25 January, 2011

Avalanche5: Is the euro crisis about olive-growing States or politicians' fingers in the nation's piggy bank?

Is the EU and the euro suffering from a southern problem? Is it a problem of olive-growing southerners against the cold, industrialized northern countries?

Not at all. The disapproving idea behind the epithet PIGS, that some Mediterranean countries are somehow genetically or geographically inferior, is a nonsense. For a start these countries led the other European States at certain times our common history. They were pioneers for Europe, whether it was trade or exploration of the world or inventions. There were also powerful bankers that led the world when northern Europe was still somewhat lacking.

Yet something is seriously missing and it is not climate. Spain and Portugal are not too warm for innovation and industrial prowess in the twenty-first century. Why then is Portugal not the equal to those on the same climate zone like California's Silicon Valley to the West or Israel's vibrant technological wonder to the East? Portugal has the advantage of a bigger internal market than the USA. This incongruity is even more apparent to the Mediterranean natives who migrate this latitude to the East or the West. They will tell you: 'There is something wrong at home.'

Is it then a matter of Europe's geography? Not at all. Europe’s most southern State is doing rather well and has not had problems in attracting long term finance. What then makes Malta superior to Greece and Portugal at the moment? Clearly Europe’s problems have nothing to do with whether the State is south or produces olive oil or not.

It is about oily hands where they should not be. Political hands. How do politics and politicians make currencies weak and sap innovation?

A major factor is the interference of politicians in the machinery of monetary affairs. The national bank should be independent of politicians. A European Bank should be independent of European politicians. Banks should be run without any interference. The Statistical Office should also be a forbidden zone for politicians. They can't resist tweaking the figures to say how great they are.

Look what happened with one member State —- Greece. This is not to say that Greece is the worst example. Every State has its own breed of corruption. Most are more sophisticated. Some facts about Greece however are in the open. They are instructive.

When Greece applied for membership, the European Commission — which was not then stuffed to the gunnels with party politicians but had a few people of honest and independent character — had to make an assessment according to the law of the three treaties. For the Economic Community, article 237 applied. The Commission delivered this Opinion in January 1978. What did it say? It said that while a positive response to the eventual application should be given, Greece was not ready.

Was it because it was poor or grew too many olives? Nope. The Commission said that an accession transition period was necessary in order to undertake ‘economic reforms.

That was a polite way of saying it. After the years of the dictatorship of the Colonels, Greece was still in a chaotic and corrupt situation. Everyone knew it. But the Greek political leadership made political appeal to their brother politicians. What was a technical matter about bad bookkeeping leading to corruption became a hot political issue.

Roy Jenkins, who became Commission President the next year was quite frank about this. Three countries had applied for membership. Greece was ‘the least qualified for membership, but it was too late for that view greatly to signify’ because of the political influence of the Greek Prime Minister Karamanlis. Guess who became a full member first?

At the time the population of Greece was 10 million and they were promised a few billion in accession funds. Later they got more munificence in the Integrated Mediterranean Programme. That looked like a politically agreed inducement. Why were European funds amounting to a few thousand for each man woman and child necessary? It doesn’t take that much to make sure the book-keeping systems are working properly. It requires hiring some honest professionals, probably at a lower salary. Investment and venture capital wings its way into any environment because it finds the right combination of active intelligence and trust.

In the Community system it is not necessary to bribe the voters. That destroys trust. If the people do not want to join, then it’s up to them. So it is not necessary for the Brussels authorities to supply other people’s money to do this bribing -- especially when the taxpayers are not asked about providing it. However if the enterprises and the workers of a country want to join there are several Community bodies with which they can establish contact and that should provide impartial and useful information. Citizens should be educated to discern the facts. They should not be the targets of a public relations campaign. It would be far better to supply funds so they could learn to detect political hum-bug on a European scale.

Politicians too often prefer to dispense money in favour of their own ideological policies. Not their own money of course. They like to be considered public benefactors but that is not really their job description. Whose agreement is necessary for representatives of the people to give away public money? Surely the public, the non-political tax-payers! The taxpayers in the other parts of the Community were not asked to provide financial supervision like the Community is supposed to do. Each of the three Communities has a consultative committee, a chamber for organized civil society, unfettered by political considerations. Their role was frozen out in the secret deals done by politicians.

Did this largesse help Greece with the ‘economic reforms’?

Judge from what happened in Court.

At the vortex of the public scandal was the Bank of Crete. This was a major bank in the Greek system, being originally an emitter of banknotes. It became a siphon for Brussels funding. Then in the 1980s one of its employees, yes an employee, an accountant working there for only two years, raised a loan from the bank and bought it! A remarkable feat pioneering criminal operations that banksters seem to have emulated elsewhere. With European and depositors’ money at his disposal, he then proceeded to create a banking and publishing empire. It controlled three daily newspapers, other publications, a radio station and a soccer team.

Of course when you buy a bank like that you think it is your own personal piggy-bank. Oily fingers dip into the till. When things got hot, the bankster fled to the USA. He ended up in jail. He was charged with forgery, bribery and embezzling more than $200 million from the Bank of Crete. Note it wasn't the Greek politicians that threatened to take him to Court. In fact when he fled Greece, a minister had to resign for this 'carelessness'. Safely in the US after a detour in Brazil, he said that operatives were out to kill him. Who did not want exposure?

Then he sang. The Greek people and other Europeans were spell-bound.

He claimed that the prime minister ordered state companies to deposit funds with the bank and took bribes from stolen money. The allegations resulted in the resignations of several ministers and demands for a vote of no confidence in the government of Prime Minister Papandreou. A court case lasting ten months astounded the public with the exposure of ministerial goings-on. Thus in 1992 several years after the event, Mr Papandreou was cleared of all charges by the Greek Supreme Court (with a close 7 to 6 vote on the most important charge). Two of his former Cabinet ministers were found guilty of related charges.

Of course there may be many such scandals hidden under the surface. Not every one is exposed in court. If one person can get away with such outrageous conduct, no doubt many others try and succeed. Did Greece and the European institutions learn a lesson? Did they install great anti-corruption measures?

The very next year Mr Papandreou was re-elected as prime minister. The Council of Ministers decided to provide even more money for the Mediterranean region.

Where did Greece and Europe go wrong? Clearly if Greece had reformed its finances to Swiss, German or Dutch standards the euro would not be in the pretty pass it is in today. Who is to blame? Clearly a succession of politicians did not do the cleaning job.

But what of the floods of European money that streamed into the banks and into the politicians pockets? What of the money that was used to bribe voters, rather than proper reconstruction and ‘economic reform’? Why was there no case to answer for this debacle in the European courts? One indication would be that the only active institutions at the time were full of people brandishing membership cards of political parties. They were already a sort of cartel.

The responsibility still lies with the European institutions. In this post-Gaullist period Europe was already creating its political buddy network where each scratched each other’s back. What’s the problem with political friendships? Nothing for the politicians but it does not get rid of the fleas.

A governance system controlled by a political cartel is a big problem for the public and the survival of independent media who criticize them. It is no coincidence that the crook in this case bought heavily into the media and offered free gifts to journalists. The politicians too often did not have the courage to clean up their own mess. Why? How can you be hard on political friends that you meet all the time at European party meetings to work out policy together? You need their vote and support to advance your own political ideas in Europe. Political parties open their doors to every lobby group in the telephone book and a few more besides. Parties can easily be captured by such lobbies. That is why the Commission should function in total independence of political parties and national governments.

Only an independent, supranational authority can cure this type of corruption that Europe is presently suffering from. The best way to achieve it is to examine the politicians’ interests in an open debate with non-ideological sections of society like enterprises, workers, consumers and the regions. Five independent bodies should provide a modicum of practical sense.

So how did Europe get into this fix with a party political cartel replacing de Gaulle’s paternalistic system that subsidized the French farming systems and others?

The biggest area of corruption occurred when the Commission became more and more the instrument of the political parties. The Treaties say the opposite. The members of the Commission should be absolutely independent. They should not talk to governments except in the Council of Ministers where there are witnesses and the public can see and hear. Yes, where the public can hear everything going on. After many years of abuse of secret political deals with their wine lakes and meat mountains, a clause was specifically written into what is now the Lisbon Treaty. It says in article 15 that all sessions of the Council must be open when they are considering money matters and any legislation. That was obvious before. Money is a public matter. Now it is written clearly in law.

After saying goodbye to de Gaulle, Europe must straighten out the party political seizure of the Commission. The treaties still say that the same thing. In the early days party politicians had the honesty to resign from parties when the joined the Commission. They said it was to ensure that they were independent but also seen to be independent.

Recently however after one secret night session, the politicians of the European Council decided without asking the people that the Commission should become their intergovernmental party political secretariat. The Council decided to prolong what was a temporary, transitional arrangement. They now stipulated that Commission members must be nationals, one each for the 27 Member States and all must be party card-holders of the main parties. That does violence to the spirit and the letter of the treaties. It is opposite to what it says. It is also dangerous for the political, financial and moral health of Europe.

In the past the Commission members — some of the strongest democrats —were not politicians and the Commissioners were independent of the States. That was because the Treaties say that the Commissioners must be independent, meaning having the courage to say NO to parties and to governments. Commissioners often take instructions from governments, also in flagrant violation to treaty law. Treaty law still says the same thing, but that does not stop the politicians of the European Council to make illegal maneuvers contrary to the treaties. They act in no-one’s interest but their own.

The next failure of Brussels lies with the representatives of organized civil society and their debating chamber. What chamber you might ask? Rightly. The members of the Economic and Social Committee — which the treaties say should have powers comparable to Parliament has NEVER been elected. If there were a debating chamber with legal powers over the legislation, we would not be in the euro crisis we have today.

A proper functioning Economic and Social Committee would have its own monetary and fiscal committee that would be independent of parties. It would ask pertinent questions about where European money was going. It would demand answers. It would not shut its mouth when the Council of Ministers and the Commission wants it to. It would also act by taking some cases to Court.

The euro crisis is the result of many years decay in professional standards of European supervision. The euro crisis will not be resolved until Europe has the proper democratic bodies functioning properly. According to the treaties a democratic Economic and Social Committee would also have its influence on whether a candidate State was accepted in the first place — such as setting its house in order before its prime minister takes a seat in the Council of Ministers.

Europe can be strong financially, politically and morally. That requires that the Commission should be independent and composed of the wisest and the best among Europe's 500 million citizens. It requires a selection process that the Council have signally failed to introduce in more than half a century.

If Europeans want to get their currency into a healthy state they should begin by insisting that the Council obeys the spirit and the letter of the law. If they do not do it themselves, someone else will make them. National courts are now examining dossiers that will begin this reform process. The Council has chosen to discriminate against Europe’s 500 million citizens, by making it impossible for free citizens to become candidates for the Commission and the Consultative Committees. Europe's 500 million citizens have ample potential to take these abuses and others to the European courts. That right of the individual and of every association was written into the treaties from the very start.

Europeans have powerful legal rights to safeguard their freedoms. A national court can catch some of the villains. But in the European system if one government is colluding criminally with other politicians, a court case can be taken out in any of the 27 national courts. People can go to the European level. They can ask for rulings on pertinent European matters even if they have a case in the lowest national tribunal. That is why governments and politicians are restricting the number of judges in the Courts in Strasbourg and in Luxembourg. However, the courts may act slowly but they do act eventually with force. On 18 April 2011 Europeans should celebrate that freedom and the sixtieth anniversary of the foundational Community Treaty and the great Charter of European inter-dependence.

13 January, 2011

Avalanche4 : the fate of the Euro, the political cartel and corrupt practice are thrown in the balance -- of Law!

Will the Euro survive? Will the European Union require stronger financial guarantees to make sure that there is not a knock-on collapse of the economies of eurozone countries? The targets of the financial market are euphemistically described as weak economies. Rather more than that is the core of the problem. Too often corruption is involved, from bending the rules, 'innovative interpretations,' bent statistics to outright crime, bribery and major fraud. The euro crisis has merely thrown this into high relief.

Why at the December 2010 European Council did the leaders of 27 Member States promise to embrace their worst nightmare -- make a treaty change? It is specifically for the euro. After a decade of controversy and demonstrations over the Lisbon and Constitutional Treaty process, why rekindle a row? The meeting on the euro crisis was behind closed doors, so those most concerned, the euro users, were kept in the dark. An earlier treaty change to please Parliament was done in a secret Intergovernmental Conference. That was small beer -- to spend extra money and give some extra salaries to extra MEPs.

This one is the biggy. It involves the alleged means to create monetary stability by plastering the ever-increasing money wall with what passes for paper or electronic currency. It is to act as a dam against nasty market speculators who see that some national books are not yet kept straight. (Note that those who kept their books straight, like Slovenia, Slovakia, the Netherlands, Germany and Luxembourg, etc are not under threat. Malta, a tiny southern economy, has the confidence of investors.)

Any treaty change is dangerous for a political group or cartel. It is much more so if it lacks popular support and has acted in defiance of popularly expressed will of the people in referendums. But contrary to the last amendment this has to be visible. The government leaders therefore made it as short as possible hoping that:
  • (a) it would not be noticed too much,
  • (b) it would pass easily through the ratification process in 27 national parliaments
  • (c) it would not cause rioting in the streets,
  • (d) it would not provoke a court case that would declare that a public referendum was necessary in an off-shore island or elsewhere.
However, 'short' does not mean unimportant. Obviously it is vital. It concerns money. Big money. The previous guarantee fund amounted to the equivalent of a nice round figure of a trillion dollars. That amounts to a couple of thousand dollars for every man, woman and child in the European Union. Handy cash. Once the public grasps the importance of issue, all sorts of questions will arise.

The European government leaders hope to get the following amendment to Article 136 of the Lisbon Treaty:
  • '3. The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality."
(For those who are curious, 136 paragraphs 1 and 2 deal with strengthening national budgetary discipline and Community surveillance, not weakening it. Whether countries are big or small, rich or poor, east or west, north or south, maritime or inland, industrial, agricultural or touristical, as long as they keep their books straight, they pose no threat to the eurozone; they uphold it.)

So why did the 27 government leaders change their mind? Instead of maintaining their previous chorus of 'No more Treaty changes, please!', all of a sudden they all say 'We all want a treaty change' and we want it NOW!' The amendment has also to get the European Parliament's approval -- and the EP previously set their mind against any treaty changes. Now they hope for an EP agreement before the Spring 2011. Are they two independent bodies who have coincidently arrived at the same conclusion? And what of the Commission? Is it independent too but also changed its tune to whistle in harmony?

(One thing all three bodies have in common is that all members are part of a tiny minority -- the two per cent of Europeans who are card-carrying members of political parties. There is not an independent person in sight. The second thing is that all the problems relate to political parties and their abuse of power.)

Why did the leaders not continue their well-trodden path by doing package deals in the secrecy of the closed-door European Council? Why subject this amendment to open parliamentary debate and dangers of failure?

The answer is simple: LAW.

The initiative to change the treaty comes from one country. That country eventually persuaded everyone else. That country is Germany. The person who did the talking was Angela Merkel, the Chancellor.
Why? And how was she so persuasive?

Germany is faced with a law case that challenges the legality of the outcomes of the politicians' secret sessions. If the case were unfounded, no one would worry. But we have 27 worried people who fear it might succeed. It might undermine the whole pile of secret package deals in the past. That could cause major chaos, as all the measures would unravel and there would be endless legal action. Frau Merkel made it clear that what they have been getting away with so far cannot last forever.

Many politicians think they are the last word and their deals are beyond the power of anyone to disrupt them. Their number even includes heads of State who have influence on all departments of State. No one is higher than we government leaders, some may think: 'We control the levers of power.'

They are wrong. The law, both the invisible supranational law and written law of the land and the EU, are always higher than any individual, corporation or abusive State. History has proved it.

In this case it is the law of the land that is now being applied. The postwar German Constitution was written by Germans who had experienced three wars in their lifetimes. Wars were fomented by reckless leaders and secret cabals. Konrad Adenauer, then a 72-year old pensioner, former mayor of Cologne, was chairman of the Constitutional committee. The next year, 1949, he became the first Chancellor of postwar German Federal Republic. He stayed as Chancellor for more than a decade assuring both a European transition and respect for the democratic rule of law in the post-Nazi generation. Germany was not immediately strong enough morally to openly oppose the anti-democratic abuses of de Gaulle in European politics.

Sixty years ago, before de Gaulle's seizure of power, Adenauer however co-signed on 18 April 1951 with other Founding Fathers such as Schuman the great Charter of the Community assuring the citizens right to choose. Walter Hallstein, a German law professor, president of the European Commission, together with his European colleagues resisted the most serious antidemocratic intrigues against Community law and attempted Gaullist sabotage.

German constitutionalists provided powers so that any citizen could complain to the Constitutional Court if they thought government leaders were abusing their powers. This type of recourse is open to other citizens in democratic States, but few have applied them against the monetary scandals. The German constitution made sure that the issue was clear as crystal.

That is precisely what happened in Germany. Even though a citizen taking on the State is no small matter, the Constitutional Court spoke out clearly. It provided a long judgement on the inadequacies of the politicians' deals at the Maastricht Treaty.

Now a further case is pending. Leading the 50 complainants is Professor Markus Kerber, a Constitutional lawyer. Another complainant is the grandson of Konrad Adenauer. The complaint questions the actions of politicians in supplying billions of funds in bail-outs when these are strictly forbidden in the Lisbon and earlier treaties.

Before the European Council met, Chancellor Merkel first had a private talk with the French President at Deauville. Why? President Sarkozy's predecessor, Charles de Gaulle, was often the initiator of the murky, secret package deals that brought European funds to assuage his voters. Thus were created the massive meat mountains, wine lakes, milk meres and cheese bergs.

We do not know what was said exactly to President Sarkozy at the Deauville rencontre, and later to the other 25 government leaders at the European Council. That remains a secret.

One guess is 'The game is up.' Without the respect of law the Community system cannot continue. Even the new intergovernmental distortions introduced into the European Union by the Lisbon Treaty will collapse unless the deals are supported by law.

However the treaty amendment is only the start of the process. It is questionable whether this proposed amendment, by politicians, for politicians to cover up a political scandal, will work. Nor can it act retroactively as a cover up of past corrupt practice. The legal case in Germany is not the end of the matter. There are 26 other national Courts that are open to such cases. There are also a couple of European Courts too.

06 January, 2011

Proliferation5 : 'I will kill anyone who dishonours Islam' says minister of nuclear-armed Pakistan

'If someone dishonors Islam in front of me, I will shoot him dead!' Those are the reported remarks of Pakistani Interior Minister Rehman Malik at a press conference.

He was speaking after the assassination of Punjab Governor Salman Taseer, who had championed the rights of Aasia Bibi and denounced the blasphemy charges against her as 'trumped up'. The Christian convert is facing execution because of what she was alleged to have said during a row over drinking water when her neighbours called her impure. They were not present days later when the charge with its mandatory death penalty was laid. Nor could her alleged words be repeated in court as that would be considered as repeating the blasphemy! She is currently awaiting an appeal court hearing.

The Governor was shot 25 times by his own security guard, whose action has been acclaimed by large, noisy sections of the nation and militant religious leaders. He was showered with rose petals and garlands.

A quasi-majority of the country expressed approval of the murder of Governor Taseer and for anyone else who expressed similar opinions of religious freedom. Are they acting out of ignorance (and wanting to stay ignorant) or out of fear that the basis of the State will be overturned by free discussions, or fear that they too might end up murdered?

What is extraordinary is that Pakistani Interior Minister's remarks -- extreme as they are -- were seen as an attempt to allay the violent wrath and murderous incitement of members of the religious groups. They were upset at the state funeral given to Governor Taseer. This 'moderate' face is extremely dangerous both inside and outside Pakistan.

In 2009 eight Christians were killed in the town of Gojra in Punjab following unsubstantiated allegations that a Christian had desecrated the Koran. Last year more than 80 members of the minority Ahmadi sect of Islam were killed in two mosques in Lahore. The small Hindu population is scared by the abduction, forced marriage and compulsory islamization of its infant daughters.

These events raise the most serious questions for Europe. What is the difference with an individual and the West as a whole that lies 'in front' of the Pakistani government? How does the minister distinguish between an Ahmadi or a Christian who expresses dissent at religious autocracy and wholesale murder?

The murderers were their own judge, jury and executioner. Minister Malik's opinion reinforces this. That is the way of anarchy. It will only be resolved, as history shows, when the strongest sectarian power wins.

Europe has rejected that concept of power politics, the rule of the fist whether religious, political, ideological or racist. It has managed to create the longest peace in the more than two thousand year history of Europe, thanks to the Community method.

In past centuries many parts of Europe were conquered by Islam. They rejected it. They preferred freedom of thought. They did not like forced conversion. They did not want to be considered second-class citizens or dhimmis, if they retained their faith in the God of the Bible.

Supranational democracy is based on Christian principles where everyone is treated equally. That applies to Christian and non-Christians.

Schuman warned about the dangers of confounding the separation of the religious domain with the political.

A theocracy does not recognise the principle of separation of the two powers. It imposes on religious thought responsibilities which do not belong to it. Under such a regime the political differences risk degenerating into religious fanaticism; holy war is the most frightening expression of a bloody exploitation of religious feeling.

For the West today, which on the whole still agrees that Islam does not present a way of enlightenment, science and truth, the logical conclusion of the minister's policy is that anyone who stands before his eyes or that of his government and who disagrees with his religious conviction (and maybe does not even know it) may be freely assassinated by that minister or that government.

The remark comes from a nuclear-armed State. The government's policy in the past was to encourage nuclear proliferation to Islamic States. Its bomb-maker, Abdul Qadeer (A Q) Khan, loaded with the nation’s highest honours, actively sought nuclear proliferation for ideological reasons.

A clarification is urgently required. The West should also be clear about its own policy. It needs to establish the proper bases of the supranational system.

Foreign policy should be based on open and publicly debated reciprocity. This need for open debate is especially important in the democracies. How should the West react to Islamic States or those where religious sectarians run rampant and who criticize Christians and who dishonour Christianity, Judaism, deny the Holocaust, the Bible and Western civilization?

Both the European Union and North American States of USA and Canada are founded on the principle of free speech, the right to choose and freedom of religion. Also a main European fundamental right is the ability to freely change one's religion. All that requires an intensive debate on religious values. No incitement to violence can be made to forbid this discussion. It requires an atmosphere of tolerance and open discussion for all its citizens. The Community system allows religious tolerance because it is based on a supranational democratic system.

Certain conditions are necessary if East and West can live together in peace. If the West looks eye to eye with the Islamic East, tolerance must exist on both sides. Mutual respect is required. Reciprocity of tolerance is vital for being interactive parts of a global society.

Today this is even more vital as trade depends on open borders and the prevention of terrorism. A major part of world trade is the information economy, newspapers, books and the Internet. While the web is filled with poisonous Jihadist sites and blogs (especially for those who know Arabic and other languages), it also provides free access to alternative religious views and facts.

Is this what Islamic sectarians fear as much as do all autocratic governments? Information can be more explosive than terrorist bombs. The human soul has an unquenchable thirst for freedom. Sectarians can do nothing against it, whether by mobs, fire or the sword. The problem of conversions and religious tolerance will not go away but only become more prominent in the coming years. The drive of information technology is also an unstoppable force.

Tolerance was declared to be a part of the Pakistani State Constitution by its founder, Mohammad Ali Jinnah in his first speech as president on 11 August 1947 to the Constituent Assembly.

'The first duty of a government is to maintain law and order, so that the life, property and religious beliefs of its subjects are fully protected by the State,' he said. The angularities between different religions and Moslem sects such as Pathans, Punjabis, Shias, Sunnis and so on will vanish under law. 'You are free; you are free to go to your temples, you are free to go to your mosques or to any other place or worship in this State of Pakistan. You may belong to any religion or caste or creed -- that has nothing to do with the business of the State.'

Some later leaders tried to make Pakistan a different type of State where death is the penalty for disagreeing with their version of Islam. This change is a vastly more dangerous move in a nuclear-armed State.

In 1947 days after Jinnah's speech, up to a million died in the disputes between Hindus and Moslems during the bloody days of partition and the separate independence of India and Pakistan.

Those people were killed by individuals and mobs. Today, the whole world could be set afire by acts of intolerance and nuclear war.