What our leaders hide from us

From left to right: Ms. Helle Thorning-Schmidt, Danish Prime Minister; Ms. Dalia Grybauskite, President of Lithuania; Mr Herman Van Rompuy, President of the European Council; Mr Jyrki Kaitanen, Finnish Prime Minister. (Council of the European Union's photographic library). See how happy Mr Van Rompuy is, seeing the Finnish PM.

From left to right: Ms. Helle Thorning-Schmidt, Danish Prime Minister; Ms. Dalia Grybauskite, President of Lithuania; Mr Herman Van Rompuy, President of the European Council; Mr Jyrki Kaitanen, Finnish Prime Minister. (Council of the European Union’s photographic library). See how happy Mr Van Rompuy is, seeing the Finnish PM. (7/2/2013)

Europe had a very interesting day yesterday. Let’s see why. First was the British PM who delayed the EU Summit for five hours, then an agreement was announced to reduce the Irish sovereign debt by €20 billion and finally it was Mario Draghi, who helped contain the hike of the euro vis-à-vis the dollar, just by an American cent though. In about fifteen hours, from early morning till 22.00 h at night on 7 February 2013, a trained observer could watch the basic EU players confirm their old tactics and tricks.

Starting from the outsiders, David Cameron wanted to be seen as trying to pose obstacles to the normal development of the leaders’ Summit. What he wanted most was that his fellow Conservatives back in London, and specially the Eurosceptic of them, watch him doing two things. Undermine the Franco-German axis and reduce the importance of the European Union in its entirety.

The British Prime Minister tried hard on both accounts. For one thing he delayed the Summit by five hours. To achieve this he used the old British tool of anti-agro spending argument, that unnerves the French. Thus he started an exchange with Francois Hollande, the French President.

Here is how the Brit did it. Before going to Summit, Cameron left to be understood that he wants the next seven EU budgets (2014-2020) to cost “only” €800 billion, instead of €950bn as proposed in a document drafted by Herman Van Rompuy, the President of the EU Council. It goes without saying that such a huge cut would mainly hit the EU’s agricultural expenses, which constitute 40% of the total and primarily favour the large French farm sector.

With that, Cameron paid his respects to Angela Merkel, the German Chancellor, a traditional lover of cuts on the EU budget. This time however Germany can go as high as €900bn (the bait has to be fat) but obviously Berlin is grateful to London for doing the dirty job with the French.

As for Paris, Cameron had in his pocket the valuable help Britain gave to France in the Mali operations and London could easily cash some of it. In any case the close Franco-British cooperation in North Africa offers enough room to London to raise a voice to Paris. Not to forget that the two have locked Germany out from North Africa.

In short Cameron played his game in three courts. The three being, the Conservative Eurosceptic yard of London, the redoubtable Berlin and the friendly Paris. But again Cameron did not want to let Merkel alone, so he pressed Hollande where it hurts; less money to French farmers.

The Irish

Yesterday was also a very special day for Mr Enda Kenny, the Irish Prime Minister. Ireland holds the rotating Presidency of the European Union and drafts the agenda of all Council meetings, including the Summit. But this was not the only cause for Kenny’s joy yesterday. Early Thursday morning, he announced that he struck a deal with the European Central Bank, to cut down his country debt by €20bn and thus reduce Ireland’s annual state budget deficit by €1bn. Is there any connection with Ireland holding the Presidency? Who knows?

ECB must have had a very active but invisible involvement in this story. Well informed sources say that the agreement was planned with the aid of KPMG from many months and the two sides just waited for the right moment to announce it. The deal contains a lot of details, which remain hidden and is considered by many as a gift from the ECB to Ireland, for being “good boy” in fully applying the Memorandum, the country signed with the troika of EU-ECB-IMF.

This last intervention of ECB’s brings us to another major but taciturn “achievement” of Mario Draghi its Governor, in holding just a bit (one American cent) the climb of the euro with the dollar. Yesterday, the ECB held its monthly governing council to set interest rates and other monetary policy plans. As markets were predicting the basic interest rate remained unchanged at 0.75%. Mario never lets markets down. Later on in the afternoon when the Governor held the regular press conference to explain policies, he mentioned the traditional ECB’s position that the bank does not have an exchange rate policy.

He stressed however that ECB will “closely monitor” what happens in the money market. Some minutes before he had stated that, “we certainly want to see whether the appreciation (of the euro), if sustained, will alter our risk assessment”. Markets didn’t need more to reverse the climb of the euro and its parity with the dollar fell, but only by one American cent. In this way Draghi proved that he could overstep ECB’s rules as he did in cutting down the Irish debt.

But let’s examine in-depth what happened today. For one thing the agreement with Ireland is a well hidden aid from the central bank to a government of a Eurozone member state, which is not allowed by ECB’s statutes. Draghi also overstepped the rules, when he left to be understood that the ECB might pursue an exchange rate policy for the euro if…. He had to keep Hollande happy who wants a cheaper euro but at the same time not to let Merkel down. One American cent less did the good job.

In total yesterday was a very interesting day in the European Union. The problem is that in all the above mentioned occasions the main players used means that are not quite transparent and contain a large dose of arbitrariness. True targets are well hidden from the eyes of the many and the game is played by the few.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Antitrust: Commission fines Sanrio €6.2 million for restricting cross-border sales of merchandising products featuring Hello Kitty characters

Re-educating the angry brain amidst COVID-19

The success story of a Chinese investment in the Greek port of Piraeus

Changing for the change: Medicine in Industry 4.0

EU takes again positive action on migration crisis while Turkey asks for dear favors in exchange for cooperation

EU Council approves visa-free travel for Ukraine and cement ties with Kiev

The European Brain Drain: hard facts and harder truths

Italy should boost spending and strengthen cooperation and integration of employment services to help more people into work

EU and China to do more in common if the global scene gets worse

The Banking Union divides deeply the European Union

Final preparations for DCX and IFRA Expo 2019, in association with The European Sting

EUREKA @ European Business Summit 2014: Innovation across borders – mobilising national R&D funds for transnational innovation in Europe

“At the Environment Assembly citizens expect clean, not hot air”, the Head of UN Environment in Europe underscores in a Sting Exclusive

At Davos, UN chief urges ‘big emitters’ to take climate action

Alcohol abuse kills three million people a year, most of them men – WHO report

Norway’s electric car market has overtaken traditional vehicle sales

Just transition in EU regions: support to people, economy and environment

Brazilian officer a ‘stellar example’ of why more women are needed in UN peacekeeping

Writing a greener story in Asia and the Pacific amidst COVID-19 outbreak

Populist Eurosceptics helped by Trumpists seriously threaten the EU edifice

Berlin cannot dictate anymore the terms for the enactment of the European Banking Union

100 years on, UN labour agency mission focussed on growing inequality, says Director-General

How AI can ensure your transition to remote work is equitable

Draghi strives to control the unruly exploitation of financial markets by banking leviathans

Why quantum computing could make today’s cybersecurity obsolete

One third of poorer countries face both undernutrition and obesity: WHO report

The world is too complacent about epidemics. Here’s how to change

Eurozone: How safe are our deposits? Which banks will survive?

Will satellites destroy our view of space?

A new dawn for Europe: Joint op-ed by President von der Leyen, President Michel and President Sassoli

Here are six bold ideas to accelerate sustainable energy innovation

What do the economic woes of Turkey, Argentina and Indonesia have in common?

International Women’s Day: Where does she belong?

Brexit Update: EU endorses unprecedented compromise to help Cameron out of the referendum mess he got himself into

Ending use of chemical weapons in Syria: ‘still work to be done’, says UN disarmament chief

COP21 Breaking News_10 December:#ParisAgreement: Points that remain in suspense

Trade in digital services is booming. Here’s how we can unleash its full potential

A European young student speaks about the Youth Policies of the European Commission

Income inequality threatens the socio-political structures in developed countries

Warmongers ready to chew what is left of social protection spending

Does the Erasmus program really contribute to the construction of a solid EU identity?

What cybersecurity professionals can learn from triathletes

Primary Health Care: in a world of specializations

What is a gender parity accelerator, and how does it work?

Independent UN rights expert calls for compassion, not sanctions on Venezuela

‘Complacency is still strong’ over stopping genocide, says top UN adviser

Will the coronavirus break the internet?

Is sub-Saharan Africa ready for the electric vehicle revolution?

Women ‘vital’ to peace efforts and ensuring long-lasting stability in Afghanistan

EU and China resolve amicably solar panel trade dispute

Time to be welcome: Youth work and integration of young refugees

EU and U.S. castigate Facebook on Cambridge Analytica scandal as citizens’ data privacy goes down the drain again

Can autonomous cars make traffic jams a thing of the past?

Banking package: Parliament and Council reach an agreement

Niger population’s suffering ‘increasing with each passing month’: UN Refugee Agency

At G20 Summit OECD’s Gurría says collective action vital to tackle global challenges

Ebola not an international ‘health emergency’ but risks spreading across DR Congo border, warns UN health agency

The EU checks the multinationals for tax fraud but Britain may sail out of the EU via Panama

Piracy and high seas crime growing, becoming more sophisticated, UN Security Council told

How the digital finance revolution can drive sustainable development

More Stings?


Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s