Though Cowards Flinch

A short while ago, I mentioned the possibility of a Greek ‘fix’ involving artificial devaluation via (temporary) import duties and export subsidies, and noted:

Of course there is a reluctance even to think about tinkering with the fundamentals of the Single Market in this way, but as ‘eurogeddon’ approaches for both Greece and the rest of Europe, a temporary fix like this may start to seem an awful lot more attractive.

I was, as expected, pilloried for such left-field (borrowed) thinking , especially in the comments on the Liberal Conspiracy Sunny horror-edit, which failed to notice that I’d already acknowledged the issue, e.g.:

Providing subsidies for exports to the EU would be clearly illegal also as there’s no realistic prospect of it being approved by the EU Commission under the State Aid rules.

This is of course, true.  Up to a point…….

Article 30 of the Lisbon Treaty does indeed say:

Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.

But then Article 32 goes on to say:

In carrying out the tasks entrusted to it under this Chapter the Commission shall be guided by………(d) the need to avoid serious disturbances in the economies of Member States and to ensure rational development of production and an expansion of consumption within the Union.

This might easily enough be interpreted, if the political will is there, as meaning the Commission doesn’t have to enforce Article 30 if it’s going to create havoc, which then opens the door to precisely what I/Duncan have in mind.

 We’ll see.  It is only one option. 

In any event, the SYRZIA leader seems to be adopting a strategy of brinkmanship on pretty well exactly the same lines as I was supporting in that piece – refusing externally imposed austerity while at the same time refusing the option of leaving the Euro,  in the knowledge that both side have the ‘nuclear option’, and that it’s Merkel who will most likely blink first; that’s why IMF boss Lagarde has been sent in to play tough cop; SYRZIA will, I hope, see that as a demonstration of increasing desperation rather than one of bargaining strength. 

Cleverly, Alexis Tsipras also refers to the “structural reforms” that a SYRZIA-led government would undertake.  This might include some kind of unilateral export subsidy (import duties will of course be much harder to implement effectively, and a holidaymaker-focused sales tax may be another partial route). I suspect ‘structural reform’ is more code for reforming the tax system so that taxes from the wealthy are a) increased; b) actually collected.  The code may be about dampening capital flight for the time being.

Alongside this,  it’s interesting to see the Tories now in the UK making plans to restrict intra-EU immigration.  This is, like duties/subvention, apparently outside the spirit of the Single Market, as set out in Article 21 of the Lisbon Treaty, but open to exception:

Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect.

It will be interesting to see, if Sunny decides to hack this article up and post random excerpts of it at Liberal Conspiracy, whether those accusing me of crass stupidity in understanding the fundamentals of the Single Market also think Theresa May’s plans are beyond the pale.

For myself, I suspect Alexis Tsipiras and his comrades understand the real politik of the European crisis rather better than Theresa May, though I may be wrong - May might be on to an incredibly cunning way for the UK to leave the EU without the bother of a referendum, thus outflanking Labour from so far to the right that even Ed’s brilliant Euro-team won’t see it coming.

Tuesday 15th May:

Open speculation about whether Greece can remain a member of the eurozone is “damaging” for the whole of Europe, Chancellor George Osborne has said.

Weds 16th May:

Europe faces the potential break-up of the single currency unless it takes urgent action to deal with the euro crisis, Prime Minister David Cameron warned today.

You couldn’t make it up etc. etc.

There are a striking number of self-declared British socialists expressing the view that Greece will be better off just defaulting on its debts and leaving the euro.  Leaving the euro, goes the argument, will be a victory for the Greek people, and a real slap in the face for the Merkelian forces of austerity.

This is total bollocks.  It’s also totally unsocialist.

Leaving the euro (and re-establishing the Drachma) may well be exceedingly good for a few Greeks, but it will be very bad news indeed for the vast majority.

While it’s impossible to say exactly how leaving the Eurozone might pan out, these will be among the consequences*:

1. Within a day of the creation and flotation of the New Drachma (probably only electronic and virtual at first as it will take three to four  months to print a new currency in sufficient quantities), its value will crash against ‘hard’ currencies, and the purchasing power of Greeks for anything imported will be slashed.  It’s impossible to know by how much, but a cut of 75% purchasing power is certainly not out of the question. 
2. In an internationalized economy like Greece, there is no such thing as ‘out of the euro’. Most rich Greeks able to do so will already have stored their wealth elsewhere and the capital flight will continue to happen.  The idea of proper capital controls is frankly fanciful.  As holders of still-valid euros, or other ‘hard’ currencies, they will then be in position to purchase both the assets and labour of the mass majority of increasingly desperate Greeks at rock-bottom rates. 
3. A dual economy will swiftly emerge, as in pretty well all countries without their own hard currencies.  This will further deepen inequalities in daily life, potentially even with usual services and products only available to those with access to hard currency, as will the emergence of black market currency trading, where the New Drachma is even less valuable than at the official exchange rate.
4. This might be exacerbated by the government seeking (understandably) to gather its tax revenues in hard currencies, although for the long-term it is better off using taxes collected in New Drachma as a way of stabilising and promoting its use within the wider economy (cf. by way of contrast Bristol City Council’s innovative plans to accept business rates payment in the “Bristol pound” as a way of promoting its use as a tool for local economic sustainability).

In short, then, it seems bizarre that socialists should be arguing for a ’resolution’ to the current crisis, whereby ordinary Greeks fall prey to even greater exploitation, and wealth inequalities become even starker.

Fortunately, the signs are that SYRZIA have decent economists, who realise what the official exit from the Eurozone would mean for their constituents.   While they are firm in their commitment to ending self-defeating austerity, they have already stated that they want Greece to remain in the Eurozone.

If British and other European socialists really want to help their comrades in Greece, they would be better off stopping the reality-free anti-German rhetoric, and starting to throw up alternatives that might assist their Greek comrades, as the latter enter an inevitable period of brinkmanship with Merkel and the European Commission.

One alternative already exists, of course.  This, as our very own union economist Duncan Weldon has set out, is through “artificial devaluation”:

By imposing a duty on imports and equal subsidy to exports a country can, in effect, devalue its currency without leaving the Eurozone. A, say, 15% surcharge on imports and a 15% subsidy to exports in Greece would be effectively a 15% devaluation in the currency.

As these countries run deficits it would, at first, be fiscally beneficial as the surcharge on imports outweighed the costs of subsidised exports.

When Duncan mooted this to economist colleagues in Rome the other week, he wasn’t laughed out of the room in the way he might have been a year ago.  Of course there is a reluctance even to think about tinkering with the fundamentals of the Single Market in this way, but as ‘eurogeddon’ approaches for both Greece and the rest of Europe, a temporary fix like this may start to seem an awful lot more attractive, and it might be possible to reach a compromise which includes a fix like this alongside a further debt ‘haircut’ for creditors, in a way which allows both Merkel and co claim that they’ve not let the Greeks of scot-free, but bringing the debt repayments into the realms of the achievable (or at least creating a breathing space while a new haircut plan is developed). 

For ordinary Greeks, artificial devaluation would also mean a major hike in prices, just as leaving the euro would, but at least it would affect ALL Greeks.  That may be preferable to a massive and permanent shift in the balance of financial muscle in favour of the part of the population that got them into this mess in the first place.

The question for socialists outside Greece is whether they prefer an end to this crisis which leave Merkel with egg on her face but the Greek people destitute, or one which lets Merkel leave office without the eggy bits but keeps the Greek people somewhere above the bread line.

Call me a hoary old social democrat washout, but I know which I prefer.  

* For a much more detailed assessment of how the euro would end as the national currency of Greece, and the New Drachma be established, Modern Monetary Theorists like Edward Harrison and Marshall Auerbach are helpful. 

Note, however, that they favour exit from the euro and the establishment of the New Drachma because they fail (or do not want) to see the economic consequences for real people, preferring instead to see Greece as a test case for their theories about how a new currency might be established  through the use of coercive currency switching (aka. theft) and Drachma-based taxation.  They also appear totally unrealistic about the capacity of the Greek government to impose its political will throughout its bureaucratic machinery.

If you thought the French elections were over, think again.

On 10th & 17th June, we have a two-round electoral contest potentially as exciting, and as important for France, as the election of President Hollande.

That’s because Jean-Luc Mélenchon, leader of the leftwing group Front de gauche (FG), has just confirmed his candidacy in the 11th circonscription of the Pas-de-Calais département, where he will go up against Front National leader Marine Le Pen in the legislative elections, at which 577 deputés are elected across France to sit in the Assemblée Nationale.

This is a somewhat risky strategy, as Le Pen led here on the first round in the Presidential election with 31.4% of the vote.  The second round (Hollande vs. Sarkozy) went to Hollande with 60.5% of the vote as FN voters obeyed Le Pen and abstained.

Much will depend, therefore, on whether Parti Socialiste (PS) voters choose to back Mélenchon at the expense of their own candidate, Philippe Kemel, in the second round (unlike in the Presidential elections, in the legislative elections all candidates gaining more than 12.5%  if the vote in Round 1 vote go on to Round 2). 

Alternatively, Mélenchon may step back, and advise FG round 1 voters to back the PS in Round 2 and allow Kemel to retain this Assemblée Nationale seat for the PS. 

I suspect this is unlikely; Mélenchon will feel he has done the right thing by Hollande for the Presidential election, and that the favour should now be returned.  Certainly he feels he has unfinished business with Hollande, and will want to be seen to hold Hollande to his promises e.g. the renegotation of the Merkozy Fiscal Compact.

In this case, much may depend on how much Kemel really wants to be deputé, and how willing he is to risk letting Le Pen through on a split leftist vote.  Early indications from the Libération coverage suggest that  Catherine Génisson, the boss of the FS Federation the Pas-de-Calais départment, may indeed be open to a second round pact to allow Mélenchon through on the PS vote, but there are bound to be countervailing voices.

In any event, keep your eyes on results as they come out on 10th June.  While clearly who gets the seat in Round 2 is the most important, the symbolic value of round 1 can hardly be underestimated either (and may well lead to a significant PS to FG switch even in Round 1). 

If Le Pen is beaten in Round 1 on home turf (she is already on the Regional Council here), then Mélenchon may attain national, even European leftie-hero status, and the Front National will have been dealt a significant blow.  If it all goes pear-shaped, with Le Pen winning Round 1 and, heaven forbid, even sneaking through in Round 2, then it will be very bad news.

In June 2014, the people of Europe will go the polls to elect its MEPs for a five-year term.  This will be the 8th time it’s happened, but – courtesy of the crisis and ensuing austerity - for many voters it will be the first European election about Europe, as opposed to a mid-term vote on the domestic government.

There is a big opportunity for the Left here. 

The mainly ignorant media focus is on whether Hollande can persuade Merkel to give way on the as yet unratified Fiscal Pact (aka. the Fiscal Compact) concocted in late 2011 by Merkel and Sarkozy (no, he can’t, is the simple answer).

But the actual opportunity to set the European Union on a different course lies in potential for radical amendment of the regulatory ‘six-pack’ (to be followed by a monitoring ‘two-pack’ this summer), designed to ensure the proper implementation of the original Stability and Growth Pact, and passed into law in November 2011.

If you’re confused by two apparently parallel (com)pacts, don’t worry.  You’re supposed to be. 

There are relatively few people (other than me) who do understand it. Charlemagne at the Economist appears to be one, as does Peter Spiegel at the FT, who says about the less-known six-pack:

Almost unnoticed by the public, the European Union has already begun transforming itself into an organisation with far more central power over national economic decision-making. The European Commission, the EU’s executive branch, has been given authority to demand spending cuts under threat of large fines….

Indeed, it is all so confusing that the European Commission has had to provide its own guide Six-pack? Two-pack? Fiscal compact? A short guide to the new EU fiscal governance, which states helpfully:

The Fiscal Compact, which is the fiscal part of the Treaty on Stability, Coordination and Governance (TSCG) – once it enters into force – and the six-pack will run in parallel.

It’s difficult to work out exactly why we have two parallel systems (other than the obvious explanation that the Compact was a late play by Sarkozy to stave off defeat by looking tough). 

My suspicion is that it’s part of a quiet power struggle between the European Parliament and its Executive, who have passed the six-pack into law (in November 2011), and the European Council (basically the heads of the 27 states), which only became a formal part of the EU structure in 2009 under the Lisbon Treaty. 

Witness, as evidence, how Olli Rehn, Commssioner for Finance (and working through the Parliament,  referred only to the Growth & stability Pact provisions in his speech at the weekend, while Merkel’s Finance Minister prefers to reference the intergovernmental aspects of the Fiscal Compact in the wake of Hollande’s victory.

It is also difficult to know which precise version of  austerity legislation will win out in time.  On balance, though, the fact that the six-pack is in place, while the Fiscal Compact still awaits ratification (notably in Ireland, which may vote ‘no’), means that the real political opportunities for the left probably lie within the Parliament, rather than (via Hollande) the European Council.  Hollande’s team probably knows this, which is why it is content to soft-soap Merkel for the moment.

Of course, the drawback is that the European Parliament will remain under the control of the Right until June 2014.  That’s a long time for Hollande to wait before he can deliver, via the European Socialist Party (PES) MEPs, a radical change in direction, if it gains a majority (although even the prospect of post-election change may be enough to slow up its implementation pre-election).

Nevertheless, the opportunity for PES is to put together a legislative manifesto which has as its centre-point precisely such a change in direction, through a ‘Keynesian’ amendment to the six/two pack regulations.  Such amendments might, for example, include a requirement on the EIB (or individual countries) to fund large-scale investment works when the economic cycle requires it.

The result could be a European election campaign like no other: a central manifesto commitment to sensible anti-austerity macro-economic management, circulated across 27 countries in countless leaflets, seeking a socialist, pan-European mandate.  

Perhaps we might even, by then, be seeing British campaigners on porte-a-porte campaigns in Cergy-Pontoise, while our French comrades hit the streets of Skelmersdale (the towns are twinned).

I’m a geek, but even I thought it was a bit geeky for the PES to launch a two year manifesto development programme, in which socialist activists across Europe are invited to put forward policy proposals (the next stage is a forum in June to collate and assess ideas).  

Now though, I understand absolutely where they were coming from, and will be forwarding a version of this post under both the ‘Fair Economy’ and the ‘Active Democracy’ themes.  There is a real chance, I contend, to put what happens in Strasbourg at the heart of our campaigning in the UK, (probably) one year before a general election, in a way which both creates a route for anti-austerity that not even Merkel can scupper AND shows up just how murky and undemocratic the European Union has been to date.

Of course I’m delighted that Hollande has won, and that Sarkozy is gone.  But I’m also worried what the next year will bring. 

Marine Le Pen’s refusal to support her natural ally, despite the lengths he was prepared to go to in order to garner Front National votes, really only means one thing.  By consigning Sarkozy to defeat, she has kick-started the UMP infighting, and her very successful one year campaign detoxification campaign now puts her in prime position to pick up a large percentage of UMP votes in June’s parliamentary elections.  That campaign started in earnest a couple of days ago.*

The complacency surrounding her Round 1 vote percentage -  the idea that she’s not that much of a threat – is likely to be washed away within a 50 days, as the parliamentary seats in all areas of France start to flow her way.  She may not be the official opposition by the end of that 50 days, but to many French people she will look and sound like it. 

Unlike her father, Marine Le Pen has – by force of circumstance – a coherent sounding argument on the economy, which touches a chord with many: ‘leave the Euro’ is a simple, effective message.   This, mixed with the message that the UMP betrayed the French people on immigration and security (especially in the wake of the Toulouse killings), will have a powerful effect on a wide group of people. 

After 2002,  Le Pen père faded away for want of this.  In 2012, Le Pen fille will not do so.

So what can British Labour and other European political parties concerned at the rise of neo-Nazism in a major European country do about it other than wring their hands?

Perhaps the only productive thing Labour can do is to support Hollande when he does his best to take on the European austerity machine, based in Brussels, with orders given in Berlin.

We know that Olli Rehn is already moving to fob off Hollande with vague reassurances, when the latter comes calling about his commitment to the French people to renegotiate the Merkozy Fiscal Treaty. 

If the “grands travaux” public investment promised by Hollande does not flow, because it becomes stuck in the bureaucratic nightmare that is the ‘six pack’ Stablility and Growth Pact legislation, Le Pen will be quick to pounce: “Hollande is as bad as all the others” will be her claim. “Only I stand aside from the Eurocrat crowd”.

Labour must step in to help Hollande here, as best it can.  It must argue, long and loud, that the Fiscal Treaty Hollande is seeking to renegotiate must take precedence over the legislation which was quietly – almost secretly – signed off last year. 

The initial signs are good.  Mandelson is no fool when it comes to Europe, and his call for a radical reconstruction on the way Europe runs its finances (this is overshadowed in the UK press by the idea of a referendum), he knows exactly what he’s doing: helping to open the way to a new agreement in Europe which sidesteps the machinations of Olli Rehn and his unelected cabale in Brussels. 

It’s a good start.  I just hope Miliband is watching and learning.

* Even in their moment of triumph, wise heads on the French left  (@Sarkofrance via (@Barsacq) are calling on the mainstream French Right (the UMP) to keep it together [awkward translation mine]:

Nous l’avons viré, ton faux mentor. Nicolas Sarkozy n’a rien à faire à droite. Il a abîmé la droite républicaine. Il faut la reconstruire, et vite. [We've seen off your false mentor.  Nicolas Sarkozy is not one of you.  He has destroyed the Republican Right. It has to be reconstructed, and quickly.]

Comme plein d’autres à gauche, je ne tire aucun plaisir d’être face à Marine Le Pen. Nicolas Sarkozy et ses sbires ont cru que la France était si à droite qu’il fallait singer Marine pour conserver son siège. Je n’ai aucune rancune. [Like lots on the Left, I take no pleasure in being faced now with Marine Le Pen. Sarkozy and his henchmen thought that France was so far to the right that they must ape Marine in order to keep his seat. I have no rancour towards you.]

Marine n’a rien perdu, Nicolas a tout perdu. Cet échec est d’abord le sien. Il ne méritait pas la République. Ami de droite, je pense à toi. Redresse-toi. [Marine lost nothing. Nicolas lost everything. He didn't deserve the Republic. Friend on the right, I'm thinking of you.  Stand proud.]

They know what’s coming.

Yesterday’s speech in Brussels by Olli Rehn, EU Commissioner for Economic Affairs is  a quite astonishing abuse of power, and a major affront to democracy.  No surprise there.

The press commentary to date suggests that Rehn’s speech signals an end to the Merkozy austerity approach, and highlights the following statement as a move towards a new stage in the context of a possible/likely win for Hollande in France:

Contrary to the misleading impression promoted by some politicians and pundits that the EU fiscal framework forces all member states into a ‘one-size-fits-all’ consolidation straightjacket, the Stability and Growth Pact is not stupid. Yes, the EU fiscal framework is rules-based, with clear reference values for public deficit and debt for triggering the excessive deficit procedure and, if needed, sanctions. But, at the same time, the Pact entails considerable scope for judgement, based on economic analysis and its legal provisions, when it comes to its application.

I think the press is interpreting the speech entirely wrongly.

It is NOT an acceptance of change in direction if Hollande comes to power, but an attempt to scupper Hollande before he even becomes President.

I say this for two reasons.

First, it allows the Commission (and Merkel) to pat Monsieur Flanby on the head when/if he comes calling, and fob him off the reassurance that everything is being taken care of, and that he need not worry. 

Second, the speech deliberately refers, NOT to the Merkozy Fiscal Treaty that Hollande has committed to renegotiating in his manifesto, but to the legal changes to the Growth & Stability Pact which were quietly signed into law on 16th November 2011 .

As I set out in detail here:

These six regulations (if you’re short of time, 2011/1176 and 2011/1174 are the crucial ones) mean that the [Fiscal] treaty is little more than the political icing on the cake.  The regulations passed in November, with no oversight from national parliaments and no news coverage to speak of,  already enshrine in law the way in which governments must run their economies, the measures by which they will be judged and (in the Eurozone) how and to what level fines will be levied on countries with “macroeconomic imbalances”. 

Gavin Hewitt now reports that the German Finance minister is promising a growth element in the Fiscal Treaty that Hollande has committed to renegotiating, but this will be for show only.

Under the arrangements quietly put in place even before Merkozy mentioned the Fiscal Pact, the real power will remain with the unelected European Commission.

It is to be hoped that Hollande’s team, if it does come to power this evening, has done its homework (frankly, it didn’t when they drafted this bit of the manifesto), and that the challenge to the Olli Rehn Brussels oligarchy comes quickly.

In this context, Mandelson’s call for a fundamental review of how Europe is governed financially (and a UK referendum to boot) couldn’t have come at a better time (and I assume Mandelson knows this).  Miliband, on this one occasion, would do well to listen to Mandelson, and get behind Hollande.

Even by the Daily Mail standards, the decision to publish an article fully in support of Marine Le Pen as President of France is pretty extraordinary, given the paper’s support for fascism in the 1930s.

The article itself need not detain us.  It is fairly clear that the author has had little recent contact with French politics, and the idea that France will be ‘saved’ by withdrawal from the Euro, and by defence of ‘national identity’, would be no more than a sign of pitiful immaturity on the part of the author if it had turned up on a blog elsewhere.  It causes concern when it has been passed through editorial hands at a mainstream paper; perhaps the ‘Brick method’ of selling papers/internet hits has gone to their heads.

What surprises me more is that relatively little attention has been paid by opponents of Marine Le Pen to what she really represents, and to how recent acts continue to reflect this.  

It is less than three months ago that Le Pen was guest of honour at a Burschenshaften [literally, 'fraternity] ball in Vienna, where she chose to dance with Austrian far right Freedom Party leader Martin Graff.  Graff is a member of  Olympia, a secret society which excludes Jews from its ranks.  His party is dedicated to the establishment of a ‘Germanic Cultural Community’ – the Nazi overtones are deliberate (for more information see L’Express, translation on request). 

The ball itself is notorious (and likely to be banned) as a gathering of far-right extremists, and Le Pen (like her father, a previous guest of honour) cannot have been doing other than making a knowing gesture of allegiance to far right extremism.

Hollande and Sarkozy’s decision not to make a big issue of this, when it emerged in January, is understandable;  by highlighting her actions they risked giving the publicity she craves (at the time she was also playing the 30 year old FN trick of complaining that the might be kept of the ballot paper by the 500 parrainages [Mayoral nominations] rule, which she claims was put in place by the state to block her democratic rights).

What is odd though is that, to my knowledge, no British commentator on the French elections has done anything other than help to confirm the ‘detoxification’ myth about Marine Le Pen, and how she offers a radical alternative to the mainstream fare of the Hollande-Sarkozy show.  

Indeed, more often than not, she seems to be paired in the analysis with leftwing candidate Jen-Luc Mélenchon, as comparable alternatives to the main parties.  This is not just lazy’two for the price of one’ journalism; it’s also an enormous insult to Mélenchon and those who will vote for him in round 1.

Given this indolence (and the astonishingly patronising Martin Kettle view that we’re all a bit too lazy to interest ourselves in French politics) perhaps it is little wonder that someone as ignorant as the Daily Mail columnist feels empowered, alongside his editors, to promote the idea of a neo-Nazi as the leader of a major European power.

The top five news stories on the FCO website are all to do with Syria, and what the UK government is doing to get rid of the Assad regime. 

 Meanwhile in Africa, a nascent democracy has fallen, a large part of the country is in the hands of a different number of armed grops with differing levels of affiliation to Al Qaeida, trouble is spilling over into neighbouring countries and refugees are on the move.  All this is happening as a direct result of the UK’s last major military intervention.

I speak, of course, of Mali, and the vast desert area referred to as Azawad by those Tourags who seek its independence.  Over the weekend the major town Timbuktu and Gao have fallen to Touareg rebels, taking strategic advantage of the recent coup d’etat.  This coup d’etat was itself undertaken by a section of the army supposedly as a reaction to the civilian government’s inability to deal with armed rebellion in the North, and that armed rebellion was fuelled by the massive overspill of weaponry from Libya via Niger into the desert regions of Mali. 

In the mix are various groups, with confused and confusing allegiance, and including the National Movement for the Liberation of Azawad (MNLA), the (Islamist) Movement for Unity and Jihad in West Africa (MUJWA) , the (Islamist) Ansar al-Din and of course Al Qaeida Middle East (AQIM), present in one form or another (from bases in Southern Algeria).  

More details are here, courtesy of the very excellent Kal at The Moor Next Door. There’s a handy map here.  I don’t pretend to out-analyse Kal on the specifics of what are and what will be in the region, but simply ask the questions:

Do Cameron and Hague now accept that what seemed like a nice Boys’ Own Adventure is turning out to have very nasty consequences not just for the millions now directly affected (Mali’s population is 16 million to Libya’s 6 million) but potentially for the much of the Sahel and into the West African states?

Hague has made no comment on Mali, as far as I can see.  Perhaps he’s not even noticed. 

As and when he does, I’d recommend this book as a primer, and especially the chapter by Robert Keohane on the distinction between act- and end-utilitarianism (aka thinking things through).

Olli Rehn, the EU commissioner for economic and monetary affairs, thinks the cause-effect is clear enough:

Because there was a perception Spain was relaxing its fiscal targets for this year, there has been already a market reaction of several dozen basis points on yields of Spanish bonds.

Let us start with bonds. After 30 years when the “risk-free” cost of money has steadily declined, a reversal of this assumption would be important indeed.

 

Mansoor Mohi-uddin of UBS made exactly that call this week, saying “this era is now set to end”. His case is as follows: “The Federal Reserve will not undertake another round of quantitative easing, the US economy shifts to a sustainable recovery, private sector credit in the US expands, China and other major emerging economies rebound after dipping in the first half of 2012, and the eurozone recession doesn’t shock the global economy.”