Ambrose Evans-Pritchard really hates Jean-Claude Junker, and he’s on sparkling form with this piece about how Juncker’s accession to the Commission presidency, as a result of the craven backsliding of, in turn, Italy, France Germany, is very bad news for everybody, but for France and Italy in particular; Austerity will be for ever, says Ambrose, and neither France nor Italy can withstand such absurd self-imposition of harmful economic policy:
This status quo is ruinous for France and Italy, yet Francois Hollande and Matteo Renzi have gone along meekly, leaving David Cameron to make quixotic stand against a decision that is nearly suicidal for the EU itself. They think they have secured breathing-room on austerity as a quid pro quo, but there was no substantive change on EU deficit rules in the summit conclusions. “The threat of more flexibility in EU fiscal policy has been avoided,” said Holland’s premier Mark Rutte, shooting their fox stone dead before they had even returned home.
Greater forces are at work in any case. Perma-slump is already written into law under the EU Fiscal Compact. Each country must cut its public debt mechanically for twenty years until the ratio reaches of 60pc of GDP, regardless of monetary policy or the state of the world. This is already haunting France as it slips deeper into a debt-deflation trap, with zero growth causing the debt trajectory to spiral upwards, despite one austerity package after another.
French debt jumped to 93.6pc of GDP in the first quarter from 91.8pc a quarter earlier. Gilles Carrez, head of the French parliament’s finance committee, says it will probably punch through 100pc by next year. This means that the debt will have to be cut by 40 percentage points, or 2pc a year, in the midst of an unemployment crisis.
It is worse for Italy, with debt ratcheting above 133pc. Mr Renzi can try to gain a little leeway for extra investment, but the task is beyond any political leader at this point. The EMU straight-jacket imposes obliges him to run a primary budget surplus of 5pc of GDP for year after year even if the European Central Bank meets its 2pc inflation target, which is it failing to do. At the current 0.5pc inflation rate , Italy has to run a surplus near 7pc to comply.
I agree completely with Ambrose on how ruinous such mechanical austerity would be. After all, I wrote about how mad it was two years ago.
But where I differ is on whether it’s actually going to happen. This is what the European Council summit conclusions Amborse refers to actually say:
The European Council welcomes the abrogation of the excessive deficit procedure for several Member States. The possibilities offered by the EU’s existing fiscal framework to balance fiscal discipline with the need to support growth should be used. Given the persistently high debt and unemployment levels and the low nominal GDP growth, as well as the challenges of an ageing society and of supporting job-creation, particularly for the young, fiscal consolidation must continue in a growht-friendly and differentiated manner. Structural reforms that enhance growth and improve fiscal sustainability should be given particular attention, including through an appropriate assessment of fiscal measures and structural reforms, while making best use of the flexibility that is built into the existing Stability and Growth Pact rules. In this context, the Commission will report to the European Parliament and to the Council on the application of the EU governance framework by 14 December 2014, as foreseen in EU law (‘6-Pack’ and ‘2-Pack’).
Now, I grant that this isn’t yet a “substantive change” to the austerity rules, but then that’s not what this European Council was about. This was about setting the priorities for the Commission for the 2014-19, and this agreement closely reflects the Council president Hermann Van Rompuy agenda paper, in which he called for a refocusing on growth, employment and “social protection systems that are efficient, fair and fit for the future”.
So while Rutte is, presumably for his own domestic purposes, claiming that austerity still holds firm, the opposite appears to be the case. Juncker has been instructed by the European Council to report back to Council and to Parliament in six months on how, without the faff of rewriting the SGP rules and rescinding EU law, those stupid rules and laws can be best ignored.
That, frankly, is confirmation of a huge victory for the centre-left governments in France and Italy, won from under the nose of Cameron, Rutte and others. Not only does it set the agenda for a post-austerity Europe, it also very deliberately holds Juncker’s feet in the fire: the clear message is “do what we say, or Article 234 of the Treaty on the Functioning of the European Union may be coming to get you and your buddies”:
If a motion of censure on the activities of the Commission is tabled before it, the European Parliament shall not vote thereon until at least three days after the motion has been tabled and only by open vote.
If the motion of censure is carried by a two-thirds majority of the votes cast, representing a majority of the component Members of the European Parliament, the members of the Commission shall resign as a body and the High Representative of the Union for Foreign Affairs and Security Policy shall resign from duties that he or she carries out in the Commission. They shall remain in office and continue to deal with current business until they are replaced in accordance with Article 17 of the Treaty on European Union. In this case, the term of office of the members of the Commission appointed to replace them shall expire on the date on which the term of office of the members of the Commission obliged to resign as a body would have expired.
There’s a lot of people in a lather about the Facebook research, in which 600,000 people were fed happy content, and 600,000 sad, so as to find out whether some people being happy on Facebook made other people sad. It’s unethical, says a law professor, because Facebook didn’t get consent*. Alex is so incensed he’s going to give up Facebook.
This makes me wonder why there isn’t the same big lather about Randomised Control Trials (RCTs), which can actively do down the life chances of participants, without those participants ever knowing what happened and – even if they do know they’ve been in an RCT – unable to reverse the effects. As this government paper recommending the widespread use of RCTs says:
Sometimes interventions which were believed to be effective turned out to be ineffective or even actively harmful. This can even be the case with the policies we think will be guaranteed to work. For example, incentives have been used to encourage adult learners to attend literacy classes, but when an RCT of this policy was conducted, it was found that participants attended approximately 2 fewer classes per term than the non-incentive group…..we could have done harm to the adult learners with the best intentions, and without ever knowing we were doing so (p.17).
True, RCTs tend not to be designed so that intuitively harmful things are done to people, but then the whole point of them of an RCT is that they may do harm, however counter-intuitive that may be to those who propose the study in the first place.
So how exactly is the Facebook research more unethical than widespread government research and consequent social policy? Or have RCTs just become so much part of the social policy furniture that no-one questions them anymore.
Maybe, if this question is provoked, the Facebook research will turn out to be massively socially useful, just as the research team intended, I’m sure.
* The issue of informed consent is course vital, even though bad things happening to people are still bad things, whether or not they are consented to.
In the adult learner incentive RCT referred to in the government paper linked to above, consent from individuals was obtained (I looked it up). However, in some RCTs, especially clutster RCTs, it becomes impractical for all individuals to provide informed consent and ethics committees have to weigh up the pros and cons, using available guidance from national and international-level experts who make the ethics of RCTs their life’s work.
So, for example, I’m not sure from the literature whether the government funded RCT into whether texts sent to people who owed fines to courts sought consent from all those who ended up as subjects of the study. More seriously, in the ongoing RCT into the Safeguarding Assessment and Analysis Framework (SAAF) child protection assessment tool, conducted at cluster level with social work teams as the unit of randomisation, it’s easy to see how difficult it would be to get informed consent on all families (and who in the family?) randomly assessed or not assessed using the tool being evaluated, especially as a decision not to give informed consent would then presumably provide social work teams with a tricky decision, both in terms of ethics and management, as to whether they should use the tool or not. Arguably, therefore, we have a trial which actively harms children, without their or their families’ knowledge, by dint either or using the tool at (cluster) random, or not using the tool at random.
This is in no way meant to be a criticism of the evaluators commissioned by DfE, who I’m sure have gone through all the correct ethical processes, and probably a few steps beyond too. I raise it simply because it highlights the tricky issues with consent. FWIW, I’ll be looking out for the results of this RCT with interest, as my hunch is that the use of the SAAF tool may turn out to be less useful than its promoters suggest it is, compared (say) to flexible and autonomous professional judgment which moves beyond the parameters of the its ‘stages’ which, of themselves, are grounded in contestable assumptions about what child protection is and should be.
What the RCT will show up will depend to a great extent on how the desirable outcomes are defined (what, after all, is a protected child, and is that the same as a happy one with a good chance of growing up happy?)
Mark at Labourlist is angry with Jon Cruddas:
The National policy Forum meets in three weeks. So why in all merry hell did Cruddas think that attacking the Labour Party – and Labour Party policy – now, of all times, would be a good idea? Labour policy chief slams policy review? How is that ever going to be a good headline? He’s smart enough and has been around the block long enough to know that this isn’t the way people of his standing in the party are supposed to behave. Look again at this line “these interesting ideas and remedies are not going to emerge through Labour’s policy review”. What were you thinking Jon? I like you – I think you’re a force for good in the Labour Party. But what were you thinking? Your job is to make sure that interesting ideas make their way through the process, not argue the opposite before the process has even finished.
I think the criticism is entirely unfair, and I entirely support Jon who, like Mark, I also think is a force for good within the labour movement. It’s very clear that Jon is attacking not the policy review itself, but the “dead hand” campaign managers and assorted “strategists” who have managed the message so badly. What he’s saying – frustratedly to a like-minded audience – is that there’s a risk that some of the really good stuff coming out of the review risks being filtered out by those campaign managers and strategists There’s absolutely nothing wrong with saying that, because it’s correct. I’m glad that Ed Balls is reflecting that.
Now I like Mark too (I think I met him once), and I think he’s a force for good in the labour movement. He knocks on doors. But he needs to take a step back and look at Labourlist’s own part in this.
The coverage by Labourlist of the big – very big, vet important, IPPR report was, like that of the mainstream media – dominated by the 18-21 year old youth allowance/JSA proposal/means-testing proposal, although it quickly became simply the JSA-slashing proposal*. Yet this was a 280 page report stuffed full of much more important stuff, one of which – the devolution to local city and county regions was in there but has had to be re-announced today. The other related biggie – the proposal to empower local authorities and other pubic bodies to draw forward investment into the early years off a five year cycle on the basis of future savings resutling from that investment – was completely ignored.
Mark accepts (I think) that no-one at Labourlist has actually read the IPPR report, and I suspect their coverage of it was influenced by other non-readings of it. Part of the problem, I suspect then, is that Labourlist’s resources have not grown commensurate with its growing profile, and importance (not in terms of its own direct readership so much as it being a go-to place for other more widely read commentators. Labour itself needs to consider what can be done about this – perhaps my moving some of its wasted PR budget towards Labourlist while guaranteeing absolute independence. In addition, the unions funding Labourlist and Left Foot Forward should consider cutting support to the latter in favour of the former, given that Left Foot Forward is now largely tripe. That way, we might expect that someone within Labourlist (or more likely a few people sharing) would actually get to grips with policy substance.
But better resources are not everything. Labour commentators and campaign managers alike need to get their heads round the idea that the Labour policy review is actually a very good thing, being very well managed within unfortunate constraints established earlier by oh-so-clever but actually much more stupid people.
In the end, it’s the content of the manifesto offer that counts, not some trashy headline from a paper which will attack Labour anyway. Jon and some at IPPR and elsewhere should be congratulated for staying focused on that, not hauled over the coals for being pissed off that the “strategists” still wield far too much influence.
* For what it’s worth, I think the conditional Youth Allowance proposals are a pretty good thing in that they free young people from the stupidity of the JSA job search requirements, but much will depend on the level of autonomy enjoyed by the Job Centre Plus Advisors around the customised plans and the “exceptions”. The proposals are still a too managerial-bureaucratic, as is the way of IPPR (especially Graeme Cooke), but there is time for them to become a useful part of the overall scheme of things. And of course, means-testing parents is only the same as happens with student’s maintenance grants, and only an indiorect form of progressive taxation, to which direct taxation would of course be preferable but not felt currently a vote winner.
On 9th June this was the official Labour line:
Labour will not support Jean-Claude Juncker as a candidate for President of the European Commission. Should Mr Juncker be put before the European Parliament, Labour MEPs would vote against him.
Yesterday, Maryhoneyball MEP said:
While I fully understand why David Cameron opposes Juncker (the Labour Party was also against him becoming Commission President)…..
Judging by the “was”, it now looks as though Labour MEPs have changed tack from a silly counterproductive gesture in the European Parliament, and will now vote Juncker through to the presidency. This is a welcome shift, as it now allows Labour to work within the SPD group to hold Juncker and his Commission to task on delivery of the ‘Van Rompuy’ agenda, delivered through the good work of other member states – notably France and Italy. It allows for a better reasoned campaign for a vote of censure later on if Juncker drags his feet, in a way which allows the will of the Council to converge with the will of the Parliament. Of course it also allows a differentiation from the Tories over the next few months, rather than allowing Labour to be portrayed as Torysceptic-lite.
I don’t know what caused the shift, but I know that some Labour MEP are quite readers of this blog, though its maverick status means that they don’t link publicly to it. So while I should in a fair-to-me world have been an MEP myself by now, arguing the case for a proper Labour role within the MEP in the open, I like to think I’ve had some quite influence.
So Cameron has lost, hook line and Juncker.
That’s a good thing, because as Jon notes it embeds the Sptizenkandidat process as the legitimate one. If the UK is in the EU in five years time, it is likely that the press will engage at least to some extent with the internal European Parliamentary Group elections and that the subsequent European elections will be much more about choosing between those group candidates.*
But the even better thing – at least for the short term – is that away from the spotlight of the Juncker row, the left in Europe has been quietly getting on with shaping Juncker’s Commission agenda. This is most clearly evidenced in the ‘strategic agenda’ paper being put to the European Council this afternoon by its own President, Hermann Van Rompuy.
This paper, which may be edited a little before it”s signed off, more or less set the heads of states agreed priorities for the next five years, and there will be an institutional expectation that Juncker, as President of the Commission, should do the detail and deliver on it. If he doesn’t, then a pincer movement between the European Parliament and the European council can be brought into play, with the ultimate sanction being invocation of article 234 by the parliament, which forces his and his Commission’s resignation. Junker knows this, even if Cameron doesn’t.
And the papers not half-bad. It’s very clear that Van Rompuy has listened to centre-left governments in putting it together, and while some lip service is paid to the relatively unimportant stuff around welfare benefits, the bulk of the paper focuses on the EU’s role in investment and employment (as well as energy policy). I like this bit especially as one of Van Rompuy’s stated priorities:
help ensure all our societies have safety nets in place to accompany change and reverse inequalities, with social protection systems that are efficient, fair and fit for the future; indeed,investing into human capital and the social fabric is also key to the long-term prosperity prospects for the European economy.
Now that’s easier said than done, although some words about ‘flexibility’ in the ridiculous fiscal compact (and paralley six pack) to allow fiscal expansion policy also help), but it’s certainly a step away from the ‘competition is all we need’ approach of recent years, and it chimes with UK Labour’s developing message around social investment, so it’s something Labour MEPs can really get behind with their colleagues in parliament should Juncker’s Commission not do the right thing (if they and Labour generally start to show some common sense, that is).
So all in all, a pretty good day for the EU: Cameron humiliated, Hollande and Renzi actually doing their jobs.
* It strikes me as odd that, with Cameron banging on about how no-one knows what the process is about or who Juncker is etc., nobody reminds him that when the Police Commissioner elections in 2012 got a 15% turnout (and no voters at all at one polling station), he talked about the time it would take, and that the process was perfectly legitimate:
Look, turnout was always going to be low when you are electing a new post for the first time. But remember, these police and crime commissioners are replacing organisations that weren’t directly elected at all.
Wonga has apologized for sending letters demanding repayment under the cover of made-up solicitor names.
Prima facie, Wonga’s acts would seem to be an infringement under Section 40, paras 1 (c) and (d) of the Administration of Justice Act 1970:
(1) A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract, he—
(a) harasses the other with demands for payment which, in respect of their frequency or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;
(b) falsely represents, in relation to the money claimed, that criminal proceedings lie for failure to pay it;
(c) falsely represents himself to be authorised in some official capacity to claim or enforce payment; or
(d) utters a document falsely represented by him to have some official character or purporting to have some official character which he knows it has not
The fine for such an offence is minimal, but a criminal record for the person or persons who authorised these activities would perhaps not go amiss.
I hope someone with more clout than me might take this up, but I’ll do the necessary with the police if need be.
According to a sweary leaked tape Jacek Rostowski, ex-finance minister for Poland, said:
No Polish government could agree to Cameron’s renegotiation proposals except in return for a mountain of gold.
The whole thing is being seen simply an attack on Cameron’s judgment, but I think this might just evidence that, behind the scenes, one or more of the EU accession and/or southern states might be be prepared to strike a deal of the type I’ve set out previously:
I can’t help feeling there’s a much bigger deal to be done with other states which would actually stop migrants from the southern and accession states from coming here, if that’s what people really, really want. Here it is:
In return for the UK and other Northern European countries getting to stop people from further away places coming over here, taking our jobs or whatever, the further away places get to put some stops on things that the Northern European keep on selling to them, so that the further away places stay poor. In time, the further away places would be less poor, and less of their people would want to come to UK to take our jobs.
In technical terms, that would mean a temporary trade off of restrictions on freedom of movement of people for restrictions on freedom of movement of capital and goods, until an agreed point of current account convergence and/or of GDP per head were reached via a process of artificial devaluation and import substitution – or, if you want to conceive of it thus, the creation of a massive virtual European Structural Fund aimed at the fastest possible reduction in structural disparities between all 27 EU states (and joiners).
That would be Rostowski’s mountain of gold, although there might also be a real Structural Fund deal to be done.
As I’ve made clear, none of this requires treaty change, as it’s all allowed under articles 30, 32 and 45. It could be done quite quickly if the political will were there, and the price was right.
Now Rostowski is not in government anymore, but it might just be he knows something Cameron doesn’t.
Which isn’t hard.