Tuesday, 10 January 2012

If Not Now, When?

Cries that a financial transaction tax can only function when it is a global tax are correct in economic terms but the ascendency of politics over economics is increasing.  The politics of a financial transactions tax imposed within the European Monetary Union (both full and candidate members) is compelling, particularly when it is combined with the requirement that clearing-houses handling euro-denominated derivatives are based in a euro country; politically compelling for the European Union, anyway, 

It may not be economically ideal but it drives the UK and its globalist rather than European agenda further from European decision-taking.

Never has it been more urgent for the UK to re-cast its relationships and obligations to the European Union. For while the threats to UK stability - grotesque debt levels, constitutional instability, European isolation, and reduction in the attractiveness of it financial activity climate are still just that - threats, the real bringing into being of uncertainty brings, as well, its fellows, low investment and lack of confidence.

Forget the arguments about nation statehood, links with the rest of the world, atlanticist  and Commonwealth ties.  Europe is not good for an off-shore state dependent upon its financial services industry and the UK government should be abandoning its dated attempts to influence European policy and doing far more to build a road to the exit.


Nick Drew said...

requirement that clearing-houses handling euro-denominated derivatives are based in a euro country

if that's what they have in mind then they clearly don't know what derivatives are !

this wouldn't be a surprise because the Germans, for one, have no real grasp of what markets are

(I have told this story elsewhere ad nauseam so switch off now ... when the EU emissions trading scheme was introduced the Germans announced that, as existing CO2-emitting power stations would be given free ETS allowances based on their historical levels of output, the market value of a CO2 allowance would NOT go straight onto the price of electricity, because they would incur no additional costs.

Many of us assured them it would - we marketeers call this an 'opportunity-cost', which is as real as any other - but they wouldn't be told. When matters transpired exactly as we had foretold, the German Parliament held a formal enquiry as to how it could be so. Truly, these very bright chaps just don't know how markets work)

hatfield girl said...

If you tell me that there is limited understanding of derivatives, markets, and especially derivatives' markets, ND, I wouldn't be a bit surprised.

Anything as cross and aggressive as the European Monetary Union that puts into question the viability of London as a financial centre is damaging though. It's the uncertainty....

What is the UK government DOING playing silly games with inappropriate foreign policy instead of securing renegotiations on its relations with the EU?

Weekend Yachtsman said...

As Dr. North keeps telling us, there's no realistic "negotiation" that the UK could do, because any significant change would require unanimous agreement of the other member states, and resultant treaty changes, none of which would ever be forthcoming.

So talk of "renegotiation" is simply talk, designed to mollify the worried sceptics, and perhaps to deceive the determined antis who don't understand how the beast operates.

I suspect the UK administration knows all this perfectly well, and its foreign policy games are a sideshow.

Remember too, that foreign policy now belongs the EU too (that is what the appalling Ashton woman is supposed to be doing) so talk of a "UK Foreign policy" is also meaningless.

No real change can ever come while we are still part of this nightmare.

We must either leave or put up with it, there are no middle ways.

hatfield girl said...

Couldn't agree more, Yacht. The UK must leave and even putting up with it isn't an option because what is it that's being put up with? Constant adaptation and growth towards a UK-unacceptable (and destructive) future.

The negotiation I had in mind was finding the way out. International treaties can't just be reneged on. Nor can treaties stand that are wholly unacceptable to some of their signatories; there has to be negotiation in such circumstances.

And you can't be saying or accepting there is no way out.

As well, it begins in the UK, with a coming to power of a determination to get out, a sorting out of its own political power groups.

Working for the European Union's collapse because the UK cannot find the political will to leave is a mean-spirited undertaking that will produce a backwash on the UK greatly to its disadvantage.