Eurogeddon Still Reigns

MORNING BRIEFING – By Benedict Brogan (Daily Telegraph).

Parliament might be in recess and politics put aside for the Jubilee, but the eurozone crisis still rages across the continent, giving David Cameron something to be busy with.

Yesterday he had a telephone call with Barack Obama about preparations for this month’s G20 summit in Mexico. No wonder – things are getting hairy. Yesterday Spain admitted for the first time that it can no longer raise money on the global markets or roll over its sovereign bonds.

And manufacturing and jobs data in the US and China came in weaker than expected. You can read more in Ambrose Evans-Pritchard’s report.

Meanwhile, George Osborne had his own teleconference with G7 finance ministers on the euro crisis. The Mail reports that a deeper eurozone fiscal union was called for – edging us ever closer to a European superstate, it says.

Of course, the Tory party is giving George a hand. In a paper for the Centre for Policy Studies think-tank, the chairman of the Treasury Select Committee, Andrew Tyrie, has called on the IMF to develop contingency plans for Greece to leave the eurozone. He told the FT (£):

“To paraphrase Wilde . . . to be caught out by the collapse of Lehman might be construed as a misfortune. Not to be prepared for a Greek exit would be carelessness.”

Dave is due to visit Berlin later this week, where he is expected to urge Angela Merkel for tougher fiscal governance in the eurozone. His challenge is to avoid appearing impotent, a bit player on the sidelines.


Mr Osborne should also take note of Bruno Wakefield’s feature in today’s Telegraph. He warns that despite the “Yes” vote on the EU fiscal pact and some encouraging signals in the economy, we should be careful not to make Ireland an austerity pin-up. The positive picture masks some serious economic challenges – high unemployment, weaker economic activity than anticipated and eurozone contagion, of course.

In a column for today’s Telegraph, Daniel Hannan argues that Eurocrats are treating the tumour instead of the patient. They see the survival of the euro as more important than the prosperity of the people using it.

Whereas Ambrose Evans-Pritchard argues that the Germans aren’t really doing anything at all, saying: “Almost everything Angela Merkel is talking about already exists. She has dressed up an old arrangement as if it were new.” They’ve firmly said no to any possibility of debt pooling so far.


And closer to home, David Cameron has a new mess in the making. He’s decided that, unlike Jeremy Hunt, Baroness Warsi should be referred to the standards watchdog. He claimed that her dealings with her business associate were “very different” from Mr Hunt’s conduct on Marr.

This is, of course, despite the fact that Sir Alistair Graham, the former chairman of the Committee on Standards in Public Life, said otherwise:

“The case is very strong. If there is found to be no substance to the allegation then that is fine, but at least people will have seen that in an important case that due process has been observed.”

James Kirkup has the details. The FT (£) has some great analysis, pointing out that she’s faced growing criticism in recent weeks from Tory Right-wingers who believe she is not tough enough or visible enough in defending the party.

In the Guardian, Ken Clarke is offering his own view, accusing the press of acting like a “lynch mob” towards Mr Hunt and Lady Warsi.

In a column in today’s Telegraph, Conservative Home’s Paul Goodman argues that Mr Cameron created Lady Warsi, put her in a difficult position by confining her to immigration control and integration policy, and may now be forced to destroy her. He explains:

“the architect of this mess isn’t so much Lady Warsi as David Cameron. There is a terrible circularity in the story of their relationship. Her original appointment protected the Conservative Party from accusations of racism. However unfairly, her plight exposes the Prime Minister to precisely that charge. In 2007, Mr Cameron rushed into the politics of ethnicity to get his party out of a tight spot. He may now have the opportunity to repent at leisure.”

Paul Goodman isn’t the first to hint at the race point. James Macintyre in Guardian does too.

Dave might be reluctant to sack her though. The Mail’s Ephraim Hardcastle column quotes a Tory source, saying: “ Warsi is something of a loose cannon which is part of her appeal but makes her a dangerous enemy. She won’t go as quietly as Jeremy Hunt. ‘Don’t mess with the Baroness’ is what her colleagues say”

There are some great cartoons on the topic, check out Brookes in Times.


John Prescott has just been on the Today programme calling for an inquiry into a security firm’s use of unpaid jobseekers to steward the Queen’s diamond jubilee celebrations in London. The full report is available in the Guardian. He said:

“This government is exploiting this for cheap labour. Is this the standard going to be used for the Olympics”


Unlike every other paper, the Independent hasn’t splashed on the Jubilee. Instead they report that the Chancellor has told Treasury officials to find ways to persuade savers to transfer billions of pounds held in bank accounts, building societies and investment funds to new government “growth bonds”.

The money would be invested in infrastructure projects such as toll roads, green energy and housebuilding. Savers could be offered tax breaks, similar to those available in ISAs.


And the Sun has a little political surprise too. It reports that Iain Duncan Smith has picked a fight with Dave on pensioner benefits, claiming that the two are “at war” over the issue.

IDS wants £5 billion cut from OAP benefits, but that would break Dave’s election promise to leave the giveaways untouched – No 10 have said no.


@edballsmp: Standing room only at our Morley Diamond Jubilee lunch – turns out I am a dab hand with a big teapot

Now that’s not fair on Ed Miliband.


In The Telegraph

Paul Goodman: Cameron created Warsi – will he be forced to destroy her?

Daniel Hannan: The euro now equals poverty and deflation

Harry Mount: This great Jubilee had a missing ingredient

Leader: It is we who should be humble, Ma’am

Best of the rest

Simon Jenkins in the Guardian: A royal jubilee of bread and circuses, maybe, but the country needed it

Martin Sorrell in the Financial Times: Mea culpa – I act like the owner I am

Matthew Norman in the Independent: After 60 years, at last the country seems at ease with itself

Alex Brummer in the Daily Mail: Not such diamond years: How the Queen’s reign has witnessed the decline of British industry


Today: David Cameron talks with Norwegian prime minister Jens Stoltenberg in Oslo

11am: The EU announces second estimate figures for GDP for the first quarter of 2012, following last month’s flash estimate figures, Q1

The euro now equals poverty and deflation

To grasp the sheer unfairness of the euro system, consider Slovakia. For a few days last October, this nation of five million defied the might of Brussels. Its MPs refused to approve the bail-out fund, arguing that it was wrong for prudent countries to be fined so as to reward profligate ones. The EU promptly turned its hideous strength against the plucky Carpathian republic. Within five days, the government had fallen and parliament had ratified the fund.

When we read of the latest euro-calamities – three Portuguese banks bailed out yesterday, Cyprus on the point of bankruptcy, retail sales across the eurozone far lower than expected – we feel sympathy rather than panic. Countries in the single currency have no such luxury.

“Since we joined the EU,” says Richard Sulik, leader of Slovakia’s liberal SaS party, “our net receipts from the Brussels budget have come to just over one billion euros. Under the European Stability Mechanism, we are liable for 13 billion. All to bail out countries with higher GDPs than ours.”

According to the polls, two thirds of those who use the euro believe it has made them worse off. They’re right. On Europe’s periphery, monetary union means deflation, poverty and emigration. In the core, it means unprecedented tax rises.

Read more….

Cameron created Warsi – will he be forced to destroy her?

In 2001, one in 10 voters were members of ethnic minorities. By 2050, that figure will have risen to one in five. And, in the words of Andrew Cooper, David Cameron’s head of strategy, “the number one driver of not voting Conservative is not being white”. Mr Cameron was well aware of the grim demographic implication of these facts for the Tories’ electoral prospects when he became party leader in 2005. They had only two ethnic minority MPs, Adam Afriyie and Shailesh Vara. Neither had much interest in the fissiparous politics of ethnicity and religion, or in being projected as the face of a modernising Conservative Party. Mr Cameron needed someone to oblige – urgently.

The someone who eventually did so was a punchy, plain-speaking Muslim woman solicitor and unsuccessful parliamentary candidate called Sayeeda Warsi. That Baroness Warsi has never won an election, and is in effect the Prime Minister’s own creation, is crucial to understanding her present troubles. In 2007, Mr Cameron plucked her from Conservative Campaign Headquarters and sent her to the House of Lords, complete with membership of the Shadow Cabinet and responsibility for community cohesion. I worked with Lady Warsi, doubling up in the same portfolio as an MP, and swiftly drew three conclusions.

Read more….

Comrade Warsi, fallen hero of the People’s Revolution

Yesterday I got back from a week’s holiday in Majorca. My return reminded me a bit of that short story by Raymond Bradbury, where the time traveller arrives back in the present, and finds a dead butterfly stuck to the sole of his shoe. He then realises that while things are ostensibly the same, some strange, subtle changes have occurred during his absence.

So, for example, the Queen’s Jubilee celebrations seemed to pass off triumphantly, save for the organisers’ decision to try to use the occasion as an opportunity to reinstate indentured labour and kill off Prince Philip. The Coalition continued to plough on with what the Prime Minister described as “resolve, strength and grit”, while at the same time George Osborne chose to emphasise that resolve by tearing up half his Budget. And perhaps most bizarre of all, Sayeeda Warsi has suddenly become a martyr to the Left.

Read more….