A Primer On The Euro Crisis

The Euro is the official currency of the "eurozone," adopted as the national currency by 17 of 27 of the member states of the European Union. It is the world's second largest reserve currency as well as the second most traded currency behind the dollar. All monetary policy for the Euro is set by the European Central Bank (ECB).

The Euro officially became an "accounting currency" subject to ECB control in 1992, with members of the Eurozone normalizing the value of their currency to a "Euro" standard. The euro as an actual physical currency didn't occur until 2002.

Nominally, the adoption of a single currency was sold on several theoretical benefits. It would eliminate the currency exchange fees from the cost of doing business between the European states. It would encourage competition by allowing quick comparison of prices. And by encouraging stability and efficiency, the hope was that the euro would stimulate economic growth, reduce the unemployment rates in the eurozone, and encourage international investment.

The reality has proven that the downsides were not sufficiently examined. Because all monetary power, including the power to set EU wide interest rates, resides with the ECB, this poses a huge problem for nations with weaker economies during times of economic downturn. One way in which weak nations have been able to survive such problems is to intentionally devalue their currency by speeding up the printing presses. While such a move brings inflation, it gives the nation a window in which to pay off its debts. The flip side of such a drastic action is that, if there is not enough discipline in the government to carefully limit the presses and pay off the debts, you end up with Zimbabwe.

It also poses a problem for nations that need to stimulate growth. Normally, a sovereign nation that wants to stimulate growth will lower its prime interest rate. But again, that is not something that the individual member states of the EU can do. They are stuck with whatever ECB decides for the eurozone as a whole - and the ECB is avoiding inflation like the plague. That leaves only tax policy to stimulate growth among the troubled eurozone members, but at this point, each is being pressured - and indeed, has agreed - to raise taxes in an effort to lower its sovereign debt.

Several people, such as Robert Samuelson, have painted the Eurozone crisis as simply a failure of the European welfare state model. Others, on the left, such as Paul Krugman, have claimed that the crisis has nothing to do with the welfare state model. Setting that argument aside for a separate post, it seems clear that the high cost of the welfare state has played a role. But there are also systemic issues, mentioned above, that are combining with a host of issues unique to individual countries such that at least five Eurozone member countries sit on the brink of fiscal ruin. Greece, Italy, Spain, Portugal and Ireland are all in danger of defaulting on their sovereign debt. The general rule of thumb is that, when a country cannot sell 10 yr. bonds with a rate of return below 7%, the likelihood of an eventual default becomes real. With the exception of Spain, all of the troubled EU nations have crossed the 7% level. Spain is flirting with it.

In the cases of Greece and Italy, deficit spending on a bloated public sector and overgenerous welfare state drove their national debt significantly above 100% of GDP (Greece - 142%; Italy 119%). Ultimately, this drove their cost of borrowing above the magic line - 7% on 10 year bonds.

Portugal is Greece without the international press. It has a debt to GDP ratio of 93%, much of it coming from deficit spending over the past decade on the welfare state. Their cost of borrowing reached a high this month of 13.47% on ten year bonds. That said, Portugal is in the midst of cutting public sector benefits and increasing taxes.

Italy, unlike Greece and Portugal, has a strong manufacturing base and a relatively frugal population. Nonetheless, Italy "suffers from an overall failure to implement reforms needed to boost productivity and growth," which, when combined with the size of their national debt, is proving toxic.

Ireland is also in dire straights. Ireland's welfare state was not overlarge, and indeed, Ireland was running a budget surplus through 2005. But today, Ireland has a debt to GDP ratio of 94.9% and is having to borrow over 40% of every Euro to finance its government spending. What drove Ireland into its hole was an ill advised easing of credit standards and a housing bubble that burst in 2007. The Irish government than stepped in and nationalized the bad debts being held by the banks, causing a massive increase in publicly held debt. Ireland's cost of borrowing is today 7.74% on ten year bonds.

As to Spain, it's national debt was a comparatively paltry 61% as of last year, though much of that has come with recent increase in deficit spending. Spain's true problems are massive privately held debt and a horrendous economic outlook. Unemployment at or near 20% combined with both a housing bubble that makes the U.S.'s look small by comparison and a country that, because it does not produce any domestic energy, is subject to extreme shock when the price of oil jumps as it did in 2008, have all combined to make Spain's economy look extremely weak. All that has driven Spain's cost of borrowing rising, recently to a high of 6.7%:

In many ways, the economic situation in Spain is now even worse than the economic situation in Greece. Spain's unemployment was already above 20 percent even before this recent crisis. There are now 4.6 million people without jobs in Spain. There are 1.6 million unsold properties in Spain, six times the level per capita in the United States. Total public/private debt in Spain has reached 270 percent of GDP.

The BBC has a very good article on Spain's deep economic troubles and how its problems do not fit the mold of profligate welfare state spending.

It is safe to say that, in each of these countries, the fact that they cannot manipulate their currency or make monetary policy has removed the traditional tools of the sovereign for saving their countries from economic disaster. To explain in greater detail, this from Edward Harrison:

Now that crisis is upon us, the currency trilemma of a currency union that is the Impossible Trinity of fixed exchange rates, independent monetary policy and free movement of capital has reared its head. Hands are tied; in a currency union, there is no devaluation to recoup competitiveness, no room for fiscal freedom, and no control over monetary policy. This leaves so-called internal devaluation and/or sovereign default as the remaining ways to escape crisis. The political will to go through this is impaired because internal devaluation (across the board wage and price cuts) leads to a long and arduous depression . . . And default leads to massive creditor losses – not just in Ireland but also in Germany. So the Eurozone is trying to figure out how to keep its union together while minimizing costs – with the ECB and IMF integrally involved.

On the flip side of the coin, there is no central authority overseeing individual nation's budgets or taxes, as if the EU were a true sovereign. So, essentially, the Eurozone presents the worst of all worlds.

In an effort to save the Euro, those five nations in trouble are being forced to adopt significant "austerity" measures. Those measures, across the board, mean a significant reduction in the size of government and their welfare programs. For example, in Greece, the public sector is set to be reduced in size by and all public sector wages are being cut by almost a third. Collective bargaining is limited. The pensions of public sector workers are being sliced by 20% to 40%.

Further, all nations in the EU, led by Germany (the rise of the Fifth Reich), are meeting to consider systemic changes to the eurozone in an effort to save the Euro. This from Reuters:

Germany - Europe's biggest economy - was intent on changing the European Union's treaty to enshrine stricter budget discipline and penalties for countries that failed to adhere to them, to ensure there could be no repeat of the current crisis. From the German perspective, only by reforming economies, cutting social benefits and working longer would the indebted members of the euro zone and the single currency project itself emerge from the turmoil. Printing money would buy only a temporary respite and would remove the incentive to reform.

As to whether the Euro can be saved, the general consensus seems to be that it cannot. That said, a detailed analysis from Goldman Sachs concludes that the Euro may be salvagable, but that all ways forward are problematic. Ultimately, the eurozone countries must either come together in a much tighter economic union with a structure much like the U.S., or Germany and other core nations are going to have to weaken their economies in favor of the "peripheral" nations. In any event, Goldman Sachs paints the consquences of the failure of the Euro as dire - with the seizing up of credit and equity markets as the first step.

But the Euro crisis is also having another, much more insidious impact. The European Union is anti-democratic, and that this monetary crisis has been the springboard for actions that are direct assaults by the EU on democracy in the European states. Indeed, both Italy and Greece have been subject to coups at the direction of the EU.

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Borders Out Of Control - In The EU

The EU has set up an insane immigration system that is an invitation nearly uncontrolled third world immigration. Ireland, being one of the few sane countries across the pond, passed a law to stop some of the worst abuses. Their law provided that non-EU spouses of EU citizens were deportable. No longer, per the highest Court in the EU.

EU law currently provides a backdoor for mass third world immigration, and the highest Court in the EU just opened the door much wider. Current EU law, actually dating back to the Treaty of Rome, provides that once a person lawfully becomes an EU citizen, they can automatically bring over their entire family. The way this works in Britain is that the socialist Labour Party is allowing large scale immigration from Pakistan that then itself gets significantly augmented. Once in Britain, a large number of the Pakistanis are importing wives from Pakistan. You can figure out the math from there. It has created an immigration/emigration nightmare in Britain.

Ireland tried to put the squelch on this occurring in their country. But today, their law was overturned, thus exposing Ireland to the same inability to control their borders as enjoyed by all the other provinces of that great experiment in socialism, the EU. But this decision of the EU even went farther, in essence giving illegal aliens the right to EU citizenship so long as they marry an EU citizen before being physically deported. As Hibernia Girl states:

This is not just some little loophole that failed asylum seekers will now be able to exploit -- this is a GAPING hole in the EU's immigration population replacement policy that is obviously being forced on all Europeans whether we like it or not.

Read the whole post. And see the detailed explanation of the EU ruling and its ramifications at EU Referendum.

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UK's Continued March Towards The EU

As I pointed out two weeks ago, Britain only had three chances to stay out of the EU - the vote in the House of Lords, the Irish Referendum, and the court case challenging Labour's refusal to grant a referendum to the people of Britain. As an aside, voting in the Tories would be utterly useless - Tory leader (term used loosely) David Cameron has already shrugged his shoulders and announced that he would treat Labour's acts as a fait accompli. Since I wrote that post, The House of Lords, gerrymandered by Labour PM Tony Blair near a decade ago, rolled over for Labour. Ireland voted against ratification of the Treaty of Lisbon / EU Constitution, but the EU is doing all it can to ignore its own laws and go ahead with the Treaty anyway. And today, the court case by Stuart Wheeler predicated on enforcing Labour's promise in their 2005 election plank to put any EU Constitution to a vote of the people, has failed at the lower court.
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This from the Telegraph:

A High court ruling removed the last obstacle to Britain's ratification of the European Union's treaty despite Labour's manifesto for a public vote.

Mr Brown has been under intense pressure to declare the treaty dead after Irish voters rejected it in a referendum earlier this month.

Mr Wheeler's case had forced the Prime Minister to delay the formal ratification of the treaty until the court's ruling.

At the heart of the case was the question of whether a political party's election manifesto was legally enforceable and whether the public have a "legitimate expectation" to see measures pledged during an election campaign enacted.

Rabinder Singh QC, appearing for Mr Wheeler, 73, said at a recent two-day hearing: "The Government promised a referendum and should keep its promise."

At stake were the fundamental principles "of good administration, fair play and straight dealing with the public," he said.

However, Jonathan Sumption QC, appearing for the Office of the Prime Minister, told the judges: "This case is politics dressed up as law."

. . . Ruth Lea, Director of the Global Vision think-tank, said: "Today's ruling by the High Court is extremely dispiriting especially as many European politicians have made it quite clear that the Lisbon Treaty is the Constitutional Treaty in all but name.

"Under these circumstances, the British people are surely entitled to their referendum on the Treaty as the Irish people did. All our polling shows an overwhelming majority in favour of a referendum."

Read the entire article. You can find the Court's decision here. According to the Court, Mr. Wheeler did not establish to the Court's satisfaction that the original EU Constitution and the new Lisbon Treaty are essentially identical documents and that, as a matter of policy, the Court would not enforce a campaign promise.

As to the argument that Wheeler's case that this was nothing more than politics dressed up as the law, what does that attorney think the law is if not politics "dressed up" with the police power of the state? This was really a case of whether politicians can be held to their political promises, which I happen to think is the weakest of arguments that could have been brought in this matter. As a policy matter, I do not think that appropriate for a court to decide for that as, carried to its logical extreme, it has the potential for havoc as circumstances or minds may validly change. That said, this particular promise was on a matter that goes to the heart of democracy in Britain and, as such, is I think a special case. Further, Courts in Britain, just as in the U.S., seem wholly unable to stay out of making inappropriate policy decisions of late, so we shall see.

The EU Referendum proclaims itself "disappointed but not surprised." They note that Mr. Wheeler's chances on appeal are, at best, slim.

The approval process for the EU is going forward with the Queen apparently having already given her assent. At Brits At Their Best, they have posted an open letter to the Queen noting that she has violated her Coronation Oath to defend the laws of Britain and withdrawing their fealty to the Crown. The fight is hardly over, and the Irish No vote has at least exposed how the EU's ruthless determination to put its plans in place wholly irrespective of democracy or law - something that will surely come back to haunt them. And perhaps the Irish vote may yet prove decisive.

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A Socialist Coup (Updated)

At least one rule of the EU is simple and unambiguous. A failure of any one member country to ratify an EU treaty (or in this case, the Constitution disingenuously renamed a treaty to get around the need for national referendums) means the Treaty does not come into force. But the EU is not going to let democracy or its own laws stand in the way. It has brushed aside the one democratic referendum held the other day in Ireland and plans to enforce the Treaty of Lisbon regardless. There is a true coup going on in Europe. The rule of law and democracy have been tossed out, and what is being created in their stead is something both both Marx and Orwell would recognize.
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If you believe in democracy and the rule of law, what you see today across the pond and in Europe should be horrifying. The Irish referendum on the Treaty of Lisbon, blogged below, by law should have ended this socialist coup. But it has not. The EU Referendum quotes a press release from Hans-Gert Pöttering, the president of the EU parliament:

It is of course a great disappointment for all those who wanted to achieve greater democracy, greater political effectiveness and greater clarity and transparency in decision-making in the European Union that the majority of the Irish could not be convinced of the need for these reforms of the European Union. We must not forget, however, that the European Union has experienced crises and times of difficulty several times before. Today, as in the past, we must keep a cool head.

The rejection of the Treaty text by one European Union country cannot mean that the ratifications which have already been carried out by 18 EU countries become invalid. The ratifications in the other EU Member States must be respected just as much as the Irish vote. For that reason, the ratification process must continue in those Member States which have not yet ratified. . . .

Read the entire post.

There is nothing democratic or transparent about the manner in which the EU operates. And indeed, the opacity and centralization of power without any institutionalized system of checks and balances will only increase significantly once the EU is operating under its Constitution. Pöttering's rejection of EU rules regarding complete ratification of the Treaty by all EU member nations as a prerequisite for the Treaty going into effect is unlawful - but it tells you precisely how undemocratic and how utterly determined the intelligentsia of Europe are to impose the EU upon its citizens, wholly irrespective of whatever the wishes of the citizens may be.

And this from the Times:

Britain is pressing on with the tortuous ratification of the European Union’s Lisbon treaty, despite Ireland rejecting it in a referendum.

Jim Murphy, the Europe minister, said today the Irish would be left isolated when the other 26 EU member nations passed the treaty into law later this year. The treaty would establish the offices of a European president and foreign minister, and would reduce the power of individual nations to veto reforms.

Gordon Brown, the prime minister, has rejected calls for a referendum on the treaty, but in Ireland, where constitutional law obliged a referendum, citizens rejected it overwhelmingly.

. . . Legally the treaty requires the ratification of all 27 member states to come into force - but Britain has joined France and Germany in signalling that it will look for a way around that technicality [emphasis added].

. . . The treaty was still good for Britain, he insisted, and the onus was now on Ireland to propose a means of resolving the crisis when EU leaders meet in Brussels next week.

The rest of the EU could proceed with the document in some form without the Irish, he signalled, and would finish ratifying it at the end of this year.

He said: “It is important to reflect then, is it 26 governments who have ratified and is it one that hasn’t? And then we discuss the way forward.”

. . . European Commission head Jose Manuel Barroso said the treaty was not dead. France and Germany, too, have urged the EU to press ahead with the project despite admitting that the referendum result was a serious blow.

Read the entire article. And there is this, also in the Times, from socialist Labour MP, Dennis MacShane. He gives you some idea of the mindset of those determined to make the EU super-state a reality, democracy be damned:

It took hundreds of pages of the Federalist Papers, a few dozen men locked for weeks in a sealed room in Philadelphia and a bloody civil war for the US constitution to be accepted. So the little local difficulties in France, the Netherlands and now Ireland must be seen in a broader perspective.

Anti-Europeans are lacing their champagne with Guinness as they celebrate the “no” vote and proclaim with W.B. Yeats “all changed, changed utterly”. Yet the EU, its Commission, existing treaties and directives will still be in place tomorrow. Europe has been here before and will be again.

. . . Ireland and the rest of Europe will wake up on Monday with a headache but not much else. Not a single Eurocrat will lose his job. . .

The big losers are Turkey and Croatia. British Tory Eurosceptics hypocritically proclaim their support for Turkish accession, but know that demanding referendums on future treaties means an end to enlargement [emphasis added].

No EU treaty can come into force until all signatory nations ratify it. But Ireland represents 1 per cent of the EU's total population and some old-fashioned democrats may feel that 1 per cent does not outweigh the rest of Europe's nations which are saying “yes” to the treaty [emphasis added].

But the rules are clear. Had the Irish voted “yes” and the British Parliament voted “no”, it is unlikely that Open Europe and Stuart Wheeler would describe the Irish popular vote as superior to one by Britain's sovereign parliament.

But amid the clamour from anti-EU campaigners in Britain and other nations to ignore sovereign parliamentary decisions, some way forward will have to be found.

. . . “Things fall apart, the centre cannot hold,” Yeats wrote, and its complacent political establishment may feel that Ireland is falling apart. Yeats added that “anarchy is loosed upon the world”, and an anarchic bust-up is what many Eurosceptics hope for. But it won't happen. Europe will go on its summer holidays. Perhaps when it comes back, ways will be found to make the treaty work, or the parts of it that do not need any treaty change.

. . . As the hysteria dies down, ways will be found to make Europe work, with or without the treaty. For both pro- and anti-Europeans, things have not changed so utterly at all.

Read the entire article. Mr. MacShane seems to be a little off in his U.S. history. There was no civil war involved in the crafting of the U.S. Constitution. Nor was it a thing crafted in hiding. Indeed, the Federalist Papers he cites and the like are a testament to just how open and democratic the process was in crafting the Constitution. That stands in stark contrast to everything about the EU. Indeed, every effort has been made to muddle the water. The Treaty of Lisbon stood for months as hundreds of pages of incomprehensible amendments apart from the original documents being amended - thus making it impossible for the average person to make heads or tails to what the Treaty actually said or to compare it to the Consitution from 2005. Indeed, it is hard to think of a more grotesque and improper comparison than that which Mr. MacShane makes between the U.S. and the socialist coup that is occurring today in Europe.

And how Orwellian is it for MacShane to appeal to "democracy" to reject the "no" vote of Ireland? The reason only 1% of the citizens of Europe voted against this socialist nightmare is because only 1% of Europe's citizens have yet to be given a vote on it, at least under its current disingenous categorization as a "treaty" rather than a "constitution." When it was named the latter, both the people of France and the Netherlands voted it down in 2005. Which is precisely why the EU renamed it a treaty and sought to ram it down citizen's throats without their opportunity to vote on it.

And what does it tell you of the thought process of Mr. MacShane to attack the Tory party over a referendum on EU enlargement, claiming hypocrisy on the Tory's part because they, the Tories, know a referendum to enlarge the EU will fail. These people have nothing but utter disdain for democracy and a complete belief in their right to impose their will. They are dangerous.

Update: More from EU Referendum on the plans impose the Treaty of Lisbon irrespective of the Irish vote here.

The people of Britain and Europe have collectively shrugged their shoulders and allowed their democratic votes to be taken from them without, seemingly, any concern. I do not understand how this can occur without blood in the streets. I will never understand this mindset and apathy. What is going on in Europe is no less a coup with a bare patina of democracy than was Hitler's accretion of power in the 1930's. I expect the long term ramifications of this grand experiment in socialism to be no less disastrous.

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A Tip O' The Hat To Democracy, A Tip O' The Knickers To The EU

Ireland, the only country out of 27 given an opportunity to vote on the new EU Constitution, have just saved the other half billion people in Europe. They have pulled Britain's crown jewels out of the fire. They have voted no to the Treaty of Lisbon. One can only imagine the number of Guiness Stouts being poured across Britain and the rest of Europe today.

As I blogged below, Britain had three last chances to stay out of the EU. One was the a vote on ratification of the EU Constitution by the House of Lords, an institution radically altered by Labour PM Tony Blair when they were not seeing things his way. Unfortunately, but predictably, they voted with Labour to approve the transfer of Britain's sovereignty to the EU. A second chance was a law suit to force a referendum in Britain based on Labour's pre-election promises to the nation. That one is ongoing. The third chance was the Irish vote. And they have not disappointed.

The Irish just tossed a huge wrench into the anti-democratic wheels of EU. Every other nation in the EU was having the new Constitution imposed on them by their political class. Ireland was required by the terms of its Constitution to hold a referendum. And hold it they did. All 27 nations have to agree for the Treaty of Lisbon to come into effect and the new EU super-state to be born - at least according to existing treaties. There are without doubt thousands of socialists in Brussels right now combing every possible nuance of every EU treaty to see if there is a way around that.

The EU Referendum, whose raison d'etre has been to fight this EU coup in Britain, should have the first word on this:

Overall result so far: 53.6 - 46.4 for the "noes", but Corbett speaks (see bottom of this post) - and so does Barroso. Despite that, there is no way that the "colleagues" can get round this. Spin they might, but the fact is that, in the ONLY referendum on the treaty, the voters said Nooooooooooooooooooooooo! . . .

OPENING A NEW FRONT: As this is not the end, the beginning of the end or the end of the beginning, a new front has been opened in the war. In a day or so there will be more about the BrugesGroupBlog and the thinking behind it.

What you will now hear is loud squealing from the direction of Brussels as the incredibly anti-democratic folks who are determined to make an EU super-state wholly irrespective of the wishes of Europe's citizens try and figure a way around this. And as the EU Referendum documents, it has already started:

UPDATE: Reuters is reporting that France's secretary of state for European affairs, Jean-Pierre Jouyet, is saying that an Irish "no" should not stop other member states ratifying the treaty. "The most important thing is that ratification should continue in other countries and I have good reasons to think that the process of ratification will continue," he told LCI television. "We would have to see with the Irish at the end of the ratification process how we could make it work and what legal arrangement we could come to."

So, the mice are gnawing away at it already. We told you this would happen! . . .

UPDATE: David Heathcoat-Amory says on BBC Radio 4 that the Conservatives should press for the UK ratification to be abandoned. Some chance!

UPDATE: Ahern says: "We're in uncharted waters." You bet!

UPDATE: The founder of Libertas, Declan Ganley, says: "The Irish people have rejected the Lisbon Treaty. "it is a great day for Irish democracy ... This is democracy in action ... and Europe needs to listen to the voice of the people." Ganley adds that Brian Cowen, "has a mandate to go back to Europe and do the best job possible".

Socialist Party leader Joe Higgins has said the likely "no" vote is a "huge rebuff to the political establishment" but a vindication of the rights of "tens of millions of workers" in the European Union. He believes the "no" side "won the argument", despite the fact that the main political parties and "big business" were in favour of the treaty. . . .

UPDATE: Poland's President Lech Kaczynski's office says he will still sign the treaty. "The president has already said the issue of ratification is a done deal," Mariusz Handzlik, head of the foreign affairs department in the president's office, told Reuters.

UPDATE: Andrew Duff, Lib-Dim leader says, "we cannot accept this result". Corbett on his blog says, "there are 26 other member states whose opinion matters too. It is inconceivable that all of the others will simply say 'too bad - one country has said no to the package as it stands, so let's forget reform and stick with the current system for evermore."

UPDATE: Deutsche Welle reports: "A feeling of gloom and uncertainty fell on Brussels on Friday after Ireland's justice minister said it appeared that the 'no' camp had pulled ahead in the referendum on the European Union's new reform treaty." The eurosceptics, meanwhile, have decamped to Kitty O'Shea's - yards from the commission building - drinking pints of Guiness while they hold an impromptu press conference.

UPDATE: EU commission President Jose Manuel Barroso is still calling on other members states to ratify the treaty. "I believe the treaty is alive and we should now try to find a solution," he says.

UPDATE: Minister for Justice Brian Lenihan says Ireland has lost influence in Europe. He was "very, very disappointed" with the outcome, adding: "I think it is a very sad day for this country and for Europe as well." It was a "serious matter for Ireland," he said, then declaring:"We have to accept the decision of the people… and that's democracy and I accept that." . . .

Read the entire post. This certainly ought to be a signal to Tory Leader David Cameron to finally get off the fence and start challenging this stealth coup being imposed on Britain. And hopefully it will put much more pressure on Labour and Gordon Brown to stop the ratification process.

We will give the last word on this to Brits At Their Best who say a very sincere "Thank You" to Ireland:

We think the Irish have said NO to the EU with gusto!

They alone, three million of the half a billion people in the 27 nations of the European Union, had a democratic vote on the undemocratic EU constitution.

Read the entire post. The war is hardly over. But think of this as Dunkirk. The socialists are not defeated, but they just lost their best opportunity to destroy the allies.

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Britain's Final Chances

The EU will become a super-state once its Constitution, embodied in the Treaty of Lisbon, is fully ratified by all member countries. The EU is an anti-democratic experiment in socialism that stands in contradiction to Britain’s anglo-saxon traditions of representative democracy, individual rights and capitalism (see here, here, here and here). While membership in the EU has proven a boon for Britain’s political class, it has proven very bad for the rest of Britain in innumerable ways that only portend to worsen.

Britain's integration as an EU province is also very bad for the U.S. Britain has been America's closest European ally. As Britain is subsumed into the EU, so goes both its special relationship with the U.S. and, in a larger context, a critically important member of the anglosphere whose traditions and values animate the freest and most prosperous nations on earth.

Britain is at a tipping point on the EU membership in many ways. Things look bleak at the moment. Gordon Brown and Labour are determined to transfer Britain’s sovereignty to the EU without any vote of the people. The "conservative" Tory Party is little more than a light version of the socialist Labour party. As I posted here, it is led by David Cameron, a weak man driven by political expediency rather than conservative principles who has said that he will treat Labour’s actions as a fait accompli. What is going on in Britain is a stealth coup by a disingenuous political class that is being largely supported by British media though minimalist and superficial coverage.

We are down now to the last three chances to derail British ratification of the Lisbon Treaty and transfer of the bulk of its sovereign powers to the EU. The House of Lords must vote on the Lisbon Treaty this week. Ireland is the only country to hold a referendum on the treaty, and they do so on Thursday. Lastly, there is a court case seeking to force Labour to uphold its pledge and hold a referendum on the EU. Speaking on these issues are Melanie Phillips, John Bolton and EU Referendum’s Dr. Richard North.
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Author Melanie Phillips has written an exceptional article documenting the current situation and the stakes at issue:

. . . The EU is the issue that all politicians are ignoring in the hope we will forget about it. Most immediately, they hope we have forgotten to be concerned about the European Constitution, which is masquerading as a bog standard treaty over which we need lose no sleep.

This constitution, which would bring into being an unprecedented bureaucratic super-state and end once and for all what remains of the independence of EU member nations, was dumped after it was rejected by French and Dutch voters in 2005. It was then resurrected in all but name as the Treaty of Lisbon, which Parliament is in the process of ratifying. This week, that constitution faces a triple test.

Today, businessman Stuart Wheeler's legal challenge to Labour's refusal to honour its manifesto pledge to put it to a referendum reaches the High Court. On Wednesday, the ratification Bill reaches the House of Lords. This Bill was ruthlessly shoe-horned through the Commons. This week we will see whether their Lordships will also spinelessly roll over, or recall their historic role as a last- ditch defence of this country's interests against such abuse of power.

But something else is happening which our politicians didn't bargain for. As we know, the constitution has to be approved by every member state or else it falls. On Thursday, Ireland votes on the treaty - and it looks as if it might vote against it.
The Irish government is filled with panic and horror at the possibility that the Irish public might actually be thinking for themselves. For the EU has always relied on bamboozling the public about the joys of EUtopia and terrifying them that their whole world will collapse if it is thwarted.

More and more people, however, are realising that they have been lied to, not only about the constitution but about the whole EU project. In Britain, we were told from the start that it was only an economic union which would entail no loss of sovereignty.

That was the very opposite of the truth. The dirty little secret is that, even without the constitution, political power has simply drained away from Westminster to Brussels.

In a little-noticed but quite devastating speech in the Commons last week, the Tory MP Peter Lilley recorded that last year the EU passed no fewer than 177 directives - more or less equivalent to our Acts of Parliament - and 2,033 regulations enforceable in the UK, as well as making 1,045 decisions which affect us.

Our own Trade Minister has admitted that 'around half of all UK legislation with an impact on business, charities and the voluntary sector' stems from laws passed in Brussels. . . .

Now the former Tory policy adviser Lord Blackwell is arguing that Britain should renegotiate the terms of its EU membership, restricting it to trade agreements and common security and environment policies, but rejecting EU control over monetary policy, foreign affairs, defence and justice.

An opinion poll run by his group Global Vision suggests that more than a third of voters across all parties would back a prospective Conservative Government pledge to negotiate such a change, and that people would support it in a referendum by more than two to one.

The fact is that those opposed to the creation of a European super-state are not the 'xenophobes' or 'Little Englanders' of the overheated Eurofanatic imagination.

. . . The EU is fundamentally an anti- democratic project, based on the belief that the individual nation is the source of the ills of the world and that by contrast supra-national institutions offer the solution to all its problems.

It is that absence of democratic transparency which is now corrupting not just European politics but our own. The fresh outbreak of 'Tory sleaze' over the expenses gravy train is rooted in Brussels, where corruption is the accepted way of EU life.

Yesterday, the Irish government said that a 'no' vote over the constitution would be a crisis for Europe. What rubbish. The plain fact is that the EU has brought about a crisis for democracy within Europe. Which is why it is essential that we should renegotiate our place within it.

Politicians, however, run a mile from any such suggestion. The terror of acknowledging the true nature of what has happened, in case he is required to address it, has propelled David Cameron into a cul-de-sac.

His pledge to allow the British people a vote on the constitution is worthless since - as he has only now admitted explicitly - once the treaty is ratified it will be almost impossible to do anything about it.

But since his party has warned that the constitution will spell the end of British self-government, this turns Mr Cameron into the Hamlet of the European debate - an awesome talent for speeches denouncing tyranny, but a complete inability to act against it.

Mr Cameron is paralysed by fear of reigniting the Tories' internal civil war over Europe. But the Tory Europhiles are now moth- eaten has-beens who have comprehensively lost the argument with the British people.

The fact is that Parliament is now so emasculated it is becoming the equivalent of Westminster regional council in the Republic of Euroland.

. . . It is time to end this charade. Whatever happens to the constitutional treaty in Ireland or anywhere else, Britain must now re-negotiate its relationship with the EU. The politician who does so will be a hero to the nation. Which is why Mr Cameron should ignore the faint-hearts and suede-shod Euro-fanatics in his ranks. This country must rediscover its identity and sense of purpose, or else it is finished. It can do so only if it regains the power to govern itself.

The issue is quite simply whether democracy in Britain has a future at all. It could not be more fundamental. . . .

Read the entire article. Former UN Ambassador John Bolton spoke at the University of Dublin against ratification of the EU treaty, both because it is anti-democratic and its effects on NATO and the US-British relationship:

The Lisbon Treaty poses a threat to NATO and undermines democracy by handing more power to Brussels, a former senior advisor to President George W Bush has warned.

John Bolton, . . . said the new Treaty could hurt the military alliance between Europe and the US.

He was speaking only days before Ireland hold a referendum on the EU Treaty, the only member country to do so, with the latest polls showing the Yes campaign slightly ahead.

But an Irish vote No on Thursday will mean the Treaty, which abolishes dozens of national vetoes and creates the new post of EU president, cannot come into force in any of the 27 member states.

. . . Mr Bolton has previously warned the deal threatens Britain's special relationship with the United States and yesterday said he would not understand the Irish giving "more powers to bureaucrats."

He added: "The only people you elect have a very limited role and I think this treaty will further enhance the power of institutions in Brussels without extending democratic authority to people."

. . . A Global Vison/ICM poll published yesterday found 64 per cent of Britons would back a renegotiated looser relationship with the EU in a referendum, against 26 per cent who would oppose it.

Read the entire article. Dr. Richard North, who runs the EU Referendum blog, added his own thoughts to those of John Bolton:

. . . For sure, the official US view is very much at variance, expressed in a report last month from the Center for Strategic and International Studies in Washington. This stated that Washington would support a more "muscular" EU, provided that European defence spending was sufficient for a radical improvement in military capabilities on this side of the Atlantic. Some four months previously, in a speech in Paris, Victoria Nuland, the US ambassador to NATO, had overtly supported a militarily stronger European Union . . . That support, though, was conditional on the Europeans embarking on a "radical improvement in military capabilities, with a far more focused policy on defence spending.

"While we cannot say that Bolton's view in any way reflects official US policy, it may be a straw in the wind. From the Istituto Affari Internazionali in Rome, we recently had a report indicating that many of the EU member states were having trouble meeting their existing defence commitments. While between 2001 and 2006, France, Britain and Spain spent more than three percent of gross domestic product on defence, Italy spent only 1.47 percent, and spending in Germany and Sweden sharply declined.

Even more recently, we had seen reports that the French military is in trouble, with most of France's tanks, helicopters and jet fighters are unusable and its defence apparatus on the verge of "falling apart".

Elsewhere on this blog we recorded the difficulties EU member states had in equipping its force for Chad and latterly we concluded that – in terms of military performance, the idea of European defence was an "unrealisable dream".Despite this, we have seen continued attempts by the EU to create a "European Army" – but all that actually amounts to is a "dedicated military headquarters", more structures and oversight of the military function by the EU parliament.

. . . For some member states . . . the objective of pooling military structure is to spend less money on defence.

Going back in history, one must recall that one of the greatest supporters of the nascent European "project" – in the fifties and sixties – was the US government, with CIA money being channelled into the European Movement. Not least, the US then saw in a united Europe a bastion against the emerging threat of Communism which threatened to engulf the whole of Europe.

Now, if Bolton is seeing the EU defence ambitions as a threat, he cannot be the only influential American to take that view. This may reflect the assiduous work of a number of British teams who have been over to the States, working through right-wing think tanks like the Heritage Foundation – warning them of the dangers.

As did it help the EU on its way, therefore, there is now a glimmer of hope that the US could be instrumental in prising away the UK from the "project", having seen – at last – that the EU represents a danger to the interests of democracy and global security.

Read the entire post. NATO as it is has significant, possibly existential problems. Most NATO nations other than Britain do not field a functional military and most NATO members are not fully supporting the NATO mission in Afghanistan. Moreover, given the anti-democratic nature of the EU, having all of the member nation’s forces integrated and under EU central control could prove problematic down the road for any states whose restive populations decide they no longer want to be part of the grand socialist experiment that is the EU.

At any rate, we are nearing the end of Britain's chances to sidestep the transfer of their sovereign rights to the EU. Much will be decided by week’s end.

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