Tiger of the Stripe Blog

Have EU Politicians and Apparatchiks Been Trying to Influence the UK General Election?

Michel Barnier

Have leading politicians and apparatchiks in the European Union such as Michel Barnier and Jean Claude Junker been trying to influence the result of the UK general election as Theresa May has suggested? I don't know but it was my first impression (before the PM made the suggestion) that they had. Frankly, there are only two possibilities: they either interfered with the intention of affecting the outcome of the election or they just happened to make a series of rather outrageous statements with obvious relevance to the election without realising their mistake. It looks like a co-ordinated attempt to me.

Either way, their behaviour shows them to be fools – no great surprise there. If they had the faintest Idea what they were doing, they would have realised that their comments would boost Theresa May's hand, both in the election and in the subsequent negotiations. Undecided voters will look at this behaviour and decide that we cannot trust the EU at all and they will be more likely to vote for the Conservatives because May has stated that 'no deal is better than a bad deal'. With a large majority May will be able to simply walk away from a bad deal. We have been told for months that the UK doesn't have the negotiation skills to deal with the EU. If these recent comments are representative of the EU's efforts to build a negotiating position, it would seem that it is the EU which lacks negotiating skills.

As someone who thinks that access to the single market would not be worth the price demanded from the EU (not just in financial terms but also the continuing influence of the European Court of Justice), I welcome Barnier and Juncker's remarks because they will probably ensure that we make a clean break. However, that is just my personal perspective. If, like many of my friends, I opposed Brexit and now favour as close a continuing association with the EU as possible, I would be absolutely furious at their behaviour.

Clean Brexit

On 17 January, Liam Halligan and Gerard Lyons published Clean Brexit, an exceptionally clear-sighted analysis of what need to be done to get the best possible deal from Brexit. The main point, and one which the Government seem to agree with, is that we need to be outside both the Single Market and the the Customs Union. Download it her: https://policyexchange.org.uk/publication/clean-br...

Carney Rubbishes UK Economic Prospects

Mark Carney, Governor of the Bank of England, issued dire warnings about Brexit before the EU Referendum. Now he has repeated his doom-mongering. He is very much Osborne's creature and his analysis is tainted. To deliberately talk down the economy after the referendum is. at best, irresponsible and, in my opinion, he must go (as should Osborne whose two Treasury reports were completely demolished by David Blake of the Cass Business School). Savvas Savouri of Tosca Fund Asset Management was entirely dismissive of Carney's comments on the Today programme this morning, saying that he was completely ignorant of macro-economics.


Lies, Damn Lies and the EU Referendum

I originally posted this on Facebook but I thought is was worth repeating here:

Can we please have an end to this pretence that the EU Referendum is a left/right issue? The only reason that Labour is campaigning to stay in is because it thought it could exploit the split in the Conservatives to its advantage. The remain campaign lied through its teeth, telling us that the European Community was just a common market. In the 1975 referendum, who wanted to leave? Michael Foot, Tony Benn, Peter Shore, Eric Varley and Barbara Castle. The Labour Party conference of 1975 voted nearly 2:1 to leave. Who wanted to remain?The right of the Labour Party, Margaret Thatcher and most of the rest of the Conservative Party. It was official Conservative policy to remain, partly because the Tories saw it as a good way to split Labour! Sound familiar? It worked and Labour lost the election, we had years of Thatcherism and we stayed in what is now the EU. There is a principled case to be made for either staying or leaving the EU but it has been drowned out by dishonest arguments on both sides.


Remain MPs Plot to Keep UK in EU

It appears that a number of MPs who favour the UK remaining in the EU are planning to ensure that this happens even if there is a majority vote to leave in the forthcoming referendum. http://www.bbc.co.uk/news/uk-politics-eu-referendu...

So what is the point of having a referendum? It is worth remembering that the Scottish Nationalist Party would have a vote out of all proportion to its share of the vote at the last general election – they won more than 8.6% of the seats with about 4.7% of the vote at the last general election. Perhaps these MPs are so contemptuous of the public that they will decide that they can ignore general election results, too.


Democracy in the EU: The Council of the European Union

The Council of the EU and the European Parliament constitute the legislature of the European Union. Sometimes referred to as the Council of Ministers, the Council of the EU exists in 10 different configurations depending on the subject to be discussed. These are: agriculture and fisheries; competitiveness; economic and financial affairs; education, youth, culture and sport; employment, social policy, health and consumer affairs; environment; foreign affairs; general affairs; justice and home affairs; and transport, telecommunications and energy. http://www.consilium.europa.eu/en/council-eu/configurations/

Each configuration consists of a relevant minister from each country. As a result, each country, however large or small its population, has one vote. However, there are some safeguards. A simple majority vote is allowed for non-legislative matters, such as votes on the Council’s own procedures. For most legislative matters, a qualified majority is required, meaning that not only must 55% of member states vote in favour but states representing 65% of the total EU population must vote in favour. Until 31 March 2017, the previous form of qualified majority voting can be requested by the member states. Since this will cease to be an option soon, there is no point in going into details.http://www.consilium.europa.eu/en/council-eu/voting-system/qualified-majority/

Certain decisions, such as the following, are considered too sensitive for qualified majority voting and require unanimity:

  • common foreign and security policy (with the exception of certain clearly defined cases which require qualified majority, e.g. appointment of a special representative)
  • citizenship (the granting of new rights to EU citizens)
  • EU membership
  • harmonisation of national legislation on indirect taxation
  • EU finances (own resources, the multiannual financial framework)
  • certain provisions in the field of justice and home affairs (the European prosecutor, family law, operational police cooperation, etc.)
  • harmonisation of national legislation in the field of social security and social protection.



Democracy in the EU: The European Parliament

There are three main decision-making bodies in the European Union: the European Parliament; the Council of the European Union; and the European Commission.

The European Parliament

From the point of view of the correspondence between the percentage of votes cast for a party and the number of seats gained, the UK election to the European Parliament, which uses proportional representation, is an improvement on our general elections. For instance, in the 2014 European Parliament elections, the Labour party (24.43% of votes) received 27.4% of the seats; the Conservatives (23.05% of votes) received 26.03% of the seats and the SNP (2.73% of the votes) received 2.74% of the seats. UKIP did rather better than it should have done with 32.88% of the seats for 26.6% of the votes, while the LibDems did a lot worse than they should have, receiving a single seat (1.37% of the seats) for 6.61% of the votes. Clearly, no form of voting is perfect. http://en.wikipedia.org/wiki/European_Parliament_election,_2014_(United_Kingdom)

However, we have to ask how this related to the vote:seat ratio in other EU countries.


Valid Votes


Votes per Seat


United Kingdom




















We can see that each vote in Slovakia and Malta is worth more than five times as much as a UK vote. While this is not as bad as the discrepancy between the SNP and UKIP in the general election, it is still very far from being a fair system. It has to be said that Germany gets an even worse deal with 96 seats for 29,340,700 valid votes. http://en.wikipedia.org/wiki/European_Parliament_election,_2014_(Germany)

There is an argument that small countries need to be over-represented to protect them from larger countries. Having seen the way that the Scottish Nationalist Party behaves with such a small proportion of the total UK vote in the last general election and a disproportionally large number of seats, I cannot subscribe to this idea; it is fundamentally undemocratic.

The European Parliament’s roles (was laid out on the EU’s own website) are defined as follows:


Passing EU laws, together with the Council of the EU, based on European Commission proposals

Deciding on international agreements

Deciding on enlargements

Reviewing the Commission's work programme and asking it to propose legislation


Democratic scrutiny of all EU institutions

Electing the Commission President and approving the Commission as a body. Possibility of voting a motion of censure, obliging the Commission to resign

Granting discharge, i.e. approving the way EU budgets have been spent

Examining citizens' petitions and setting up inquiries

Discussing monetary policy with the European Central Bank

Questioning Commission and Council

Election observations


Establishing the EU budget, together with the Council

Approving the EU's long-term budget, the ‘Multiannual Financial Framework’


Does Remaining Guarantee Stability?

The 'remainers' have argued forcibly that Brexit would pose all sorts of hazards to the economy, but they tend to ignore the dangers of remaining in the EU. There has been a tacit assumption in the ‘remain’ camp that no exit from the EU means no change, but this is foolish; despite the often glacial speed of change in the EU, it is nothing like the organisation we joined.

To take one example of a major impending change, in 2010, the European Commission’s 2010 proposed a financial transaction tax (or Tobin tax), despite the fact that the Commission itself originally predicted that this in the long term could reduce EU GDP by up to 1.76%. Sweden introduced such a tax in 1984 and quickly found that it raised very little in the way of taxes, drove traders in bonds, equities and derivatives to move to London, and damaged the economy. It is possible that such a tax might be beneficial, but only if it were adopted by every country in the world. This project is still very much alive and could very well prove to be immensely damaging to the City of London.

However, the biggest threat to the UK associated with remaining in the EU is probably the Eurozone. The single currency was introduced, despite many warnings that it could only work properly with complete fiscal union – which, in reality, means complete political union. As was revealed by Der Spiegel back in 2010, Germany, most of whose population has always been wary of the Euro, was told by France that German re-unification could only take place if it agreed to give up the Deutsche Mark. Some contend that the threats issued by François Mitterrand to Helmut Kohl did not in themselves lead to monetary union, but it seems clear that they accelerated it; that, in turn, may have been responsible for some of the grave mistakes which were made. Der Spiegel Business Insider Vox Europe Helmut Kohl

Among the many mistakes in setting up the Euro was the willingness to allow Greece to participate, even though it was clear that it did not meet the criteria for entry. While it is true that Goldman Sachs helped Greece to massage the figures (Der Spiegel), it is equally clear that other European leaders were aware of the deceit – Guardian. It is also clear that Helmut Kohl knew that Italy was in no state to join the Euro. Der Spiegel

Although there is a new ‘solution’ to Greek debt every few months, it is clear that the problems will continue until (i) most of the Greek debt is forgiven and (ii) Greece leaves the Eurozone. Neither of these two events seems imminent, but both are inevitable and delay is expensive both for Greece and the Eurozone. It must be clear to the European Central Bank and the other members of the Eurozone that these are inevitable but they refuse to admit it, partly for fear of losing face and partly because it could cause further Euro instability. Unfortunately, Greece is the least of the Eurozone’s problems. Italy has the potential to be a far bigger threat. Italy has a debt-to-GDP ratio of about 132%, the second-highest in the EU after Greece. Unfortunately, its banks have a very high percentage of non-performing loans (NPLs), with estimates ranging from 17% to 21%, equating to about €200 bn or 12% of Italy’s GDP. Italy originally proposed to allowing the banks to spin off the NPLs to a state-backed ‘bad bank’, rather as what has been done with various bank assets in the UK. However, EU rules no longer permit this. Instead, Italy will have to sell off the NPLs to investors with some state guarantees for the less risky assets. However, these NPLs are still risky and those holding bonds in these banks are likely to lose heavily. Such turmoil and the response to it by the ECB could also cause knock-on effects in Spain and Portugal. To quote one recent commentator, ‘A deteriorating financial crisis in Italy could risk repercussions across the EU exponentially greater than those spurred by Greece.’ Jeffrey Moore

Of course, the UK is not in the Eurozone and David Cameron has, in theory, received guarantees that the UK will not be required to help fund Eurozone bail-outs. However, Roger Bootle, Executive Chairman of Capital Economics, writing about a possible Euro collapse, asks, ‘How exactly will it be clear what part of this mess will be outside the UK’s financial responsibility?’ (Daily Telegraph, 23 May 2016)

The very fact that the UK is not in the Eurozone is also a danger. With the EU apparently determined to support the existence of the Eurozone at all costs, it will be forced to press for ever-closer political union within the Eurozone, leaving the UK excluded from most of the decision-making. This could cause enormous damage to the UK.


The Importance of EU Countries as Trading Partners

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Some Comments on the EU Referendum

There has been a lot of nonsense talked about the pros and cons of a British exit from the European Union – the so-called Brexit. Both sides have made up figures relating to finances and immigration. This is almost inevitable because the present statistics are opaque and unreliable and future ones are impossible to predict. Anyone (you know who you are!) who claims to know the future with any certainty carries about as much authority as Mystic Meg. There has also been a lot of abuse hurled in both directions and glib dismissal of anything which doesn't fit with the preconceptions of one side or the other. None of this is helpful and much of it is counterproductive as well as being unpleasant.

I was going to write a short eBook on the subject but I became so deluged with material from the leavers and remainers that I found it impossible. Instead, I intend to spell out some of the arguments in a series of blog posts.


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