Tag Archives: opinions

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The quiet rise of the pound

When the pound was declining a bit more after the Brexit vote we got daily commentaries from the media on this and how they thought  it was caused by the decision of UK voters. Most of the devaluation of the pound actually occurred between July 20165 and April 2016, long before the media thought we would leave the EU. There was a further leg down after June 23rd. Over the last month the pound has been rising against the dollar and the Euro. We rarely get news of this, and the rise is not attributed to the moves recently taken to press on with Brexit.

If someone believes Brexit was the crucial variable when it was falling, why do they change their view when it is rising? Why didn’t the pound fall this month, given the clear indication that the government does now  intend to send the Article 50 letter and has Parliamentary support to do so?

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Why is the EU isolated?

Mr Tusk’s cry of desperation portrays an EU surrounded by hostile forces, and in danger of subversion from within. He sees Russia as an enemy of the EU. He condemns Islamic terrorism and is clearly worried about several states to the south across the Mediterranean. He dislikes the policy of the new President of the USA. He makes no secret of his worries about China. In other words, he sees the EU as a lonely group of states in a largely hostile world, where the world’s three largest military powers are not in sympathy with the EU or are hostile to it.

What is his remedy? He wants the EU to arm itself and undertake more common defence, with increased defence spending. There is no mention of NATO, Europe’s principal security guarantor. He wants to accelerate European union, to create a more cohesive force in the world with a united foreign policy.

He should ask himself how has the EU got itself into such an impasse with the world’s great powers?

The EU has helped create the rift with Russia. The EU claims cause against Russia for Russia’s illegal military intervention in Crimea. Russia points out the EU helped destabilise the elected President of Ukraine who was just about keeping Ukraine together, to back a new President with a pro EU agenda that the Russian speakers in the country did not support. At the very least we in the west must concede that the EU helped create the conditions for an opportunistic move into Crimea by Russia.  Since then the EU has wished to keep up a tough rhetoric against Russia, and has imposed sanctions. I am no supporter of Russian aggression, but I do want the EU to recognise the need to live alongside Russia and to be careful about the interventions it makes in territories where Russia has influence. Working with Russia in the Middle East is now important given the position Russia has militarily and diplomatically in the region, as successive US Presidents have recognised.  The EU also needs to understand that the surest defence the EU has is from NATO, with the explicit military guarantee for all members.

The EU now seems to want to assert itself against China, though the cause and reason is less clear than with Russia. The EU regularly condemns Islamic terrorism, but is challenged when it comes to defining which rebels and forces on the ground in the complex Middle Eastern civil and religious wars qualify as terrorists and which can be defeated by EU action. In recent days the EU has been keen to indulge in a war of words against the new Trump Presidency, without listening to the concerns of the new Administration in Washington about trade, currencies and migration.

The overriding pessimism of Mr Tusk is sad to read. The lack of any positive forward looking agenda to engage with our ally the USA, or with the powers of China, Russia and the Middle East goes a long way to explaining the EU’s loneliness. If all you offer is fear mixed with the odd threat it is not surprising the EU lacks friends. It was that combination which helped lose the EU one of its major financial contributors, the UK.

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Donald Tusk speaks out for the elites

Mr Tusk has written a letter to the EU 27 saying he disagrees with the views of many voters around the EU “that European integration is beneficial only to the elites, the ordinary people have only suffered as a result”. He should try telling that one to the millions thrown out of work or never able to get a job thanks to the Euro and the EU’s banking and economic policies. The UK was badly damaged by the EU’s Exchange Rate Mechanism.

He thinks that people do not feel secure enough. He urges the EU 27 to unite to undertake “definitive reinforcement of the EU external borders”. Does that mean he now wants to build more walls and fences, as the EU is helping Turkey do already and as some EU countries have done individually?

There is news for the UK, which is not mentioned by name. He tells us “The EU should not abandon its role as a trade superpower, which is open to others”. That sounds like a man who wants to have access to the UK market and accepts we will have access to the EU’s internal market. He clearly does not wish to lose any  European trade.

There is also the curious statement that “the times of European unity have been the best times in all of Europe’s centuries long history”. Is this the idea that the Roman Empire or the Habsburg Empire or the French conquests of the late eighteenth century were some golden age, despite the role of the military and of occupation?

His letter of course sets out exactly what many of us expected to be the EU’s next move – more progress towards a full political and defence union.

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