' Euros. This is a farcical but inevitable result of trying to push economic water uphill.

But of course it's all the wicked banks ripping us off, wail the thick Leftists. To which comes more elegant analysis from Tim Worstall:

The banks have already lost their money. Deutsche Bank carries Greek debt on its books at 50% of nominal. So does RBS. So, in fact, does every bank that has even a modicum of sense (this excludes certain French banks but then we knew that was likely, finance and Frenchmen not mixing well).

For the banks Greece going bust has already happened, they’ve already lost their money. What’s next on the banks’ agenda is, OK, so, they’re bust. What do we all do to get them moving again?

The people who are not being asked to take a haircut are the IMF, the ECB, the EFSF, the whole lot of public sector holders of Greek debt. They too have, in reality (perhaps not the IMF as it is always first in line as a creditor) lost 50% of their money…..because Greek debt is trading at 50% of nominal.

This whole farce of a bailout, the austerity, the entirely counter-productive wringing out of a nation, is all to try and make sure that those public sector holders do not have to acknowledge the loss they have already made...

Wait! It's all the fault of the evil anonymous markets! How dare 'markets' dictate to governments!

Er, not that either.

Governments choose to borrow from different parts of the planet because taxpayers won't pay enough tax to finance things governments say taxpayers must have even though they won't pay enough tax.

And if you borrow money, the lenders may politely ask how you plan to pay it back, and trust you to give an honest answer. If they don't get an honest or credible answer, they are inclined to put up the cost of lending you more money.

That's not an evil market at work. That's good manners.

Last word with Tim who explains why the EU elite won't do what is needed to end the crisis:

... What wouldn’t survive is the Grand European Dream, that the disparate continent can be turned into one Great Country ruled by the technocrats in Brussels. Which is why the technocrats in Brussels won’t solve the problem in the obvious and simple manner. Because the Dream is more important than the People.

Sadly, an economy, a country, where a Dream, any Dream, is more important than the People isn’t a nice one for people to inhabit.

We mere taxpayers suspect in our dark hearts that a formidable industry has grown up around the 'climate change' issue, with all sorts of organisations big and small depending on state handouts to survive, and so frothing up the climate issue regardless of the facts to make sure that those handouts keep on rollin'.

Today I was giving my views on the Diplomacy of Climate Change to one such NGO, pointing them in the direction of my website and such gems as this and especially this:

It of course all depends on the precise questions being asked.

Does human activity have an impact on the planet?  Of course.

Is it easy to measure that impact?  To a degree yes, but only over the relatively short term.

Does the climate change naturally anyway?  Of course. It would be impossible to imagine a world in which it didn't. It probably would be dead.

So how do we measure what changes are caused by Man, and which are occurring anyway?  Ah, now you're talking. Very difficult, the more so if you look at longer timescales.

If it turns out that human activity is affecting the planet, are the effects good or bad?  Some must be bad (eg if we eat every fish, no more fish). But again, it depends on what timescale you choose to use - what is Bad over (say) a century may turn out to be Good over a longer period. Thus the Industrial Revolution poured out nasty pollution (and still does) but it opened the way to far more economical use of natural resources now and into the future.

Is it better to act now to stop future bad outcomes?  This is the heart of it. We can't be sure what will be bad outcomes and what will be good ones. So it may well not be wise to overinvest now in vast inflexible and expensive schemes to 'prevent' climate change. Better (in my view) to spend money as we go, adapting to the effects of changes as they unfold over time.

So are you saying do nothing now?!  No. Energy-saving ideas and generally being less wasteful look to make sense. There will be a role for government in advancing those. But the main impetus must come from market forces and human ingenuity. Where else? Huge collectivist schemes are unlikely to be wise or sustainable in terms of popular support - we just do not know enough about Cause and Effect over the timescales concerned.

But what about all the scientific evidence?  Hmm. In the past thirty years 'scientists' have veered between warning of a new Ice Age to warning about Global Warming to (now) warning about Climate Change in any and all directions. Not very persuasive? 

Don't you care about future generations?  I do care about them, often. Some of them live in my house and demand pocket money. But one way to care about them is not to lumber them with huge debts and stupid policies brought about by our current ignorance and hubris. Look at it this way. Which scientific innovations or other trends/developments would you have stopped in 1909 to make things better now? And how would you have been sure that you hit the right ones then? Why should poorer people in 1909 have subsidised far richer people in 2009? Why should poor people in 2009 subsidise far richer people in 2109, or 2209?

Bottom Line?  Steady as she goes. Bet on the wisdom of people, not on the dogmatic certainty of governments. Because it is just not clear what to do for the best. And governments will make a far bigger mess if they get that wrong.   

We chatted to and fro about Climate diplomacy. I said that as Copenhagen had showed, the very complexity of the issue meant that a 'global' approach to it was doomed to fiasco. Better to get together a smallish group of industrialised carbon-generators (eg the Top 20) and try to sort out something within a much smaller circle. There would be fierce squeals from all the people and NGOs left out, but too bad - Saving the Planet was far more important than their self-esteem issues.

But even that, said I, assumed that (a) we could convincingly identify a causal relationship between human activity x and bad climate change y, and (b) identify policies that would help tackle y while not causing new problem z.

Oh, and then we'd have to work out who pays for it all.

All of which went to explain why countries like China piously insisted on bringing in the developing world to the process: by expanding the meeting they ensured that nothing would happen on Climate, which suited them for the next 50 years or so as their development hurtled on.

Meanwhile all bureaucrats could sense when top-level leaders were really focusing on an issue, or not. The policy caravan had moved on, from Climate to Arab Spring to Money. No senior attention was being given to Climate issues, regardless of the fact that more huge Climate junkets were continuing in Durban soon and on to Rio next year. PM David Cameron had already said that he's not going to Rio. Good choice - total waste of time.

I concluded that it all boiled down to a simple choice: spend massively now with money we don't have on uncertain and probably stupid measures, or be less ambitious and invest in adapting to Change rather than foolishly trying to modify it. And even that was not a choice - we'd end up adapting and hoping for the best, as there was no deliverable alternative to it.

My youthful NGO friend said that he tended to agree with the Bjorn Lomborg arguments on the whole issue. But he had to be careful what he said, lest his NGO stop getting funding!

I politely pointed out that he had said something profoundly bad and corrupt. The whole Western world was reeling from ill-advised investment decisions (mainly by profligate governments), and his organisation was hiding what it believed to be the truth to keep getting money. Horrendous. I sympathised with his current career plight, but that was no way to go. He ruefully said that he saw the point.

So, there we have it.

It's not Climate Truth that counts.

It's the requirement that we taxpayer suckers keep paying out to people who want to avoid the truth if it puts their grants at risk.

QED. 

A feisty but realistic article in the Guardian by Nikos Dimitriou looks at Greece's deep problems whatever happens:

Greece relies on imports, fuel and food especially. The agricultural sector has dropped to less than 4% of GDP – can enough be grown to feed the population? How many more businesses will close because they can't get stock or supplies? Where do we get the cash and specialised skills to revive moribund industry to produce products needed in the country, let alone exports? Will stagflation and harsher austerity be survivable?

Tourism may boom, at least for those who don't mind things scruffy and simple. Hopefully they won't expect quality, and will be content with what we used to offer in the 60s – as long as it's dirt cheap...

... The disconnect is mutual. It's rare to find anyone who retains faith in any bastion of the state. Polled regarding corruption among various professions, 94% believed politicians are all or mostly corrupt, journalists 80%, the church 67%, judges 64%.

Such animus is justified, by revelations of how much of the country's money they have simply lost (the state bank president reported that 30% of the budget was unaccounted for); by endless scandals that never lead to punishment; by more than three decades of much-needed improvements promised, enacted into law, then ignored.

Fear and anomie increase as we realise how profoundly wounded this society is. It seems the price of freedom from the bloated, feckless bureaucracy in Brussels is to maintain the status quo; that the opportunists will flourish; the political cabal will expand their power; that justice won't prevail.

The only certainty is how wrong the pundits are to presume Greece's recovery is simply a matter of "weathering the transition, increasing exports and returning to the markets".

See also an unusually cogent stream of Comments, going to and fro over how far Greece and its Leftist culture have created all this misery.

The key issue is simple. How can a country like Greece create wealth and so avoid being like a dusty poor part of Africa?

The traditional route is obvious enough. It exports sunshine in the form of tourism. But modern tourism needs decent facilities and one or two basic things like water and petrol. Cheaper-end tourism won't pay for the imports to keep up standards on the scale Greece needs. So wealth-creating industries and activities are needed too.

Greece's problem now is that no-one wants to lend Greece the money to help these things keep going, except at unaffordable interest rates. For all the reasons described in the above article, Greece has collectively lost credibility as a society.

Commenter Demetri is on superb form here:

Too many Greeks want money.... from someone else.The believe their are "owed" money by other Greeks...the government... .the banks... the EU.... rather than take personal responsibility for their own lives. The unions are still holding Greece hostage with their endless strikes and riots (destroying their own country)/ This is not out of principle and human goodness. Its because austerity hurt their pocket books. Their motivations are personal greed and petty envy of those that have more money than themselves... not ethics.

In reality far leftists in Greece are tax evaders and corrupt in no lesser frequency than the very "elites" they constantly scapegoat for their problems. The main difference is the far leftists expect the same money as others... but don't actually produce enough to earn the money they think they are owed. They would rather hug a tree and write poetry rather than build a factory that produces jobs and goods.

In short, they want to live parasitically off others while whining about the injustice of it all.

... If Greeks want their dignity back they will now have to earn it through their labours not borrowing money or expecting others to fund their lifestyle. Rather than constantly whining about how the government owes them money and calling for revolution far leftist Greeks need to grow up and start thinking about how to start an export business. Or how to get practical in demand technical skills.

Rather than scheming for new ways as to how they can taking the wealth of others, far leftists in Greece need to start thinking how they can produce wealth themselves. It is morally stronger position to give than to take.

A profound conclusion lost on the tedious #OccupyLSX tent-dwellers and all the other 'occupiers' now being roundly ignored everywhere.

Their remedy - to make things better by 'protesting' and 'making demands' while offering not a shred of a sensible idea - is just what is NOT needed to impress foreign investor who now have money which we don't have.

The Great Unravelling continues apace.

As readers here know, the Spiegel Online site is a fine way to find thoughtful pieces on the goings-on in Europe from a German perspective.

Try these two for size.

The first is an interview with Polish Central Bank Governor Marek Belka (who served for a while as a technocrat Prime Minister while I was in Warsaw). Belka is a smart, steady operator who chooses his words well. Here he tries to present a cautious but optimistic picture of Poland's prospects for joining a reformed and disciplined Eurozone:

SPIEGEL: The phrase "Polish economy" once stood for inefficiency. How did Poland manage to be the only EU country to keep on growing its economy during the financial crisis?

Belka: We did a few things right. Our economic policy was cautious. We took integration into the EU very seriously. Many of our rules are more modern than the rules in Germany or France. We have had a debt limit enshrined in our constitution since 1997. We have low taxes and competitive labor costs. The Poles complain a lot, but we are basically optimists. Optimists spend money, while pessimists do not. The Germans believe that after the Hartz (welfare) reforms, they now have a flexible labor market. But ours is even more liberal. We have avoided financial turbulence. And there was no credit bubble.

...  The euro zone is heading for an increasingly closer political union, without which the euro can't be saved. One day Poland will join a new and different euro zone, which will have more of the characteristics of a federation than it does today. We have to be strong and healthy to avoid losing our economic sovereignty, which is now happening to a few countries that have problems.

And this is an important corrective to those of us in the richer parts of Europe squealing about 'austerity':

SPIEGEL: ... Why are the people in Eastern Europe so much more patient?

Belka: Because the people here still aren't used to prosperity. Let me give you an example from my days at the International Monetary Fund. It was at a time when the Latvians had to implement a drastic austerity program, which caused consumer spending to drop by 25 percent in a year.

I asked a Latvia negotiator how his country expected to survive this dramatic crisis. He said: What crisis? We had a crisis when the Soviets were sending us to Siberia. Here in Eastern Europe, many still remember why they were once poor, and they're not afraid of reasonable reforms that are painful in the short term.

But see also this tricky argument that failure to give Poland lots of EU money in the next Budget spending round would be a Breach of Promise:

SPIEGEL: Is it conceivable that the EU will cut back on other spending in the future because of the unimaginably expensive bailout funds? Spending such as subsidies and structural assistance, which has also helped Poland in recent years?

Belka: We're worried about that, of course. It would be a violation of the accession agreements. The deal, at the time, was this: We adjust our markets, and you help us in the process. If this were no longer the case, it would be a breach of promise.

Nice try. But no.

Then read this piece vividly describing how Germany's insistence that all countries make a 'real effort' is now creating a divided Europe:

... the price of her success in Brussels is the division of Europe. Those countries that are not part of the euro zone are now no longer part of a core Europe, and are now being asked to leave the room when the truly important issues are being debated. While the 17 euro-zone members walk at the front of the pack, the 10 non-euro-members are forced to walk behind, like stragglers and second-tier nations.

And now they have it in writing. In the closing document of last week's summit, euro-zone member states grant themselves the right to work together more closely without having to wait for the non-euro countries. The EFSF also deepens the divide. It is a facility set up by the 17 countries in the monetary union for the 17 countries in the monetary union...

The 17 euro-zone leaders decided to make the bailout fund and its director, Klaus Regling, even more important in the future. Regling will receive more power and influence, as well as more money. He will become the nucleus of a new Europe driven by fiscal policy.

The EU summits last week saw difficult exchanges between the UK and Eurozone countries about all this and a classic drafting fudge:

Most readers of this website are interested in one way or another in 'foreign affairs'.

As I have described on different occasions here, the heart of international diplomacy is the state. That idea in its modern form emerged from the Peace of Westphalia. Here are some passages from my 2009 DIPLOMAT article on this subject:

A vital date in the history of the modern world is 1648. That was when the Treaties of Osnabrück and Münster were signed. All readers of DIPLOMAT know these treaties off by heart. They together are more usually known as the Peace of Westphalia, which ended the Thirty Years’ War within the Holy Roman Empire and the even more geriatric Eighty Years' War between Spain and the Republic of the Seven United Netherlands.

The negotiation of those two treaties invented modern grand scale diplomatic junketing. Haggling meandered on for six years. Over 100 different delegations of states, ‘imperial states’ from the Holy Roman Empire and interest groups (today known as NGOs) jostled for good outcomes, all on generous expenses.

The Two Treaties were mainly about settling Europe’s violent religious differences. But in doing so they set up new principles of sovereignty, under which the rulers of ‘nation states’ agreed to manage their relationships in a peaceful or at least civilised way. As democracy slowly came to qualify the power of those rulers, such sovereignty was seen as lying not with the national leader but rather in the ‘nation’. Which opened the way for ‘nation states’ to emerge as independent actors on the international stage.

Hence two tricky questions, still alive and well today:

·         how does a defined territory join this grand process (ie what is a ‘state’)?

·         which people join this grand process (ie what is a ‘nation’?)?

... Meanwhile Yugoslavia too had broken up. That hard question at the heart of Westphalianism – nation or state? - posed itself in acute form

Should the rest of us recognise the former internal borders of the USSR and Yugoslavia as the borders of the new countries concerned? Or should we negotiate border changes in some cases, better to reflect the principle of self-determination? Who or what should be sovereign? 

... The West looked at Slovenia (predominantly Slovene-populated, borders mainly not contested) and decided to have its cake and eat it. Slovenia handily ticked both boxes: internal borders as new international borders, and self-determination.

Which was fine for Slovenia. But not for Croatia, Bosnia, Macedonia, Montenegro or Serbia, the other five republics in communist Yugoslavia each with different ethnic/national identity tensions. Not to mention the sizeable category of ‘Yugoslavs’ – people not identifying themselves with one or other ethnic community...

You know the rest. Calamity. War. Refugee columns.  Ethnic cleansing. War crimes. ICTY. NATO bombing. In today’s Europe! Dayton. Rambouillet. More NATO bombing. Kosovo run by the UN. Milosevic sent to ICTY and dies in prison. Kosovo declares independence in 2008, but is still not recognised by the majority either of countries or of the world’s population.

... Diplomacy. Building on what exists (ie racial, ethnic, religious tensions going back centuries) and accept that Good Fences make Good Neighbours? As we (HMG/West) did in accepting the break-up of what remained of Yugoslavia into Serbia + Kosovo + Montenegro?

Or building towards what we insist has to exist, hoping to compel people to cooperate nicely within single state frameworks which they dislike and distrust, as we (HMG/West) have done in Bosnia?

Two utterly different philosophies and policies, applied to places a few miles apart, which for eighty years were in one country.

Foolish Consistency? Or Foolish Inconsistency?

From Westphalia to West failure?

Now a new book by Norman Davies is coming out: Vanished Kingdoms. It looks at how the ebb and flow of history builds, removes and sometimes (Poland; Montenegro) restores polities.

Here at Browser is a super interview with Professor Davies, who as usual is on lively, challenging form:

People who have their eye on short-term, contemporary events and the world around us tend to forget this. I sometimes think they imagine the world politic to be a chessboard, where you play games, have a crisis, and then you put all the pieces back and have another game. Well it’s not like that. You can have a chessboard, you have players who are either pawns or kings or whatever, but the players themselves are always changing...

At the end of the Roman Empire, in the Byzantine period, the empire shrinks and shrinks until it consists of one city, Constantinople, and the Ottoman Turks can encircle it. There’s a final siege and the Turks go over the wall. The last emperor – number 156 or whatever – disappears in the fray, is killed, and that’s the end of the empire. This is, if you like, the guidebook to this story, to exactly what Rousseau is saying. No matter how powerful they may look, the time will come, as in the lives of men and women, when they die. It’s not a topic that people are eagerly looking at...

And the indigenous population of the region where Glasgow is – Strathclyde, as it’s called now – was Welsh. The chief hero of medieval Scotland was William Wallace. Wallace means Welsh. The Scots don’t tell you that. They had this theory that William Wallace’s family came from Shropshire, which is how they try to explain how a Welshman could be in what they thought of as Scotland. They didn’t know that these Welsh of the north were not intruders from Wales, they were there long before the Scots...

Part of the afterlife of the Soviet Union is, of course, in Putin’s brain. Putin is ex-KGB, an organisation founded to preserve the Soviet state which failed completely. Putin must have a terrible sense of failure. In fact, he has said that the collapse of the Soviet Union was the greatest catastrophe of modern times. So sure, Putin, in the back of his mind, would like to reassemble if not the Soviet Union, then some sort of empire, a broader Russian-dominated grouping which would be a modern version of the Soviet Union. I don’t think he’s got a cat’s chance in hell...

And finally:

Is there a European identity strong enough to overcome the national identities of its member states? It’s touch and go. But I’m an optimist. I think there will be one hell of a crisis. I doubt if the EU will disappear, but it will be severely chastened. And it will have to put its house in order. Otherwise it will become one of the vanished kingdoms. It wouldn’t be unprecedented for that to happen.

Read the whole thing. It's crackling with wisdom and interest.

Then order the book (on Kindle too):

A reader steers me towards this energetic and well informed stream of consciousness account of the Eurozone deal, over at Midwest Musings:

And speaking of insurance, one has to wonder what this does to the very active CDS market of very unhappy memory--AIG--as this supposed deal with the banks is being catogorized as a "non-credit event," it being "voluntary" in nature, and not a default which would trigger payment under the CDSs.  

I suppose if a gun is held to your head and you give all your money to the guy with the gun that could be considered a "voluntary" act:  I kinda look at it as theft but that's just me...

If anyone believes this 103 Billion Euro crap they aught to have their head examined, but there was language that the liquidity of the system would be protected in some undisclosed manner (read, ECB prints as much money as needed) so that isn't a bad thing.  Mind you, there isn't a lot out there, IMHO, to be raised for any Euro bank so all of this may be moot.  Look for partial nationalizations, mergers and issuance of funny money from the governments if they are to fulfill this nonsensical requirement...

...Anyone know how one says, "Waddayou nuts?" in Portugese?

Remember the wail of rage against greedy bankers who had put the whole of the world's finances at risk because they set up ingenious schemes based upon layer after layer of ill-understood risks?

Aren't EU leaders doing the same now on an even vaster scale - but with public money?

In 1969, in her seminal work On Death and Dying, Elisabeth Kubler-Ross eloquently detailed the five stages of dying - denial, anger, bargaining, depression and finally, acceptance. It remains one of the most important contributions to our understanding of the final phase of life and will do much to explain the otherwise baffling lack of self-awareness characterizing European elites' approach to the entire EU project...

Back in 2005 after the French and Dutch referendum debacles, William Schirano and John Hulsman wrote a doom-laden piece for the US-based The National Interest about the fact that the European Union and its ideals were, in fact, dying.

Watching the latest fevered summitry it is hard not to see Denial, Anger, Bargaining and Depression aplenty. Just quite not enough Acceptance yet?

Perhaps this is understandable. How to accept that something so vast and magnificent is failing, and perhaps giving way to uncertainty and disarray which risk lurching Europe back towards its ghastly past?

Read a version of their famous article here. It's only some 300 weeks old, but the names of the key players (Blair, Chirac, Schroder) seem to come from a prehistoric age.

Six years on things are, of course, much worse. But their core idea still makes sense:

Simply put, a one-size-fits-all approach does not conform to the modern political realities of the Continent - European countries have politically diverse opinions on all aspects of international life: free trade issues, attitudes toward NATO, relations with the United States and how to organize their own economies.

For example, the Netherlands is a strongly free-trading country, traditionally pro-NATO and proAmerican. France, by contrast, is more protectionist, more skeptical of NATO, more statist in organizing its economy and more competitive in its attitude toward America. Thus the two European renegades actually have very different political cultures  - there simply is no common "European national interest."

The EU should function as a political clubhouse - coordinating an intra-European consensus where one exists...

I thought I'd treat myself for Christmas and get one of these fine watches from Christopher Ward.

Tragedy! It arrived but was just too big for my, ahem, delicate wrist.

I promptly repacked the box and sent it back. They are promptly refunding both the cost of the watch and the cost of the special posting needed to return it safely.

If you are ordering a watch online, do think about just how big you want your watch to be. Wide and a tad heavy appears to be in fashion at the moment, and it's not easy to tell as you blink in awe at this site what it will look and feel like in practice. Christopher Ward are most helpful in talking this through too. 

So if you are looking for that always winning combination of fine service and elegant products for a special gift for someone, go no further than this site.

Retailers! Even when you end up not selling something you generate great good will and a strong reputation by being organised, helpful and courteous about it.

* * * * *

Update   One of the founder partners of Christopher Ward writes:

I just wanted to thank you for taking the trouble to pen such a positive note – even though we didn’t sort out a watch you wanted. Rest assured, the whole team will be circulated with your comments as this is the kind of reward that really motivates them to continue giving what we hope is the finest assistance possible to our customers.

Let's give his troops a boost by looking at what they are doing well.

The core Christopher Ward business is selling good Swiss watches much cheaper than others by cutting out marketing and other glossy flim-flam. Hence the watches are sold through their website.

To sell a classy product they need a classy website, duly delivered.

Very few(!) grammatical and other infelicities of the sort likely to annoy someone like pernickety me. Easy to navigate. Lots of quick-access photos of the different watches to make a potential customer get very interested. Nice testimonials and media reviews (although of course we see only the good testimonials - maybe some people out there thought the products rubbish?). Also interesting background material on what makes watches special. There's even a section on Ethics, although this seems a bit 'random' and inward-looking.

This is all backed up by people who answer telephones and reply quickly to emails in a positive, professional way. 

So, in short, an impressive enterprise which does a good job in trying to create a feeling of partnership and engagement with customers. Dialogue/questions/comments are positively welcomed. This is hard to deliver on a larger scale for obvious reasons (see the very different emphasis of eg Amazon, although their vast operation also turns on strong service and reliability), but for a smaller, more targeted customer-base it is a strong feature as long as it is done well. Which in this case it is, to judge by my own experience.

All in all, Christopher Ward come across as people who enjoy what they are doing and are really striving to give their customers something 'extra'.

In other words, a superb example of the benefits of capitalism. People taking a personal risk to build a new business using a new model, whose success in turn creates new jobs and new products: incredibly sophisticated, beautiful devices available to a much wider group of people than ever before in human history.

Take that, you silly #OccupyLSX losers.

How many times do I need to argue that the 'basic' problem with the European Union is a failure to accept certain Realities?

If you're sick of hearing it from me, as well you might be, listen to John Kay over at the FT (Note: it's painful to pay (horror) for news and analysis, but if you want to follow the Eurozone calamity properly you must buy an online FT subscription):

The decisive action they all seek is not really a European solution at all. It is that the German government should write very large cheques – or underwrite very large borrowings.

Whenever you assert responsibility for issues you do not have authority to tackle, you risk a crisis of credibility that undermines the authority you do have. Europe’s leaders see themselves as mustering resources for a war with the markets: a war which they will lose, not just because they will never find sufficient resources to defeat the markets, but because they are really fighting reality

Which is why cross Leftist articles like this one miss the core point:

Reading the press, one gets the impression of a bunch of lazy Mediterranean scroungers, enjoying one of the highest standards of living in Europe while making the frugal Germans pick up the tab. This is a nonsensical propaganda...

Angela Merkel clearly has Italy in her sights. She, and the Troika are scapegoating the Greeks – in order to make sure that should Greece take the rumoured “hair cut” on its debt and restructure, the other peripheral countries – especially Italy – won’t get any ideas and be tempted down the same path of forced debt restructuring, but rather will redouble their efforts to achieve arbitrary fiscal targets on an equally arbitrary timeline (and how’s that worked out for Greece?), and learn to “live within their means”, as the Germans always piously lecture the world.

This is the strategy to prevent what is euphemistically called the “contagion impact”. In reality, it is also called the principle of collective guilt – destroying the livelihoods of thirteen million people for political or ideological or faith based reasons, which is frankly disgusting and unacceptable. Given their own history, German policy makers should understand this phenomenon...

It's not just about a crude cost/benefit analysis. It's about Morality.

The 'Reality' (as I see it) is that the much vaunted EU Solidarity requires certain minimal levels of discipline by all sides. No-one has ever wanted to talk about this too openly: it's all too pointed and embarrassing, since to talk about the mutual obligations of Solidarity is money-grubbing and lacking in trust. We're all Europeans, right? So what's the problem?

The problem is that the Germans see (not without some reason) many of the southern European belt of countries as being simply unable or unwilling to achieve the necessary level of collective national discipline to make Solidarity credible (running honest businesses and honest accounts, paying taxes, respecting rules - tough stuff like that), and that when these countries fall short (as they inevitably do) they expect Germany to pick up the bill.

Yes, it could cause unfathomable disaster including for Germany if the Eurozone crashes. But is Germany to sit there and be ripped off indefinitely? Is refusing to subsidise the hapless or feckless for ever really "disgusting and unacceptable"?  

Germany, like Atlas, is shrugging.