hms iron duke

hms iron duke

Wednesday 29 February 2012

Libya: The Transition Clock

Alphen, the Netherlands. 29 February. PRISM, the Journal for the Center for Complex Operations at the National Defence University in Washington has just published a significant article of mine entitled, “Libya: The Transition Clock” (http://www.ndu.edu/press/prism3-2.html). Some three months on from the October 2011 slaying of Gadhafi the piece offers a realistic appreciation of Libya’s progress on the transitional road to a stable, functioning, representative state.

Imagine an imaginary twelve hour clock face on which zero hour is chaos and twelve hours is a stable, functioning, representative Libya. Against that clock-face I set five principles of conflict transition established by the United States Institute for Peace and the US Army Peacekeeping and Stability Operations Institute: a safe and secure environment; rule of law; stable governance; a sustainable economy; and social well-being.

A safe and secure environment (3 o’clock) is defined as the "ability of the people to conduct their daily lives without fear of systematic or large-scale violence." With much of the country effectively lawless public order is virtually non-existent. The physical challenge alone is daunting. Even though 90 per cent of Libya’s 6.5 million people live on the coastal strip, the country is roughly the size of Alaska with 1.1 million square kms/680,000 square miles of territory. The coast alone is 1,758 kms/1,099 miles long with land borders totalling 4,357kms/2,723 miles. Furthermore, with so many militias spread across the country it is going to be some time before legitimate state monopoly over the means of violence is reasserted or indeed control over borders re-established. Critical to the entire transition process and, indeed, one of the key indicators will be to what extent, and at what pace, Tripoli can weld all the militias into a single national army.

Rule of law (3 o’clock) is defined as the "ability of the people to have equal access to just laws and a trusted system of justice that holds all persons accountable, protects their human rights and ensures their safety and security." Logically, the first order principle for Tripoli is to establish the equitable rule of national law in Libya’s two major population centres—Tripoli and Benghazi—and then expand its writ across the country once the seat of government has been firmly established.  However, a just legal framework for the whole of Libya will not only take time, but will prove an intensely political process. Islamist groups insist on a strict interpretation of Sharia law, a position that led Berber representatives to walk out of meetings to discuss transitional arrangements. Public order, another key facet of rule of law, is fragmented and uncertain. Furthermore, accountability under the law, access to justice, and eventually a culture of lawfulness will likely require the establishment of an entirely new system for the administration of justice.

Stable governance (4 o’clock) is defined as the "ability of the people to share access or compete for power through non-violent political processes and to enjoy the collective benefits and services of the state." Libya is in early post-conflict transition which requires the steady and sustained reduction of conflict across security, economic, and political spheres. Tripoli is only taking the first and most tentative steps toward representative government. And, what is emerging is a hybrid, instable political structure involving secular, tribal, and Islamist elements with all three vying for supreme state authority. How this equilibrium is institutionalized with the necessary checks and balances to ensure that no single group dominates will be a critical test of transition.

A sustainable economy (2 o’clock) is defined as the "ability of the people to pursue opportunities for livelihoods within a system of economic governance bound by law." According to the UN Development Programme Human Development Index, Libya ranked 53rd out of 169 states prior to the civil war. Libya thus enjoys a relatively educated population with enough of a middle class to in principle provide an entrepreneurial impetus to the economy. One of the first order requirements for the new government is to re-establish macroeconomic control over consumer price inflation, growth in the gross domestic product over one or more business cycles, changes in measured unemployment and employment, the effective management of fluctuations in government finances, and currency stability. However, Tripoli at present lacks any real influence over its conflict-torn economy and is thus incapable of establishing the functioning structures critical for effective economic governance.

Social well-being (2 o’clock) is defined as the "ability of the people to be free from want of basic needs and to coexist peacefully in communities with opportunities for advancement." Libya’s greatest assets (apart from its people) are its high-grade hydrocarbon and gas reserves. These will in time fund the resources for meeting the basic needs of the people, but only in time. Encouragingly, Tripoli has moved rapidly to establish new contracts with potential partners. At an estimated 41.5 billion barrels, Libya has the largest proven oil reserves in Africa—about 3 per cent of the global total—with much of the country unexplored due to past sanctions. The geology, however, looks very promising. Even without further discoveries, Libya has some 20 years of reserves at 2009 production rates. Libyan oil is also easy to recover. In addition, the country has proven gas reserves of 52 trillion cubic feet, making Libya the world’s 14th largest producer. That said there are profound tensions between the rural-based militias that did much of the fighting and the city dwellers that sat on the fence for much of the conflict, particularly in Tripoli, which could hamper exploitation. Moreover, it is the intellectual capital represented by Tripoli that is vital to Libya’s future stability.

Libya is thus only at 3 o’clock on the transition clock with the next year or so being pivotal for the transition process. With Tripoli only some 294 kms/184 miles from both the EU and NATO now is the moment when the transitional government in Tripoli needs maximum support.

Libya, sadly, is still a country at war with itself.

Julian Lindley-French

Tuesday 28 February 2012

How Much More Discrimination Must the English Suffer?

Alphen, the Netherlands. 27 February. You will recall in yesterday’s blog I talked of how in Britain all minorities are given higher priority than the English, be they from within the British Islands or beyond. Tonight there is definitive proof.

I have just been watching the BBC TV News during which three stories stood out. First, English students attending Scottish universities are required to pay full fees, whilst those from the rest of the EU pay nothing. Welsh students are subsidised and a cap exists in Northern Ireland on all fees paid by students. This is because the English taxpayer subsidises Scotland, Wales and Northern Ireland. However, English students studying at English universities are required to pay up to £9000 per annum for their university fees. English students are thus facing indefensible discrimination.

Second, the sorry plight of Indian citizens who had come to Britain illegally was shown. It is a disgrace that a civilised country should treat any human being in such a way with many forced to seek shelter on London’s streets in cardboard boxes. What is more galling is that many of these people have asked for voluntary deportation but cannot leave due to appalling bureaucratic incompetence by both the British and Indian governments. There is a wider picture here – such is the uncontrolled level of immigration to England (not Scotland or Wales) that some English towns are ceasing to be English. Lincolnshire is now known as Lincolnshiregrad. And yet the government refuses to take action claiming as usual that ‘Europe’ would not permit it. I am more than willing to accept managed immigration but the current levels of immigration – both legal and illegal – are simply out of control. All government ministers can offer are the usual platitudes.

Third, the wife of Englishman Mr Christopher Timmins, who was extradited last Friday to the US under a wholly unbalanced extradition treaty that is loaded overwhelmingly in favour of the US, gave evidence today to the House of Commons Home Affairs Committee. She explained that Mr Timmins was not even allowed to give his side of the story to an English court prior to extradition. I have checked with an American lawyer friend of mine who works in this area and he tells me that as part of American legal proceedings under this treaty a US citizen does indeed have the right to put his or her case before an American court. It now transpires that Mr Timmins is allowed one hour a day out of his cell and has had his reading materials confiscated. Does that not constitute torture? If so why did the European Court of Human Rights refuse to hear Mr Timmins’s case and yet blocked the extradition from Britain of radical Muslim cleric Abu Qatada to Jordan who has called for Jihad against Britain and its citizens? This is in spite of written assurances from the Jordanians that he would not be subject to torture and verbal assurances that no evidence in his trial would be gathered using coercion.

The British government is becoming very good at inventing excuses as to why the English suffer such blatant discrimination but is doing little or nothing to stop it. During my trip to Oxford last week I talked to a lot English people and all expressed deep concerns about a government that refuses to listen or act - all talk, no action.  No wonder that is a recent poll 59% of English people said they did not believe the British Government acts in their best interest. Moreover, a 2011 study by the Joseph Rowntree Foundation found that active discrimination was taking place by both local and national authorities against low income English communities.

Be careful government.  Your inability/refusal to stem the rising tide of discrimination aganst the English is stoking real anger across the length and breadth of England. Politicians, you seem to have forgotten a fundamental tenet of democracy to listen to the people who put you in power.

Julian Lindley-French

Monday 27 February 2012

British Security Policy: A Mess of Olympic Proportions

Oxford, England. 27 February. To paraphrase US President Richard M. Nixon; finishing second in the Olympics gets you silver, finishing second in security risks oblivion. I have returned to my alma mater University College, Oxford to present a copy of my new book – The Oxford Handbook of War. Olympic-mania is already apparent in this country from the moment one steps off the plane at Heathrow Airport until the moment (with relief) one gets climbs back on again. In my short stay here in Oxford several stories have broken in the British press that demonstrate not only that the London Olympics are vulnerable to terrorist attack, but that the security of Britain itself is now at risk from a dangerously unconnected and disconnected British government. Put simply, British security policy is about as ‘un-joined up’ (in the terrible jargon of Whitehall) as it is possible to be.

National security policy is comprised of six elements: effective control over national borders; effective management of immigration; the prevention of extremism and its export; the legal protection and punishment of citizens and others; (and credible) defence. The sixth and most important element of security policy is that the people trust the system and believe government is acting efficiently in their best interests. The British Government is failing in all six areas. Let me take you through a week in the life of security failure.

On 20 February Home Secretary (Interior Minister) Theresa May ordered the splitting up of the UK Border Agency after hundreds of thousands of people were let into the country without appropriate checks. This is some five months prior to the Olympics. Specifically, some 500,000 nationals from the European Economic Area travelling on Eurostar services from France were not checked against security warning lists. Secure ID checks were suspended at London Heathrow Airport some 463 times between June 2010 and November 2011. Between January and June 2011 a system for reading a biometric chip was deactivated 14,812 occasions at various British ports.

On 21 February Janes Defence Weekly reported that China would spend $120 billion on defence this year climbing to $238 billion by 2015, a rise of 18.75%. This is in addition to the 256% increase in China’s defence spending since 2005. The same day President Putin announced that Russia would spend $775 billion by 2020, including the deployment of 400 new intercontinental ballistic missiles. The two sets of increases are clearly linked. Meanwhile Britain is cutting its defence budget by a nominal 8% between 2010 and 2015 (in fact the cuts go far deeper) and is likely to cut further. Clearly the balance of power both in Europe and the wider world is shifting dangerously but government is impervious to this.

On 23 February the Office for National Statistics reported that in the year up to June 2011 some 593,000 people entered Britain with net migration rising by 250,000. Immigrants from Africa and the Indian sub-Continent totalled 170,000. The massive majority are of course perfectly decent people seeking a better life and who make a real contribution to society, although the sheer pace and scale of immigration is imposing huge pressures on British society. Equally, many come from the most conservative regions of the Islamic world, such as Nigeria, Pakistan and Somalia. This makes a mockery of government claims that British troops are fighting and dying in a corner of an Afghan field to keep radical Islam away from Britain. It is entering via the front door.

On 23 February, Prime Minister Cameron hosted the London Somalia Conference designed to kick-start serious international aid to a country that is now one of the epicentres of international terrorism. Nothing wrong with that, although it does seem strange that having failed in Afghanistan Britain is now so keen to fail in Somalia.  Once again, British taxpayers money is being 'invested' in another failed state with no particular strategy in sight. It may have something to do with the fact that there are 50 ‘British’ members of Somali Al Qaeda affiliate Al Shabab, the greatest number from any foreign country.  It would make more sense for the government to focus properly on home-grown threats. The government’s PREVENT counter-terrorism strategy is in tatters mainly because of problems in the Home Office (Interior Ministry). This weakening of effort is reinforced by the 11.3% cuts to the security services which have taken place since 2010.

On 24 February, 65 year old British citizen Mr Christopher Tappin was taken by two US Marshals from Éngland to America to face trial under an extradition treaty that is so blatantly loaded in favour of the US as to render England little more than a colony. Indeed, whilst the US population is some five times greater than that of Britain the US has successfully carted off some 75 British citizens against only 40 US citizens being sent the other way. This is due to the much higher burden of evidence demanded by American courts.

The sheer scale of the complacency at the top of government was revealed to me this week in evidence apparently given by Cabinet Office minister Oliver Letwin to the House of Commons Select Committee on Public Administration. Mr Letwin was responding to a report to which I had contributed which highlighted the need for a real national strategy to foster high-level unity of effort and purpose in British security.  Sadly, his testimony was worthy of Sir Humphrey Appleby of Yes Minister fame at his dissembling worst. Mr Letwin rejected both the idea and language of a national strategy as something he did not recognise. He implicitly trashed both the National Security Strategy and the Strategic Defence and Security Review by suggesting that all Britain needed was vague ‘strategic aims’ and to ‘scan horizons’. It was as though Britain was still an imperial power of such influence and resources that hard choices and disciplined, cohesive government in pursuit of sound security policy – the very rational for strategy - was not really at all necessary.  This was not an exercise in the management of decline, but the active encouragement of it. To Letwin’s mind it was OK for Britain to simply muddle along.  It is the job of the Cabinet Office to ensure coherence across government.  It has palpably failed.

Why is this happening? First, the culture of political correctness is now so pervasive amongst the Whitehall elite that the interests of all minorities, be they from within these islands or beyond, are placed above those of the majority English. Second, Britain has effectively lost control over much of its border to the EU and the European Court of Human Rights, which now effectively controls just who Britain can and cannot deport. Third, in the absence of strategy and leadership from Downing Street a form of market competition has broken out between the key ministries for what little money and resources are available. The tail is most definitely wagging the dog. Sadly, it is competition reinforced by profound ideological divisions within and between key ministries as to how security should be pursued which effectively prevents a coherent and cohesive cross-government security policy.

Does all this matter?  A very senior American colleague told me this week that the many contradictions in Britain’s security policy make Britain not simply a security risk, but a risk to US security and that of allies and partners.

This is a security mess of Olympic proportions….and come this summer the Olympics will be in the front-line.

Julian Lindley-French

Tuesday 21 February 2012

Why People Do Things and How to Beat Them…and All That

Alphen, the Netherlands. 21 February. I know, I should be writing about how my Dear Leaders of the Eurozone Onion agreed to Greece having another €130 billion of my money, which I have not got, so that Athens can continue to pretend to reform and that future Greek ‘competitivity’ is more than just an ancient Greek joke re-visited. However, I am so bored by this deceit that I will avail you all of only a summary. The Euro was born of a lie, it is being sustained by a lie and that lie will continue for many years to come. Is that clear?

What is going to happen? That is easy to predict. Greece will get another bail-out next year before leaving the Euro in 2014 when the firewall to protect Italy, Portugal and Spain has been properly topped out with more of my money at which time they will become long-term financial protectorates.  Thereafter, we Dutch taxpayers (and others) will be 'invited' to support our Euro-fellows for many years as an act of 'solidarity' (appalling and empty Onion-Speak) as our Dear Leaders hope against hope that a) sufficient economic growth returns to limit the damage to taxpayers in the so-called AAA countries; b) sufficient growth returns soon enough to prevent other European economic basket cases, such as Belgium and much of eastern Europe joining the hand-out queue; and c) we do not take to the streets in mass protest at the tax-raiding of our meagre savings and pensions to fund all this. Ten years ago when I was working for the European Onion I saw the real cause of this mess; the rejection by Brussels and all our Dear Leaders of any reality that did not accord with Euro-reality and the persecution of any heretic brave enough to point this out. Nothing changes.  This is one hell of a gamble.

No, today, I am going to talk about something close to my heart – defence education in Europe. Why? Well, because the Euro crisis is not only disconnecting European security from world security, it is turning many European armed forces into little more than armed pensions. Something radical needs to be done to bridge the abyss between strategy and austerity through which our armed forces are now falling.

Now, you all know that I do not normally use my blog-blast to push someone else’s book. Indeed, normally this page is reserved for shameless and utterly ill-deserved self-promotion. Moreover, this book at no points cites any of my own works for brilliant insight.  This usually condemns a book in my mind to what Blackadder once said of Dr Samuel Johnston’s “Dictionary”; the most pointless book since “How to Learn French” was translated into French. Sadly, this book suffers from no such failings, although it does have perhaps what Blackadder would have described as the worst title in the history of bookdom since “Paradise Lost” was re-titled “Getting Lost in Chalfont St Giles on a Day Out” (those with a literary bent will get the pun). So, what is the book’s saving grace? Simple - it agrees with me.

Entitled “Behavioural Conflict – Why Understanding People and Their Motivations Will Prove Decisive in Future Conflict”, it should have been called, “Why People Do Things and How to Beat Them...and All That!” It is written by a couple of colleagues of mine – Andrew Mackay and Commander Dr Steve Tatham of the Royal Navy.

The implicit theme running through a book with a decidedly British flavour is that military and defence education as currently conceived simply does not prepare people for the challenges of tomorrow’s conflicts. The status quo is rarely challenged, nor are courses structured or led to encourage the free-thinking vital to future mission success.

My own view of Western military power has long been that it will need to become much more intelligent. Not simply in terms of the weapons it can fire, but how each and every member of the force thinks about his or her role in a mission, and about the people and places where they take place. Indeed, for me the only way for ever-shrinking European armed forces to be effective in a world in which the use of armed force is sadly becoming more not less likely is to exploit comparative advantage – educated human capital.

During my about to end time as Eisenhower Professor of Defence Strategy at the Netherlands Defence Academy I enjoyed some modest success in creating the concept of officer-scholar. A few select officers were taken out of the traditional career chain to undertake doctoral research so that lessons-learned from military operations could be just that – learnt. Too often said 'lessons' end up propping up endless shelves in endless corridors in some classified ‘bibliotheque’ never to be seen again, especially if they say something interesting.

One of the many oft-uttered platitudes that tended to bring on nausea is that armed forces are learning organisations. No they are not. They are too often course-following, box-ticking, exam-passing organisations. Defence academies are thus merely the gate-keepers to promotion. Doing is the thing – not learning. And sadly too often too many defence educators conspire in this cosy conceit, preferring narrow, irrelevant research to the building of life-long learning relationships. A real opportunity is thus missed to improve the effectiveness and efficiency of our military people…and others. Indeed, with even a smidgen of vision defence academies could be real hubs for the kind of distance and life-long learning partnerships which our armed forces will desperately need if they are to succeed in the complex environments into which they will be inevitably thrust.

The point about learning is that it teaches one how to question and that is the problem. Too often be it staff colleges, defence academies or even defence universities, the role of applied research – the very essence of questioning – is suppressed because it is perceived to challenge the orthodoxy of command authority. If our armed forces are going to have any chance of succeeding this century the entire concept and approach to defence education will need to change. Sadly, there is no appetite for that in either hard-pressed defence ministries or too often in staff colleges and defence academies. Defence academies have become so conservative as to make them pointless.  This is self-defeating as the real enemy these days are governments which see defence budgets as targets for deep and damaging raids to fund the kind of Onion-rubbish apparent last night in Brussels.  A bunker mentality does not tend to promote free-thinking. 

So, those of you ‘in the business’ strong enough to brave the appalling title please read this book. You might learn something. But then what do I know – I am a heretic.

Julian Lindley-French



Friday 17 February 2012

Entente Frugale: Why England and France Must Hang Together...or Hang Separately

Alphen, the Netherlands. 17 February. David Cameron is today in Paris to meet with his ‘friend’ French President Nicholas Sarkozy. The ostensible purpose of the meeting is to sign a treaty of co-operation on the sharing of civil nuclear technology, i.e. the French are to remind the English of what they once knew about nuclear stuff but have now forgotten, and to confirm a new joint military headquarters and defence-industrial co-operation over a new unmanned aerial vehicle rather bizarrely called MALE (why not call it 'Fred' or 'Pierre'?).

In fact the real reason for the meeting is both much more political and much more profound – the reaffirmation that in spite all of the usual spats between the two countries the grand strategic principles the two countries share are so profound that England and France must hang together or hang separately. This is the only way both countries can craft real strategy in austerity, via an Entente Frugale.

Now, before I go further I must declare myself. For all my not-so-occasional frustrations with the French ability to be consistently wrong about almost everything I remain a Francophile. And, in spite of once having a very French boss, I retain a strong respect for the country, the people, the culture, and of course French cuisine and wine. Moreover, I speak the language, albeit with a Yorkshire accent, which my French friends call ‘charmant’, and I have lived and worked in Paris.  In spite of all that I still like them.

A year or so ago I wrote a big report for the Royal Institute of International Affairs (Chatham House), entitled “Britain and France: A Dialogue of Decline”, which laid out the enduring principles which force the two countries to co-operate, whatever the short-term irritations. Put simply, the world is getting relatively bigger precisely because England and France are getting relatively smaller.  Therefore, to influence the strategic environment, the strategic allies (America and Germany) and potential strategic adversaries, who shall remain nameless, England and France must work together.

However, for the two countries to work together they must also strive constantly to see the bigger picture. That will not be easy as there is much that will likely happen in the coming years to force London and Paris apart. In the defence realm England will shift back towards a maritime strategy, whilst France will retain a continental strategy.  However, two political issues stand out – Scottish independence and French debt.

England’s estrangement with the European Union will likely grow, possibly to the point where England departs from the EU. There are those in Paris who harbour hopes that Scottish independence will reduce England’s standing in the world. In fact, if the 5 million Scots (yes, that is all of them, they just make a lot of noise) vote for independence they will simply be marginalising themselves as the Scottish GDP at $207bn is but a small part of Britain’s GDP of $2.25 trillion, and much of that figure is from oil and gas produced in Scottish waters. In such an event the English, the true power in the land, will do all they can to ensure the Scots are just that – marginalised.

The Scottish Nationalists seem to be under the mistaken belief that should they con their fellow Scots into voting for independence nothing much will change – it will.  France will be tempted by memories of the 'auld alliance' but would be well-advised not to interfere. Forget all the Braveheart rubbish Alec Salmond is trotting out; William Wallace was ultimately crushed by Edward I, an English king. It was ever and will be ever thus and France's relationship with England is critical.  Scotland will still have to follow England’s will whatever, although post-referendum we English will no longer have to pay for these nationalist irritants.  Thankfully, my respect for the Scottish people is strong enough to believe that when faced with modern reality they will honour the canny pragmatism for which they are renowned and avoid Scotland becoming an irrelevant rock stuck onto northern England. 

As the Euro strains (as it will) and France is finally forced to confront its debt in much the same way the English are confronting their own France will face real challenges, not least finding itself in the EU facing German power without the English. Equally, if Paris tries to defy economic gravity and spend its way out of crisis, which could happen if the Socialists are elected, French decline will only accelerate and ‘La France Forte’ will be but a memory.  Either way the need for an alliance with England will only grow.

However, for the English and French relationship to work all the clutter of EU and independence politics must be put to one side as much as possible and a focus established on certain power fundamentals. First, England and France must seek a shared concept of Europe’s role in the world that goes beyond the EU institutions. Second, England and France must together retain sufficient diplomatic power to justify their respective seats on the UN Security Council. Third, England and France must together support each other to develop sufficient military power to both influence US security and defence policy, both through NATO and increasingly beyond. Fourth, England and France must retain sufficient military capabilities to be able to influence key adversaries and lead Europeans back from the strategic wilderness into which they have wandered. Fifth, the societies of both England and France share many of the same social, economic and cultural tensions, not to mention facing a very similar threat from violent Islamists. It is essential that the two countries strive to build an intelligence relationship founded on sufficient trust that it can survive the inevitable and occasional piece of political theatrics.

Whatever one might think of President Sarkozy the simple fact is that his world view is much closer to Cameron’s world view than that of Francois Hollande, his rival in ‘la Presidentielle’. Ed Milliband?  I am not sure he has a world view.  If Sarkozy loses, as seems likely, like it or not England and France will once again have to reinvent a strategic relationship that, let’s face it, does not come naturally. Therein lies the reason for today’s agreements – to tie England and France to each other in practical areas precisely so that the relationship survives whatever the coming politics throws at it.

The Scottish Nationalists want the independence referendum to be held in 2014 to coincide with the anniversary of the 1314 Battle of Bannockburn, an occasional Scottish victory. Far more important is 2015; the six hundredth anniversary of the Battle of Agincourt – “we few, we happy few…”.

Julian Lindley-French

Thursday 16 February 2012

Sean Who?

Alphen, the Netherlands.  16 February. Let me tell you a fairy story. None of it is true.  Are you sitting comfortably?  Once upon a time a long way, away there was a Yank called Sean, who was not very bright, who wanted we British to hand something he called Lost Mal Virus, or something like that, back to the Argies.  Sean was an actor.  He was not a very good actor because he spent his days living in a fantasy world so far from reality he could no longer tell the difference.  Sadly, not many people went to see Sean's films, which I am told were by and large rubbish because the plots tended to be far too far fetched.  Sean was not very bright.  

He decided one day to make a new fantasy film which was SO far-fetched it was beyond credulity.  In his film a bunch of sad, lost Argie scrap metal merchants accidentally stumbled across a mythical island near the mythical Lost Mal Virus called South Georgia, and which was ruled by an evil prince called William.  In the film the naughty scrap metal merchants decide to dismantle the place without the Prince's permission. 

Brave to the point of stupidity, Sean was not very bright, our hero defied the evil Prince William by offering Georgia to his fairy Princess La Kirchner.  Princess La Kirchner, who was one tango short of a samba, was secretly in love with Prince William.  Sadly, Princess La Kirchner felt terribly slighted because the previous year Prince William had married a girl called Kate from Rotherham.  So, to make Prince William jealous she pretended to love Sean and start a war.  

Sadly, there was just an ever so minor flaw in the plan.  Sean, who was not very bright, confused South Georgia with Georgia, which was ever so slightly part of the United States of America, and which was known to be ruled by a big, bad ogre called Borat or something like that, who was known for his short temper and had lots of aircraft carriers.  Thankfully, being a Yank Borat was a kind, politically correct ogre who had caught onto a new idea called 'democracy', which was Greek and therefore cost a lot.  And, he was not at all happy when the scrap metal merchants started dismantling Atlanta, although many north of the Mason-Dixon line thought this a good idea.  Sadly, there were rarely good ideas in Borat's White Castle, but this Greek democracy thing was a real bozo; the people got to decide. 

Sadly, for Sean, who was not very bright, after two centuries of trying the Yanks had also at last learnt to read a map.  Borat, who had many wise counsellors, realised that Sean, who was not very bright, had not only confused South Georgia with Georgia, but Lost Mal Virus with the Falkland Islands.  Now, the Falkland Islands were a real, happy place where a happy, bucolic (and ever so occasionally alcoholic) frolicking people had lived for almost 200 years.  Like Borat they also believed in democracy and did not have a particularly high regard for the evil Princess La Kirchner.  She wanted to steal their homes and expel them from their tropical paradise and send them to a cold, forbidding and damp island called England where the people are ever so slightly wet.  Heaven forbid! 

Also, the Falklands did not really belong to Prince William, who visited on holiday from time to time in his magic yellow Sea Prince helicopter.  The Falklands belonged to the people, who liked sheep...a lot.  So, being the owners of the Falklands the good people of the Falklands decided to have a vote (that Greek thing again) in which all of them (i.e. 100% all of them) decided that whilst Prince William may be a tad evil, going bald and married to some woman from Rotherham, he offered infinitely better life insurance than the very evil Princess La Kirchner, who was one tango short of a samba. 

Borat, recognising he too faced this democracy thing, and a tough battle with several really ogerish ogres in the Republican Party, thought for a moment about the Latino vote and then decided that democracy might just be a thing called a political principle.  He then tells Sean, who was not very bright, and the evil Princess La Kirchner, who was one tango short of a samba, to butt out of the Falkland Islands and leave the happy people in peace and let then decide their future, which was all their hearts desire.  They called it self-detoxication or something like that.

If they heeded this friendly advice they would all have lived happily ever after...except Sean that is, who was not very bright, and, of course, Princess La Kirchner, who was one tango short of a samba.

This was a fairy tale.  Let's keep it that way!

Julian Lindley-French


Wednesday 15 February 2012

Who Will Pay for Greece?

Alphen, the Netherlands. 15 February. “Bring your desires down to your present means. Increase them only when your increased means permit”, Aristotle once famously wrote. He could have been talking of Greece today. Eurozone finance ministers should today have been meeting to rubber stamp a €130 billion ($170bn) bailout for Greece from the European Union and International Monetary Fund. Instead the bailout is on hold primarily because Germany and other northern European states are not at all convinced that the Greeks will follow through with the package of cuts demanded in return for releasing the money.

Unfortunately, the cuts demanded by Greece’s Eurozone partners seem now beyond bearable for a Greek people long accustomed to being subsidized by their fellow European citizens. They have a point; under the austerity plan the already small minimum wage will be cut by a further 20% to around €600 ($700) per month as prices soar with some 150,000 public sector jobs due to be cut. Put simply, someone is going to have to pay for the Greeks because if Greece is forced out of the Euro the very stability of Greece will be at stake. Indeed, if Greece were forced out of the Euro on a Friday and the New Drachma started trading on the global capital markets on a Monday it would probably have a life-expectancy of around five seconds. Greece will thus need to be subsidised for many years to come – either to keep the Euro afloat or to prevent dangerous political instability on Europe’s periphery.

Right now the Germans want a written assurance from Antonis Samaris, the leader of the New Democracy Party, which looks likely to prevail in April’s elections, that he will honour an extra €300 million of cuts on top of the €3 billion already demanded. It is a fair question as attempts thus far by Athens to sell off state assets have been derisory. That is why the EU’s Economics Commissioner Olli Rehn has called on Greek officials to “take ownership” of the crisis. Sadly, Greek leaders continue to believe they can get away with promising much and then doing little or nothing. It is an old Athenian game.

Equally, there are other more structural forces at work that suggest many in Germany would prefer Greece pushed out of the Eurozone so that the problem can be ‘globalised’. That seems to be behind the emerging schism between Chancellor Merkel, who still sees the resolution of the Greek tragedy as essentially a European political problem, and her finance minister Wolfgang Schauble who sees the problem as an insoluble financial catastrophe and wants to shield the German taxpayer from the consequences by getting others to pay. Certainly, if Greece remains in the Eurozone the German taxpayer will indeed have to subsidise Greece for many years to come, supported by Dutch, Finnish and other northern European taxpayers (i.e. me). Schauble’s position has been reinforced this morning by news that the German economy shrank by 0.2% during the last quarter.

There is also a wider issue of political philosophy which speaks to the very viability of the European Union. A good friend of mine who is also one of Germany’s leading political commentators once told me that Germans lack any real sense of solidarity. What Germans really want, he said, is more Europe for no more money, so long as more Europe means more Germany. This crisis is revealing his words to have been wise.

This confluence of cost and political philosophy are already stoking tensions between Germany and France. The French want the money released to Greece quickly because French banks are so exposed to Greek debt. France would also be happy to shackle Germany with Greek debt for many a year to come. This would establish a precedent for all future bailouts should the Greek contagion really spread to Italy, Spain and Portugal and to which French banks are equally exposed. Whilst the Germans seem to be shifting towards the idea that Greece could default and the Euro survive, the French still see such an event as an impending disaster. Either way it is one hell of a gamble.

The sad reality is that unless there is a real game-changer Greece is now locked into a death-spiral of excessive debt, economic depression and massive budget holes from which there seems little chance of escape. One possible game-changer is that the Greek diaspora, amongst whom are some of the world’s richest people, step into to take ownership of their ancestral homeland in its hour of need. There is little sign of that happening thus far.

My bet is that Greece will indeed receive this tranche of my taxes to keep it stumbling on within the Euro for another year or so but that the real crisis will come in 2013, when the Greeks have failed to follow through with cuts in the face of mass public protest. By then the Germans are hoping that sufficient growth will have returned to Eurozone economies and with it a Euro sufficiently strong to survive a Greek default. The fundamental question thus remains not if Greece defaults, but when, and of course who Greece takes down with it.

Thucydides writing of the death of that great Athenian Pericles once said, “…wealth we employ more for use than for show, and place the real disgrace of poverty not in owning to the fact but in declining the struggle against it”.

All the Greeks are buying with this bailout is time for Germany.

Julian Lindley-French